Course:Strategic Management Class: GaMBA01.M0909 Group: 12 GRIGGS UNIVERSITY GLOBAL ADVANCED MASTER OF BUSINESS ADMINISTRATION PROGRAM CAPSTONE PROJECT REPORT BUILDING BUSINESS STRATEGY OF VIETCOMBANK BAC NINH IN 2011 – 2015 PERIOD 0 Course:Strategic Management Class: GaMBA01.M0909 Group: 12 COMMITMENT We would like to be committed that: The content of this graduation capstone assignment has not been submitted to any higher education degree programs as well as any training programs. We are also committed to add that: This capstone assignment is the effort of our team. The results of the analysis and conclusions in this capstone assignment (in addition to parts referred) are the working result of our whole group. Hanoi, 04/25/ 2011 AUTHOR GROUP 1 Course:Strategic Management Class: GaMBA01.M0909 Group: 12 ACKNOWLEDGES We would like to show sincere gratitude, most deeply to the teachers of ETC Center - Hanoi National University, Griggs University (United States) in Vietnam have taught us in the Global Advanced Master Training program in business administration and the contribution comments for our graduation capstone assignment.
We would like to say thank ETC Center’s leaders, officials in the Center, teachers, tutors in our class, thank the collective and fellow-students, Joint Stock Commercial Bank for Foreign Trade of Vietnam (VCB)’s employees; friends and families who have created favorable conditions encouraged, motivated and helped us throughout the process of work, study and research to get the results shown in this graduation capstone assignment. We also would like to receive the long-term help and attention of Joint Stock Commercial Bank for Foreign Trade of Vietnam (VCB) for the operation of Joint Stock Commercial Bank for Foreign Trade of Vietnam (VCB) - BacNinh Branch and the group in striving to make VCB BacNinh branch go up and get high effectiveness more and more. Hanoi, 04/25/ 2011 AUTHOR GROUP 2 Course:Strategic Management Class: GaMBA01.M0909 Group: 12 TABLE OF CONTENTS COMMITMENT.2 TABLE OF CONTENTS.12 SOME BASIC THEORIES ON DEVELOPING THE STRATEGY FOR THE ENTERPRISE. BASIC MATTERS ON STRATEGY AND BUSINESS STRATEGY12 1.1 Some concepts of strategy.
Process to develop the strategy. Strategic vision and mission. External environment analysis.4 Internal environmental analysis. SWOT synthesis matrix.
Strategic choices model QSPM.1 Corporate level strategy.2 Business level strategy.31 CHAPTER II: BUSINESS ENVIRONMENT ANALYSIS OF VCB BACNINH.32 3 Course:Strategic Management Class: GaMBA01.1 Overview on Joint Stock Commercial Bank for Foreign Trade of Vietnam and BacNinh Branch.1 Overview on Joint Stock Commercial Bank for Foreign Trade of Vietnam (Vietcombank).2 Overview on Joint Stock Commercial Bank for Foreign Trade of Vietnam - BacNinh Branch.2 Analysis of the external environment affecting VCB BacNinh’s business operations.1 The impact factors from macro environment.2 Analysis of banking sector environment.3 Identifying the opportunities and challenges of VCB BacNinh.3 Analysing the internal environmental factors of VCB BacNinh.1 Elements of the internal environment.2 Identifying the strengths and weaknesses of VCB BacNinh.4 Internal factor evaluation matrix of VCB BacNinh (IFE):.67 CHAPTER III: SELECTION STRATEGY FOR VCB BACNINH BY 201569 3.1 The development objective of VCB BacNinh by 2015.2 Building and selecting developing strategy of VCB BacNinh in the period from 2011 to 2015.1 Formulating strategies from SWOT matrix.2 Strategic business plan of VCB BacNinh in the period 2011- 2015.3 Strategy selection according to QSPM.3 Solution on strategy implementation.1 Solution on marketing:.77 4 Course:Strategic Management Class: GaMBA01.2 Human resources solutions.2 Human Resource Solutions.3 Solution on organizational structure.4 Complete solution for information system:.5 Implement Vietcombank's culture. BANKING PRODUCTS OF VIETCOMBANK 5 Course:Strategic Management Class: GaMBA01.M0909 Group: 12 LIST OF TABLES TABLES Page Table 1.1: Analysis of macro environment 