GRIGGS UNIVERSITY GLOBAL ADVANCED MASTER OF BUSINESS ADMINISTRATION PROGRAM CAPSTONE PROJECT REPORT “BUILDING AND SELECTING BUSINESS STRATEGY FOR MARITIME COMMERCIAL JOINT STOCK BANK (MSB) – DONG DA BRANCH (2010-2015)” HANOI, June 2010 1 COMMITMENT We commit that the capstone project’s presented contents are extremely our group’s research work. We do not copy or reproduce from any sources or files and the data used is honest from the original ones. We bear the total responsibility for this engagement. The group members: 1.
Nguyễn Trọng Tĩnh 2. Nguyễn Thái Anh 3. Nguyễn Công Chiến 4. Hoàng Thu Hà 2 ACKNOWLEDGMENTS We sincerely thank the honored teachers from International business administration Master Program of United States GRIGGS University for enthusiastically supervising us during the graduation report.
We also want to send our great thanks to Dong Da Maritime Comercial Joint Stock Bank Branch, families, friends for supporting and creating favor condition for us in the past time. 3 CATEGORY CONTENTS PAGES OPENING PART 8 CHAPTER 1: THE COMMON THEORICAL BASIS OF BUILDING 11 BUSINESS STRATEGY 1.1 The theories about strategy and strategy management 11 1.3 Basic steps of strategy management 14 1.1 Planning strategy stage 14 1.2 Implementing and review strategy stage 17 1.2 Analyzing environment and the models 18 1. Macro environment analysis - The PEST model 19 1. Political and legfal factors.
Cultural social factors 20 1.2 Analyzing the industry environment – 5 competitive forces 22 model of Michael Porter 1.3 Internal environment analysis 25 1. SWOT Matrix establishment for selecting the business strategy 25 CHAPTER 2: ENVIRONMENT FACTORS ANALYSIS TO 30 CHOOSE MSB DONG DA’S BUSINESS STRATEGY 2.1 An overview about MSB and MSB Dong Da branch 30 2.1 The MSB overviews 30 2.2 The MSB Dong Da branch overviews 31 2.2 The analysis of MSB Dong Da Branch’s circumstance 34 2.1 External environment factors analysis 34 4 2.1 Macro environment analysis under the PEST’s model 34 2.2 Industry invironment analysis under the M.2 MSB Dong Da’s internal factors analysis 45 2.3 Correlative comparison between MSB Dong Da and other 60 banks’ branches 2.3 Weakness and strength analysis: Opportunities and threats 61 2.3 SWOT matrix establishment and business strategy selection 63 CHAPTER 3: BUSINESS STRATEGY SOLUTIONS FOR MSB 67 DONG DA BRANCH UNTIL 2015 3.1 Business targets of MSB Dong Da branch until 2015 67 3.2 The solutions executing business strategy 68 3.1 Human resources solutions 68 3.2 Training and retraining 69 3.3 Personnel management, salary, bonus and rewarding policy 70 3.4 Promotion, appointment and rearrangement 71 3. Network and structure organization 71 3. Solutions for products and services 72 3.
Information technology solutions 75 3. Risk management solutions 76 3. Capital raising and lending solutions 76 3. Building business culture 77 Conslusion 79 References 81 5 Appendix 1 82 Appendix 2 83 6 TABLES AND CHARTS LIST No.
Title Page Figure 1.1 “Strategy” term 12 Figure 1.2 Differences among 3 usage ways of “strategy” term 12 Figure 1.3 Steps of forming strategy 15 Figure 1.4 Five types of pressure model of M.6 The basic steps of planning strategy 17 Figure 1.7 Business strategy web 18 Figure 1.8 5 competitive forces model of M.2 Organization structure of MSB Dong Da branch 32 Table 2.1 The basic items of whole MSB system 31 Table 2.2 Vietnam’s GDP growth rate in period of 2005-2010 35 Table 2.3 MSB DD’s Capital mobilization during the recent years 46 Table 2.4 Analysis of credit balance during the time 49 Table 2.5 Debt classification during the time 49 Table 2.6 Business results in time order 50 Table 2.7 The plan items for 2010 52 Table 2.8 Revenue of loan granting and debt collection 56 Table 2.9 Productivity of using raised capital 57 Table 2.10 Correlative comparison among MSB Dong Da branch and other 60 banks 7 ABBREVIATIONS No Abrr Description 1 ACB Asian Commercial Bank 2 ASEAN Association of Southeast Asia Nations 3 Co. Company 4 Eximbank Vietnam Export Import Bank 5 FDI Foreign Direct Investment 6 GDP Gross Domestic Product 7 HSBC The Hong Kong and Shanghai Banking Corporation 8 Ltd,. Limited 9 MSB Maritime Commercial Joint Stock Bank 10 R&D Research and Development 11 RIC Registered Investment Capital 12 Sacombank Sai Gon Thuong Tin Commercial Joint Stock Bank 13 Techcombank Vietnam Technological and Commercial Joint- stock Bank 14 USD United States Dollar 15 Vietcombank Bank for Foreign Trade of Vietnam 16 Vietinbank Vietnam Joint Stock Commercial Bank for Industry and Trade 17 VND Vietnam Dong 18 VNPT Vietnam Posts and Telecommunications Corporation 19 WTO World Trade Orgnization 8 THE OPENING PART The reason of topic selection In economic market, if a company wants to survive and develop, it must prepare plans for trades and productions well in the future. Firstly, it is a short-term plan for short-sight targets and then the strategies must be constructed to suit long- term ones.
As for the high competitive and large-invested industries, building development strategy is so important and bears a special meaning for the operations period of those companies. Banking industry is really a special trade field. It plays an extreme important role in developing process of the nation. However, it is also sensitive with any fluctuation of domestic and oversea economy, politic and society.
