Luận văn tiếng Anh: Business strategy for An Binh commercial joint stock bank in the period 2011 - 2015
Nhà xuất bản: Trung tâm Công nghệ Đào tạo và Hệ thống việc làm
Ngày: 2011
Chủ đề: Chiến lược kinh doanh
Ngân hàng Thương mại Cổ phần
Giai đoạn 2011 - 2015
Miêu tả: Electronic Resources
Luận văn ThS. Quản trị kinh doanh – Trung tâm Công nghệ Đào tạo và Hệ thống việc làm. Đại học Quốc gia Hà Nội, 2011
INTRODUCTION ………………………………………………………… 1
CHAPTER I ………………………………………………………… 4
I, Theoretical basis ........................................................................................ 5
1,Concepts, role of strategy and business strategy ................................. 5
1.1, Concept of strategy .................................................................. 5
1.2, Strategies at different levels within an organisation ……............. 6
1.3, The role of business strategy ........................................................ 6
2, The strategic building process ....................................................... 7
2.1, The strategic formulation process…………………………………... 7
2.1.1, Determination of the mission and of the organization ……. 8
2.1.2, Determination of the goals of the organization …………….. 8
2.1.3, Determination of the strategic objectives ……………………. 9
2.1.3.1, The internal factors ………………………………………….. 10
2.1.3.2, The external factors ………………………………………….. 10
2.1.4, Analysis the business environment of firm .............................. 11
2.1.4.1- The impacts of external environment for business strategy 11
2.1.4.1.1, Macro environment ....................................................... 11
2.1.4.1.2, Competiors .................................................................. 12
2.1.4.1.3, The quality and capabilities of companies in the industry 13
2.1.4.1.4, Market demand …………………………………………… 13
2.1.4.1.5, Customers .................................................................. 13
2.1.4.1.6, Suppliers ................................................................... 14
2.1.4.2, Assessment of environmental impacts …………………… 14
2.1.4.3, Internal analysis …………………………………………. 14
2.1.4.4, Value chain of the organisation analysis ……………. 15
2.1.4.4.1, The primary activities ............................................ 15
2.1.4.4.2- Support activities …………………………………… 15
2.1.5, Financial analysis …………………………..……………… 15
2.1.6, The rotation index .................................................................. 15
2.1.7, Organizational culture and reputation analysis ...................... 15
2.2, Implementation of strategy …………………………………... 16
II, The methods of research............................................................................. 16
1, Method of data collection .................................................................. 16
1.1, By referring to a document ....................................................... 17
1.2, From the experiments .................................................................. 17
1.3- From non-experimental data (questionnaire survey) ........... 17
2, Method of comparison ............................................................. 17
2.1- Comparison of relative movement ............................................ 17
2.2- Absolute comparison .................................................................. 18
3, Method ofstatistical description ........................................................ 18
4, Method of SWOT analysis .................................................................. 18
5, SWOT Matrix ........................................................................................ 18
6, Method of Five Forces Analysis ....................................................... 19
7- Method of Quantitative Strategic Planning Matrix (QSPM) ……... 20
Summary of Chapter I ............................................................................. 20
CHAPTER II …………………………………………………………. 21
I, General introduction of ABBank ........................................................ 22
1, Introduction ………………………………………………….. 22
2, Products and services …………………………………………… 22
2.1, For individual customers …………………………………..... 22
2.2, For corporate customners .................................................................... 23
2.3, Special customers in electric sector ……………………………. 23
3, The formation and development of ABBank ................................. 23
4, Structure of shareholders ………………………………………….. 24
5, Organization structure of ABBank ......................................................... 25
5.1- Board of Directors ………………………………………… … 26
5.2, Board of Supervisory .................................................................... 27
5.3, Executive Board ............................................................................... 27
5.4, The Council, Committee of the Board .................................................. 27
5.4.1, Credit Council .................................................................................... 27
5.4.2, Assets and Liabilities Management Commitee (ALCO) ................. 27
5.4.3, Risk Monitoring Committee ............................................................. 27
6, Business network ………………………………… ………................... 28
II, Results of operations of ABBank in the period 2006 to 2010 ................ 28
1- Some key indicators of business from 2006-2010 of ABBank ................ 28
2, Characteristic activities of ABBank .................................................. 30
III, Analysis ABBank‘s business activity ............................................................. 31
1, SWOT analysis of the current operating environment of ABBank ........... 31
1.1- Opportunities ………………………………………… ………….. 31
1.1.1, The economy growth is continuous at high speed ........................... 31
1.1.2, Globalization and international economic integration ................ 32
1.1.3, The legal environment for banking activities have been
increasingly improved ............................................................ 32
1.1.4, Population size and structure are favorable for the development of
banking services ....................................................................... 33
1.1.5, Vietnam's society and politics are stable ...................................... 33
1.2, Threats …………………………………………………................. 33
1.2.1, The increase in competitive pressure in the banking sector ............... 33
1.2.2, Pressures in keeping and expanding in the local market share .... 34
1.2.3, Competition labor market is increasingly fierce ............................ 34
1.2.4, Pressure on increasing charter capital, the management capabilibity
of commercial banks in compliance with the international standards
and rules (Basel II) by the State Bank of Viet Nam’s regulations ..... 34
1.2.5, Customers become increasingly more demanding for banking services 35
1.3 - Matrix of environmental factors assessment ...................................... 35
2, Analysis of the internal ABBank ............................................................. 36
2.1- Strengths ………………………………………… ………………….. 36
2.1.1, The advantage of equity ............................................................ 36
2.1.2, Foreign and domestic trategic partners are financial and economic
institutions with prestige and strong financial resources ......................... 36
2.1.3, A wide distribution network ............................................... 37
2.1.4, Risk management system and supervision system .......................... 37
2.1.5, Employees with force capable, experienced and high qualitified 37
2.1.6, Executive capacity ...................................................................... 37
2.2, Weaknesses…………………………………………………………… 37
2.2.1, Low effective of using capital .......................................................... 37
2.2.2, Distribution channels ..................................................................... 37
2.2.3, Competitive advantage ..................................................................... 37
2.2.4, Service qulity ................................................................................ 38
2.2.5, Marketing activities ..................................................................... 38
2.3- Matrix of the internal analysis .......................................................... 38
3, Analysis competitors ……………………………………………………. 39
4 - Some forecasts of banking operations from 2010 to 2015 ............... 43
4.1- Key issues is addressed in the development period 2011-2020 ...... ... 43
4.1.1- For all commercial banking system of Vietnam .......................... 43
4.1.2- For state-owned commercial banks. ................................................ 44
4.1.3- For joint stock comercial Banks ………………………………. 44
4.1.4- For the non-banking institutions ................................................. 45
4.2-The general direction of Vietnam's banking by 2020 ........................... 45
4.2.1, Competitions …………………………………………………….. 45
4.2.2, Health and stability ………………………………………… …… 45
4.2.3, Transparency, Disclosure ............................................................. 46
4.2.4, Easy access ................................................................................... 46
4.2.5, International integration ............................................................. 46
Summary of Chapter II ………………………………………… …………… 47
CHAPTER III …….………………………………………………………. 48
I, Strategies of ABBank in the period 2011 – 2015 ....................................... 49
1, Orientation of business strategy for ABBank in the period 2011 – 2015 ..... 49
1.1- General orientations (general goals) ..................................................... 49
1.2- Guideline ............................................................................................ 49
1.3- Orientation some basic norms in the period 2011-2015 .............. 49
1.3.1- Equity ........................................................................................... 50
