CAPSTONE PROJECT REPORT BUILDING BUSINESS STRATEGY OF AN BINH COMMERCIAL JOINT STOCK BANK FOR THE PERIOD 2010 – 2015 GRIGGS UNIVERSITY GLOBAL ADVANCED MASTER OF BUSINESS ADMINISTRATION PROGRAM GRIGGS UNIVERSITY GLOBAL ADVANCED MASTER OF BUSINESS ADMINISTRATION PROGRAM CAPSTONE PROJECT REPORT BUILDING BUSINESS STRATEGY OF AN BINH COMMERCIAL JOINT STOCK BANK FOR THE PERIOD 2010-2015 Class: GeMBA01. 5 Students' name: Doan Thi Dzung Thai Thi Yen Pham Anh Van Le Duc Dinh Le Thi Huong HANOI 2009 2 ACKNOWLEDGEMENT First of all, the group of authors would like to express our deep gratitude to: The lecturers of the MBA training program of United State Griggs University - who provide knowledge; Managers and staff of the Centre for Educational Technology and Career Development - Hanoi National University(ETC)-who are enthusiastic and indispensable helpers in the process of learning; The authors would also like to thank the Managers and staff of An binh Joint Stock Commercial bank- who are main supporters in the process of studying about the situation of the enterprise; And especially, Board of Management of the Electricity of Vietnam (EVN)- who create the opportunity, finance, provide the support of time so that members of the group can join and complete the training course. Finally, we would like to send the most sincere thanks to families, colleagues and classmates -who are the solid basis of spirit for members of the group during the participation of Griggs University MBA program and the process of completing major assignment Capstone Project "Building business strategy of An Binh Commercial Joint Stock Bank for the period 2010-2015" 3 TABLE OF CONTENTS ACKNOWLEDGEMENT.3 LIST OF ABBREVIATIONS.6 LIST OF TABLES. 8 LIST OF FIGURES, GRAPHS.10 Chapter 1 BASIC ARGUMENTS ON BUSINESS STRATEGY OF THE ENTERPRISE.
Overview of strategy and business strategy.1 Definition of strategy.3 Process of strategic management. Vision, mission and core value.1 Analysis of the external environment. Analysis of the internal environment of the enterprise.3 Summary of SWOT analysis.4 Selection and construction of business strategy.1 Business strategies in practice.2 Construction of main objectives of the strategy. Selection of strategy.4 Solutions of strategy implementation.
Assessment of strategies and implementation measures. Some issues on building business strategy for commercial banks.36 CHAPTER 2 STATUS OF BUSINESS STRATEGY OF AN BINH COMMERCIAL JOINT STOCK BANK. Overview of An Binh Commercial Joint Stock Bank.2 Establishment and development process of ABBANK.3 Milestones of chartered capital growth. Organizational structure of ABBANK.5 Products and services of ABBANK.
Analyze and evaluate the situation and business performance of ABBANK. Business results of ABBANK.2 Capital mobilization and lending.4 Development of Information Technology.5 Development of networking.6 Operation of international payment. Development of card system. Analyze and evaluate the current business strategy of ABBANK.1 Current business strategy of ABBank.2 Evaluation on current business strategy of ABBANK.
