Capstone project report 1 BUILD BUSINESS STRATEGIES FOR AGRIBANK HOANGMAI BRANCH IN THE PERIOD 2012 – 2015 ______________________ GROUP 8 - GaMBA X0410 1. Vu Thi Hanh 2. Dinh Tuong Van 3. Nguyen Doan Tam 4.
Nguyen Van Qui (1968) Ha Noi , 2011 Capstone project report 2 APPENDIX COVER PAGE 1 APPENDIX 2 LIST OF ABBREVIATIONS 4 INTRODUCTION 5 6SECTION I - FUNDAMENTAL THEORY ON BUSINESS STRATEGIES OF 6 ENTERPRISE.OVERVIEW OF BUSINESS STRATEGIES 6 1. BUSINESS STRATEGIES OF ENTERPRISE 6 2. SPECIFIC KINDS OF BUSINESS STRATEGIES 6 II. BUSINESS STRATEGY MANAGEMENT 7 III.
BUSINESS STRATEGY FORMULATION 7 1. BUSINESS VISION AND MISSION 7 2. THE EXTERNAL ASSESSMENT 7 3. THE INTERNAL ASSESSMENT 9 4.
STRATEGY ANALISIS AND CHOICE 9 4.3 LONG-TERM TARGETS 12 SECTION II: CURRENT SITUATION OF BUSINESS ACTIVITY OF 13 AGRIBANK HOANG MAI BRANCH. ANALYSE IMPACTING FACTORS. OVERVIEW OF AGRIBANK HOANG MAI BRANCH 13 1. ABOUT AGRIBANK HOANG MAI BRANCH 13 2.
SOME BASIC CRITERIA 15 II. CURRENT BUSINESS STATE OF AGRIBANK HOANG MAI BRANCH 16 1.MAJOR BUSINESS ACTIVITIES 16 1.3 INTERNATIONAL PAYMENT AND FOREIGN CURRENCY BUSINESS 18 1.4 DOMESTIC PAYMENT AND FUNDS 18 1.7 OTHER PRODUCTS/ SERVICES 18 Capstone project report 3 2.BUSINESS RESULTS OF AGRIBANK - HOANG MAI BRANCH 20 III. ANALYZE OPERATING CONDITIONS OF AGRIBANK HOANG MAI 21 BRANCH 1.ANALYSIS OF EXTERNAL FORCE 21 1.1 ANALYSIS OF GENERAL BUSSINESS ENVIRONMENT 21 1.2 BANKING BUSINESS ENVIRONMENT 25 1.3 OPPORTUNITIES AND THREATS 29 1.4 ASSESSMENT OF EXTERNAL FACTORS 31 1. ANALYSIS OF INTERNAL FORCE 34 2.1 HOANG MAI BRANCH’S RESOURCES 34 2.2 HOANG MAI BRANCH’S CAPACITY 37 2.3 STRENGTH AND WEAKNESS 40 2.4 ASSESSMENT OF INTERNAL ENVIRONMENT 41 SECTION III - BUSINESS STRATEGIES FOR AGRIBANK HOANG MAI 42 BRANCH PERIOD 2012 – 2015 I.
LONG-TERM BUSSINESS TARGETS IN THE PERIOD 2012 – 2015 43 III. STRATEGIC ANALISIS AND CHOICE 43 1.1 STRATEGIC ANALISIS WITH SWOT MATRIX 43 1.2 STRATEGIC ANALISIS WITH SPACE MATRIX 45 2.STRATEGIC EVALUATION AND SELECTION 48 3.1 CONTENT OF BUSINESS STRATEGY 49 3.1 HUMAN RESOURCE SOLUSIONS 52 4.4 FINANCIAL SOLUSIONS 53 IV.RECOMMENDATIONS 55 CONCLUSION 55 REFERENCE 56 Capstone project report 4 LIST OF ABREVIATIONS ATM Automatic teller POS Point of Service AGRIBANK Vietnam bank for Agriculture and rural development ARIBANK HOANG MAI Agribank Hoang Mai branch VIETINBANK Vietnam bank for industrial and commercial BIDV Vietnam bank for investment and development ANZ Australia and New Zealand Bank HSBC Hongkong Shanghai Bank Corporate SBV State Bank of Vietnam GDP Gross Domestic Product WTO World Trade Organization ISO International Standard Organization USD United State Dollar VND Vietnam dong Capstone project report 5 INTRODUCTION Along with the current integration into the global economy, the banking industry has been strongly and obviously affected from this integration. The integration will bring about both lots of development opportunities and many risks as well as challenges to each Bank. At present, there are 102 banks in Vietnam, including domestic banks and foreign banks of which business networks are expanded throughout Vietnam.
