2011 | Global advanced MBA Program (Class: GaMBA01-X0510) | Group No.06 CAPSTONE PROJECT REPORT STRATEGY FOMULATION FOR VIETNAM - RUSSIA JOINT VENTURE BANK IN THE PERIOD 2011 - 2015 NGUYEN THI BICH HONG LE THI KIM CHUNG TRAN QUOC TUAN NGUYEN HUU HOANG Class: GaMBA01-X0510 Hanoi, 2011 MBA Capstone Project Report – Griggs University & International Academy GRIGGS UNIVERSITY GLOBALADVANCEDMASTEROFBUSINESSADMINISTRATIONPROGRAM Capstone project report STRATEGY FOMULATION FOR VIETNAM - RUSSIA JOINT VENTURE BANK IN THE PERIOD 2011 - 2015 Group No.: 06 Student's name: NGUYEN THI BICH HONG LE THI KIM CHUNG TRAN QUOC TUAN NGUYEN HUU HOANG Class: GaMBA01-X0510 Hanoi, 2011 2 MBA Capstone Project Report – Griggs University & International Academy REASSURE WORDS Our group reassures this capstone project is the result of our scientific and independent research. Data and result mentioned in this project is honest and clear origins. ON BEHALF OF GROUP 6 Nguyen Thi Bich Hong 3 MBA Capstone Project Report – Griggs University & International Academy THANK YOU LETTER To finish and complete this project, our group 6 would like to thank to our teachers, friends and colleagues working at VRB, who have spent more time exchanging documents and provide relevant information ON BEHALF OF GROUP 6 Nguyen Thi Bich Hong 4 MBA Capstone Project Report – Griggs University & International Academy LIST OF ABBREVIATION VRB : Vietnam – Russia Joint Venture Bank WTO : World Trade Organization NPL : Non-performing loans IFE : Internal factor evaluation CPM : Competition profile matrix EFE : External factor evaluation QSPM : Quantified strategic planning matrix SWOT : Strengths, Weaknesses, Opportunities, Threats 5 MBA Capstone Project Report – Griggs University & International Academy LIST OF TABLES AND DIAGRAMS Diagram I.1: Strategic management process.2: Process of strategy fomulation.3: Specific steps of strategy fomulation.1: External factor evaluation matrix ( EFE ).4: Five forces model by Michael Porter. Competition profile matrix.
Internal factor evaluation matrix (IFE)…………………. VRB’s organizational structure.1: VRB’s business result in the period from 2008 to 2010…………. VRB’s external factor evaluation matrix. VRB’s competition profile matrix.1 VRB’s total assets growth through years…………………………….2 VRB’s capital mobilization through years.3 VRB’s growth of equity and charter capital………………………….
VRB’s internal factors evaluation (IFE matrix). SWOT matrix to combine strategy. Quantified strategic planning matrix of replaceable strategy of VRB (QSPM). Estimated balance sheet.
Estimated income statement.56 6 MBA Capstone Project Report – Griggs University & International Academy INDEX INTRODUCTION. The necessity of the topic. Aim of the project. Object and scope of the project.
Contribution of the project.2 CHAPTER I: GENERAL THEORY OF BUSINESS STRATEGY FOMULATION. Definition and role of business strategy. Business strategy definition and classification. The role of business strategy.
Strategic management process. Process of strategy fomulation. Vision, mission, strategic target. Business environment analysis.General business environment.
Political, legal factor. Socio-cultural factor.9 7 MBA Capstone Project Report – Griggs University & International Academy 2. Synthesis of external environment analysis - External factor evaluation matrix (EFE). Analysis of industrial environment.
Threat of substitute products. Synthesis evaluation of the competition in the industry - Competition profile matrix (CPM). Internal factors analysis. Human resources and organizational structure.
Research and development.Evaluate the internal factor of the enterprise – Internal factor evaluation matrix (IFE). Selecting the strategy. Matrix to combine strategy (SWOT matrix). Matrix to select strategy - Quantified strategic planning matrix (QSPM matrix).17 CHAPTER II: ANALYSIS THE BUSINESS SITUATION OF VIETNAM - RUSSIA JOINT VENTURE BANK.