1.3.2- Total Assets ................................................................................ 50
1.3.3- The total capital mobilization ........................................................... 50
1.3.4- Total outstanding loans to the economy ..................................... 50
1.3.5- Return on equity (ROE) ...................................................................... 50
1.3.6- CAR ............................................................................................ 50
1.3.7- Number of branch / transaction devisions ..................................... 50
1.3.8- Strong research and development of products and services ............... 50
1.3.9- Establishment representative offices or branches .......................... 50
2, Strategy formulation ................................................................................. 52
2.1, Financial capacity stratergy ........................................................... 53
2.2, Technology capacity stratergy …………………………………....... 54
2.3, Management capacity stratergy ……………………………… 54
2.4, Stratergy of organizational structure and network development ... 55
2.4.1, Organizational structure construction ……………………….. 55
2.4.2, Network development ……………………………………………… 55
2.5, Strategy for products quality and the new products development 56
2.6, Corporation stratergy ………………….……………………….. 56
2.7, Branding and marketing stratergy ………………………………. 56
2.8, Human resource stratergy …………………………………................... 57
3, Selection of stratergy and specific solutions ……………………….. 58
3.1, QSPhần mềm analysis …………………………………………………….. 58
3.2, Some of other main reasons ............................................................ 68
3.2.1, Human resources ………………………………………… …… 68
3.2.2, Products quality …………………………………………………….. 69
3.2.3, Business network ………………………………………… …… 70
3.3, Specific group of solutions ………………………………… ……. 71
3.3.1, Solutions for capital ………………………………………… …… 71
3.3.2, Solutions for network development stratergy ...................................... 72
3.3.3, Solutions for products quality …………………………………….... 75
3.3.4, Solutions of human resources development ……………………..... 76
II, Determining the time to implement the strategy ……………..……...… 78
1, The 1st period ............................................................................................. 78
2, The second period ...................................................................... 79
3, Steps to develop and implement strategies ……………………………… 79
III, Some recommendations ...................................................................... 80
1, For Government, State Bank of Vietnam and concerned ministries .... 80
2, For ABBank .................................................................................. 81
Summary of Chapter III……………………………………………… …….. 82
CONCLUSION ……………………………………………………………… 83
REFERENCES ……………………………………………………………… 85
INTRODUCTION
After the global economic crisis in 2008, many countries are evaluating its
socio-economic impact to build a new development model suitable for each country’s
actual conditions. Restructuring the economy and changing the development strategy
and model to meet the competition requirements are urgent issues.
Vietnam's economy is not out of that context. The country has adopted a trialand-error approach toward the establishment of the most appropriate development
strategies during its 20 years of socio-economic reform In recent years, Vietnam has
pursued the width of growth model so long, the elements of capital, labor, natural
resources, position and comparative advantages have not been the same as before.
Therefore, in order to ensure successful competition, it’s necessary that Vietnam must
change the research of competition strategy and policy, including changing patterns of
growth, restructuring technology, innovation of management and operation in line with
the new situation.
Amid this context, it is vital that the banking sector change its strategy and
restructure the whole system in accordance with the general economic situation. It now
goes without saying that commercial banks and financial institutions have confirmed
their role as the lifeblood of the economy. After Vietnam’s integration into the WTO
(World Trade Organization), competitive pressures have forced commercial banks to
change the way they operate their business. Banks now focus on building long-term
strategy for improvement of their operations, instead of depending on annual business
development plan as before.
In general, the prerequisite for success of commercial banks now is to develop
specific business strategies corresponding to each bank’s actual conditions.
Within this context, An Binh joint-stock commercial bank needs to research,
review its operations in order to set up new competitive strategies, as well as
restructuring organizational structure and operations, investing in development of
human resources and technology, and changing executive management in line with
new conditions for powerful breakthroughs
From the aforementioned real situation of Vietnam’s banking system, we
decided to choose the theme “Business strategy of An Binh joint stock commercial
bank (ABBank) for the period 2011-2015”.
1. The necessity
Business strategies are required for each development stage. Strategies with
clearly defined steps and implementation schedule play a very important role in
carrying out long-term plans for an enterprise’s operations.
The formulation of business strategy is especially of great importance for
ABBank in the year 2011 which witnesses Vietnamese banking system’s strong
commitments to the roadmap of WTO’s regulations ensuring equality between
domestic and foreign financial institutions.
With the knowledge acquired during the course of the MBA program, we make
research and systematization of the basic theory on business strategy as the premise
basis for formulating ABBank’s strategies in the period 2011 - 2015. In addition, by
analyzing the actual situation in the internal operations and business environment of
the ABBank, the opportunities - and challenges, we have chosen the strategic plan in
line with the development of ABBank in the forthcoming years.
The data of this capstone project report is extracted and compiled from
statistical yearbooks, the annual report of ABBank. In addition, we also use some
references, books, magazines and other bank documents relating to subjects of the
Global Advanced Masters of Business Administration of Griggs University.
2. Purposes
2.1- General purposes
The establishment of ABBank’s business strategy for the period 2011 – 2015 is
aimed at determining the necessary steps for the bank to achieve specific objectives
such as growth, service development, as well as consolidating its brand name in the
banking sector.
2.2- Specific purposes
- Analyze ABBank’s overall performance of its operations in order to have a
clear picture of the actual situation and to find the root of underlying problems.
- Use SWOT analysis to find the strengths, weaknesses, opportunities and
challenges of banks.
- Use QSPhần mềm analysis to determine the key strategies in which ABBank should
be interested.
- Analyze market, product and competitive situation.
- Propose specific strategies and solutions for business activities of ABBank in
the period 2011 - 2015.
I. Theoretical basis
1. Concepts, role of strategy and business strategy
1.1- Concept of strategy:
Business strategy is the most important part in the whole strategy of the
organisation. Other parts of the overall strategy must be developed based on the
business strategy.
Business strategy is very important for the existence and activities of the
business. It identifies major goals necessary for mobilization of short and long term
resources. It ensures that the plan is not being diverted. Business strategy helps the
enterprises to gain more profit, maintain a firm foothold in their already wellestablished business sector, and to proactively adapt to business environment.
A prerequisite for any enterprise’s success, therefore, is to build a business
strategy suitable for specific conditions.
Business strategy is what defines a company’s products and services, its
business scale, factors of production, profitability and growth prospects.
It is also a series of commitments and actions that a company uses to windows a
competitive advantage by exploiting its core competencies in a specific market.
Strategy is the direction and scale of an organization in the long-term: strategy
will bring advantages to the organizations through the optimum arrangement of
resources in a competitive environment to meet the market demand and expectations
of stakeholders.
In summary, strategy is:
• A place where enterprises try to get to the long-term (direction)
• That enterprises must compete in the market and what kind of business
activity is conducted on that market (market size)?
• How the company will work better than competitors on those markets
(advantages)?
• What resources (skills, assets, finance, relationships, technical competence,
facilities) are needed to be able to compete (resources)?
• The factors from the external environment affecting the competitiveness of
enterprises (environment)?
• The values and expectations of those who have power inside and outside the
enterprises (stakeholders)?
1.2- Strategies at different levels within an organisation.
• In any organization, strategies have a multi-level presence stretching from
each working individual to the entire organization.
• Corporate Strategy - relating to the overall purpose and scope of enterprises
to meet the expectations of the contributors. This is an important level because it has
strong influence on investors in the enterprise and at the same time it also guides the
process of making strategic decisions throughout the enterprise. Corpotate strategy is
often presented in a clear "mission statement".
