Global Advanced Master of Business Administration TABLE OF CONTENTS LIST OF ABBREVIATED WORDS LIST OF TABLES – FIGURES INTRODUCTION 6 CHAPTER 1: GENERAL THEORIES ABOUT BUSINESS STRATEGY 8 FORMULATION 1.1 Theories about strategy and strategic management 8 1.2 Strategy formulation process 9 1.1 Determination of business assignment 9 1.2 Assessment of external factors 10 1.3 Assessment of internal situation of enterprises 11 1.4 Strategic analysis and choice 11 1.3 Basic steps of strategic management 11 1.1 Period for strategic planning 11 1.2 Period for strategic implementation 12 1.3 Period for strategic check 12 1.2 Strategic planning tools 12 1.1 Period for information collection and systematization 12 1.2 Competitive image matrix 13 1.2 Period for combination 13 1.3 Grand Strategy Matrix 15 1.3 Decisive period 16 CHAPTER 2: CONDITION OF BUSINESS ENVIRONMENT OF 17 1 Global Advanced Master of Business Administration AGRIBANK-HANOI BRANCH 2.1 Overview of Agribank and Agribank - Hanoi branch 17 2.1 Overview of Agribank 17 2.3 Vision and mission 18 2.2 Overview of Agribank - Hanoi branch 21 2.1 Process of formation and development 21 2.2 Operational and institutional structure 23 2.3 Results of business operations 23 2.2 Analysis of environmental factors 36 2.1 Analysis of external environmental factors 36 2.1 Analysis of macroscopic environment according 38 to PEST model 2.2 Analyzing industry’s environment according to 42 M.3 Assessment of opportunities and threats 44 2.4 External Factor Evaluation Matrix (EFE) 46 2.5 Competitive imagine matrix 47 2.2 Analysis of internal Agribank - Hanoi branch.5 Research and development 52 2.7 Assessment of strong points, weakness 53 2.8 Internal factor evaluation matrix (IFE) 54 2 Global Advanced Master of Business Administration 2.3 The necessity of making business strategy for Agribank – Hanoi 55 branch CHAPTER 3: BUSINESS STRATEGY OF AGRIBANK - HANOI 57 BRANCH DURING THE PERIOD 2012 - 2015 AND ITS SOLUTIONS 3.1 Business purpose of Agribank – Hanoi branch by 2015 57 3.1 The overall objective of Agribank.2 Matrixes formulation and Business strategic selection 61 3.1 SWOT matrix analysis 61 3.2 SPACE Matrix Analysis 63 3.3 Analysis of grand strategy matrix 64 3.4 Determining alternative business strategies 65 3.3 Solutions for implementating Strategies 71 3.1 Solution to human resource development 71 3.2 Solutions for Marketing and communication 73 3.3 Solution for Technology 76 3.4 Solutions for restructuring the organizational structure 77 CONCLUSION 81 RECOMMENDATIONS 82 REFERENCE 84 ANEX 85 LIST OF ABBREVIATED WORDS 3 Global Advanced Master of Business Administration NHNN State Bank of Vietnam HN Ha noi Agribank Vietnam Agriculture and Rural development Agribank Hanoi Vietnam Agriculture and Rural development – Hanoi Branch IT Information Technology BTA Bilateral Trade Agreement EFE External Factor Evaluation Matrix IFE Internal Factor Evaluation Matrix SWOT SWOT matrix (Strengths, Weaknesses, Opportunities, and Threats) SPACE SPACE matrix (The Strategic Position and Action Evaluation) QSPM Quantitative Strategic Planning Matrix Vietinbank HN Vietnam Industry and Commercial Bank – Hanoi Branch BIDV HN Bank for Investment and Development of Vietnam – Ha noi Branch Vietcombank HN The Bank for Foreign trade of Vietnam – Hanoi Branch TCTD Banker LIST OF TABLES – FIGURES 4 Global Advanced Master of Business Administration Results of implementation of some operation norms for the 2005 – Table 2.1 19 2010 period Results of business operation of Agribank in Vietnam for the 2005- 2010 Table 2.3 Operating results of Agribank - Hanoi branch 24 Table 2.4 Data sheet of customers’ deposit mobilization 26 Loan and structure of outstanding credit in the 2007 – 30/09/2011 Table 2.6 Services operations 31 Table 2.7 The growth of number in banking industry 36 Table 2.8 Growth of capital mobilization and credit 37 Table 2.9 EFE matrix 46 Table 2.10 Compatitive image matrix 47 Table 2.11 IFE matrix 55 Table 3.1 SWOT matrix for Agribank - Hanoi branch 61 Table 3.2 SPACE matrix for Agribank - Hanoi branch 63 Table 3.3 QSPM matrix for Agribank - Hanoi branch 66 Figure 1.1 Business