CAPSTONE PROJECT REPORT PLANNING BUSINESS STRATEGY FOR BANK FOR INVESTMENT AND DEVELOPMENT OF VIETNAM - EAST HANOI BRANCH UP TO YEAR 2015 TABLE OF CONTENTS LIST OF ABBREVIATIONS.1 LIST OF TABLES.2 LIST OF FIGURES. 4 CHAPTER I: THEORETICAL BACKGROUND OF BUSINESS STRATEGIES OF ENTERPRISES.1 Business strategies of enterprises.2 Strategies of business unit.1 Focus growth strategy.2 Competitive strategies of M.3 Competitive strategies for business units on the basis of position of market share in the market.2 Process of strategies establishment.1 Specify business mission.2 External environment evaluation.3 Evaluate internal situation of enterprise.4 Strategy analysis and selection.3 Tools for business strategy establishment.1 Stage of information collection and systematization.2 Matrix of Competitive Images.4 Characteristics of the banking sector affect the management strategy.1 Potential demand service bank ranking.2 Management of State Bank of Vietnam.3 Growth level of relevant and auxiliary sectors.5 Banking Internal factors.21 CHAPTER II: REAL SITUATION OF BUSINESS ENVIRONEMENT OF BANK FOR INVESTMENT AND DEVELOPMENT – EAST HANOI BRANCH.1 Overview of Bank for Investment and Development – East Hanoi Branch (BIDV EHN).1 Foundation and development.2 Analysis of external factors affecting activities of BIDV East Hanoi.2 Cultural and social environment.3 Legal, governmental and political environment.3 Opportunities and challenges evaluation.4 Matrix of external factors evaluation (EFE).5 Matrix of competitive images.3 Analysis of BIDV East Hanoi’s internal factors.8 Strengths and weaknesses evaluation.9 Matrix of internal factors (IFE).4 The necessity of establishing business strategies for BIDV East Hanoi.60 CHAPTER III: BUSINESS STRATEGY OF BIDV EAST HANOI TILL YEAR 2015.1 Business objectives of BIDV East Hanoi till 2015.2 Specific objectives till 2015.2 Feasible business strategies analysis.1 SWOC matrix analysis.2 Great strategic matrix analysis.3 Replaceable business strategies determination.4 Solutions to strategy implementation.1 Solutions to human resources development.1 Recruitment process and human resources attraction.2 Staff training and re-training.3 Policy for human resources management, salary and remuneration.4 Policy for human resources promotion and allocation.2 Marketing Mix implementation.2 Information and Technology Staff (IT).4 Organizational restructuring solutions.5 Build organizational culture.82 0 LIST OF ABBREVIATIONS SBV State Bank of Vietnam CB Commercial Bank JSCB Joint Stock Commercial Bank SOCBs State – owned Commercial Banks BIDV Ho Head office of Bank for Investment and Development of Vietnam Vietcombank Bank for Foreign Trade of Vietnam Vietinbank Vietnam Bank for Industry and Trade Agribank Vietnam Bank for Agriculture and Rural Development BIDV Bank for Investment and Development of Vietnam SACOMBANK Saigon Commercial Bank BIDV EHN Bank for Investment and Development – East HaNoi HCM City Ho Chi Minh City IT Information and Technology ATM Automatic Teller Machine BSMS Consulting information via mobile phone EFE External factors evaluation matrix IFE Internal factors evaluation matrix SWOC Strengths – weaknesses, opportunities - challenges SPACE Matrix of strategic position and evaluation of activity BCG Matrix of Boston Consulting Group IE Matrix of internal – external factors 1 LIST OF TABLES Table 2.1: Automatic Teller Machine (ATM) network.2: Report of business results.3: GDP Growth Speed.4: Import and export turn - over.5: Population scale and composition.6: Structure of overall means of payment period 2002 -2006.8: Matrix of competitive images. 68 2 LIST OF FIGURES Figure 1.1: Import and Export Turn – over. The necessity of the research topic According to the commitment with World Trade Organization (WTO) and bilateral agreements, Vietnam is obliged to remove all barriers in the field of trade and finance to foreign investors in domestic market.
Therefore, the enterprises of Vietnam in coming years will face many difficulties which arise from the strong competition when its market is open. By the end of 2011, when foreign banks are treated as Vietnam’s banks, it is true that Vietnam's banks shall face strong competition these competitors. At the present, banks are urgently being established, expanding its activity scale in order to establish certain positions for themselves. It is urgent for each bank to establish business strategy planning which is suitable with specific characteristics of each bank with an aim to survive, to develop and to increase competitiveness.
Originating from this real situation, our team selected the topic: "Planning business strategy for Bank for Investment and Development of Vietnam - East Hanoi Branch up to year 2015" as main assignment of our team. Subject and scope of the research - The subject of the research is business strategies of Bank for Investment and Development of Vietnam – East Hanoi Branch - The scope of the research is business activities of Bank for Investment and Development of Vietnam - East Hanoi Branch, in comparison with the business activities of other competitors in the banking sector, including: Bank for Foreign Trade 4 of Vietnam (Vietcombank), Vietnam Bank for Industry and Trade (Vietinbank), Vietnam Bank for Agriculture and Rural Development (Agribank). Aims and objectives of the research The purpose of the research is to plan business strategy for Bank for Investment and Development of Vietnam - East Hanoi Branch up to 2015 and propose solutions for implementing this strategy so that Bank for Investment and Development of Vietnam - East Hanoi Branch can become one of the strong banks in the BIDV system. Aims of the research - Generalize theoretical background of business strategy, process of strategy development, tools for building strategy, the characteristics of the banking sector affecting strategy management.