Analysis on impact factors from the external business environment.1 Political and legal environment.3 Cultural and social environment.5 Analysis on factors of the banking sector of Vietnam.1 Threat from new entrants.2 Threat of substitutes.3 The bargaining power of Buyers.4 The bargaining power of supplier.5 Analysis of competitors. Analysis of internal factors of ABBANK.1 Factors of technology, product and service quality.2 Factor of customer service.6 Research and development (R&D).8 Leadership and management. Identify strengths & weaknesses and opportunities & challenges of ABBANK.88 CHAPTER 3 SUGGESTIONS AND SOLUTIONS TO BUILD THE BUSINESS STRATEGY OF ABBANK FOR THE PERIOD 2010-2015.1 Summary of analysis results in Chapter 2.2 Summary of SWOT Analysis.3 Propose business strategies for ABBank.4 Select the business strategy for ABBANK.5 Business strategy of ABBANK in the period 2010-2015:.1 Mission of ABBANK.2 Vision of ABBANK.3 Core values of ABBANK.4 Business strategy of ABBANK.6 Solutions on implementing business strategies.1 Solution of technology:.2 Solutions on management of human resources.3 Solutions on marketing.4 Solutions on improving financial capacity.5 Solutions on improving the effectiveness of risk management.6 Solutions on improving the efficiency of executive management. Conditions on strategy implementation.8 Route for implementation of strategic solutions.107 5 LIST OF ABBREVIATIONS ABBANK An binh bank- An Binh Joint Stock Commercial Bank ATM Automatic Transfer machine CITAD Centre for Information Technology and Development GDP Gross Domestic Product ISO International Standard Organization POS Point of Service MIS Management information system SMS Short Massage Service USD United State Dollar WTO World Trade Organization VND Vietnam dong Vietinbank Vietnam Joint Stock Commercial Bank for Industry and Trade BIDV Bank for Investment & Development of Vietnam VCB,Vietcombank Bank for Foreign Trade of Vietnam Agribank Bank for Agriculture and Rural Development of Vietnam TCB, Techcombank Technological and Commercial Joint- stock Bank HSBC Hongkong Shanghai Bank Corporate SOCBs State-owned commercial banks JSCBs Joint Stock Commercial Banks ACB Asia Commercial Bank STB, Sacombank Sai gon Thuong tin commercial Joint stock bank MB Military Joint Stock Bank EAB Eastern Asia Bank Habubank Hanoi Building Commercial Joint Stock Bank VP bank Viet nam commercial joint stock bank for private enterprises VIB Viet nam International Bank ANZ Australia and New Zeland Bank SBV State Bank of Viet name 7 LIST OF TABLES Table 1.1 SWOT Matrix Table 1.
Model GREAT Table 2.1 Chartered capital of ABBANK Table 2.2 Several financial indicators of ABBANK 2006-2008 Table 2.3 Income Statement of ABBANK 2006-2008 Table 2.4 Capital mobilization of ABBANK 2006-2008 Table 2.5 Outstanding loans of ABBANK in 2006-2008 Table 2.6 List of some companies contributed by ABBANK Table 2.7 Demand of investment loans for power works of EVN in 2010- 2015 Table 2.8 Number of banks in 1991-2008 Table 2.9 Basic financial indicators of competitors in 2008 Table 2.10 Structure of ABBANK human resources based on qualifications Table 2.11 Evaluation the surpassing capability of ABBANK Table 2.12 Evaluate and compare strengths and core capacity of ABBANK Table 3.1 Analysis of SWOT matrix Table 3.2 Selecting ABBANK's strategy through GREAT model Table 3. 3 Specific financial objectives of ABBANK 2010-2015 8 LIST OF FIGURES, GRAPHS Figure 1.1 The strategic management process Figure 1.2: Model of five competitive forces created by M.1 Organization chart of ABBANK Figure 2.2 Chart of GDP growth rate of Vietnam Figure 2.3 Chart on comparison of Cash/M2 ratio Figure 2.4 Market share of bank mobilization and lending in 2000-2008 Figure 2.5 Comparison on branches & transaction offices of commercial banks in 2008 Figure 2.6 Chart on equity of commercial joint stock banks in 2008 Figure 2.7 Chart of comparison of total assets of commercial banks in 2008 Figure 2.8 Chart of NPL of commercial banks Figure 2.9: Chart of ROA of commercial banks in 2008 Figure 2.10 Chart of ROE of commercial banks in 2008 9 INTRODUCTION 1. Necessity and meaning of the theme With its open-door economic policy and that Vietnam officially entered the World Trade Organization (WTO), these have created new opportunities and challenges for the whole economy as well as Vietnamese enterprises. Under WTO committments, Vietnam will fully open the financial and banking field in 2011.
