VIETNAM NATIONAL UNIVERSITY, HANOI SCHOOL OF BUSINESS W8 Nguyen Huyen Trang BUSINESS STRATEGIES: THE CASE OF BAOVIET’S FRONTING AND BROKING CORPORATE INSURANCE MASTER OF BUSINESS ADMINISTRATION THESIS Hanoi- 2011 VIETNAM NATIONAL UNIVERSITY, HANOT SCHOOL OF BUSINESS Nguyen Tuyen Trang BUSINESS STRATEGIES: TIE CASE OF BAOVIET'S FRONTING AND BROKING CORPORATE INSURANCE Major: Business Administration Code: 60 34 05 MASTER OF BUSINESS ADMINISTRATTON ‘THESIS Supervisor: PhD. Nguyen Viet Anh TIanoi - 2011 This watermark does not appear in the registered version - httpuAwww.com TABLE OF CONTENTS ACKNOWLEDGMENTS. i z gia oe 1 ABSTRACT scens gse01 0814 /01 0 16401 40 160 1 60 53072/306.10 i TÔMT T‹sseessesessseseseoessonsee iv TABLE OF CONTENTS. RAIS ‘QB TABLES csizsssnsssvsscssyccopcccsconensnccnnanssonsdnndeaseonsessueseqcosoconnnsensnennpeete LIST OF FIGURES LIST OF ABBREVIATION.
§cope of wotk. Objeetives and aim. coll 4, Research questions. Research methods and data sources.
— ò4 CHAPTER 1: THEORETICALFOUNDATION ud) 1.2 Concepts of business strategy. Vision and Mission statement.22 CHAPTER 2: FORMULATION OF BUSINESS STRATEGIES. The concept of service area G2022 se ¬—-.1 Insuranee in general. 24 This watermark does not appear in the registered version - httpuAwww.2 Characteristics of fronting and broking corporate insuranee.2 Introduction to Bao Viet Insuranee.1 Itroduetionto Bao Viet Holdings.2 Bao Viet Insurance Corporation (Bao Viet Insurane).3 Vision and Mission statemehf.3 Internal environment analysis .4 Choice of strategies.- CHAPTER 3: IMPLEMENTATION OF CHOSEN STRATEGIES.
Choosing strategic solutions.1, SWOT matrix for strategic solutions. Performing components of srategy implemenfation. 3:22 SH eeeiiaiaeenniiiee 32/3 TH bseeanmisdesaianiisbeeee 3.1 Activities to strategic solution 01 - Improving clients discovery and ST Bổ seoeemaionenoieeenniogiiiaestii6i610005118000010002001003095001-300101560102008/00000.2 Activities to strategic solution 02 - developing professional underwriting 78 3. 8Ũ 3,4 Recommendations to Bao Viet Insurance.5 Recommendations to the Government.SICSOHIE ss i i HRSPHA00V90/ 89 This watermark does not appear in the registered version - httpuAwww.com LIST OF TABLES Table 1.1: Sample SCA identification process .2: A complete SWOT analysis .3: SWOT matnix 21 Table 2.
-year base-line forecasting.2: Vietnam Economic Activity Table 2.3: Real GDP growth.4: Foreign direct investment projects licensed in period 2000 - 2009.5: Numbers of enterprises (2008 — 2009). Hee we M4 Table 2.6: Some figures of non-life insurers.8: Identification of sustainable competitive advantage 68 Table 2.9; Assessment of Weaknesses.11: SWOT matrix for generic strategy. GREAT model for generic strategy - Table 2.13: GREAT model for generic strategy - 2.1; SWOT matrix for strategic solution Table 3.2: GREAT model for strategic solutions Table 3.3: Actions plan for 5-year strategies. This watermark does not appear in the registered version - httpuAwww.com LIST OF FIGURES Figure 1.1:Generic strategies MAtHIX.2: Strategic management process.4: Five forces model.5: Value chain model.1: Structure chart — Bao Viet Holdings.2: Structure chart - Bao Viet Insurance Corporation.3: Baseline forecasting for 5 years.