• Business strategy - more related to how a company can compete successfully
in a specific market. It concerns strategic decisions about choice of products to meet
customer needs and to gain competitive advantages over competitors, to exploit or to
create new opportunities etc..
• Operational Strategy - relating to each department in the enterprise as regards
how to implement strategic direction at the enterprise level and each department level
within the company. Therefore, the operational strategies focus on the issues of
resources, processes and people, etc. ...
1.3- The role of business strategy:
Being a business manager, it’s necessary to have a strategy for success. The
manager is easy to forget and ignore the business strategy because they are very busy
with their current job. In this case, he/she can not know where his/her work is located.
With good strategic skills, he/she will set real goals and know clearly how to achieve
them in the future. In addition, he/she can not authorise others to build his/her business
strategy. He/she has to decide the future of their enterprise or they will lose their
market position to competitors.
It’s necessary to determine the strategy for the survival and growth of any
enterprise. Strategy is interpreted as a general plan of the enterprise. It gives the
growing trend in the long term; confirms the major objectives and outlines the basic
resources it also suggests ways to deal with the uncertainties in a competitive
environment. So the strategy is a basic foundation which is responsible for
determining (locating) the resources, creating a unified resource focusing on the
objectives, using the power of institutions to implement of that goal.
Competitive strategy helps enterprises to capture the market opportunities and
to create competitive advantage in the market by applying limited resources of the
enterprises for superior results in order to achieve targets and to Giúp enterprises to
consider and to determine the best orientation as well.
The rapid changes of business environment always create opportunities and
risks in the future (business strategy will Giúp businesses to use opportunities and to
reduce risks relating to the business environment).
Business strategy not only helps organisations to cope and to better master the
changing market but also reduces risks and strengthens the organisations’ ability to
take business opportunities when they appear.
2. The strategic building process
The strategic building process is conducted by several separate steps,
commencing from the internal and external firm’s factors of which strategy is held
under the special characteristics of the enterprise.
These two factors seem to be related but in fact they completely separate from
the purpose of analysis. The strategic formation is related to the former whereas the
deployment of strategy is concerned with the later. The strategy should determine the
thinking and the analysis of strategic development of the company board.
There are many different opinions and approaches to strategic building
process, but in general strategy is usually done through the following steps:
2.1- The strategic formulation process
The strategic formulation process is accomplished through the identification of
opportunities and risks; resources, materials, engineering, finance and management of
the business. Human values and determination of the leadership affirm the corporate
social responsibility through the strategy, objectives and policies and also industrial
areas of the company; structure of the enterprise and relationships; the division of
labor, coordination between departments, information systems; organizational process
and behavior; standards and methods of measurement, powerful systems; control,
selection and promotion systems etc ...
2.1.1- Determination of the mission organization
When searching for solutions and deciding the choice, firm’s leaders must base
on clear goals that they want to achieve. They ought to face many different demands in
order to serve their interests. These requirements are derived from the shareholders,
employees, suppliers, customers, governments, and communities. Therefore, they must
be evaluated, arranged in priority order, so its role is the orientation of decisionmaking process of the organization.
2.1.2- Determination of the goals of the organization:
Identifying goals of the organization is not only a theoretical issue but it is also
what the strategy must regularly confront. Therefore, it’s essential to understand such
goals to establish the strategy and also for researche purposes.
It’s said that the organization's main goals are its existence. Therefore, the
approach to strategic objectives will determine the orientation for the formation of
strategy and having influence on strategy content.
Some views of the organization's mission:
According to Latin Mittere to send; Cumming and Davies, 1994: The mission
of the organization includes all the basic point of departure and the period that it will
guide the organization in a certain direction.
According to Mc Coy, 1985, Collins and Porras, 1994: The goal of the
organization is the most important point of the opening period for the formation of
strategy, and it is strongly influenced by the organisation’s cultural values.
Some other views are that ambition and intention are an important part of the
organization’s mission. According to Campbell and Yeung, the mission brings
together all the factors into a unified framework.
Normally the establishment of a mission statement is an ongoing process
through six basic steps:
Step 1: Establishing the initial idea for the business mission.
Step 2: Surveying the external environment and identify internal conditions.
Step 3: Defining the idea on the business mission.
Step 4: Rebuilding the company's mission.
Step 5: Implementing of the company's mission.
Step 6: Reviewing and adjusting the mission.
When a mission is set up, the next step is not only concerned with the leader’s
wishes, but also with internal and external factors relating to the company.
2.1.3- Determination of the strategic objectives:
Objectives affect all kinds of business activities. They are also a source of
irritation. So it is used as a tool to assess and control these activities.
They allow the checking of whether the result is consistent with the
requirements given or not so that the leaders maytake appropriate action to achieve
desired results, and consolidate responsibilities with work. The central role of target is
the result of the comparison. For each enterprise, there are long-term, medium term or
short term goals.
Economists assume that the business goals are set in the following eight main
areas:
- Market-position.
- Renewal.
- Productivity.
- Financial and logistical resources.
- Profit.
- Development and performance of staff.
- The attitude and performance of workers.
- Responsibilities to society.
If It exists a lack of any one in eight areas, it will directly affect the overall
operation of the enterprise. Determination of the short-term objectives is useful for
long-term goals of the enterprises.
In any corporate, a specific job’s goals can be a constraint for other work.
However, the implementation of a goal may conflict with other targets.
Targets must satisfy one of the following factors :
Goal is really clear. An obvious target would not adversely affect the operation
of the collective. Target must have its own characteristics. If a goal is uneffective, it’ll
reduce interests of all members of the organization.
Goals for each stage must be based on the recently announced mission and
have moderate impact on the impact of other objective factors. These are internal and
external factors of the company:
2.1.3.1- The internal factors
+ The ability of companies is of great importance for the consideration of the
objectives of an organization. Calculation capabilities of talent and material resources
is the premise for target selection. Target system should be developed so as to make
the most of curent ability but not exceed it.
+ Management perspective : It is the company management team who set up
strategic objectives for any enterprise. Their viewpoints, therefore, is of great
importance for the establishment of strategic objectives.
+ The results of the company in the past provide conditions for implementation
of the present target system, because the result always comes with the extremely
valuable experiences.
+ The owner or the employees of the company: Making the goal has always
been dominated and influenced by this group. Owners financing the activities of the
company are responsible for the assets of the company, they always eager to quickly
increase the company's assets. Employees of the company are those who make it their
goal, always wish that the performance of targets will contribute to add value and
quality to their lives.
2.1.3.2- The external factors
+ Business environment: it affects all activities of the enterprise. So it can
govern successful implementation of objectives. For smooth operation of the
enterprise. For advantaged operation of the enterprises, business targets must be
consistent with the enterprise’s business environment.
+ Customers, competitors and other objects are the factors that directly affect
the survival of the company. The company's goal is to satisfy the needs of customer,
social subjects and to limit the strength of competitors by creating superior competitive
advantage for themselves.
2.1.4- Analysis the business environment of enterprise:
2.1.4.1- The impacts of external environment for business strategy:
Any enterprise exists in a certain business environment. Its existence and
development are influenced by the external business environment. The impact of the
external business environment can be positive or the negative. In order to survive and
develop, firms must develop in line with the external environment.
Business environment, includes the economic environment or macro
environment; industry environment or operational environment. Operational
environment is the key factor affecting daily operations of the enterprise while the
macro environment does not have a direct effect, but a long term impact on the
development process.
