GRIGGS UNIVERSITY GLOBAL ADVANCED MASTER OF BUSINESS ADMINISTRATION PROGRAM CASPTONE PROJECT REPORT BUILDING AND CHOOSING BUSINESS STRATEGIES FOR THE QUANG MINH BRANCH OF VIETINBANK PERIOD 2009-2013 Thanks We would like to thank you the teacher teaching the course of International Business Management – Griggs University for having guided us enthusiastically throughout the process of writing the capstone project for last course. Thank you the Quang Minh Branch of VietinBank for supporting and making good condition for us recent time Sincerely COMMITMENT We commit that the capstone project: “Building And Choosing Business strategy for The Quang Minh Branch Of VietinBank (2009 – 2013)” is our research. The data and information used in this research is completely honest Authors List of Abbreviated Words Vietcombank Joint Stock Commercial Bank for Foreign Trade of Viet Nam Vietinbank Viet Nam Joint Stock Commercial Bank for Industry and Trade Quang Minh Vietinbank: Branch of Viet Nam Joint Stock Commercial Bank for Industry and Trade. Agribank Agricultural and Rural Development Bank BIDV Bank for Investment and Development of Vietnam SACOMBANK SaiGon Commercial Joint Stock Bank IT Information Technology ATM Automatic Teller Machine SWOT Strengthens, Weaknesses, Opportunities, Threats LIST OF TABLES, SCHEDULES AND DIAGRAM IN THE CAPSTONE PROJECT Notation Name Page Diagram 1 The process of managing strategies 16 Diagram 2 The steps to form strategy 17 Diagram 3 The process of identifying advantages of 25 sustainable competition Diagram 4 Analysis framework of irreducible SWOT 27 Diagram 5 Quantitative matrix with GREAT criteria 36 Diagram 6 Table of common strategies in the model with 5 30 competitors of Michael Porter Diagram 7: Table comparing the characteristics of common 34 strategies in the context of environment having five competitive forces Table 1 ATM network 40 Table 2 Report of business results 41 Table 3 GDP growth rate of Vietnam in the period of 45 2002-2008 Table 4 GDP growth rate of Me Linh district in the period 46 of 2002-2008 Table 5 Import and export turnover 47 Table 6 Structure of payment means in the period of 51 2004-2008 Graph 1 Situation of raising capital of banks in the area of 62 Me Linh in the period of 2007-2009 Graph 2 Situation of lending capital of banks in the area 63 5 Me Linh in the period of 2007-2009 Table 7 SWOT matrix of Vietinbank Quang Minh 70 Table 8 Evaluate according to the GREAT criteria 77 Appendix 1 Polls of Customers’ feedback 97 Appendix 2 5 year development of Vietinbank Quang Minh 98 Appendix Structure of the Organization of Vietinbank 99 3,4 Quang Minh before conversion and after conversion TABLE OF CONTENTS 6 INTRODUCTION.8 CHAPTER I : THE BASIC ACADEMIC QUESTIONS ON MANAGING STRATEGY APPLIED IN THE FIELD OF BANKING OPERATION.
Concept and process of managing strategy.2 Order of content to build the business strategy. Define functions and tasks (in other words mission is to identify business) and business strategic targets. Analyze external environment. Analyze internal environment.
Analysis SWOT matrix. The basic business strategies in practice. Select the optimal strategy.35 CHAPTER II: BUILD AND CHOOSE BUSINESS STRATEGY FOR QUANG MINH BRANCH OF VIETINBANK. Overview of Quang Minh Industrial and Commercial Bank branch.1 Process of formation and development.3 Products and services:.2 Analysis of outside environmental factors.2 Social and cultural Environment.3 Polictics and government, law environments 2.
Assessing opportunities and risks.3 Analysis of internal factors Vietinbank Quang Minh.1 Elements of human resources.3 Interior organizing, managing factors.5 Factors facilities, equipment and logistics services.6 Assessing strengths, weaknesses.4 SWOT matrix analysis.70 CHAPTER III: SOLUTION OF IMPLEMENTING STRATEGY FOR BRANCH OF QUANG MINH VIETINBANK IN THE PERIOD OF 2009 – 2013.1 Business goal of Vietinbank Quang Minh to 2013.2 Specific objectives toward 2013.2 Determining interchangeable business strategies.3 Solutions to implement strategy.1 Solutions to develop human resources.2 Implementation of Marketing Mix.2 Human Resources Information Technology (IT).4 Solution of restructuring the organization.5 Organized culture construction. The reason to choose the topic Banking is one of the blood-vessel activities in the economy , it has especial importance contributing promote economic growth. However, today most banks are operating in the increasingly complex and fluctuating risk increasing business environment. This is expressed through a series of new trends increasingly strong impacting on business activities of banks in recent times such as: the financial monetary crisis worldwide recently with starting point from below standard loans of the banks in the U.S, tend to increase competition among banking enterprises with other financial institutions; the demands of increasing in both quantity and quality of banking services by customers become more proficient in using banking services; The trends of merger and internationalization of banking services are increasing clearly.
All of those have leaded to the result of decreasing in profitability of banks. According to the commitments of the World Trade Organization (WTO), the route to the end of 2011, the foreign banks will be treated as Vietnamese banks. Up 9 to the present time, according to the data of State Bank, there have been five banks with 100% of foreign capital have been licensed, 40 branches of foreign banks are operating. The Banks of Vietnam will face fierce competition from these competitors.
