qua CAPSTONE PROJECT REPORT THE BUSINESS STRATEGY FOR CREDIT OPERATION AT AGRIBANK TRANG AN BRANCH 2009 - 2015 VISION 2020 GRIGGS UNIVERSITY GLOBAL ADVANCED MASTER OF BUSINESS ADMINISTRATION PROGRAM CAPSTONE PROJECT REPORT THE BUSINESS STRATEGY FOR CREDIT OPERATION AT AGRIBANK TRANG AN BRANCH 2009 - 2015 VISION 2020 Group No.8: Pham Thi Van Anh – Leader Le Trung Vu Bui Van Nam ABSTRACT As a result of the imminent WTO accession and the obligations arising from bilateral trade agreements, the government of Vietnam has realized the compelling need to reform the economy. Vietnam has committed to move to a market-based economy and to create a level playing field for all participants, whether state-owned or private, domestic or foreign. Companies from all sectors are obliged to strengthen their competitiveness in order to survive on the domestic business arena and overseas markets. This study laid the focus on the strategy building for the Agribank’s Trang An branch period 2009 - 2015.
In order to understand the situation of Trang An branch in particular and the Agribank in general, the author has conducted the literature survey with the Vietnam banking industry include the macro and micro environmental. To deeply understand the fact situation of Trang An branch, the author has also conducted interview with the officers and staff of banking industry, and 100 questionnaires have been delivered to officers and staffs to get the recommendations. From the results, the competitive strategy has been selected to improve the competitiveness of Trang An branch period of 2009 -2015 and vision 2020. Keyword: Strategy, Credit, Banking management, Vietnam banking industry i DECLARATION We undertake that the content of the thesis has not been submitted to any program for any degree and any training programs in other levels.
This thesis is a presentation of our original research work. Wherever contributions of others are involved, every effort is made to indicate this clearly, with due reference to the literature, and acknowledgement of collaborative research and discussions. The work was done under the guidance of Professor Vu Tri Dung, at the Griggs University The student’s name and signature ii ACKNOWLEDGEMENT Firstly, we would like to express thanks to the Schools, professors, experts, lectures and staffs of THE CENTER FOR EDUCATIONAL TECHNOLOGY AND CAREER DEVELOPMENT, HANOI NATIONAL UNIVERSITY and GRIGGS UNIVERSITY – USA, who were always with us during the course. Via this course, we learn have chance to approach a high education with advanced teaching method, method of theoretical application and information gathering in management practices in for improved business efficiency.
Regarding this thesis, we would like to thank Mr. Dung for his guidance and help for its improvements. Yours Sincerely! iii TABLE CONTENT Content Page Abstract i Declaration ii Acknowledgement iii List of figure viii List of table ix Abbreviations x Introduction 1 1. Research Methodology 2 3 3 The implication of research 4 4.
The new idea of research 4 5. The structures of the research 5 Chapter 1: Theoretical background 5 1.1 The theoretical of strategy and strategy management 5 1.2 The basic of strategy 7 1.3 The basic of strategies building 7 1.2 Competitive strategy and model of analysis and develop strategies 9 1.1 Macro environment iv 11 1.2 Michael Porter’s competition model 13 1. Selected business strategy 16 1.1 Costs leadership strategy 16 1.4 Blue Ocean strategy 18 1.6 Select methods of assessment strategies 21 CHAPTER 2: The current situation of credit activities at Agribank’s Trang An Branch 22 2.1Overview of Agribank and Trang An branch 22 1.1 Overview of Agribank 22 1.2 History of Trang An Branch ( Langthuong Branch) 23 2.2 Analysis of the situation of the Agribank Trang An branch Activities 26 2.3 Socio-cultural environment 35 2.2 Environmental analysis sector by five forces model of M.1 The threat of entry 38 2.3 Power of customer 41 v 2.4 Power of supplier 43 2. The threat of substitutes 43 44 2.