2.1.4.1.1, Macro environment:
Macro environment consists of many different factors indirectly influencing the
activities of the business through its impact on the industry environment, in which
there are five elements considered the most powerful factors such as economy,
institution, law, technology and society and nature.
a, Economic factors:
Economic factors have great influence on the business as well as a mobilizing
factor, the most unpredictable of the macro factors. Its movement is always involves
both opportunities and challenges. Which is more prominent trends of:
- The trend of total domestic product and gross national product: This direct
impact on the rate of economic growth, the growth of disposable income of residents.
It will change consumer demand, the size of the market, and affect the balance of
supply and demand of products.
- Interest rate is a key factor affecting the trend of consumer savings and
investment, it makes the demand go up or down, stimulate or restrict investment to
expand production.
- Rate of inflation: It influences predictability of investors when inflation
increases, their predictation becomes more difficult and investment will bring more
risks.
- Balance of payments, exchange rate: influence market and external economic
relations of enterprises, sometimes it leads to change in the general economic status.
- The economic policies reflect the views of government in the development of
industry.
b, Institutional and legal factors:
Institutional and legal factors include the systems of views, policies,
regulations, rules and procedures. It affects the survival and development of the sector,
the economic status and so it will affect the operation of enterprises.
c, Tecnological factors:
With the growth of scientific technology, the life cycle of technology
increasingly shortened. The advent of new technology will destroy the old one and will
increase the advantages of alternative products; products becomes better, price
becomes cheaper and the new market will be set up. Enterprises therefore need to
increase capacity in utilization and research new technology.
d, Social factors ( population, customs, hobbies ...) are direct factors
influencing consumer needs of society.
e, Natural factors: a significant factor in people's life, are considered less
volatile elements, however in recent decades, the natural environment is being
seriously degraded. That may have great influence on business trends.
f, Operational environment: It is associated with the operation of enterprises,
the elements of the operational environment decide the investment environment, the
intensity of competition and profitability in the industry.
2.1.4.1.2- Competiors
a, Potential competitors are companies which are not involved in the industry
yet but will enter the industry. The appearance of such competitors will intensify
competition, reduce profits in the industry. Their penetration depends on the barriers
to enter the industry. The greater the barriers are, the less feasible penetration is.
According to Joe Bain, the three main barriers are: the loyalty of customers for the
company's products, an absolute advantage in costs and the economic advantages of
scale.
b, The current competitors: they are pressure and direct threat to the
company. Competition from curent companies in the industry is more growing
increasingly the ability of profits, the existence and development of the company are
more threaten. Due to this competition, the company is forrced to increase investment
costs in order to differentiate products and services; to access market or to reduce
cost. Intensity of competition in the sector often depends on factors:
2.1.4.1.3- The quality and capabilities of companies in the industry:
The quality and capabilities of companies in the industry decide the nature and
intensity of competition in the industry. For an industry with a large number of
companies and similar ability, competition takes place with the war of price . In the
case of a few powerful companies, they often have links with each other to dominate
the market and companies with less force must comply with rules that the lead
companies set out.
2.1.4.1.4- Market demand:
Demand for products and services has enormous impact on the intensity of
competition. When product demand tends to increase, it will be easier for companies
to defend or expand its market share, so competitive nature is less fierce. But when
demand tends to decrease, companies want to protect market share and further develop
the market, so they must be involved in a fierce battle with other companies.
As costs increase, enterprises will have to fight for survival so as not to get out
of business. That increases the intensity of competition, especially for the sectors in
the period of maturation or degradation. Conversely, if barriers are lower, the level of
competition in the industry tends to decrease.
Besides, the intensity of competition also depends on other factors such as the
difference in products and services between companies in the industry, the growth of
the industry, betting on the sector, fixed cost ...
2.1.4.1.5- Customers:
The pressure from major customers is derived from the customer’s ability of
bargain which is mainly expressed in two forms namely price reduction and quality
improvement. When the bargaining ability of buyers increase and profits will be
reduced. This pressure will increase as products and services are of little variety,
consumers purchase use large numbers ect...
2.1.4.1.6- Suppliers:
Suppliers may pressure the company by price or quality of the inputs. It directly
affects the cost and quality of products and services of the company so it will impact
customers' responses.
+ Alternative products are different products but meets the same demands of the
consummers. The emergence of these products creates the risk of competitive price
and profitability for the company.
2.1.4.2- Assessment of environmental impacts:
To assess the impact of the environment, people often use the method of
quantifying the impact of environmental factors on the operation of the enterprises,
then they synthesize all of the elements. The process is conducted through five steps:
Step 1: To make a list of factors that play a decisive role for the success of the
enterprise.
Step 2: To determine the importance of each factor to the industry.
Step 3: To determine the weight of each factor in relation to the reactivity of
the current strategy of the company or the importance for enterprises.
Step 4: To calculate each element point.
Step 5: Calculation of total points.
After calculating the total points, we will see the impact of the environment on
business, so we can identify opportunities and challenges that enterprises need to
overcome. This is the basis for business strategy to ensure compatibility of strategies
with environmental advocacy.
2.1.4.3- Internal analysis:
Ability of the enterprises is fundamentals to decide what they can do, wherther
the strategy has successfully implemented or not. To ensure the viability of the
strategy, we have to assess the actual situation, identify strengths and weaknesses
thereby determine the capacity of discrimination or competitive advantages of
enterprises. Internal analysis was conducted on the following aspects:
2.1.4.4- Value chain of the organisation analysis:
Value chain is all activities that increase business value. Organization's value
chain is composed of two activities: primary and support activities.
2.1.4.4.1- The primary activities:
The activities associated with products and services of the enterprises. It is the
purchasing operations and management of inputs, services marketing and customer
care operations later. These activities are evaluated as regards whether it contribute to
cost savings, enhance product quality satisfy customer requirements the best or not.
When these activities are sucessful, the company's value chain is increasingly
appreciated and competitive advantage will be powerful.
2.1.4.4.2- Support activities:
These activities indirectly impact to the products and services. They Giúp to
support the primary activities of the enterprises better and more effective. It is the
human resources management, technology development, acquisition ect ...
2.1.5- Financial analysis:
Financial situation and indicators reflect the financial performance and
capability of the organization. Financial situation of the company reflects not only the
operational capacity of the company in the past but also the ability of the company's
development in the future. The financial ratios are often interested in performing the
financial analysis and strategic formulation include:
2.1.6- The rotation index: reflects the company's ability to meet financial
obligations in the short-term , it is only the ability of the current and quick liquidity, in
addition to other indicators such as debt indicators, ROA, ROE, ...
2.1.7- Organizational culture and reputation analysis: Organizational culture
plays an important role in the formation of the organization. Every company needs to
make its members understand the operation objectives and views of their companies.
That will boost the company's members commitments to common objectives of the
company.
The company's reputation also contributes significantly to the successful
implementation of the objectives of the company. Reputation is a form of intangible
value that the company has formed in the process of long-term development.
A company with a good reputation in the market will more easily reach new
markets, and their new products are easy to accept ... However, it’s very difficult to
creat a reputation as well as to maintain and strengthen that reputation.
In addition to internal company analysis, we also care other factors such as the
legality of the company's activities, cultural leaders ...
After analyzing the internal capacity of the company, the planners make
meaningful comparisons. That comparison reflects the company's growth and its
strength in relation to competitors in the industry.
2.2- Implementation of strategy
This is often the hardest content. When a strategy has been analyzed and
selected, then the task is to convert it into action in the organization, including the
following steps:
- Preparing resources for strategy implementation. By this step, enterprise
must plan detailed resources such as: human resource, technology, finance, facilities
ect ..... for adapting to the implementation.