- Analyze external factors, internal factors find the strengths - weaknesses, opportunities - challenges of Bank for Investment and Development of Vietnam - East Hanoi Branch. - Define business goals on the basis of strengths - weaknesses, opportunities - challenges, plan business strategies and propose solutions to implement such strategies. Methodology - Sources of information: The research used secondary source of information coming from books, banking magazines, website (asset.), reports which have been released by banks as Vietcombank, Vietinbank, Agribank. 5 - Approached methodologies: The research used synthetically methodologies.
When analyzing the real situation of business activities of Bank for Investment and Development of Vietnam - East Hanoi Branch, the researcher used individual approach methodology, when analyzing the internal and external factors which affect business activities of Bank for Investment and Development of Vietnam - East Hanoi Branch, the researcher used history access methodology, combined approach of quantitative methodology and qualitative methodology. - Method of information processing: The capstone project used descriptive statistics when analyzing the results of business activities of Bank for Investment and Development of Vietnam - East Hanoi Branch. Method of combination among subjects: Strategic Management, Human Resources Management, Marketing. Significance of the research The research has based on the theories which are related to strategic management and applied these theories to analyze the strengths - weaknesses, opportunities - challenges of Bank for Investment and Development of Vietnam - East Hanoi Branch.
Since then, plan business strategies and propose solutions to implement these strategies, especially in the context of Vietnam's accession to WTO and full implementation of commitment in respect of the banking sector in the year 2015. 6 CHAPTER I: THEORETICAL BACKGROUND OF BUSINESS STRATEGIES OF ENTERPRISES 1.1 Business strategies of enterprises 1.1 Definition “Business strategy of an enterprise is a general action program towards the implementation of the objectives of the enterprise" Business strategy does not aim to specifically outline how to be able to achieve these objective because it is the duty of a numerous support programs, and other strategic functions. It just creates the frame of mental guide to make an action. * Business strategy typically is defined according to three levels: + Strategy at the company level: Define and outline clearly aims, objectives and business activities of the company, generate basic policies and plans to achieve the aims of the company.
+ Strategy at business level: Identify the selection for the product or specific form of the market for business activity within the company, determine how each businesses unit will try to complete its objectives to contribute to the completion of the company's overall objectives. + Strategy at functional level: Identify solutions, plans for each business field. * In the concept of business strategy, there are some concepts that are closely related: + Mission report: Report on the purpose of long – term serve mission which expresses the company's business mission with products and services that organization 7 provides to customers, distinguish this organization with the others. It describes the values and priorities of the organization, identifies general orientation for development of the organization.
+ The long - term goals: are the determined achievements that an organization tries to achieve when pursuing its main task. Long-term goal is more than a year. It must be challenging, measurable, appropriate, reasonable and clear. It is set for the whole company and for each part of the company.
The importance of long-term goals is the period of strategy establishment. + Annual targets: are the targets that the organization must achieve to reach long - term goals. It is given in the form of achievements in management, marketing, finance / accounting, production / management, development research and information system. The importance of annual targets is the period of strategy implementation.
+ Policies: are the means to achieve set objectives, the instructions for making decisions and implementing repeated situations or periodical situations. The importance of policies is in the period of policies implementation. + Opportunities and Challenges: are the effects of externalfactors which is beyond the control of the organization and can be advantageous or harmful to the organization. + Strengths and weaknesses: are the effects of internal elements of the organization which is within the control of the organization.
It is defined in the relation to competitors.2 Strategies of business unit 1.1 Focus growth strategy Each strategy of the company has been applied for business unit level. However, 8 at the business unit level, it must first pay attention to the focus growth strategy since the focus objects of this strategy are products and markets. This focus group strategy is primarily to improve the competitive position of the company with existing products on the basis of increasing marketing activities or changing the existing marketing strategy without changing any product. This type has three main strategies: + Market penetration: Search increasing market share for present products and services in the existing market thanks to marketing efforts.
+ Market development: Bring available products and services to new areas. + Product Development: Increase sales by improvement, innovation available products and services.2 Competitive strategies of M.Porter’s view Michael E. Poter - professor at Harvard University gave basic competitive strategies in his work "Competitive strategy": 1. Low cost leading strategy This strategy creates competitiveness in two ways: - Fix a lower price than competitors in the sector in order to attract target customers who are sensitive to price to increase the total revenue.
This strategy is suitable with large scale business units and is able to reduce costs in operation process. - Curb not to sale off entirely, to be content with the current market share and use the lower cost to gain higher profits per unit of product which is sold. Different strategy Business unit will focus on creating the markedly different kinds of products and 9 marketing programs in comparison with its competitors to reach the position of a leading sector. Since then fix prices higher than other conventional products, increase sales by attracting customers who like outstanding brand such as a unique taste, the ability to reserve for available distribution to customers in anywhere, scientific applications in the design and implementation, optimum service, high quality, reputation and distinctive features.
Focus on key strategy According to this strategy, the business units pay their attention to the narrow segment of the entire market. These segment can be defined by geographic area, products and customers objects. These attractive segments shall be selected as places where there are no competitors or rivals for not meeting the needs and satisfactions of customers.3 Competitive strategies for business units on the basis of position of market share in the market Although being at the same company but each business unit has its different position in the market 1. Business units that lead the market.