as triingtö3e6sstgiancgsias BO: Figure 2.4: Exchange rate VND/USD.5: Interbank USD/VND.6: 'Typhoons and stormns.7: Non+life insurers diviđed by OWNEf§. scene 7 om 31 Figure 2.9: Einancial ñgures of4 giants — 2009.ỔT This watermark does not appear in the registered version - httpuAwww.com LIST OF ABBREVIATION SWOT Strengths, Weaknesses, Opportunities, Threat GREAT Gain, Risk, Expense, Achievability, Time bound PEST Political, Economic, Social, Technological. SCA Sustainable Competitive Advantage SCIC State Capital Investment Corporation CEO Chief Executive Officer GDP Gross Domestic Price IT Informatics Technology R&D Research & Development ` This watermark does not appear in the registered version - httpuAwww. The problem “Tomorrow always arrives.
It is always different, and then even the mightiest company is in trouble if it has not worked on the future” - Peter Drucker, the legendary management theorist, writer and consultant. Business strategies help organizations figure out the right ways to increase their competitiveness and compete successfully, especially in the under-systematic and changing market. As the saying above, companies who applying appropriate strategies will create sustainable development, On the contrary, companies with unsuitable strategies or without strategies will come to an end, Bao Viet Insurance is a big insurer in Vietnam at the moment. However, nothing is ever built to last without its own vision and efforts, especially in doing business with foreigners.
In fast-changing environment, right strategies are of much more importance. The study will help formulate and implement appropriate strategies for Bao Viet’s fronting and broking corporate insurance with the hope that this service will get and maintain its sustainable development. Scope of work ‘This research focuses on the strategic analysis, business strategy formulation andimplementation; and applying the analysis and suggestions to fronting and broking corporate insurance of Bao Viet in order to suggest suitable business strategies for the company in terms of fronting and broking corporate insurance until 2015. Objectives and aim In terms of objectives, the research helps review the theory of business strategies and helps give a clear view on industry and service area.
And then it will apply the theory of business strategies formulation. selection and implementation into the case of Bao Viet in order to figure out appropriate business strategies for Bao Viet’s fronting and broking corporate insurance. This watermark does not appear in the registered version - httpuAwww.com In terms of aim, the suggested appropriate business strategy can help Baoviet remain the sustainable leading insurance company in increasingly complicated and challenging Vietnam insurance market. Research questions For getting suggested business strategies for Bao Viet’s fronting and broking corporate insurance, it is vital to answer and make clear of the following research questions: - What are business strategies? - What is the way/process to formulate, select and implement the business strategies? - What is the nature of industry and service area? - How should Bao Viet do to formulate suitable business strategies for fronting and broking corporate insurance? - How should Bao Viet do to implement the selected strategies into business and operation reality? - What are recommendations to the company as well as Government in terms of strategic performance? 3.
Research methods and data sources The qualitative (descriptive) methodology is applied to this thesis through specific case study. A review of theoretical foundation is carried out to understand the process to formulate, and choose the right strategies; and then know how to apply them into reality. Both secondary and primary data collection are used for this research. The theoretical foundation part deals with studying books, articles, online documents and other sources.
The secondary data are also collected from Bao Viet Insurance and its different departments, from State’s administration offices, from other insurance companies’, brokers’ and partners’ reports and websites (both local and foreign ones). The primary data are collected though interviews of managers, staffs, clients and partners from Bao Viet Insurance as well as from other insurance This watermark does not appear in the registered version - httpuAwww.com companies, insurance brokers and partners, Some in-dept interviews have been conducted with experts and managers from several companies regarding non-life insurance in order to complete the assessment, ranking, comparison and so on (the detailed results show in tables of chapter 2 and chapter 3 and the detailed list of interviewees shown in Appendix C). Significance In terms of theory, the thesis will help understand more about business strategies formulation and implementation (vision and mission statement, external and internal environment analysis; recognition of opportunities, threats, strengths and weaknesses; and selection and implementation of the right business strategies in order to achieve company’s goals). In terms of practice, the thesis should help suggest business strategic analysis and business strategies selection and implementation for Bao Viet, especially for fronting and broking corporate insurance.
