CAPSTONE PROJECT REPORT BUSINESS STRATEGY PHASE 2012 – 2017 OF DONG DA BRANCH – VIETNAM INTERNATIONAL COMMERCIAL JOINT STOCK BANK (VIB) Quach Thanh Nam Dang Ngoc Tuyen Pham Thi Bich Truong Duong Duc Tuyen Class: X0810 Hanoi, 2011 GRIGGS UNIVERSITY GLOBAL ADVANCED MASTER OF BUSINESS ADMINISTRATION PROGRAM CAPSTONE PROJECT REPORT BUSINESS STRATEGY PHASE 2012 – 2017 OF DONG DA BRANCH – VIETNAM INTERNATIONAL COMMERCIAL JOINT STOCK BANK (VIB) Group Number: 06 Student’s name: Quach Thanh Nam Dang Ngoc Tuyen Pham Thi Bich Truong Duong Duc Tuyen HA NOI 2011 ACKNOWLEDGEMENT Over two years of study, research with Lecturers of international business management Master program, which is held jointly between U. Griggs University and Hanoi National University, we have obtained profound knowledge of business management such as finance, personnel, marketings. On the basis of knowledge learned, group 6 has built the topic "Business Strategy period 2012 - 2017 of Dong Da Branch - Vietnam International Commercial Joint Stock Bank", which is the distilled knowledge equiped by the Lecturers and program during the past two years. Group 6 would like to express our sincere thank to the Lecturers, staff of ETC center who create all favorable conditions for our group to complete the program group in a convenient and efficient manner.
3 LIST OF TABLES.8 TABLE OF CONTENTS CHAPTER 1: THEORY ON BUSINESS STRATEGY MANAGEMENT. Overview on business strategy. Concept of business strategy. Role of business strategy.
Company – level strategy. Business unit strategy. Steps in strtategy building. External environment analysis of business.
Internal environment analysis of business. 19 CHAPTER 2: ANALYSIS OF STRENGTHS, WEAKNESSES, OPPORTUNITIES, CHALLENGES OF DONG DA BRANCH - VIB. Overview of Vietnam International Commercial Joint Stock Bank (VIB). Formation and development of VIB.
Establishment and development of Dong Da Branch – Vietnam International Commercial Joint Stock Bank (VIBDD). Common strategy of VIB. Macroscopic business environment analysis (PEST). Legal & political factors.
Socio-cultural factor. Information technology factor. Analysis of bank competitive environment (5 competitive forces by M. Bargaining power of suppliers.
Threat of substitute products. Threat of potential entrants. Bargaining power of buyers. Threat of existing firms.
Internal analysis of Dong Da Branch (VIBDD) – Vietnam International Commercial Joint Stock Bank VIB. IT and modernization factors of bank. Organization structure and business network. Products and services.
Analysis of opportunities, threats, strengths, weaknesses of VIBDD (SWOT). Building matrix for assessment of opportunities, threats, strengths, weaknesses.45 CHAPTER 3: STRATEGY FOR DONG DA BRANCH – VIETNAM INTERNALTIONAL COMMERCIAL JOINT STOCK BANK, PHASE 2012 – 2017. Growth orientation of VIB Dong Da. Development orientation of VIB.
Development orientation of VIBDD. Growth target of VIBDD till 2017. Concrete target of the strategy. Comparing VIBDD’s strategy and VIB’s strategy.
Strategic selections of VIBDD till 2017. Building strategy based on TOWS matrix. Budget for strategy implementation. Close coordination between business units.
Making development and customers care plan. VIB should build a personnel training system. Building an effective approval procedure. Building the proper interest rate, exchange rates and fees.
61 LIST OF TABLES STT NAME OF TABLES PAGE CHAPTER 1 1 External economic environment 13 2 Example on external factors evaluation matrix EFE 14 3 Five competitive forces of M. Porter 15 4 Example on CPM matrix 16 5 Example on IFE matrix 18 6 Example on SWOT matrix 19 7 Example on QSPM matrix 20 CHAPTER 2 1 Some financial indicators of banks 28 2 Comparison and assessment table 29 3 Evaluation of strength, weakness of the 5 competitive factors 29 4 Financial data table of VIB 31 5 Financial data table of VIBDD 32 6 Business units chart 32 7 Organization chart of VIBDD 33 8 Number of branches by years 34 9 EFE matrix 43 10 IFE matrix 44 11 CPM matrix 45 CHAPTER 3 1 SWOT matrix 50 2 QSPM matrix 51 PREFACE Necessary aspect of the research topic In recent years, the world and Vietnam economy is in a crisis, high inflation, exchange rates, interest rates change sharply, payment risk appears more and more, businesses fall into difficulties and many have bankrupted. In the difficult economic conditions, VIBDD is a business unit of VIB Bank system, which is in strong transition from organizational structure model, appearance to the inside operation. VIBDD need to find their own direction in order to minimize the negative impact from the economy, and promote strength, take the opportunity to develop.
For a correct direction, and internal and external issues of VIBDD should be studied and considered carefully through the objective listing, analysis. Our theme uses scientific analysis tools of such factors in a qualitative and quantitative manner to point out the strengths, weaknesses, opportunities and threats of VIBDD and simultaneously build the business strategy with the solutions for implementation of the strategic. Target The study of VIBDD’s business strategy in the coming period is to apply theory to business practice. The study allows to indicate clearly the positive and negative effects with their impact to the business activities of VIBDD.