To prepare for this competition today, the Bank of Vietnam is urgently establishing and expanding their scale of operation in order to make the best positions for theirselves. From July 2009, Viet Nam Joint Stock Commercial Bank for Industry and Trade (Vietinbank) officially opened with total assets of 240,388 billion VND, the charter capital of 11,252 billion VND, in which state shareholders hold 89, 23% and non-state shareholders hold 10. This is an important platform for Vietinbank in the process of development to become a versatile financial group with 2 main pillars are the Commercial Bank (CB) and the Investment Bank. Overcoming many difficulties and challenges due to unpredictable evolutions of the domestic and international economy, recent time, VietinBank always actively promotes its role as a leading commercial bank through implementing exemplarily solutions of national monetary policy, contributing to achieve the operating objectives of the Government and the State Bank of Vietnam (SBV) to curb inflation, stabilize macro-economy but still ensure the targets, major planned tasks, in which the largest is to change operation model and officially listed on the Ho Chi Minh Stock Exchange ( HOSE).
Besides the undeniable advantages, the transition to model of the commercial joint stock banks also poses many difficulties that VietinBank has to overcome. The biggest challenge is to restructure completely the whole operation system of VietinBank to suit the model of a commercial joint stock bank, avoid the situation of "a new decanter with old wine." This is not really easy, because the process of restructuring must ensure to develop the banking system both in quality and 10 quantity, to grow both in scale of assets and total of assets, to improve the quality of each banking products and services, to improve performance of each member unit - including the Branch of Vietinbank Quang Minh. With all the above reasons, the direction of business strategies in accordance with the specific characteristics of each bank in order to survive, develop and improve the competitiveness is necessary for each bank in general as well as the Branch of Quang Minh Vietinbank in particular at present. Coming from that practice, our group decided to choose the theme: "Building and Choosing business strategies for the Quang Minh Branch of Vietinbank in the period of 2009 - 2013" to be our capstone project.
Objects and scopes of research The object of the research is the business strategy of Quang Minh Vietinbank. The scope of research is the business activities of the Quang Minh Vietinbank, having a comparison and comparison with the business activities of the other competitors in the operation area of Quang Minh VietinBank, including: Bank for Investment and Development of Vietnam (BIDV), Technology Commercial Bank (Techcombank), Agricultural and Rural Development Bank (Agribank). The purposes of the research The purpose of the research is to systematize, generalize theoretical problems on building and choosing business strategies, analyzing the reality of business operations and modern business strategy of Quang Minh Vietinbank at present, from which propose solutions to improve business strategy in the period of 2009- 2013 in order to make Quang Minh Vietinbank become one of the strong banks in the Vietinbank system and in the operation area. The methodology of research Our exercise uses three methodologies as follows: 11 - Study materials from the secondary sources of information such as: books, banking magazines, websites (asset.), the reports announced by banks of Vietcombank, Vietinbank, Agribank, BIDV.
- Qualitative research - Survey: Conducted a survey for our customers through intelligent Vietinbank Quang survey, but at the time of reporting capstone project have not been recovered and set the survey to conduct analysis. Thus research methods and research materials are primarily computer 1. The expected results Our project is expected to achieve the following results: - Specify the specific characteristics of building business strategies using in banking business. - Determine the real situations of building and implementing business strategies in Quang Minh Vietinbank - Build business strategy for Quang Minh Vietinbank and offer implemented solutions, a specific plan from 2009 to 2013.
Our capstone project make development plan for period from 2009 to 2013 on the basic of internal analysis and forecasting of trend of Quang Minh Vietinbank. Because surveying on the basic of practice and written by responsible members, business plan of the Branch will surely be regarded as a guiding for the activities of the Quang Minh Vietinbank in coming years. However, the context of the current complex economy is at end of the recession. Therefore, the given forecasts are long-term strategic directions without covering a detailed operation plan for Quang Minh Vietinbank.
Structure of the major exercises Besides the Introduction and Conclusion, the thesis includes three more chapters: Chapter 1: THE BASIC ACADEMIC QUESTIONS ON MANAGING STRATEGY APPLIED IN THE FIELD OF BANKING OPERATION Chapter 2: BUILD AND CHOOSE BUSINESS STRATEGY FOR THE QUANG MINH BRANCH OF VIETINBANK. Chapter 3: SOLUTION OF IMPLEMENTING STRATEGY FOR THE QUANG MINH OF VIETINBANK IN THE PERIOD OF 2009 – 2013. CHAPTER I THE BASIC ACADEMIC QUESTIONS ON MANAGING STRATEGY APPLIED IN THE FIELD OF BANKING OPERATION 1. Concept and process of managing strategy In the activities of an organization, building strategies is one of the most important activities of the manager.
An organization does not have a strategy like the ship without rudder. Today only 16/100 of the largest companies in the United States since the early 20th century can keep their positions, and to 44,367 U.S enterprises apply for bankruptcy and the number of companies that are fail even larger. This shows that most failures in business are due to lack of a proper strategy, or lack of proper implementation. So what is strategy, and how to specify in the field of banking activities? "Strategy is a complex series of actions to mobilize resources for an organization to achieve a certain goal.
(Managing strategy syllabus, GaMBA 2009) 13 Applied to the fields of banking, “the strategy of a bank is an overall long term program activities to create a certain development of the bank, is the first commitment about the basic and comprehensive objectives that a bank needs to achieve and allocate important resources to achieve goals in the future operating environment”. (Banking Management and Business Syllabus - Bank Institute - 2002) The term of strategy can be understood to encompass the following meanings: +Firstly, the strategy is a long-term plan with basic orientation on many different levels: Enterprise Strategy - relate to the overall objectives and scope of the enterprise to meet the expectations of the capital contributors. This is an important level because it is heavily influenced by investors in enterprises and at the same time it also guides the process of making strategic decisions in the whole enterprise. Enterprise Strategy is often presented clearly in the "Declaring Mission".
Business strategy - focus on how an enterprise can compete successfully on a specific market.