The level of competition in the banking sector is forecast to become harsher and harsher as there will be more 100% foreign invested banks established to operate in Vietnam. A fact is set forth that Vietnamese banks are, at present, taking the advantage of opportunities of the integration of the international economy and preparing their luggages to cope with those challenges. With the banking sector, in the recent period, to meet the demand of capital for economic development, to satisfy client requirements on financial and banking service products, Vietnamese banks have ceaselessly developed themselves in scale, network expansion, non-stop improvement, increasing the quality of service products at the same time built up more new service products. These banks have been competing and accepted the competition for existence and development.
Especially, in the period from late 2007 and early 2008 to present, either the world or Viet nam did experience complicated developments and severe consequences of the global financial crisis: World economic growth slowed down; many developed countries such as the United State of America, Japan and EU member nations suffered from economic recession; there were a drop in global trade and world-wide stock markets, an abnormal fluctuation in global prices; and bankruptcy, liquidation or merger of series of big financial institutions in the world. A series of banks in which there are also such American big banks as Lehman Brothers, CIT Group … which have already applied their petitions for bankruptcy protection. Economies in the world have got to shoulder and confront to overcome the crisis. Because of wide openness of the economy, Vietnam could not avoid impact of complex developments of the world economic environment.
10 Domestically, the macroeconomics had to face a lot of adverse factors such as increasing inflation and trade deficit, the slowdown in economic growth and difficulties in manufacturing and operations of enterprises. When the economy of Vietnam is affected by the world financial crisis, the banking sector is also affected hardly. In the context of market fluctuations, difficulties and risks, Vietnamese banks in general need to admit and totally assess their activities, compare with targets and strategies set forth, analyze to find out the cause to explain the success or failure in each operating field. On that basis, these banks will have to build their own business strategy so that they are able to catch opportunities, overcome challenges, develop their strengths, reduce weaknesses, prevent risks during the process of operation to target growth and development, increase the value for stakeholders and meet the demand of clients better and better.
An Binh Commercial Joint Stock Bank (ABBANK), which was transformed from a rural bank into the urban bank by the end of 2005, is of the group of commercial joint stock banks. It experienced in 2008 with difficulties and challenges as its operating results did not meet the expectation of shareholders. And the bank is preparing its development strategy for the next stage. In addition, among members of the group there are shareholders of the bank and also work for the Electricity of Vietnam (EVN) – strategic shareholders of An Binh Bank.
With the wish to apply knowledge during the process of the training program of Master of Business Administration (MBA) at Griggs University in practice, after discussions and exchanges, members of the group 5 have agreed to choose the theme: Building the business strategy of An Binh Commercial Joint Stock Bank for the period 2010-2015. Through analyzing strengths and weaknesses of ABBANK, opportunities and threats from the external business environment, proposals are raised to build the business strategy for the bank. It is hoped that research results of the group will be useful and meaningful to ABBANK. Study objectives: 11 - Study and systematize basic arguments on strategic management to build the business strategy for ABBANK; - Analyze and evaluate the operating situation and business environment of ABBANK, from that select the business strategy for the bank in the 5-future-year period.
- Propose solutions to implement the business strategy as selected. Scope of study: - The study object is An Binh Commercial Joint Stock Bank - Scope of study: It is limited in the banking sector of Vietnam, characteristics & the operational situation of ABBank in recent years and some bank competitors 4. Study method: - The theme is to mainly apply the method of comprehensive analysis, statistics and comparison. - Method of data collection: Based on real materials of ABBank, there are also data references supported by documents of the State Bank of Vietnam(SBV), several commercial banks and others.
Structure of the theme It includes the followings - Introduction - Chapter 1: Basis of arguments on business strategy - Chapter 2: Situation analysis of An Binh Commercial Joint Stock Bank - Chapter 3: Propose solutions and give recommendations to build the business strategy for ABBANK - Conclusion 12 Chapter 1 BASIC ARGUMENTS ON BUSINESS STRATEGY OF THE ENTERPRISE 1. Overview of strategy and business strategy 1.1 Definition of strategy The definition of strategy was born in the Greek ancient time. This term naturally has the far-reaching source in the military field. The strategy is generally thought to be the leading art of the general staff in order to obtain the victory in a war.