CAPSTONE PROJECT REPORT BUILDING THE BUSINESS STRATEGY OF THE JOINT STOCK COMMERCIAL BANK FOR FOREIGN TRADE OF VIETNAM- VINH BRANCH FROM 2011-2020 Le Thi Hue Anh Pham Thi Hoai Thu Tran Thanh Son Nguyen Van Phuc Class: GAMBA01.V03 NGHE AN 2011 STRATEGIC MANAGEMENT Group 1 - GAMBA01.V03 ACKNOWLEDGE First of all, we would like to thank the griggs university for providing us the opportunity to participate in this course, in which we have received many benefits in terms of knowledge, approach and methodology of doing research. We certify that the Capstone Project Report “Developing business strategy for Joint Stock Commercial Bank For Foreign Trade of Vietnam-Vinh Branch in the period of 2011 - 2020” is the result of our own work, data collection and analysis of the Capstone Project Report is correct. The Capstone Project Report does not coincide with any other Capstone Project Report. Our thanks are also sent to all our teachers in the griggs university for Master of business administration Programs for their enthusiastic supports.
We also wish to express our appreciation for the assistance of the university staffs; all our friends and classmates who helped us fulfill this Capstone Project Report. Vinh city, 31 May 03 2011 On behalf of group 1 Leader Le Thi Hue Anh 1 STRATEGIC MANAGEMENT Group 1 - GAMBA01. Necessity of the Capstone Project Report ………. Research objective and scope… …………………………………………………… 7 4.
Structure of the Capstone Project Report………………………. 7 CHAPTER I:THE RATIONALE FOR BUILDING THE BUSINESS STRATEGY OF ENTERPRISE 1. Definition and role of strategy …… ……………………………………. Roles of strategy….3 Strategy of business unit……….
Process of developing business strategy…………………………………………. Analysis of economy environment …………………………………………… 12 1. Analysis of business sector environment……………………………………… 14 1. Tools and techniques for strategic analysi…………………………….
22 CHAPTER II: ANALYSIS OF BUSINESS ENVIRONMENT OF VIETCOMBANK VINH BRANCH 2. Introduction of Vietcombank Vinh branch……………………………………. Establishment and development process, organization structure and operation 24 modal of Vietcombank Vinh branch 2. Vision and mission.
Organization structure, management mechanism and distribution network 25 2. ANALYSIS OF BUSINESS ENVIRONMENT FOR VIETCOMBANK VINH BRANCH… 27 2. Analysis of economic environment affecting Vietcombank Vinh branch……. Political and legal factor …….
Analysis of business sector environment for Vietcombank Vinh branch……. 33 2 STRATEGIC MANAGEMENT Group 1 - GAMBA01. Competition of existing competitors ………………………. Negotiation power of customers ………………………………….
Pressure of substitution products ………………………………………. Bargaining power of suppliers ……………………………………………. Threat of potentials competitors ……………………. SynCapstone Project Report of opportunities and challenges for 38 Vietcombank Vinh branch… 2.
Internal analysis of Vietcombank Vinh branch ………………………………. Analysis of marketing qualification ……………………………………….3 Analysis of financial capacity ……………………………………………….4 Analysis of technology capacity………………………………………….5 Analysis of management capacity …………………………………………. SynCapstone Project Report of strengths and weaknesses in Vietcombank 47 Vinh branch…. CHAPTER III: SELECTION OF STRATEGY AND STRATEGIC MEASURES AT VIETCOMBANK VINH BRANCH IN PERIOD OF 2011-2020 3.
Development orientation of Vietcombank in period of 2011-2020………. Strategies selection of Vietcombank Vinh in the period of 2011-2020…………… 50 3. SWOT matrix and formulation of strategic plans ……. QSPM-Select SO plans …… ……………….
Content of the choice strategic.3 Solution of implementing strategic…………………. Solutions of organization and human resources …………………………… 62 3. Solution of the healthy in financial situation ………………………………. Solution of information technology applications.
