vietnam national university, HANOI school of business Trinh Van Do * master of business administration thesis Trinh Van Do IMPROVING THE COMPETITIVE ABILITIES OF THE BANK THROUGH IMPLEMENTING THE NEW PRODUCT - LOGISTICS FINANCING- "TECHCOMBANK CASE STUDY" * master of business administration thesis 2007 Hanoi - 2007 1 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com vietnam national university, HANOI school of business Trinh Van Do IMPROVING THE COMPETITIVE ABILITIES OF THE BANK THROUGH IMPLEMENTING THE NEW PRODUCT - LOGISTICS FINANCING- "TECHCOMBANK CASE STUDY" Major: Business Administration Code: 60 34 05 Master of business administration thesis Supervisors: DR. Ta ngoc Cau Hanoi - 2007 2 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com CONTENTS Acknowledgements i Abstract ii TÓM TẮT iii Key words iv Content vi List of Tables x List of Figures xi INTRODUCTION 1 1. Necessity of the thesis 1 2. Objective of the thesis 3 3.
Contribution of the thesis 8 7. Thesis structure 9 CHAPTER 1: LITERATURE REVIEW 10 1. Competitiveness, competitive advantages and the importance of competitive advantages. Competitiveness and competitive advantages.
The importance of competitive advantage 11 1. Specific expression of competitive advantage. The ability to meet the demand of customers timely and quickly 13 1. Nature and process to realize sustainable competitive advantage 14 1.
Source and process to recognize sustainable competitive advantage 14 vi LUAN VAN CHAT LUONG download : add luanvanchat@agmail. Sources, capability, key ability, exceeded capability and sustainable competitive advantage. Competitive advantage and sustainable competitive advantage 19 1. Criteria of sustainable competitive advantages 20 1.
The difficulty of imitation 21 1. Coincidence with factors of success 22 1.3 Functional field- The foundation to create sustainable competitive advantages 23 1.1 Production and operation management 23 1.4 Research and Development (R &D) 28 1. The planning of the labor source 31 1. Training and Education 31 1.
Salary and good-treatment- policy 32 1.7 Customer relations and customer services 32 1.8 Building trademark and culture of enterprises 33 1. Building culture of enterprises 34 1. New service and product implementing 35 1. The new service and product definition 35 vii LUAN VAN CHAT LUONG download : add luanvanchat@agmail.
Why do the firms design and offer new service and product 35 1. The development process of new service and product 35 1. Mass customization 38 CHAPTER 2: ANALYZING THE REAL SITUATION OF TECHCOMBANK 39 2. The Techcombank mission statement and vision 44 2.
Techcombank internal analysis 50 2. Competitive environment analysis 52 2. Macro competitive environment 52 2. Industrial competitive environment 54 2.
Identifying the competitive advantage of Techcombank through comparison with the same ones in banking field 56 2. SWOT analyzing 58 CHAPTER 3: PRODUCT DESCRIPTION 62 3. The features of Logistics Financing product 62 3. The conception of Logistics financing of Techcombank 62 3.
The structure of Logistics financing of Techcombank 62 3. The value Logistics financing creating for its clients and Techcombank 63 3. The value Logistics financing creating for Techcombank 63 3. The value Logistics financing creating for its clients 66 3.
Conditions to use the service 68 3. Procedure of purchasing the service 68 3. Logistics partners of Techcombank 69 CHAPTER 4: SOLUTIONS RECOMMENDATIONS AND CONCLUSION 70 4. Providing unique products and its structures 70 4.1 How to be a unique product? 70 4.
Solutions to structure of the bank 71 4. Solutions to system development 72 4. Solutions to structure of procedures 73 viii LUAN VAN CHAT LUONG download : add luanvanchat@agmail. Solutions to targeted customers and marketing 73 4.
Solutions on human resources 74 4. Solutions to technology 75 4. Solutions to finance 76 4. Solutions to risk management 76 a.
Credit risks management 77 b. Market risks management 78 c. Exploiting risks management 78 4.1 Recommendations for Techcombank 79 4.2 Recommendations for the Government 81 4.3 Conclusions 83 ix LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com Key Words APPENDIX2. -LOGISTICS FINANCING BUZZ-WORDS- 1- In- transit stocks 2- In- transit assembly 3- Inventory control 4- Inventory management 5- Invoicing 6- Issuing delivery invoice 7- Just in time inventory 8- Link customer information system systems for electronic management of supply chain process 9- Logistics management services 10- Localizations of products 11- Market research 12- Materials management 13- Merchandising 14- Modal analysis 15- Multi- modal management systems 16- Multi- package shipment processing 17- Online telecommunications 18- Order fulfillment 19- Order processing and control 20- Parts sequencing 21- Post production services 22- Pricing 23- Project cargo 24- Reduce inland transportation cost iv LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com 25- Receiving report 26- Quality control 27- Quality assurance 28- Relocations 29- Remote spare parts distribution 30- Sailing advice 31- Sea/air 32- Shipment status report 33- Secure storage 34- Value added services 35- Warehouse and inventory 36- Warehouse localization 37- Vendor compliance v LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com List of Tables Tables.
2-2: Invisible sources………………………………………………16 Table. 2-3 : Criteria to define sustainable competitive advantages. 2-4: The combination among sustainable criteria…………………. 2-5: The structure of culture of enterprises…………………………34 List of Figures Figure.