The problems that VIBDD have experienced limiting development are identified and analyzed, the cause is found to take measures to handle. Study methodology Research methodology is an integrated approach based on statistics, which sum and make analysis to compare with the actual situation in VIBDD; development orientation of industry, field of operations along with the professional opinions through published sources of data, result of market survey and research to clarify and concretize the research’s content. Research objective and scope Objective of the research is the business strategy of VIBDD period 2012 to 2017, this is the stage predicted that the economy of Vietnam and the world escape the crisis. The topic is used on the basis of analysis of practical issues associated with strategic theory to develop a business strategy for VIBDD period 2012 to 2017.
Theme content The theme is divided into big contents: Chapter 1: Theory on business strategy management Chapter 2: Analysis of strengths, weaknesses, opportunities, threats of Dong Da Branch – VIB Chapter 3: Strategy for Dong Da Branch – VIB period 2012 - 2017 CHAPTER 1: THEORY ON BUSINESS STRATEGY MANAGEMENT 1. Overview of business strategy 1. Concept of business strategy The strategy concept occured from ancient Greek, originated from the military field, the basic point that one side can crush his opponents if they can lead the game and put opponents on the battlefield upon easy for them to deploy their capabilities (advantages). Today, the concept is increasingly researched, developed and there are many different concepts on strategy, but we all know that in all strategic concepts occuring the phrases that manifest different aspects needs to be included and as Mintzberg which focuse on five main categories: - Plan: Sequence of actions planned in a consistent manner; - Pattern: The consistency of behavior over time may be intended or unintended; - Position: Match between organization and environment; - Ploy: Specific way to deceive opponents; - Perspective: How to acutely aware of the world So, strategy can be interpreted as follows: “A unified, comprehensive and coordinated plan, which is designed to ensure that the basic objectives of the business are successfully implemented” (Lawrence R.
“A model or plan of an organization to coordinate the key objectives, policies and actions order in a uniform" (Quinn, J., B (1980) Strategy for change: Logical Inscrementalism. Homewood, Illois, Irwin. “Studying to find a suitable position in a competitive industry, a range of activities in which competitive activities taking place” (Porter, M. (1981) The contribution of Industrial Organization to Strategic Management.
- Generally, a strategy built must simultaneously meet the following factors : - Outlined for a long time, determine clearly the basic objectives and business direction of the business. - Creating growth for organizations to ensure business continuity and development of environmentally sustainable business competitive. - Use all the resources that the organization is a most effective way; - Create the best competitive position for the future organization. Role of business strategy Business strategy plays a very important role for the survival and growth of every business.
The importance of business strategy is reflected in following aspects: - Help businesses to orient their activities in the future through the analysis and forecast of business environment. - Help businesses grasp opportunities as well as full risk for the development of enterprise’s resources, it helps enterprises to exploit and use rationally resources, promote the strength of the business. - The strategy creates a orbit for business activities, helps businesses to connect individuals with other interests towards a single goal, and together develop business. - Business strategy is an effectively competitive tool of businesses.
Present studies show that if application of strategic management such organization will achieve better performance than those do not perform this process. If you get the suitableness between the organization's environmental and strategy, structure and its processes it will generate a positive effect on performance of organizations. The classification of strategy In an organisation, strategy administration is divided into three basic levels: company, business units and functional branches. The administration of strategy at each level has similar forms, including such stages as: analysing the environment to define targets and tasks, analysing and selecting strategy, organising and inspecting strategy.
However, the content of each stage and the way to make decisions depend on different administrators. Strategy at company level The strategy at company level defines orientations of an organization in the long term with the aim of fulfilling tasks and reaching growth targets, for example: focused growth strategy (market penetration and development, and new product development), integration growth strategy (ahead and beyond), diversification growth strategy (concentric, horizontal, and mixed), joint venture strategy etc. Based on the strategy at company level, organizations will deploy their own strategies. Strategic business unit (SBU) SBU strategy (SBU _ Strategic Business Unit) in a company may refer to a sector or a genre of products etc.
The strategy aims to direct the development of each sector or each kind of products, contributing to completing the strategy at company level. It is necessary to identify each sector’s advantages compared with rivals to lay out a strategy suitable with the strategy at company level, for example: strategy to create difference, low-cost strategy, defensive strategy for market consolidation, offensive strategy for market development. In the market economy with fierce competitiveness, marketing strategy is considered a key one of business units, connecting with strategies of other functional organs. Strategy of functional organs Each company has its own functional departments such as: marketing, personnel, production, research and development etc… Such departments need strategies to the SBU strategy and the strategy at company level, for example: marketing department has 4Ps strategy, personnel department has a strategy on attracting talented people, financial department has a strategy on reducing expenditures and investing in new products etc.
The strategy at functional levels often shows its values at each stage during the implementation of SBU and company strategies. Thus, strategies of the three fundamental levels are not independent but have a close ties and follow a rule that the lower-level strategies must conform to the upper-level ones to ensure the success and effectiveness of implementation. Steps in strategy building 1. Analysis of external enviroment of the business External enviroment Activities of each organization are set in certain conditions and circumstances, the external factorscontinously affect them.
Therefore, the strategy building should always pay attention to these factors. Politics - Risks of potential law competitors Economic Bargain Bargain ing The ing power competition of power Globalizat existing firms ion of of supplier buyers s Threats of substitute products Culture - Society technology demographi c Figure 1: External economic environment Political-legal environment : Political and legal factors such as institutions, laws and policies. can create opportunities or threats for businesses, organizations. This is the main interaction way between the Government & businesses.
Economic environment: The state of macro-economic environment determines the health, prosperity the economy, it always causes an impact on businesses and industries, it changes the ability to create value and income.