Cultural Vietcombank Building …………………………………………… 64 CONCLUSION 66 REFERENCES 67 3 STRATEGIC MANAGEMENT Group 1 - GAMBA01.V03 LIST FIGURE Figure 1.1:Strategic planning process…………………………………………… ……….2: Competitive capacity model of M.4 QSMP matrix ……… …………………………………………………………… Figure 2.1 : Operation model of Vietcombank Vinh branch LIST TABLE Table 2.1: GDP Growing rate and GDP per capita of Vietnam in the period 1990-2010 28 Table 2.2: GDP Growing rate of Nghe An Province in the past years……………….3 Consumming price index in recent months ……………………………….4 Capital mobilization chart in Nghe An province until 31 december, 2010 34 Table 2.5 outstanding mobilization chart in Nghe An province until 31 december, 2010 35 Table 2.6: Assess and compare capacity of competitors ……………………………….7: EFE Matrix of Vietcombank Vinh branch ……………………………….8: Operating result of Vietcombank Vinh branch …………………………….9: Amount of banks chart in the area Nghe An province until 31 december, 44 2010 Table 2.10: Import, export payment revenus chart of banks in the area Nghe An 45 province until 31 december, 2010 Table 2.11: IFE matrix of Vietcombank Vinh branch 48 Table 3.1: SWOT matrix of Vietcombank Vinh branch …………………………….2 : Internal and External factor Matrix (IE)………………………………… 52 Table 3.3: QSPM for S-O group ……. 53 4 STRATEGIC MANAGEMENT Group 1 - GAMBA01.V03 LIST ABBREVIATION IFE : Internal Factor Evaluation Matrix EFE : External Factor Evaluation Matrix SWTO : Strengths, Weaknesses, Opportunities, and Threats QSPM : The Quantitative Strategic Planning Matrix ASEAN : Association of Southeast Asian Nations AFTA : Asean Free Trade Area APEC : Asia-Pacific Economic Cooperation WTO : world trade organization GDP : Gross domestic product SB : State Bank of Vietnam IMF : International Monetary Fund CPI : Consumer price index BIDV : Bank for investment and development of Vietnam VIB : Vietnam International Commercial Joint Stock Bank VIETINBANK : Vietnam joint stock commercial bank for industry and trade VP BANK : Vietnam Joint Stock Commercial Bank for Private Enterprises VIETCOMBANK : Joint stock commercial bank for foreign trade of Vietnam L/C : Letter of Credit EFTPOS : Electronic Transfer at Point of Sale ATM : Automatic Teller Machine 5 STRATEGIC MANAGEMENT Group 1 - GAMBA01. Necessity of the Capstone Project Report The banking sector is one of sectors affected most obviously and powerfully by the trend of current international economic integration. Integration could bring more development opportunities but also bring many risks, threats and challenges for the banking sector.
The banking is a specific business sector and has a special importance in the process of national economic development but also is very sensitive to the national and international changes of economic, political and social environment. Therefore, the activities of commercial banks are always concerned and controlled closely. Besides, internal competitive pressure has been increasingly severe and the economic integration process of the country has happened deeply and widely. Requirement for each bank is to build their own strategies to operate stably and develop on the basis of taking advantage of opportunities and limiting challenges in the integration process.
To overcome challenges and make good use of the opportunities, thereby improve their competitive position in the market, the bank must make appropriate business strategy for each period, each stage of the development, in accordance with global trend on the principle of balancing national interest with bank interest. In such general context, Joint Stock Commercial Bank for Foreign Trade of Vietnam, Vinh Branch has tried effort to assert its position together with improving competitiveness in exciting financial bank market of Nghe An Province. 6 STRATEGIC MANAGEMENT Group 1 - GAMBA01.V03 Originating from this practice, the research team chose the Capstone Project Report: "Building the business strategy of the Joint Stock Commercial Bank For Foreign Trade of Vietnam-Vinh Branch from 2011 to 2020” in the hope of improving business efficiency and put up Vietcombank Vinh branch a new position in Vietcombank system in particular and Vietnam's banking system in general. Research purposes The purposes of the Capstone Project Report is to develop business strategy for Joint Stock Commercial Bank For Foreign Trade of Vietnam-Vinh Branch from 2011 to 2020 and suggest implementation measure; and with their own smart business strategy, Vietcombank Vinh branch will improve competitive position, market share for capital mobilization, payment services, card services.
make an important contribution to the economic development of the province in the renovation period. Research objective and scope Research objective is Vietcombank Vinh branch Research scope of the Capstone Project Report restricts to strategic issues and strategic management of the banking sector. Analysis data is primarily from Vietcombank Vinh branch. Therefore, the Capstone Project Report is only applied for this branch.