- Strategic selection. This step is related to understanding the nature of the
expectations of the capital contributors ("basic principles") to identify strategic
options, and then evaluating and selecting strategies.
- Setting up the targets for every year. This step is based on the strategy of
enterprise to make the specific annual plan.
II - The methods of research
1, Method of data collection: Data collection plays an important role in
scientific research activities. Its purpose is the basis of scientific reasoning or
argument to prove the hypothesis or to find a problem that needs study.
There are three methods of data collection:
collections, cash flow management, arragement of funds for electronic projects,
investment consulting, guarantee for issuing bonds ect. Besides, ABBank plans to
develop a special kind of card which is used for payment of electric bills, overdraft
account, salary payment and e-banking services such as: internet banking, home
banking, phonebanking ect....
3.3.3- Solutions for products quality
a, Improving services quality in the process of creating products and
providing services to customers including:
Control and rebuild process of creating product and providing service in line
with customer demand, the focus of which is on:
+ Developping specific standards for banking products and services providing to
customers to meet customer expectations. Products and services must conform to
management requirements, domestic regulations and international practices.
+ Assigning of specific responsibilities and powers to each department, each
individual involved in different stages of product creation process.
+ Determining the time required and service quality in line with
+ Setting method of measurement and test in each specific stage of the process.
+ Conducting investigation and evaluation after each step of the plan in terms of
achieving the standards of quality and in accordance with the plan.
+ Setting the necessary operation to rectify any unsatisfactory inspection.
b, For quality of products
- Improving the quality of guidance and counseling for clients with issues
related to the establishment and management of investment projects as well as a way
to use capital efficiently.
- Banking services to customers must have specific criteria such as the time of
operation for each different type of products, requirement for operational quality ect...
with exact and clear information for each product or service.
- The feedback from customers is the basis of solutions to the enhancement of
banking service quality.
c, Enhancing and promoting the information technology system for the
development of electronic trading products.
- Improvement of technology systems:
As the orientation of State bank of Vietnam is Building a system of strong,
dynamic credit institutions and financial infrastructure support sufficient capacity to
meet the full requirements of banking services for a economic growth of Vietnam, for
further integration into international and regional markets, and development on part
with the leading nations in the group of countries with average incomes in the region,
for ABBank’s targets such as diversification of products and services), it is necessary
to invest more in banking technolgy and software packages enhancing competitiveness
and integration into the community of world banking, in which joining the global
payment network SWIFT is a step in the implementation of modern banking projects.
On basis of corporation with Maybank, ABBank will receive many supports in
advanced technology from this bank as operation manegement systems including:
credit management system for individuals, centrelaized information management
system, credit rating system ect for futher services quality and safety of asets.
- Improvement of customer information systems:
Customer information system plays a very important role in serving the needs
of management in the operation of a bank. In particular, the focus is on the
formulation of periodical reports so as to analyze, evaluate and classify clients using
advanced software packages meeting modern international standards.
3.3.4- Solutions of human resources development
In banking,personnel is the face and the cultural image of the bank. Assets,
image, cultura anf brand of the bank,. Therefore, the personnel activities and human
resource training are also one of the main solutions of ABBank to implement business
strategies 2011-2015. In particular, focus on the following issues:
- Differentiate clearly between ownership and management rights in order to
avoid unnecessary intervention by a shareholder or group of shareholders (for their
benefit) in the conduct of banking activities.
- Training for human resource
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Nhà xuất bản: Trung tâm Công nghệ Đào tạo và Hệ thống việc làm
Ngày: 2011
Chủ đề: Chiến lược kinh doanh
Ngân hàng Thương mại Cổ phần
Giai đoạn 2011 - 2015
Miêu tả: Electronic Resources
Luận văn ThS. Quản trị kinh doanh – Trung tâm Công nghệ Đào tạo và Hệ thống việc làm. Đại học Quốc gia Hà Nội, 2011
INTRODUCTION ………………………………………………………… 1
CHAPTER I ………………………………………………………… 4
I, Theoretical basis ........................................................................................ 5
1,Concepts, role of strategy and business strategy ................................. 5
1.1, Concept of strategy .................................................................. 5
1.2, Strategies at different levels within an organisation ……............. 6
1.3, The role of business strategy ........................................................ 6
2, The strategic building process ....................................................... 7
2.1, The strategic formulation process…………………………………... 7
2.1.1, Determination of the mission and of the organization ……. 8
2.1.2, Determination of the goals of the organization …………….. 8
2.1.3, Determination of the strategic objectives ……………………. 9
2.1.3.1, The internal factors ………………………………………….. 10
2.1.3.2, The external factors ………………………………………….. 10
2.1.4, Analysis the business environment of firm .............................. 11
2.1.4.1- The impacts of external environment for business strategy 11
2.1.4.1.1, Macro environment ....................................................... 11
2.1.4.1.2, Competiors .................................................................. 12
2.1.4.1.3, The quality and capabilities of companies in the industry 13
2.1.4.1.4, Market demand …………………………………………… 13
2.1.4.1.5, Customers .................................................................. 13
2.1.4.1.6, Suppliers ................................................................... 14
2.1.4.2, Assessment of environmental impacts …………………… 14
2.1.4.3, Internal analysis …………………………………………. 14
2.1.4.4, Value chain of the organisation analysis ……………. 15
2.1.4.4.1, The primary activities ............................................ 15
2.1.4.4.2- Support activities …………………………………… 15
2.1.5, Financial analysis …………………………..……………… 15
2.1.6, The rotation index .................................................................. 15
2.1.7, Organizational culture and reputation analysis ...................... 15
2.2, Implementation of strategy …………………………………... 16
II, The methods of research............................................................................. 16
1, Method of data collection .................................................................. 16
1.1, By referring to a document ....................................................... 17
1.2, From the experiments .................................................................. 17
1.3- From non-experimental data (questionnaire survey) ........... 17
2, Method of comparison ............................................................. 17
2.1- Comparison of relative movement ............................................ 17
2.2- Absolute comparison .................................................................. 18
3, Method ofstatistical description ........................................................ 18
4, Method of SWOT analysis .................................................................. 18
5, SWOT Matrix ........................................................................................ 18
6, Method of Five Forces Analysis ....................................................... 19
7- Method of Quantitative Strategic Planning Matrix (QSPM) ……... 20
Summary of Chapter I ............................................................................. 20
CHAPTER II …………………………………………………………. 21
I, General introduction of ABBank ........................................................ 22
1, Introduction ………………………………………………….. 22
2, Products and services …………………………………………… 22
2.1, For individual customers …………………………………..... 22
2.2, For corporate customners .................................................................... 23
2.3, Special customers in electric sector ……………………………. 23
3, The formation and development of ABBank ................................. 23
4, Structure of shareholders ………………………………………….. 24
5, Organization structure of ABBank ......................................................... 25
5.1- Board of Directors ………………………………………… … 26
5.2, Board of Supervisory .................................................................... 27
5.3, Executive Board ............................................................................... 27
5.4, The Council, Committee of the Board .................................................. 27
5.4.1, Credit Council .................................................................................... 27
5.4.2, Assets and Liabilities Management Commitee (ALCO) ................. 27
5.4.3, Risk Monitoring Committee ............................................................. 27
6, Business network ………………………………… ………................... 28
II, Results of operations of ABBank in the period 2006 to 2010 ................ 28
1- Some key indicators of business from 2006-2010 of ABBank ................ 28