2-1: New service or product developnt proces……………………37 x LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com REFERENCES Reference Books Articles Interviews Internet sites APPENDIX APPENDIX 1.-THE LOGISTICS FINANCING SERVICES QUESTIONNAIRE APPENDIX2. -LOGISTICS FINANCING BUZZ-WORDS- APPENDIX 3 -SUM OF THE QUESTIONNAIRE APPENDIX 4- THE STRUCTURE OF TECHCOMBANK xi LUAN VAN CHAT LUONG download : add luanvanchat@agmail. Necessity of the thesis The thesis comes to take full advantages of the event Vietnam joined the WTO. WTO has been creating a common market among its members, speeding up commercial exchange and improving manufacturing.
WTO really creates a playing field for all countries including Vietnam. The open of the big market means Vietnamese goods can be welcome in member markets. Similarly, Vietnam becomes potential market for many importers, which brings about the busy transaction activities among member countries. Through the penetration, Vietnam has chances to learn experience and practice from other partners.
Of which, logistics seems to be an useful service used by foreign enterprises for such a long time. The logistics has helped them to gain competitive advantages over other rivals. Vietnam has no way but to do in line with common practice when joining WTO. This means Vietnamese enterprises should be offered with such a new way of trading oversea.
By this way can Vietnam catch up with international practice of doing business as well as improve trademark of goods and reputation of Vietnamese enterprises. The thesis is in line with the directions to find out new ways to diversify and create competitiveness of Techcombank against other banks for its further development in the future. The thesis offers theoretic condition to implement a new service in addition to traditional ones such as deposit accounts, savings, loan, payments, credit and debit cards, investment, guarantees and safe custody facilities. Further more, logistics financing is an unique and completely new service which can help Techcombank take priority over other rivals in the race to control the potential market.
The thesis also complies with the objective of Techcombank is to strive its best for the benefit of customers and partly contribute to the development of foreign trading. Thesis comes timely to meet the demands of many clients who are in difficulties. Under the signed agreement among WTO‟s members Vietnam have 1 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com many chances to access to the common market without being taxed on some items, which creates favorable condition for Vietnam‟s products to penetrate into foreign markets, especially into such prosperous but highly demanded ones as EU or USA, etc. However, it isn‟t easy to make money in these hard-to-deal- with markets.
Doing business in the global market means all enterprises need to master “rules of the game” and has enough conditions to be successful. Meanwhile, most of Vietnamese enterprises are in shortage of capital, which makes them have few chances to access to the loans from banks; out of date technology; weakness in managing; inexperience of trading abroad and having no tools to minimize risks floating up during oversea purchases. Further more, most Vietnamese enterprises have difficulties in transaction due to lack of proper understanding and knowledge, which often leads to the unexpected lawsuits and loss in trading affairs. To make the matter worse, loan – given procedures of the banks are very troublesome, which makes enterprises confused and prolong time for a purchasing affair.
It is time Vietnamese enterprises needed an agent which provides a full- service to help them with import-export activities. Another reason that makes the thesis necessary is to change the thought of Vietnamese‟s importers and exporters. I‟d like to mention the disadvantages of the old method of export- import which is used for such a long time. Exporters are used to F O B (Free on Board) method which can be illustrated by the following process: after receiving order enterprises focus on manufacturing, then they ask a bank to open Letter of Credit ( L/C).
After finishing with bank documents, they transport goods to an assigned port, load on board then waiting till goods are delivered to buyers. Buyers only pay the exporters via above bank after checking up for the quality, quantity and model. The process seems to be very easy in theory but not effective in practice because of some following reasons: - It is a time- consuming method because it often takes from 20 to 40 days to finish a trade (including time for checking up goods ), which leads to the shortage of capital. - There are so many risks during shipping and checking up such as loss, damage, fire or lack of hygienic condition of the goods, etc.
2 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com - Exporters and importers may be in trouble with international Laws in delivery and clearance. - There is high risk of information. - Adding price of the products up because of the expenditure for freight, insurance, employment and hygienic checking, this decreases the competitiveness of the products and enterprises. Similarly, C I F method (cost, insurance and freight) used by importers also has the same problems which are mentioned above.
In the current context, no companies can cover everything in trade affairs. To raise their competitiveness, they must outsource their weak points and focus on their strength. This is an indispensable tendency of specialization. Exporters- importers should change their mindset by having a new and effective way of doing business otherwise they may be left behind or fail in the “race” with foreign rivals (According to statistics, a sum of around $3.9 billion USD spent in transporting, insurance and checking run into the wallet of foreign enterprises every year instead of that of Vietnamese ones).
Objective of the thesis In the first part I have mentioned the necessity of the thesis. This section will clarify the objective or the meaning of the thesis. The most important meaning of the thesis is to define the long- term strategies of Techcombank. The three most important strategies can be considered respectively as below.
First of all, Techcombank focuses on big customers in import-export field. On what bases that Techcombank decided to give out such strategy? Just have a look at the past of Techcombank. At the beginning, Techcombank was a small bank and its customers were only small and medium enterprises ( SMEs). It was the limited capital that prevented it from targeting at big clients.
Nowadays, Techcombank has grown to become one of the largest and fastest growing full 3 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com service joint-stock banks in Vietnam with the registered capital of VND 1,500 billion, total assets of nearly VND 15,000 billion. Once its financial power reaches to an extent , Techcombank finds it timely to focus on bigger and more potential clients. Besides, we can not take into consideration objective reality that such traditional and small enterprises as Hoa Phat and Nam Vang, etc have developed into big corporation.