Therefore, banking activities always are strictly considered and supervised. Besides, it is daily increasing the fierce competitiveness in internal banking industry together with international widely integration process. Under the commitment with WTO, until the end of 2011, the foreign banks will be treated like the Vietnam local banks. According to SBV statement, there are 5 foreign capital banks approved and 40 foreign banks’ branches operating at the time of June, 2010.
It is necessary for each bank to itself setup strategy for its own so that it can run stably and develop upon basis of salvaging advantages and limiting risks in the integration process. From all reasons above, the most urgent present demand is that a business strategy is suitable for each bank’s characteristics in order to survive and develop, and MSB and MSB branch are not exceptional. Based on that practice, Group 11 chooses the topic: “Buiding and selecting business strategy for MSB Dong Da branch period 2010-2015”. 9 Research purposes Research purposes are to systematize and generalize the theories of constructing and selecting business strategy; analyze business reality and plan the present business strategy of MSB Dong Da.
From there, business strategy is selected and executing solutions period 2010-2015 suggested in order to make MSB Dong Da become one of the strongest branches in MSB system and the area as well. Subjects and research scope Subjects that are researched to build and choose a business strategy for MSB Dong Da branch, are MSB and MSB Dong Da themselves, the joint stocks banks in Hanoi and environment impact on MSB’s operations. Research scope is MSB Dong Da. Analyzed data is mainly got from MSB Dong Da and some other joint stock banks, plus statistics reports and the SBV’s analysis period 2005-2010.
Research methods Theoretical basis of research is the subjects’ theory: the strategic management, the operative management, the human resources management, the marketing management… The majority research methods are historical materialistic, description statistics together with analyzing, generating, comparing, and checking with others… to clearly illustrate and specify the research contents of this project. Satisfactory results The project is estimated to obtain the following results: - Showing special characteristics of building business strategy applying in banking business field. - Building business strategy for MSB Dong Da and suggesting the prospect solutions period 2010-2015. The project put the development plans period 2010-2015 upon internal analysis basis and forecast the trends of MSB Dong Da.
Surveyed against practical 10 basis and written by the operators, business plans of MSB Dong Da are an essential guideline for the branch in next years. However, the economy is complexly changing in the present circumstances. Thus, the forecasts given that solely bring strategy trends foe a long time, but not for a detailed operations plan of MSB Dong Da. Project structure Not including the opening, conclusion, references, category, the project is structured in 3 chapters: Chapter 1: The common theorical basis of building business strategy.
Chapter 2: Business environment analysis to choose MSB Dong Da’s business strategy. Chapter 3: Building business strategy for MSB Dong Da period 2010-2015. 11 CHAPTER 1: THE THEORETICAL BASIC OF BUILDING BUSINESS STRATEGY 1.1 Theories about strategy and strategic management 1.1 “Strategy” concept Term of “Strategy” appeared in the Ancient Greek time, originated from military field (strategos), with the basic theoretical point is that one side could defeat its rivals, even the bigger and stronger ones if it could take control of the battles and put the rivals into battlefields which are favorable for it to take its advantages. In current competitive business world, further researches on strategy have been carried out and paid attention to, focusing on 4 main categories including: plan, model, position, and vision.
According to them, strategy means: “A unified, comprehensive and integrated plan designed to assure that the basic objectives of enterprise are achieved” ( Lawrence R. “A pattern or plan that integrates an organization's major goals, policies, and action sequences into a cohesive whole" (Quinn, J., B (1980) Strategy for change: Logical Inscrementalism. Homewood, Illois, Irwin). “Researches to find out a suitable competitive position in an industry, a scope of activities in which competitive activities occur” (Porter, M.
(1981) The contribution of Industrial Organization to Strategic Management. New York: Wiley). “The determination of the basic long-term goals and objectives of an enterprise and action course along with the allocation necessary resources for carrying out these goals” (http://www.1 “Strategy” term (Source: http://www.vn/Strategic ) A normal strategy will reflect the way to reach the goals. Therefore, it links to relationships between final goals and implementing means based on available resources of enterprises.
Whereas, Competitive Strategy or Business Strategy gives out the business basements to compete (potential power of enterprises, correlative relations in business environment) and Company Strategy points out missions and visions of an organization, including introducing who you are, the reason to be established and development trend in the future. It can be said that strategy is the bridge linking finals goals to implementing means. The difference in using those concepts and exact meaning of those types of “strategy” is clearly demonstrated in the following figure: Figure 1.2 The difference among three types of “Strategy” term (Source: http://www.vn/Strategic ) 13 In general, a business strategy needs to meet all of the following factors: - Being researched and developed in a long time. - Boosting business development.
- Effectively exploiting all available resources. - Creating the best competitive advantages for business in future. Therefore, strategy can be said to be “a series of long-term activities built to make an organization from its current position to a desirable position in the future through establishing competitive capacity compared with advantages of other groups in the market".2 Strategy foundations Strategy is the long-term direction and scope of action of an organization aimed to gain business advantage through determination of available resources which can be used in specific business environment in order to meet market needs and ensure benefits for all relative stakeholders. In detail, strategy aims at: - Gaining long-term goals (business and social responsibility) in a sustainable way.
- Defining markets or market fragments where company does business and applies business tactics. - Answering the question: how an enterprise can take advantages over its rivals in the market with specific customers? - Answering the question: what kinds of resources such as human, skills, assets, finance or technology key should be use to achieve goals? - Determining potential outside threats which can affect on implementing strategy such as environment, competition, politic, resources… and then making risk prevention plans. - Determining values that both of the enterprise and society profit from doing business. 14 In any organization, strategies are in different levels from the whole enterprise or a group of enterprises to individual level.