Moreover, the more new banks are established, the more critical and fiercer the competition in finance and banking market is. Agribank Hoang Mai Branch of Vietnam Bank for Agriculture and Rural Development (Agribank) is the I-level branch directly under Agribank – the biggest commercial bank in Vietnam currently. For over 8 years of operation, Agribank Hoang Mai Branch has developed strongly, played the significant role in Hoang Mai District, and made important contributions to the socioeconomic development in the Southeast of Hanoi. However, in order to remain the sustainable and efficient growth, and to justify its position among capital market, it is required Agribank Hoang Mai Branch to apply appropriate business strategies in accordance with each period, each stage, market trend and to ensure the harmony between economic and social benefits.
With our expectation to improve the position as well as importance of Agribank Hoang Mai branch in finance market, our group number 8 have decided to develop the Project “Business strategy of Agribank Hoang Mai Branch in the period of 2012-2015”. The Project consists of three main parts: - SECTION I : FUNDAMENTAL THEORY ON BUSINESS STRATEGIES OF ENTERPRISE. - SECTION II : CURRENT SITUATION OF BUSINESS ACTIVITY OF AGRIBANK HOANG MAI BRANCH. ANALYSE IMPACTING FACTORS.
- SECTION III : FORMULATION BUSINESS STRATEGIES FOR AGRIBANK HOANG MAI BRANCH – SOLUTIONS AND RECOMMENDATIONS. We are looking forward to receiving highly valuable contributions from Teachers and other students so that our Project is really practical, improving the position of Agribank Hoang Mai in particular and of Agribank in general. Capstone project report 6 SECTION I FUNDAMENTAL THEORY ON BUSINESS STRATEGY OF ENTERPRISE. OVERVIEW OF STRATEGIC MANAGEMENT 1.
Business strategies of enterprise Strategies of enterprise are long-term activities or general action routines toward achieving objectives of enterprise. Strategy does not aim at showing specifically how to achieve those aims because it is the duty of a multitude of assistance programs, other functional strategies. It only creates the framework to guide thinking action Strategy is usual defined as three levels: - Corporate level strategy: Identifying and defining the goals, objectives and business operations of the company, creating policies and basic plans to achieve the basic objectives of the company. - Business level strategy: Determining whether the product selection or specific form of the market for private business activities within the company, determining how each business unit will try to accomplish its goal to contribute to the completion of company’s common goals - Functional- level strategy: defining solution, plans for each business field.
Specific kinds of business strategies: There are many kinds of strategies. In the scope of this design, we use some following specific kinds of strategies: - Product development strategy: Is increase in turnover improving or modifying current products or services - Market development strategy: is providing current products and services to new area. - Combination Strategy (towards): is increasing control to distributors or retailers - Combination Strategy (backwards): is increasing control to suppliers. - Cost- leadership strategy: emphasizing on producing standardized products with Capstone project report 7 low price for sensitive customers.
- Key-focused strategy: is producing products and services which meets the demands of a small group of customers. BUSINESS STRATEGY MANAGEMENT Business strategy management is art and science to establish, implement, evaluate decisions related to many functions which help an organization gain referred objectives. Strategic management focuses on merging management, financial accounting, production, development research, information system of business fields to gain success. Business strategy management includes 3 main periods: - Strategy formulation period : is period of establishing business assignment, study to specify internal and external shortcomings to formulate long-term objectives and choose among substitute strategies.
- Strategic implementation period : Mobilizing managers and staff to carry out the strategy. Implementing strategies includes setting annual goals, developing policies and distributing resources. - Strategic evaluation period : including basic operations are to review the elements which are the basis for the present, measure performance and implement corrective actions. BUSINESS STRATEGY FORMULATION Business strategy formulation is the first period of strategic management.
Process of business strategy management includes 4 following steps: 1. Business vision and mission Business assignment specification includes specifying vision and assignment of enterprise. - Vision: is a position which enterprise wants to reach in the future. - Mission: what does enterprise do? Who does enterprise serve for? 2.