21 Table 1.2: External Factor Evaluation Matrix (EFE) 24 Table 1.3: Resources visible 25 Table 1.4: Invisible sources 26 Table 1.5: Standards identified core competencies 27 Table 1.6 : Internal Factor Evaluation Matrix (IFE) 28 Table 1.7: SWOT matrix 29 Table 1.8: The Quantitative Strategic Planning Matrix (QSPM) 30 Table 2.1: Network of branch level 1 and Transaction offices of 52 state-owned commercial banks in BacNinh province in 2010 Table 2.2: Competitive image matrix 53 Table 2.3: Summary of industry competition factors 55 Table 2.4: List of Opportunities and Threats 56-57 Table 2.5: External Factor Evaluation Matrix (EFE) 58 Table 2.6: One of VCB BacNinh’s main operating targets 60 Table 2.7: Strengths and weaknesses of VCB BacNinh 66 Table 2.8: Internal factor evaluation matrix (IFE) 67 Table 3.1: SWOT Matrix of VCB BacNinh 71-72 Table 3.2: QSPM Matrix group S / O 74-76 6 Course:Strategic Management Class: GaMBA01.M0909 Group: 12 LIST OF FIGURES List of Figures Page Figure 1.1: Process to business strategy 16 Figure 1.2: External environment 17 Figure 1.3: The Five forces of competition model 22 Figure 2.1: Diagram of VCB BacNinh’s structure organiztion 37 Figure 2.2: Graph of market of fund mobisation to 31/12/2010 48 Figure 2.3: Diagram of VCB BacNinh’s credit market share to 49 31/12/2010 Figure 2.4: Chart of revenue on import - export payments 50 during 2008-2010 by VCB BacNinh Figure 2.5: Graph of issuing ATM card during 2008-2010 by 51 VCB BacNinh Figure 2.6: Revenue on card usage during 2008-2010 by VCB 51 BacNinh Figure 2.7: Internal - external Matrix (IE) 68 7 Course:Strategic Management Class: GaMBA01.M0909 Group: 12 LIST OF ABBREVATIONS S ABBREVATIONS INTERPRETATION TT 1 VCB Vietcombank 2 Vietcombank Joint Stock Commercial Bank for Foreign Trade of Vietnam VCB BacNinh Joint Stock Commercial Bank for Foreign Trade of Vietnam – BacNinh branch Vietinbank (Vietnam Joint Stock Commercial ICB Bank for Industry and Trade) Vietnam Bank for Argriculture and Rural 3 Argribank Development 4 BIDV Vietnam Bank for Investment and Development 8 ATM Automated Teller Machine 1 POS Point Of Sale WTO World Trade Organiztion F FDI Foreign Direct Investment N NPL Non Performing Loan ICOR Incremental Capital – Output Rate SWOT Strengths – Weaknesses – Oppotunities - Threats 8 Course:Strategic Management Class: GaMBA01. The necessity of the topic Before the integration requirements, implementation of international commitments on banking operations and meeting capital needs along with the demands for financial services for the firm development of the economy and Vietnam banking system, Vietnam banking system must restructure comprehensively to improve its competitiveness. Therefore, the development of business strategies for Vietnam’s commercial banks is extremely important for them.
It also plays a decisive role in the success of each bank, towards the bank maximizing their internal resources as well as their opportunities and contributing to the development banks in the sustainable way. Business strategy has become more urgent with each bank as the finance business environment is the one which has the most variations and very sensitive to changes in the macroeconomy, international financial market, especially when Vietnam has officially and fully participated in the commercial organizations in the regional and international areas such as Asean Free Trade Area (AFTA), Asia- Pacific Economy Cooperation (APEC), Wold Trade Organization (WTO). For Joint Stock Commercial Bank for Foreign Trade of Vietnam - BacNinh Branch (VCB BacNinh), after 6 years of operation has confirmed its reputation and position in BacNinh province, the market share of VCB BacNinh’s products and services is growing and has the trend of dominating the market in a certain number of activities. However, the competive intensity from banks in the area of BacNinh province is very fierce, it requires VCB BacNinh to have to build business development strategies to compete with existing and potential rivals.