This is also the reference for other firms and products/services, especially for insurance companies and insurance products/services, which need suitable business strategies for their development 7. Limitations The thesis is directly applied to the case of Bao Viet Insurance, especially fronting and broking corporate insurance. In so as to be applied to the cases of other products/services and other firms, it is necessarily required further researches. In addition, the thesis is also applied to the case of Bao Viet’s fronting and broking corporate insurance in the period of 5 years from 2011 to 2015.
For different period’s appropriate business strategies formulation and implementation, further researches are also required, 8, Expected results The study reviews the process to formulate, select and implement suitable business strategies for the company. And then the study successfully formulates and selects right business strategies for Bao Viet in terms of fronting and broking This watermark does not appear in the registered version - httpuAwww.com corporate insurance. Furthermore, the study suggests some appropriate measures for the company to implement the chosen strategies into business and operation reality. Thesis structure The thesis includes Introduction part, thenthe three chapters, and the Conclusion part as following: Introduction part deals with the research methodology for the thesis to be cartied out.
Chapter 1, Theoretical foundation, provides a fundamental review on strategic management theory. It focuses on the business strategies formulation, selection and implementation, Chapter 2, Formulation of business strategies, presents the specific process to formulate the suitable business strategies for Bao Viet’s fronting and broking corporate insurance. Chapter 3, Implementation of chosen strategies, suggests recommendations on the business strategies implementation. And, Conclusion part draws some significant points and results of the thesis, This watermark does not appear in the registered version - httpuAwww.com CHAPTER 1: THEORETICAL FOUNDATION “Without a strategy the organization is like a ship without a rudder, going around in circles.” [Joel Ross and Michael Kami] In the world of business, there always remains the question: why some firms/businesses succeed while others fail, or why some firms succeed in some times but still fail in the future.
Strategy and strategic management shall answer the above. The today’s highly competitive pressures have put managers and employees on the special attention to strategic responsibilities. Thus, it is very important for them to master the strategic management, both theory and practices. This chapter is born to provide a whole and general picture on strategy, business strategy, and strategic management.1 Business strategy LLL.
Strategy The word “strategy” derives from an ancient Greek word “strategos”, which is the combination of the two: stratos (for army) and ago (for leading). A strategy may be accepted as a leadership plan. The concept of strategy can be said to borrow from the military with the birth of “The Art of War”. Coming back to the date somewhere around 320 BC when the Chinese military strategist Sun Tzu wrote The Art of War, a work influenced not only on war-strategic minds but also on the thinking of many moder businesses, and then led to the thoughts of “art” being applied on modern business.
We can regard The Art of Waras the start of strategy and strategic management and a serious subject, the publication of overall framework and methodology for the formulation of strategy. There are a plenty of strategy concepts and views. Some of them are commonly accepted and used as follows: This watermark does not appear in the registered version - httpuAwww.com “A company’s strategy is the “game plan” management has for positioning the company in its chosen market arena, competing successfully, pleasing customers, and achieving good business performance. Strategy consists of the whole array of competitive moves and business approaches that managers employ in running a company”.
It can be known that strategy is both proactive (intended) and reactive (adaptive); is partly visible and partly hidden to outside view. According to Michael Porter, the essence of strategy is choosing to perform activities more differently than the rivals do. Another term that Michael Porter mentioned is “strategic positioning”. In the Article named “What is strategy”, he said that Strategic positioning attempts to achieve sustainable competitive advantage by preserving what is distinctive about a company.
It means performing different activities from rivals, or performing similar activities in different ways.2 Concepts of business strategy The concepts of business strategy may have origins from strategy at different levels of business — ranging from overall business through to individuals working in it: corporate strategy, business unit strategy, and operational strategy. There still exist a lot of definitions on business strategy.