2, Characteristic activities of ABBank .................................................. 30
III, Analysis ABBank‘s business activity ............................................................. 31
1, SWOT analysis of the current operating environment of ABBank ........... 31
1.1- Opportunities ………………………………………… ………….. 31
1.1.1, The economy growth is continuous at high speed ........................... 31
1.1.2, Globalization and international economic integration ................ 32
1.1.3, The legal environment for banking activities have been
increasingly improved ............................................................ 32
1.1.4, Population size and structure are favorable for the development of
banking services ....................................................................... 33
1.1.5, Vietnam's society and politics are stable ...................................... 33
1.2, Threats …………………………………………………................. 33
1.2.1, The increase in competitive pressure in the banking sector ............... 33
1.2.2, Pressures in keeping and expanding in the local market share .... 34
1.2.3, Competition labor market is increasingly fierce ............................ 34
1.2.4, Pressure on increasing charter capital, the management capabilibity
of commercial banks in compliance with the international standards
and rules (Basel II) by the State Bank of Viet Nam’s regulations ..... 34
1.2.5, Customers become increasingly more demanding for banking services 35
1.3 - Matrix of environmental factors assessment ...................................... 35
2, Analysis of the internal ABBank ............................................................. 36
2.1- Strengths ………………………………………… ………………….. 36
2.1.1, The advantage of equity ............................................................ 36
2.1.2, Foreign and domestic trategic partners are financial and economic
institutions with prestige and strong financial resources ......................... 36
2.1.3, A wide distribution network ............................................... 37
2.1.4, Risk management system and supervision system .......................... 37
2.1.5, Employees with force capable, experienced and high qualitified 37
2.1.6, Executive capacity ...................................................................... 37
2.2, Weaknesses…………………………………………………………… 37
2.2.1, Low effective of using capital .......................................................... 37
2.2.2, Distribution channels ..................................................................... 37
2.2.3, Competitive advantage ..................................................................... 37
2.2.4, Service qulity ................................................................................ 38
2.2.5, Marketing activities ..................................................................... 38
2.3- Matrix of the internal analysis .......................................................... 38
3, Analysis competitors ……………………………………………………. 39
4 - Some forecasts of banking operations from 2010 to 2015 ............... 43
4.1- Key issues is addressed in the development period 2011-2020 ...... ... 43
4.1.1- For all commercial banking system of Vietnam .......................... 43
4.1.2- For state-owned commercial banks. ................................................ 44
4.1.3- For joint stock comercial Banks ………………………………. 44
4.1.4- For the non-banking institutions ................................................. 45
4.2-The general direction of Vietnam's banking by 2020 ........................... 45
4.2.1, Competitions …………………………………………………….. 45
4.2.2, Health and stability ………………………………………… …… 45
4.2.3, Transparency, Disclosure ............................................................. 46
4.2.4, Easy access ................................................................................... 46
4.2.5, International integration ............................................................. 46
Summary of Chapter II ………………………………………… …………… 47
CHAPTER III …….………………………………………………………. 48
I, Strategies of ABBank in the period 2011 – 2015 ....................................... 49
1, Orientation of business strategy for ABBank in the period 2011 – 2015 ..... 49
1.1- General orientations (general goals) ..................................................... 49
1.2- Guideline ............................................................................................ 49
1.3- Orientation some basic norms in the period 2011-2015 .............. 49
1.3.1- Equity ........................................................................................... 50
1.3.2- Total Assets ................................................................................ 50
1.3.3- The total capital mobilization ........................................................... 50
1.3.4- Total outstanding loans to the economy ..................................... 50
1.3.5- Return on equity (ROE) ...................................................................... 50
1.3.6- CAR ............................................................................................ 50
1.3.7- Number of branch / transaction devisions ..................................... 50
1.3.8- Strong research and development of products and services ............... 50
1.3.9- Establishment representative offices or branches .......................... 50
2, Strategy formulation ................................................................................. 52
2.1, Financial capacity stratergy ........................................................... 53
2.2, Technology capacity stratergy …………………………………....... 54
2.3, Management capacity stratergy ……………………………… 54
2.4, Stratergy of organizational structure and network development ... 55
2.4.1, Organizational structure construction ……………………….. 55
2.4.2, Network development ……………………………………………… 55
2.5, Strategy for products quality and the new products development 56
2.6, Corporation stratergy ………………….……………………….. 56
2.7, Branding and marketing stratergy ………………………………. 56
2.8, Human resource stratergy …………………………………................... 57
3, Selection of stratergy and specific solutions ……………………….. 58
3.1, QSPhần mềm analysis …………………………………………………….. 58
3.2, Some of other main reasons ............................................................ 68
3.2.1, Human resources ………………………………………… …… 68
3.2.2, Products quality …………………………………………………….. 69
3.2.3, Business network ………………………………………… …… 70
3.3, Specific group of solutions ………………………………… ……. 71
3.3.1, Solutions for capital ………………………………………… …… 71
3.3.2, Solutions for network development stratergy ...................................... 72
3.3.3, Solutions for products quality …………………………………….... 75
3.3.4, Solutions of human resources development ……………………..... 76
II, Determining the time to implement the strategy ……………..……...… 78
1, The 1st period ............................................................................................. 78
2, The second period ...................................................................... 79
3, Steps to develop and implement strategies ……………………………… 79
III, Some recommendations ...................................................................... 80
1, For Government, State Bank of Vietnam and concerned ministries .... 80
2, For ABBank .................................................................................. 81
Summary of Chapter III……………………………………………… …….. 82
CONCLUSION ……………………………………………………………… 83
REFERENCES ……………………………………………………………… 85
INTRODUCTION
After the global economic crisis in 2008, many countries are evaluating its
socio-economic impact to build a new development model suitable for each country’s
actual conditions. Restructuring the economy and changing the development strategy
and model to meet the competition requirements are urgent issues.
Vietnam's economy is not out of that context. The country has adopted a trialand-error approach toward the establishment of the most appropriate development
strategies during its 20 years of socio-economic reform In recent years, Vietnam has
pursued the width of growth model so long, the elements of capital, labor, natural
resources, position and comparative advantages have not been the same as before.
Therefore, in order to ensure successful competition, it’s necessary that Vietnam must
change the research of competition strategy and policy, including changing patterns of
growth, restructuring technology, innovation of management and operation in line with
the new situation.
Amid this context, it is vital that the banking sector change its strategy and
restructure the whole system in accordance with the general economic situation. It now
goes without saying that commercial banks and financial institutions have confirmed
their role as the lifeblood of the economy. After Vietnam’s integration into the WTO
(World Trade Organization), competitive pressures have forced commercial banks to
change the way they operate their business. Banks now focus on building long-term
strategy for improvement of their operations, instead of depending on annual business
development plan as before.
In general, the prerequisite for success of commercial banks now is to develop
specific business strategies corresponding to each bank’s actual conditions.
Within this context, An Binh joint-stock commercial bank needs to research,
review its operations in order to set up new competitive strategies, as well as
restructuring organizational structure and operations, investing in development of
human resources and technology, and changing executive management in line with
new conditions for powerful breakthroughs
From the aforementioned real situation of Vietnam’s banking system, we
decided to choose the theme “Business strategy of An Binh joint stock commercial
bank (ABBank) for the period 2011-2015”.
1. The necessity
Business strategies are required for each development stage. Strategies with
clearly defined steps and implementation schedule play a very important role in
carrying out long-term plans for an enterprise’s operations.