strategy formulation process 9 Figure 1.2 External environment 10 Figure 1.3 SWOT Matrix 14 Figure 1.4 SPACE Matrix 15 Figure 1.5 Grand Strategy Matrix 15 Figure 2.1 Operational and institutional structure 23 Figure 2.2 Map of transaction offices under the branch 23 Figure 2.3 GDP growth speed of economic sectors in the 2000 – 2010 period 38 Figure 2.4 Average GDP per capita in the 2000 – 2010 period 39 Figure 3.1 SPACE matrix for Agribank Hanoi branch 64 INTRODUCTION 1. Reasons for topic 5 Global Advanced Master of Business Administration The financial crisis has rocked the globe and one again confirmed the special role of banks in the globalized economy in recent years. Today, close the bank or weakened banking system not only disrupt the domestic economy but also quickly spread like infectious diseases. Although Vietnam's economy is not really integrated into the regional economy, but the sequence of the financial crisis has left the Vietnam banking system, which to be solved.
The integrated trend is an objective process; time of integration is very near. To integrate successfully requires the Vietnam banks improve their competitiveness quickly. Currently Vietnam Commercial bank system includes five state-owned banks, 37 joint stock banks, 5 joint venture banks and 48 foreign bank branches. To be sure, with the easing route and banking liberalization for foreign banks, the competitive level will be increasingly fierce among banks.
In the extremely difficult period of the Vietnam banks when Vietnam integrates into the world economy, if business strategy of a bank executed well, it will be the determining factor to the survival, development or speed up of the bank. Bank of Agriculture and Rural Development of Vietnam is the leading commercial banks play a key role in investing the capital for economic development of agriculture, rural as well as for other areas of the Vietnam's economy. With the knowledge gained from the MBA course of Griggs University and is one of the staff of the Bank for Agriculture and Rural Development - Hanoi Branch with a desire to contribute to the Bank for Agriculture and Rural Development growing more and more, the 7 group decided to select topic: “Building business strategy for Vietnam Bank for Agriculture and Rural development (AGRIBANK) - Hanoi branch for period 2012-2015”. Purpose of research: The topic is with a view to establish and select business strategy for Agribank - Hanoi branch period 2012- 2015 and propose solutions to implement this strategy, aiming at leading Agribank - Hanoi branch to be one of great branches among Agribank system and on the its area.
6 Global Advanced Master of Business Administration The great assignment is done by a group of most members who are working in banking and is investigated, analyzed based on the reality, therefore business strategy set up for Agribank - Hanoi branch by this group must make a positive contribution to the branch’s activities in the following years. Research method It is mainly based on knowledge of the economic subjects such as: strategic management, financial and monetary theory, marketing management, human resource management, financial management and practical knowledge application. The data analysis according to historical materialism method and descriptive statistics based on the statistics, the figures reported by the State Bank and of the commercial banks. Lay-out of the great assignment Apart from introduction, conclusion, reference materials, the great assignment includes 3 chapters: Chapter 1: General bases of arguments about business strategy formulation Chapter 2: Analysis of business strategy formulation for Agribank - Hanoi branch Chapter 3: Business strategy of Agribank - Hanoi branch period 2012-2015 and Solution for implementation CHAPTER 1 7 Global Advanced Master of Business Administration GENERAL BASES OF ARGUMENT ABOUT BUSINESS STRATEGY FORMULATION 1.1 Theories about strategy and strategic management 1.1 Strategic definition Definition of the strategy appeared in the Ancient Greece, this term of military origin derives from the word “Strategist” referring to a leader of commander of an army.