Our oauthor group with two members as the medium-level leaders of VCB BacNinh and the rest are VCB BacNinh’s clients, so we believe that VCB BacNinh will be the leading bank in BacNinh province after 5 later years. With great enthusiasm, 9 Course:Strategic Management Class: GaMBA01.M0909 Group: 12 our team has selected the topic: Building business strategy in Joint Stock Commercial Bank for Foreign Trade of Vietnam – BacNinh Branch for the period 2011-2015 2. Research objective Theoretical research and systematization on building the strategy for VCB BacNinh Analysis and assessment for the real status of activities, business environment of VCB BacNinh, from which analyzing and selecting appropriate strategic plans for the development plan of VCB BacNinh in the next 5 years. Building measures to implement the strategy.
The Object and scope of research: - Research object is business operation of banking products and services in VCB BacNinh - Scope of research: analyzing the real status and proposing the strategy for business development of VCB BacNinh in 2011-2015 3. Research Methodology The method of collecting secondary data The capstone project report’s data is extracted and summarized from statistical annual publication, report data from State Bank’s website, annual reports of banks. In addition, the capstone project report also uses a number of references, books, magazines and other specialized teaching materials. Comparative method, synthesizing method, expert method During the analysis, the authors have used the comparative method, synthesizing method for the data of VCB BacNinh in the past and present, as well as comparing indicators and data of business results between VCB BacNinh with several other commercial banks, and simultaneously consulting experts’opinion on evaluating points in the process of analyzing the matrixes.
10 Course:Strategic Management Class: GaMBA01. The layout of the capstone project report Apart from the introduction, conclusion, appendix and the list of references, it includes the there following chapters CHAPTER 1: SOME BASIC THEORIES ON DEVELOPING THE STRATEGY FOR THE ENTERPRISE CHAPTER II: BUSINESS ENVIRONMENT ANALYSIS OF VCB BACNINH CHAPTER III: SELECTION STRATEGY FOR VCB BACNINH BY 2015 11 Course:Strategic Management Class: GaMBA01.M0909 Group: 12 CHAPTER I : SOME BASIC THEORIES ON DEVELOPING THE STRATEGY FOR THE ENTERPRISE 1. BASIC MATTERS ON STRATEGY AND BUSINESS STRATEGY 1.1 Some concepts of strategy There are many definitions of what strategy is, each definition has many different points depending on each perception of each author. In 1962, Chandler’s strategy was defined as "determining goals, long-term fundamental purpose of the enterprise and applying a sequence of actions as well as the distribution of necessary resources for the implementation of this target.
Until the 1980s when the strategic management course had become ripe, Quinn given more general definition: "Strategy is the pattern or plan to integrate the major goals, policies, and the sequence of actions into an overall which is cohesive rigorously." Then, Johnson and Scholes redefined the strategy in the environmental conditions which were much in rapid changes: "The strategy is orientation and scope of an organization in long term to gain competitive advantage for the organizations through formatting its resources in changing environment, to meet market demand and meet expectations of concerned parties.1 The concept of business strategy "Business strategy is the direction and scale of an organization in the long-term: business strategy will bring advantages for the organizations through the optimum 12 Course:Strategic Management Class: GaMBA01.M0909 Group: 12 arrangement of resources in competitive environment to meet market demand and expectations of stakeholders' .2 Basic characteristics of the business strategy Business strategy clearly defines the basic objectives and business direction of the firm in each period. The crystal orientation of the strategy aims at ensuring the firm to develop continuously and firmly in the business environment which constantly fluctuates. Business strategy aims at ensuring maximum mobilization and optimal combination of the exploitation and use of the enterprise’s resources in the present and future, promoting the advantages and seizing the opportunity to win advantage in the competition. Business strategy clearly defines the basic objectives and business direction of the firm in each period.
The crystal orientation of the strategy aims at ensuring the firm to develop continuously and firmly in the business environment which constantly fluctuates. Business strategy aims at ensuring maximum mobilization and optimal combination of the exploitation and use of the enterprise’s resources in the present and future, promoting the advantages and seizing the opportunity to win advantage in the competitio 1. The types of business strategy According to different approaches, there are different business strategies. * The level of corporate governance: the firm level strategy and business strategy of the functional division.
Among them, firm level strategy is overall business strategy of the whole enterprise.