The formulation of business strategy is especially of great importance for
ABBank in the year 2011 which witnesses Vietnamese banking system’s strong
commitments to the roadmap of WTO’s regulations ensuring equality between
domestic and foreign financial institutions.
With the knowledge acquired during the course of the MBA program, we make
research and systematization of the basic theory on business strategy as the premise
basis for formulating ABBank’s strategies in the period 2011 - 2015. In addition, by
analyzing the actual situation in the internal operations and business environment of
the ABBank, the opportunities - and challenges, we have chosen the strategic plan in
line with the development of ABBank in the forthcoming years.
The data of this capstone project report is extracted and compiled from
statistical yearbooks, the annual report of ABBank. In addition, we also use some
references, books, magazines and other bank documents relating to subjects of the
Global Advanced Masters of Business Administration of Griggs University.
2. Purposes
2.1- General purposes
The establishment of ABBank’s business strategy for the period 2011 – 2015 is
aimed at determining the necessary steps for the bank to achieve specific objectives
such as growth, service development, as well as consolidating its brand name in the
banking sector.
2.2- Specific purposes
- Analyze ABBank’s overall performance of its operations in order to have a
clear picture of the actual situation and to find the root of underlying problems.
- Use SWOT analysis to find the strengths, weaknesses, opportunities and
challenges of banks.
- Use QSPhần mềm analysis to determine the key strategies in which ABBank should
be interested.
- Analyze market, product and competitive situation.
- Propose specific strategies and solutions for business activities of ABBank in
the period 2011 - 2015.
I. Theoretical basis
1. Concepts, role of strategy and business strategy
1.1- Concept of strategy:
Business strategy is the most important part in the whole strategy of the
organisation. Other parts of the overall strategy must be developed based on the
business strategy.
Business strategy is very important for the existence and activities of the
business. It identifies major goals necessary for mobilization of short and long term
resources. It ensures that the plan is not being diverted. Business strategy helps the
enterprises to gain more profit, maintain a firm foothold in their already wellestablished business sector, and to proactively adapt to business environment.
A prerequisite for any enterprise’s success, therefore, is to build a business
strategy suitable for specific conditions.
Business strategy is what defines a company’s products and services, its
business scale, factors of production, profitability and growth prospects.
It is also a series of commitments and actions that a company uses to windows a
competitive advantage by exploiting its core competencies in a specific market.
Strategy is the direction and scale of an organization in the long-term: strategy
will bring advantages to the organizations through the optimum arrangement of
resources in a competitive environment to meet the market demand and expectations
of stakeholders.
In summary, strategy is:
• A place where enterprises try to get to the long-term (direction)
• That enterprises must compete in the market and what kind of business
activity is conducted on that market (market size)?
• How the company will work better than competitors on those markets
(advantages)?
• What resources (skills, assets, finance, relationships, technical competence,
facilities) are needed to be able to compete (resources)?
• The factors from the external environment affecting the competitiveness of
enterprises (environment)?
• The values and expectations of those who have power inside and outside the
enterprises (stakeholders)?
1.2- Strategies at different levels within an organisation.
• In any organization, strategies have a multi-level presence stretching from
each working individual to the entire organization.
• Corporate Strategy - relating to the overall purpose and scope of enterprises
to meet the expectations of the contributors. This is an important level because it has
strong influence on investors in the enterprise and at the same time it also guides the
process of making strategic decisions throughout the enterprise. Corpotate strategy is
often presented in a clear "mission statement".
• Business strategy - more related to how a company can compete successfully
in a specific market. It concerns strategic decisions about choice of products to meet
customer needs and to gain competitive advantages over competitors, to exploit or to
create new opportunities etc..
• Operational Strategy - relating to each department in the enterprise as regards
how to implement strategic direction at the enterprise level and each department level
within the company. Therefore, the operational strategies focus on the issues of
resources, processes and people, etc. ...
1.3- The role of business strategy:
Being a business manager, it’s necessary to have a strategy for success. The
manager is easy to forget and ignore the business strategy because they are very busy
with their current job. In this case, he/she can not know where his/her work is located.
With good strategic skills, he/she will set real goals and know clearly how to achieve
them in the future. In addition, he/she can not authorise others to build his/her business
strategy. He/she has to decide the future of their enterprise or they will lose their
market position to competitors.
It’s necessary to determine the strategy for the survival and growth of any
enterprise. Strategy is interpreted as a general plan of the enterprise. It gives the
growing trend in the long term; confirms the major objectives and outlines the basic
resources it also suggests ways to deal with the uncertainties in a competitive
environment. So the strategy is a basic foundation which is responsible for
determining (locating) the resources, creating a unified resource focusing on the
objectives, using the power of institutions to implement of that goal.
Competitive strategy helps enterprises to capture the market opportunities and
to create competitive advantage in the market by applying limited resources of the
enterprises for superior results in order to achieve targets and to Giúp enterprises to
consider and to determine the best orientation as well.
The rapid changes of business environment always create opportunities and
risks in the future (business strategy will Giúp businesses to use opportunities and to
reduce risks relating to the business environment).
Business strategy not only helps organisations to cope and to better master the
changing market but also reduces risks and strengthens the organisations’ ability to
take business opportunities when they appear.
2. The strategic building process
The strategic building process is conducted by several separate steps,
commencing from the internal and external firm’s factors of which strategy is held
under the special characteristics of the enterprise.
These two factors seem to be related but in fact they completely separate from
the purpose of analysis. The strategic formation is related to the former whereas the
deployment of strategy is concerned with the later. The strategy should determine the
thinking and the analysis of strategic development of the company board.
There are many different opinions and approaches to strategic building
process, but in general strategy is usually done through the following steps:
2.1- The strategic formulation process
The strategic formulation process is accomplished through the identification of
opportunities and risks; resources, materials, engineering, finance and management of
the business. Human values and determination of the leadership affirm the corporate
social responsibility through the strategy, objectives and policies and also industrial
areas of the company; structure of the enterprise and relationships; the division of
labor, coordination between departments, information systems; organizational process
and behavior; standards and methods of measurement, powerful systems; control,
selection and promotion systems etc ...
2.1.1- Determination of the mission organization
When searching for solutions and deciding the choice, firm’s leaders must base
on clear goals that they want to achieve. They ought to face many different demands in
order to serve their interests. These requirements are derived from the shareholders,
employees, suppliers, customers, governments, and communities. Therefore, they must
be evaluated, arranged in priority order, so its role is the orientation of decisionmaking process of the organization.
2.1.2- Determination of the goals of the organization:
Identifying goals of the organization is not only a theoretical issue but it is also
what the strategy must regularly confront. Therefore, it’s essential to understand such
goals to establish the strategy and also for researche purposes.
It’s said that the organization's main goals are its existence. Therefore, the
approach to strategic objectives will determine the orientation for the formation of
strategy and having influence on strategy content.
Some views of the organization's mission:
According to Latin Mittere to send; Cumming and Davies, 1994: The mission
of the organization includes all the basic point of departure and the period that it will
guide the organization in a certain direction.
According to Mc Coy, 1985, Collins and Porras, 1994: The goal of the
organization is the most important point of the opening period for the formation of
strategy, and it is strongly influenced by the organisation’s cultural values.
Some other views are that ambition and intention are an important part of the
organization’s mission. According to Campbell and Yeung, the mission brings
together all the factors into a unified framework.
Normally the establishment of a mission statement is an ongoing process
through six basic steps:
Step 1: Establishing the initial idea for the business mission.
Step 2: Surveying the external environment and identify internal conditions.
Step 3: Defining the idea on the business mission.
Step 4: Rebuilding the company's mission.