In most cases, the strategy is a military term used to refer to the plan of disposing and distributing forces for the purpose of beating enemies or achieving its military target. Nowadays, definition of the strategy is used very widely and considered as base for operation of enterprises. Accurate definition of the strategy according to natural levels depends on point of view. In general, a strategy when set up must satisfy all the followings requirements: - Being mapped out for a long time; - Creating the growth of the organization; - Using all resources that the organization has in the best effective way; - Creating the best competitive position for the organization in the future.
Hence, it can be said that, the strategy "is a series of activities of the long term, built up to enable an organization to achieve its desired position from current position through its formulation of competitiveness in comparison with other organizations’ advantages on the market. Strategic management is the process of analyzing current environment, forecasting future environment, determining mission, target and strategic program, carrying out, inspecting and evaluating the implementation of targets, strategic program in reality.2 Strategy formulation process 8 Global Advanced Master of Business Administration Figure1.1: Business strategy formulation process Mission, vision Formulation & choice of External analysis Internal analysis strategy + Macro analysis: + Model: (SWOT) external analysis. Value chain, + Micro analysis: Five Competitive advantage competitive forces model. + Conclusion: + Conclusion: Strengths Chosen strategy Opportunity Weakness Lead on expenses Threat Product differentiation Concentration Accord apparatus Implementation and Supervision and organization with adjustment of strategy assessment of strategy strategy implementation Source: document of Strategic management book 1.1 Determination of business assignment The report of business assignment is a statement of “reason for existence” of an organization.
It responds to the central question” what is our business?” It is obvious that the report of business assignment is extremely necessary for establishing and drafting strategies in an effective way” (Peter Drucker,1970).2 Assessment of external factors 9 Global Advanced Master of Business Administration Figure 1.2: External environment Source: Teaching materials on strategic management Environment of an organization refers to external factors impacting on the operation and operational result of that organization. Environment of the organization can be divided into two levels: macro and micro environments (industrial environment). Analysis of macro environment (comprising 06 segments according to widen PEST model): Economic, Technological, Socio-cultural, Demographic, Political- Legal and Global environments. Analysis of industrial environment (Five competitive forces model of Michael Porter): Potential competitors; Competition between competitors within the industry; Right to negotiate from customers; Right to negotiate from supplier; Threat from substitute products.
Analysis of environmental factors shall enable enterprises to identify Opportunities (O) which can be used or Threats (T) which must be face with. Accordingly, enterprises build up clear business assignment, determine long-term feasible target, design suitable strategies and lay out reasonable policies for achieving annual targets.3 Assessment of internal situation of enterprises 10 Global Advanced Master of Business Administration Internal situation of the enterprise is often accessed via functional areas such as: Finance, Human resources; Organizational structure, Marketing, Research/Development; Information Technology, etc. Purpose of analyzing internal environment is to identify existing and potential resources, key capability, generating competitive advantages of the enterprise; and to recognize obstacles in remaining sustainable competitive advantages. Analysis of internal affairs of the enterprise shall help identify strengths (S) and weaknesses (W) of the enterprise.
As a result, business strategies chosen need to dramatically promote strengths and overcome weaknesses of the enterprise as well.4 Strategic analysis and choice Strategic analysis and choice is to make subjective decisions based on objective information, aiming at determining possible operations processes for choice, by which the enterprise can complete its responsibilities and targets. Strategies, targets and mission of the enterprise in combination with internal and external control information shall the base for establishment and assessment of strategies which can be chosen feasibly.3 Basic steps of strategic management 1.