Overview of Vietnam - Russia Joint Venture Bank. Establishment and development process.20 8 MBA Capstone Project Report – Griggs University & International Academy 3. Business result in the period 2008-2010…………………………………………. Analysis of business environment and the internal factors of Vietnam - Russia Joint Venture bank……………………………………………………………….
Analysis of business environment……………………………………………….1 General environment analysis…………………………………………………. Socio-economic factor……………………………………………………………. Evaluation on the analysis of external environment (using EFE matrix)……………………………………………………………………………………. Industrial environment analysis………………………………………….
Pressure from customers…………………………………………………………. Threat of substitutes……………………………………………………… ………. Pressure from suppliers……………………………………………………………30 1. Competition profile matrix.
Internal factor analysis. Human resources and organization structure……………………………………. Research and development……………………………………………………. Synthesis evaluation of analysis of VRB’s internal factor (IFE matrix)….
Evaluation on VRB’s current business strategy……………………………. Limitations………………………………………………………………………41 9 MBA Capstone Project Report – Griggs University & International Academy CHAPTER III. SELECTION OF BUSINESS STRATEGY FOR VIETNAM - RUSSIA JOINT VENTURE BANK IN 2011-2015, SOLUTIONS AND RECOMMENDATIONS…………………………………………………………42 I. Foundation for strategy formation……………………………………………….
Long-term goals…………………………………………………………………42 3. Potential growth of banking sector……………………………………………. Propose strategy for Vietnam - Russia Joint Venture bank…………………. Taking advantage of opportunities…………………………………………….
Propose business strategy for VRB. Strategy for market penetration. Strategy of products differentiation. Strategy for strengthening the risk management.
Select strategy - Quantified strategic planning matrix (QSPM). Solution for business strategy implementation……………………………. Solution for increasing capital resources. Solutions for expand operations and distribution channels.
Risk management and internal audit………………………………………. Management and controlling………………………………………………. Petition…………………………………………………………………………63 10 MBA Capstone Project Report – Griggs University & International Academy 1. With the Government and Statebank of Vietnam……………………………….
With two parents bank of BIDV and VTB………………………………. Estimated balance sheet and income statement in 2011 – 2015………….67 CONCLUSION……………………………………………………………………69 11 MBA Capstone Project Report – Griggs University & International Academy INTRODUCTION 1. The necessity of the topic International economic integration is a common and inevitable tendency of every economy and every business sector of the economy. Integration in financial and banking sector is participating in the playing field of financial markets such as credit relations, currencies and other activities.
This integration makes the business environment of the banking industry fiercely competitive, which requires banks to innovate and develop in all aspects such as financial capability, technology, risk management, human resources, branding. So, to formulate appropriate business strategies with the characteristics of each bank to survive and thrive in conditions of tough competition is an urgent task for every bank. In Vietnam - Russia Joint Venture Bank, although the business strategy formulation has been developed, but so far business strategy in 2011-2015 has been only mentioned the development target. The analysis of business environment and internal analysis have not been mentioned.
Starting from the theoretical and practical argument above, with the desire to build an appropriate strategy for the development of Vietnam - Russia Joint Venture Bank, our group has agreed to select the topic "Strategy formulation for Vietnam - Russia Joint Venture Bank in the period from 2011 to 2015" as the topic for our capstone project of Master of Business Administration Program by Griggs University and ETC center of Hanoi National University. Aim of the capstone project To analyze the real business situation of Vietnam-Russia Joint Venture Bank, on this basis, propose appropriate business strategies in the period 2011-2015. Object and scope of the project: - Study object: Vietnam - Russia Joint Venture Bank - Scope of the study: To do research of the Vietnam - Russia Joint Venture Bank from the time established till now. Since then, by applying the basic theory of strategy fomulation, strategic management and basing on practical and competitive 1 MBA Capstone Project Report – Griggs University & International Academy trends in the banking sector, we offer some strategies and some solution to implement business strategy for Vietnam - Russia Joint Venture bank in the period from 2011 to 2015.
