TABLE OF CONTENTS Page Preamble Chapter 1: SCIENTIFIC BASIS OF THE TOPIC 1.1 Concept and role of business strategy.1 Concept of business strategy.2 Role of business strategy.2 Procedure of establishment of strategy.3 Selection of strategy.1 Strategy at company level.2 Strategy at business level.17 Chapter 2: ANALYSIS OF BUSINESS ENVIRONMENT …………………….1 Overview of Tien Phong Joint Stock Commercial Bank-TPB ……………19 2.1 Establishment and development process of TPB …………………………19 2. Business features of TPB ……………………………………………….3 Business results of TPB in recent years ………………………….2 Analysis of impacts of external factors on business of TPB …………….1 Impacts of macro environment.1 Socio-economic factor .2 Political – legal environment.2 Impacts from micro environment.1 Supplier and customer.3 Identify opportunities and challenges of TPB.3 Analysis of internal environmental factors of TPB ……………………….1 Factors of internal environment.2 Identify strengths and weaknesses of TPB.1 Strengths of TPB.4 Weaknesses of TPB.55 Chapter 3: BUILD THE DEVELOPMENT STRATEGY OF TPBank TILL 2015 …………………………………………………………………………………….1 The development objective of TPB till 2015.3 Specific development objectives of TPB till 2015.2 Build and select the development strategy of TPB till 2015.1 Foundation to build the strategy.2 Form strategies from SWOT Matrix ……….1 Market penetration strategy .2 Market development strategy.3 Development strategy for new products and services.6 Development strategy for financial capacity.7 Improvement strategy for human resource quality and management.8 Establishment strategy for sustainable customers.9 Promotion strategy for marketing operations.3 Overall solution for the strategy.1 Improve financial capacity.3 Solutions of the network and distribution channel.1 Re-arrange the available business network.2 Enhance to open the transactional locations at the supermarket.3 Open more banking service office.4 Establish and expand ATM network.4 Solutions of technology.5 Solutions of completing and developing the product of the banking services.1 Product group of capital mobilization.2 Group of credit product.3 Group of product of payment service and other products.6 Complete the marketing policy.1 Implement frequently the analysis of the competitors.2 Develop the trademark of TPBank.7 Improve the capacity of risk management of BIDV.1 For the State.2 For the State Bank of Vietnam. 77 CONCLUSION REFERENCES LIST OF ABBREVIATIONS Page 3 ACB: A chau Commercial Joint Stock Bank ATM: Automatic Teller Machine TPB: Tien Phong Commercial Joint Stock Bank AGRIBANK: Vietnam Bank for Agriculture and Rural Development SOCB: State-Owned Commercial Bank SBV: The State Bank of Vietnam S&P: Services and Products USD : United States Dollar Page 4 LIST OF TABLES Page Table 1.1: Business results of other activities of TPB period 2008-2010.2: Business of Tien Phong Bank period 2008-2010.3 Summary information about biggest banks in Vietnam.4: The matrix of competitive image.5: The matrix of external factors evaluating (EFE).6: The capital level.7: The matrix of internal factors evaluation of Tien Phong’s Bank.2 QSPM Matrix S/O group.3 QSPM Matrix S/T group. 64 Page 5 LIST OF FIGURES Page Figure 2.1: Chart of capital growth and mobilization of Tien Phong Bank period 2008- 2010.2: Credit growth chart of TPB period 2008-2010 ……………….3: Chart of credit structure of Tien Phong Bank period 2008-2010.4: Revenue from international payment ………………………………………30 Page 6 PREAMBLE 1.
The reason why choosing the topic The world economy integration is an essential trend and objective demand for any country during its development process. This trend has been increasingly formed obviously, especially while the market economy is becoming a common playground for all countries, the financial market is expanding its scope without limit, it not only creates favorable conditions to strengthen cooperation, but also promotes and accelerates the competition process. In the field of banking, the international integration is to open banking operations of one economy with the international financial community like credit, monetary relations and other banking operations, as well as remove barriers which separate this area from the remaining of the world. During integration, it requires banks and non-banking financial organizations should directly compete to each other to exist and develop.
Banks which want to maintain their profit and competitiveness should always renovate and develop in all aspects: Capital, technology, service, organizational structure, managerial qualifications, quality of risk control system as well as uninterruptedly enhance their prestige and brand name. For Tien Phong Commercial Joint Stock Bank (TPB), after more than 03 years of operation, it achieved several results: Rate of capital mobilization and credit supply increases higher and higher, contributing to promote the economic growth, supply banking services to be increasingly expanded and developed, create utilities to attract clients, contributing to create favorable conditions to circulate capital more quickly, save expenses for social circulation, TPB network structure to be increasingly diversified, expanded and developed. When entering into integration, TPB shall cope with severe and harsh competition which may threaten the existence and development of TPB; therefore, how TPB must build business strategy within next 05 years, an extremely difficult period of Page 7 Vietnam banks. Being a managerial cadre in TPB system, I attach special importance to the above issue and choose the topic: “Build the development strategy of Tien Phong Commercial Joint Stock Bank till 2015” 2.
Study’s purpose Study and systematize fundamental theories of strategy which are the foundation for building the strategy of TPB. Analyze and evaluate the real situation, business environment of TPB, then analyze and select suitable strategies for the TPB development in the forthcoming years. Build solutions to perform strategies. Study’s method Collection method of secondary figures Figures of the thesis extracted and summarized from statistical annual publication, financial statement, report figures from the State bank of Vietnam website, annual report of banks.