The external assessment : Capstone project report 8 Evaluating external factors to control external opportunities and threats effected enterprise. External opportunities and threats include socio-economic, political, technological, competitive trends and events which will be able to benefit or damage to an organization in the future. The opportunities and threats are beyond the control of individual institutions and therefore are called external factors. To evaluate external factors, we use the following models: - PEST model is used to evaluate effects of 4 external factors on enterprise: Politics, Economics, Socials, Technology.
- The 5 competitive forces model of Porter is to evaluate the effects of five forces : barriers to entry, customer power, supplier power, substitute products and competitive internal industry. - To quantify the influence of external environment, the competitive conditions in the business, we use matrix evaluation of external factors (EFE) to summarize and evaluate external information of politics, economics, socials, technology, competitive Industry (the below table). The total number of important score reflects enterprise’s response to external factors. Matrix of External factor evaluation (EFE) External factors Importance level Classification Number of important score The first factor ….
Total Important level: The importance of each factor to success of business which is classified from 0.00 (very important) Classification of external factors: 1 = the enterprise's response is at least, 2 = reaction is medium, 3 = reaction is above medium, 4 = reaction is the strongest. To analyze the major competitors, identify strengths and weaknesses of competitors -competing picture matrix (CPM) Competing picture matrix (CPM) Model enterprise The first enterprise The second enterprise Capstone project report 9 Successful Important Classifica Important Classifica Important Classific Importa factors level tion score tion score ation nt score The first factor …. Total Important level: importance of each factor to success of business is classified from0. External factors classification: 1 = enterprise’s reaction is at least, 2 = enterprise’s reaction is medium level, 3 = enterprise’s reaction is above medium level, 4 = enterprise’s reaction is strongest.
Internal factors classification: 1 = weakest, 2 = least weakness, 3 = least strength, 4 = strongest. The internal assessment Internal Strengths and weaknesses : business activities can be controlled within an organization made particularly good or bad. Internal factor evaluation includes judgment and evaluation of strengths and weaknesses in the business of enterprise including management, marketing, financial accounting, production / implementation, development research, information system and relationships among them. To quantify the internal situation of the business, we use the IFE matrix to summarize and evaluate the important strengths and weaknesses of functional business units and become a basis to determine relationship among them.
Strategic evaluation and choice Strategic evaluation and selection is to identify operation progress, which may be chosen so that enterprise can fulfill their assignment and objectives. The current strategies, objectives and mission of the enterprise as well as internal and external control information will provide the basis for the formulation and evaluation of practically chosen strategies.1 Strategic analysis: To analyze the strategies we use matrix of strengths, weaknesses, opportunities and threats (SWOT). This matrix is an important tool to develop four types of strategic Capstone project report 10 strengths-opportunities, strengths- challenges, weaknesses-opportunities, weaknesses and threats S W List of strengths List of weaknesses O Strategies SO Strategies WO List of opportunities Using strengths to take Overcoming weaknesses by advantages of opportunities taking advantage of opportunities T Strategies ST Strategies WT List of threats Using strengths to avoid Minimizing weaknesses and threats avoiding threats To choose strategic position, we use SPACE matrix. The axis of the matrix represents two aspects within the organization (financial strength FS and competitive advantage CA) and two external aspects of the organization are (environmental stability ES and industrial development ID) FS Cautious strategy 6 5 Offensive strategy 4 3 2 Capstone project report 11 CA -6 -5 -4 -3 -2 -1 0 1 2 3 4 5 6 IS -1 -2 -3 -4 Competitive strategy Defense strategy -5 -6 IS, FS = +1 worst, …= +6 best; CA, ES = -1 best, = -6 worst Vertical axis coordinates; medium level of factor group ES and FS Abscissa axis coordinates, medium level of factor group CA and IS Vector linking from the origin of matrix to the above coordinates shows strategic position of enterprise.2 Strategic choice : To select strategy, we use planning matrix used to quantify QSPM.
QSPM matrix use the inputs of the matrix to evaluate external factors EFE and internal evaluation matrix IFE and SWOT matrix. QSPM Matrix is a tool that allows to evaluate objectively alternative strategies based on internal and external identified influential factors.