Table synthesis of external factors 48 2.4 Analyze internal of Agribank’s Trang An Branch 48 2.1 The basic activities 56 2.2 The supporting activities 62 2.3 Comparing correlation between Trang An with others 64 2. SWOT matrix and strategies by SWOT matrix 66 Chapter 3 Conclusion and Recommendation 3.1 Summary of development strategy in the period of 2009 -2015 and 66 vision 2020 of Agribank’s Trang An branch 66 3.1 The general orientation of credit policies: 67 3.2 Credit policy orientation in the 2009-2015periods of Agribank 68 3.3 Goals of credit operations at Agribank’ Trang An branch 69 3.4 The strategy setout for Agribank Trang An 70 3.5 Select the optimal strategy for Agribank Trang An 3.2 Solutions and recommendation on the improvement of Agribank’s 71 Trang An branch competitiveness in credit operation 3.1 Maintain current customers and expand domestic and international markets 71 3.2 Developing product and product quality solution 74 76 3.4 Solutions to training and exploitation of human resources 78 3.5 Developing brand advertising program 79 3.6 Road map for implementation solutions of business strategy 79 3.1 Concerning the State 79 3.2 Concerning the bank 80 3.4 Limitation of research 81 3.5 Recommendation for further research 81 Conclusion 82 Reference 83 Appendix 85 Appendix 1: Vietnam GDP – Real Growth rate from 2003 -2009 85 Appendix 2: Equity Capital of Largest Commercial Bank of Vietnam in Comparison 86 Appendix 3: Market share of capital mobilization of Largest Commercial 86 Bank of Vietnam 87 Appendix 4: Share of loan of Largest Commercial Bank of Vietnam 88 Appendix 5: Question investigation of environment factors Appendix 6: Question investigation assessment comparison correlation 91 between Trang An and others 92 Appendix 7: Staffs survey 93 Appendix 8: Interview list LIST OF FIGURE Content Page vii Figure 1.1 Strategic implementation 9 Figure 1.2 model of analysis and develop strategies 11 The Figure 1.3 the 5 force Model of M.4 The SWOT matrix 15 Figure 2.1 The organizational structure of Trang An Branch 24 Figure 2.2 Inflation forecast 32 32 Figure 2.3: Vietnam - Exports by Destination in 2008 LIST OF TABLE viii Content Page Table 1.1 GREAT quantitative matrix 21 Table 2.1 Key Events in the Development of the Commercial Banking System of Vietnam 28 Table 2.2 Vietnam’s: Growth, inflation, base rate, and USD-VND forecasts 31 Table 2. The comparison of several large bank 40 49 Table 2.4 Mobilize capital structure over time 51 Table 2.5 Structure of loans 55 Table 2.6 Sales of loans, debt collection 56 Table 2.7 Efficiency of capital mobilized Table 2.8 Comparing correlation between Agribank’s Trang An 62 branch with others 63 Table 2.9 Survey of staff who are working at the company 70 Table 3.1 the score table of strategies ABBREVIATIONS ix ACB Asia Commercial Bank ADB Asian Development Bank ASEAN Association of South East Asian Nations ATM Automatic Transaction (or Teller) Machine BOD Board of Directors BoP Balance of Payment BTA Bilateral Trade Agreement CAR Capital Adequacy Ratio CBI Critical Business Issues CEO Chief Executive Officer CFO Chief Financial Officer CIC Credit Information Center EBT Earning Before Tax FDI Foreign Direct Investment FIEs Foreign Invested Enterprises GDP Gross Domestic Product GSO General Statistic Office HCMC Ho Chi Minh City HR Human Resources HSBC Hongkong Shanghai Bank Corporation IAS International Accounting Standards IFC International Finance Corporation IMF International Monetary Fund IT Information Technology JSCB Joint Stock Commercial Bank MIS Management Information System x ODA Official Development Assistance OTC Over The Counter PCF People’s Credit Fund SBV State Bank of Vietnam SME Small and Middle Enterprises SOCB State-owned Commercial Bank SOE State-owned Enterprises SSC State Securities Commission SWOT Strength Weakness Opportunity and Threat US$ United State’s Dollars USA United States of America VAS Vietnam Accounting Standards VAT Value Added Tax VBARD Vietnam Bank for Agriculture and Rural Development VCCI Vietnam Chamber for Commerce and Industry VCI Vietnam Credit Index VET Vietnam Economic Times VIB Vietnam International Bank VIR Vietnam Investment Review VND Vietnam Dong WTO World Trade Organization xi INTRODUCTION Vietnam attracts its investors to its largely untapped market with its population of 85 million, strategic geographical position in one of the world’s most economically dynamic regions, stable political situation, high economic growth and low production costs. The shift from a centrally planned economy to a market economy over the last two decades is also paying off with an average annual growth of 7 percent.