Besides, the thesis also uses several references, newspapers, magazines and teaching materials for specific purpose. Comparative method, summary method, specialist method During analyzing, the author use comparative method, summary method for TPB’s figures in the past and at present, as well as compare targets, figures about the business performance of TPB with some other Commercial Banks; and consult opinions of TPB’s specialists about the mark evaluation during matrix analysis. Topic’s lay-out Apart from the preamble, conclusion, appendix and list of references, the thesis also consists of the following chapters: Chapter 1: Scientific basis of the topic Page 8 Chapter 2: Analysis of TPB’s business environment Chapter 3: Build the development strategy of TPB till 2015 Page 9 Chapter 1 SCIENTIFIC BASIS OF THE TOPIC 1.1 Concept and role of business strategy 1.1 Concept of business strategy Business strategy of an enterprise is a general action program towards the implementation of the goals of the enterprise. The strategy is not aimed to map out how to reach these goals, as this is task of many other supporting programs and functional strategies.
Business strategy involves how an enterprise can compete successfully in a certain market. It relates to strategic decisions in terms of selecting products, meeting customers’ requirements, and gain competitive advantage in comparison with opponents, exploitation and creating new opportunities. So far, there are many different concepts about business strategy depending on different approaches.David : "Business strategy is a science of art and establishment, implementation, and evaluation of decisions relating to many functions, allowing an organization to reach set goals”. - According to Garry D.Arold and Bobby R.Bizzell : "Strategic planning is a process of researching current environment as well as the future, planning goals of an organization; set forth, implement, test the implementation of decisions in order to reach these goals in the current environment as well as in the future”.2 Role of business strategy Firstly, business strategy helps enterprises recognize opportunities and threatens in business, then to make suitable development policies to reach its target.
Page 10 Secondly, business strategy helps managers forecast some contingencies and risks which may occur in current time as well as in the future, and then base on its potential to be active in coping with those contingencies. Thirdly, business strategy coordinates with divisions in the enterprise in the best manner; helps members to bring into full play its activeness, creativeness to reach the common goals.2 Procedure of establishment of strategy • Step 1: Study the environment Environmental factors have great impacts as they affect next steps in the strategic management. The set strategy must be planned on the basis of environmental conditions of the enterprise. Environment of an enterprise includes factors, forces, institutions outside of the enterprise which are beyond the control of managers, but they have great influence on business and operation results of the enterprise.
Environment of an enterprise includes macro and micro environment. - Study macro environment: is a process of studying factors such as economy, politics, culture, society, legal bases, geography, technique, technology and policies of the State… - Study micron economy: is a process of studying factors such as opponents, consumers, suppliers, and alternative products, units which are going to be merged or retreated from the sector. Analysis of macro and micro environment shows opportunities and threatens which enterprise will have to meet to establish strategies in order to take advantage of opportunities and avoid or reduce adverse effects of threats. After analysis of each separate factors of the macro environment, managers’ task is to give a common conclusion about factors which mainly brings opportunities and causes contingency of the environment.
According to Fred R.David, it is needed to establish: Matrix of external factor evaluation (EFE): Page 11 This matrix allows summarizing and assessing outside environment of an enterprise. This is an indispensable matrix in strategy establishment. Regardless of main opportunities and threatens included on the EFE, possible total highest important mark of an enterprise is 4 and lowest is 1. Total average important mark is 2.
If the total important mark is 4, the organization is coping well with current opportunities and threatens in its environment. In other words, strategies of the enterprise effectively take advantages of current opportunities and minimize possible adverse impacts of outside threatens. If total important mark is 1, this show that the strategies set by the enterprise could not take advantages and could not avoid outside threatens. An important part of step 1 is the establishment matrix of competitive images.
Among all factors which can affect the enterprise, impacts of competitiveness is considered to most important factor. Competitive image matrix is the expansion of matrix assessing external factors in the conditions that importance, classification and total important marks having the same meaning. Total mark assessed of opponents is compared with the sample enterprise. Factors being listed in this matrix includes: market share, competitiveness, financial position, product’s quality, trustworthy of customers.
Degree of classification shows the manner in which strategies of the enterprise cope with each factor of opponents: importance of the mark 4 is the best one; the mark 3 is the above average level; mark 2 is the average level and mark 1 is the bad level. • Step 2: Internal analysis Is the process of analyzing internal activities of the enterprise which managers are aware of and can control, through the analysis, strengths and weaknesses in business of the enterprise can be recognized to establish strategy to bring into full play of strengths and overcome weaknesses. Page 12 The analysis of the environment requires enterprises to collect, process information about: production, management, financial activities, personnel, study for development, and market and information system of the enterprise. The final step in the internal analysis is the establishment of matrix for internal factor evaluation (IFE): It is a tool to summarize and evaluate strengths and weaknesses of functional business divisions and it also provides basis to identify and evaluate the relationship among those divisions.
The important mark in this matrix is classified from the lowest level of 1 marks to the highest level of 4 marks and average level of 2. If the total important mark is lower than 2.5, this means that enterprise is weak at internal activities and if the mark is higher than 2.5, this means that the enterprise is strong at internal activities. • Step 3: Identify goals of an enterprise Goals of an enterprise identify results which the enterprise wishes to reach after some certain years. The goals must ensure the scientific features, the consistency, continuousness, advancement, practicality and flexibility.