Research methodology: Some methodologies of research used in our capstone include: methodologies of analysis, synthesis, comparison, and inheritance. Contribution of the project: - Research and systematization of the basic theory of business strategy as a basis for developing strategies for Vietnam - Russia Joint Venture Bank. - Make analysis and assessment of the business situation of Vietnam - Russia Joint Venture Bank, some results and limitations in implementing the business strategy of Vietnam - Russia Joint Venture Bank. - Analyze the business environment, pointing out the opportunities and challenges for VRB from which find out solutions for choosing and fomulating business strategies in consistent with the business environment and internal factors of VRB to improve operational efficiency.
Project structure: Beside the introduction, table of contents, list of abbreviations, list of tables, figures, introduction, conclusion, list of references, appendix, the content of the project is divided into three chapters: Chapter I. General theory of business strategy fomulation Chapter II. Analysis the business situation of Vietnam - Russia Joint Venture bank ChapterIII: Selection of business strategy for Vietnam - Russia Joint Venture bank in 2011-2015, solutions and recommendations. 2 MBA Capstone Project Report – Griggs University & International Academy CHAPTER I: GENERAL THEORY OF BUSINESS STRATEGY FOMULATION I.
Definition and role of business strategy 1. Business strategy definition and classification The term of “business strategy” has appeared since there is competition in the market. This concept has been defined by many economists. Despite various ways of definition, business strategy includes all the contents related to how a business can compete successfully in the market.
Specifically, it includes all the strategic decisions about products choice to meet customer demands; how to gain competitive advantage over competitors, how to exploit or to create new opportunities. To compete successfully, their business strategy must meet some requirements as follows: - Enable to increase and gain competitive advantage over the competitor. When fomulating business strategy, these enterprises must fully exploit its competitive advantage. - Ensure the safety in business operation.
To meet this requirement, the enterprise must research and predict the business environment in the future. - Business strategy must clearly define the targets and the basic conditions to achieve these targets. - The strategy must combine the opportunities and maturity, and the enterprise must build provision strategy. The role of business strategy: Business strategy plays an important role in the sustainable development of enterprises.
A good business strategy can help the enterprises: - Identify goals in each stage of the business; help them clear their direction to reach their target. - Help the leader see the opportunities and challenges from the outside, the strengths and weaknesses of their businesses, to forecast future changes to find solution for adaptation to such difficulties. 3 MBA Capstone Project Report – Griggs University & International Academy - Help them to exploit and make use of their resources, to appropriately allocate resources, improve the efficiency of enterprises avoid risks and prevent the difficulties occured. - Increase coherence and consensus of the staff and the leadership in implementing the goals of the business.
Strategy classification: There are some ways of classifying the strategy according to different approaches such as the characteristics, the level or scale,. Under our capstone, we refer to classify business strategy on its nature. In this way, business strategy is divided into: - Functional strategy is the strategy aiming at improving the performance of each function in the company such as production, marketing, material management, research and development and human resources. - Corporate strategy towards the coordination of business strategies in relation to the expectations of the owners.
With a long-term prospects, corporate strategy refers to the different cases in which the industry is growing or declining. Strategic management process Strategic management is defined as "an artistic and scientific establishment, implementation and evaluation of decisions concerning many functions that allow an organization to achieve its target set out" (Strategic management – concepts and cases by Fred R. Strategic management process consists of three main stages of strategy fomulation, strategy implementation and strategy evaluation as follow: Diagram I.1: Strategic management process 4 MBA Capstone Project Report – Griggs University & International Academy Internal Process of Environment strategic Strategic goals Input management External Environment Strategy building Strategy implementation Company Active Corporation reactions Strategic strategy Competition strategy Company Structure management and control Acquisition, International Cooperation Management Starting a strategy business and restructure strategy strategy innovation achievements Strategy Competition strategy and average profit Feedback Source: Strategic management lecture slide-Griggs 1. Strategy fomulation: including the development of business tasks, identifying opportunities and risks from outside the organization, pointing out strengths and weaknesses of the enterprise, setting long term goals, formation of strategy, alternative strategies and select specific strategies to pursue.
Implementation strategy: is the process of putting the different strategies of the organization into practice. Measures to implement different levels of strategy are tied to the strategy.