In the year to come, the country aims to achieve growth of more than 8 percent to bring Vietnam out of its position as an undeveloped country [36]. To fuel economic growth, Vietnam needs further investment, and to attract investors it has introduced regulatory and institutional reforms. Vietnam’s WTO entry in January 2007, have been pivotal in opening the US and world markets for Vietnamese products, laying the ground for the rapid expansion of the manufacturing sector which has underpinned Vietnam's high economic growth rates. For Vietnam industries, particular Financial Services and Banking, WTO accession has been a platform for many of Vietnam’s industry to modernise and compete on the global scale.
Financial services and banking requires greater level of transparency, reporting and compliance to international standards as more international investments (FDI) enter the sector. Through initiatives such as the ASEAN Free Trade Area (AFTA), the Bilateral Trade Agreement with the United States and Vietnam’s accession to the WTO, Vietnam’s increasing integration with the global economy and international business networks means that local companies need to be able to compete and collaborate in both the domestic business arena and overseas markets. Enhance the competitiveness of the economy in general and the banking sector in particular is a central task and to develop basic market economy. In market economies, the competition is effective tool to promote economic development, improve the efficiency and quality, created successful businesses, competitive market domestic and international.
To gain the initiative in the integration process, Vietnam should build a banking system has the form of formal, prestigious customers, operating efficiently, safely, improve competitiveness, maximum mobilization of idle capital in society and 1 expand the investment to meet the needs of industrialization and modernization of the country. With the research “The business strategy for credit operation at Agribank’s Trang An branch (period 2009 -2015 vision 2020)" was selected as the research in the hope of contributing to concretize the management theory they have learned the same time provide some solutions to solve practical problems are set out in the process of regional economic integration and the world. Thesis’s objectives - Through research, the researcher will systematize the knowledge learned from the application to a specific business object. This is the first step to get to know and handle situations when access to management practice.
Also, through which summarize the experience in solving problems arising in practice later. - With the analyzing of strengths, weaknesses, opportunities, risks and comparison with competitors of the Agribank, thereby giving objectives and strategic direction in accordance with actual situation of business. - Based on the sum of theoretical, practical and assess properly the reality of the business activities from which to propose feasible solutions to enhance the competitiveness of enterprises, as the premise of money for the renovation and complete a number of mechanisms and policies of the state during the campaign in the economy market. Research Methodology: The methodologies are used in this thesis will rely on the scientific methodology and provide practical applicability in the research process should be primarily based on the research methods to solve the problems of the thesis.
It includes the methods as: a. Comparative approach, synthetic d. Inductive method, inference. 2 Survey conducting In addition to the analysis environmental assessment and internal Agribank’s Trang An Branch by five forces model and value chain and summary it in SWOT matrix, to assess a more authentic strengths and limited point of Agribank’s Trang An Branch authors have conducted surveys, interviewed experts to check the analysis results of the investigation.
- Target sample The survey was conducted on two target groups: the external experts and staff employees working in Agribank’s Trang An Branch.