Research method - The rationale for the Capstone Project Report research is the subjects theory: Strategic Management, Marketing Management, production administration. - The approach: the Capstone Project Report combines approaches such as individualized approach, historical approach, the approach of quantitative and qualitative. - Method of data processing and analysis: The Capstone Project Report uses method of descriptive statistics, analysis, and synCapstone Project Report when 7 STRATEGIC MANAGEMENT Group 1 - GAMBA01.V03 evaluating the business operation results of Vietcombank Vinh branch: Use analysis matrix EFE, IFE, SWOT, QSPM. - Information sources: The Capstone Project Report uses secondary information from newspapers, Internet and reports of Vietcombank Vinh branch, the State Bank of Nghe An Province.
Structure of the Capstone Project Report: Apart from introduction, conclusion, reference, and appendix, structure of the Capstone Project Report consists of three chapters: Chapter I: The rationale for building the business strategy of enterprise Chapter II: Analyzing the business environment of Vietcombank Vinh branch Chapter III: Selection of strategies and strategies measures at Vietcombank Vinh branch in the period of 2011-2020. 8 STRATEGIC MANAGEMENT Group 1 - GAMBA01.V03 CHAPTER I THE RATIONALE FOR BUILDING THE BUSINESS STRATEGY OF ENTERPRISE 1.1 Definition and role of strategy 1.1 Definition In the opinion, business strategy is an art, then: - Alain Threlart states that "Strategy is the art that enterprises use against competitiveness and to success" - M. Porter believes that "Strategy is the art of building a solid competitive advantage to defense". Thus, these authors considered business strategy as an art to compete in the market and business development.
In terms of management standpoint and category, business strategy is a plan, then: - G. Arlleret states that "Strategy is the determination of ways and means to achieve the objectives defined by the policies" - D. Bizrell and the authors believe that "Strategy is as a general plan leading or directing enterprise to the desired target. It is the basis to establish the policies and operational measures" - Gluecl believes that "Strategy is a consistent, comprehensive and integrated plan designed to ensure that the enterprise’s objectives will be performed" In the opinion of combining consistence: 9 STRATEGIC MANAGEMENT Group 1 - GAMBA01.V03 - "Business strategy is the art of coordinating activities and controlling them to achieve long-term targets of enterprise" - Chandler considered that strategy involves defining the basic long-term targets of enterprise, choose way or the process of action, allocate the necessary resources and implement those targets.
In the enterprise, "Strategy is the art which designs and organize proposals to achieve long term targets of the business and have a relationship with the changes of the business and competitiveness environment" 1.2 Roles of strategy First:business strategy helps enterprise to identify the purpose and its direction as a basis, a guideline for all business and production activities of enterprise; Secondly:Business strategy helps businesses to seize and take advantage of business opportunities, and have proactive measures to overcome the risks and threats in the competitive market; Thirdly: Business strategy contributes to improve the efficiency of using resources, enhance the competitive position of enterprises to ensure the sustainable development of enterprises; Fourthly: Business strategy creates a solid basis for working out decisions and policies on business production in line with market fluctuations. Strategy of business unit a) Cost leadership strategy Cost leadership strategy is collection of actions aiming at providing products or services that have the characteristics accepted by customers with the lowest cost in relation to all competitors. The purpose of cost leadership strategy is to do better than competitors, so that the cost of producing and supplying any product or service is lower than that of competitors. b) Differentiation strategy 10 STRATEGIC MANAGEMENT Group 1 - GAMBA01.V03 Target of general differentiation strategy is to gain the competitive advantage of company by producing products (goods or services) that customers can realize their unique feature in terms of some important characteristics.
Company makes a difference to satisfy customer demand in a way that competitors cannot do with requirement of price increases (at significant price above the industry average).