Step 5: Implementing of the company's mission.
Step 6: Reviewing and adjusting the mission.
When a mission is set up, the next step is not only concerned with the leader’s
wishes, but also with internal and external factors relating to the company.
2.1.3- Determination of the strategic objectives:
Objectives affect all kinds of business activities. They are also a source of
irritation. So it is used as a tool to assess and control these activities.
They allow the checking of whether the result is consistent with the
requirements given or not so that the leaders maytake appropriate action to achieve
desired results, and consolidate responsibilities with work. The central role of target is
the result of the comparison. For each enterprise, there are long-term, medium term or
short term goals.
Economists assume that the business goals are set in the following eight main
areas:
- Market-position.
- Renewal.
- Productivity.
- Financial and logistical resources.
- Profit.
- Development and performance of staff.
- The attitude and performance of workers.
- Responsibilities to society.
If It exists a lack of any one in eight areas, it will directly affect the overall
operation of the enterprise. Determination of the short-term objectives is useful for
long-term goals of the enterprises.
In any corporate, a specific job’s goals can be a constraint for other work.
However, the implementation of a goal may conflict with other targets.
Targets must satisfy one of the following factors :
Goal is really clear. An obvious target would not adversely affect the operation
of the collective. Target must have its own characteristics. If a goal is uneffective, it’ll
reduce interests of all members of the organization.
Goals for each stage must be based on the recently announced mission and
have moderate impact on the impact of other objective factors. These are internal and
external factors of the company:
2.1.3.1- The internal factors
+ The ability of companies is of great importance for the consideration of the
objectives of an organization. Calculation capabilities of talent and material resources
is the premise for target selection. Target system should be developed so as to make
the most of curent ability but not exceed it.
+ Management perspective : It is the company management team who set up
strategic objectives for any enterprise. Their viewpoints, therefore, is of great
importance for the establishment of strategic objectives.
+ The results of the company in the past provide conditions for implementation
of the present target system, because the result always comes with the extremely
valuable experiences.
+ The owner or the employees of the company: Making the goal has always
been dominated and influenced by this group. Owners financing the activities of the
company are responsible for the assets of the company, they always eager to quickly
increase the company's assets. Employees of the company are those who make it their
goal, always wish that the performance of targets will contribute to add value and
quality to their lives.
2.1.3.2- The external factors
+ Business environment: it affects all activities of the enterprise. So it can
govern successful implementation of objectives. For smooth operation of the
enterprise. For advantaged operation of the enterprises, business targets must be
consistent with the enterprise’s business environment.
+ Customers, competitors and other objects are the factors that directly affect
the survival of the company. The company's goal is to satisfy the needs of customer,
social subjects and to limit the strength of competitors by creating superior competitive
advantage for themselves.
2.1.4- Analysis the business environment of enterprise:
2.1.4.1- The impacts of external environment for business strategy:
Any enterprise exists in a certain business environment. Its existence and
development are influenced by the external business environment. The impact of the
external business environment can be positive or the negative. In order to survive and
develop, firms must develop in line with the external environment.
Business environment, includes the economic environment or macro
environment; industry environment or operational environment. Operational
environment is the key factor affecting daily operations of the enterprise while the
macro environment does not have a direct effect, but a long term impact on the
development process.
2.1.4.1.1, Macro environment:
Macro environment consists of many different factors indirectly influencing the
activities of the business through its impact on the industry environment, in which
there are five elements considered the most powerful factors such as economy,
institution, law, technology and society and nature.
a, Economic factors:
Economic factors have great influence on the business as well as a mobilizing
factor, the most unpredictable of the macro factors. Its movement is always involves
both opportunities and challenges. Which is more prominent trends of:
- The trend of total domestic product and gross national product: This direct
impact on the rate of economic growth, the growth of disposable income of residents.
It will change consumer demand, the size of the market, and affect the balance of
supply and demand of products.
- Interest rate is a key factor affecting the trend of consumer savings and
investment, it makes the demand go up or down, stimulate or restrict investment to
expand production.
- Rate of inflation: It influences predictability of investors when inflation
increases, their predictation becomes more difficult and investment will bring more
risks.
- Balance of payments, exchange rate: influence market and external economic
relations of enterprises, sometimes it leads to change in the general economic status.
- The economic policies reflect the views of government in the development of
industry.
b, Institutional and legal factors:
Institutional and legal factors include the systems of views, policies,
regulations, rules and procedures. It affects the survival and development of the sector,
the economic status and so it will affect the operation of enterprises.
c, Tecnological factors:
With the growth of scientific technology, the life cycle of technology
increasingly shortened. The advent of new technology will destroy the old one and will
increase the advantages of alternative products; products becomes better, price
becomes cheaper and the new market will be set up. Enterprises therefore need to
increase capacity in utilization and research new technology.
d, Social factors ( population, customs, hobbies ...) are direct factors
influencing consumer needs of society.
e, Natural factors: a significant factor in people's life, are considered less
volatile elements, however in recent decades, the natural environment is being
seriously degraded. That may have great influence on business trends.
f, Operational environment: It is associated with the operation of enterprises,
the elements of the operational environment decide the investment environment, the
intensity of competition and profitability in the industry.
2.1.4.1.2- Competiors
a, Potential competitors are companies which are not involved in the industry
yet but will enter the industry. The appearance of such competitors will intensify
competition, reduce profits in the industry. Their penetration depends on the barriers
to enter the industry. The greater the barriers are, the less feasible penetration is.
According to Joe Bain, the three main barriers are: the loyalty of customers for the
company's products, an absolute advantage in costs and the economic advantages of
scale.
b, The current competitors: they are pressure and direct threat to the
company. Competition from curent companies in the industry is more growing
increasingly the ability of profits, the existence and development of the company are
more threaten. Due to this competition, the company is forrced to increase investment
costs in order to differentiate products and services; to access market or to reduce
cost. Intensity of competition in the sector often depends on factors:
2.1.4.1.3- The quality and capabilities of companies in the industry:
The quality and capabilities of companies in the industry decide the nature and
intensity of competition in the industry. For an industry with a large number of
companies and similar ability, competition takes place with the war of price . In the
case of a few powerful companies, they often have links with each other to dominate
the market and companies with less force must comply with rules that the lead
companies set out.
2.1.4.1.4- Market demand:
Demand for products and services has enormous impact on the intensity of
competition. When product demand tends to increase, it will be easier for companies
to defend or expand its market share, so competitive nature is less fierce. But when
demand tends to decrease, companies want to protect market share and further develop
the market, so they must be involved in a fierce battle with other companies.
As costs increase, enterprises will have to fight for survival so as not to get out
of business. That increases the intensity of competition, especially for the sectors in
the period of maturation or degradation. Conversely, if barriers are lower, the level of
competition in the industry tends to decrease.
Besides, the intensity of competition also depends on other factors such as the
difference in products and services between companies in the industry, the growth of
the industry, betting on the sector, fixed cost ...
2.1.4.1.5- Customers:
The pressure from major customers is derived from the customer’s ability of
bargain which is mainly expressed in two forms namely price reduction and quality
improvement. When the bargaining ability of buyers increase and profits will be
reduced. This pressure will increase as products and services are of little variety,
consumers purchase use large numbers ect...
2.1.4.1.6- Suppliers:
Suppliers may pressure the company by price or quality of the inputs. It directly
affects the cost and quality of products and services of the company so it will impact
customers' responses.
+ Alternative products are different products but meets the same demands of the
consummers. The emergence of these products creates the risk of competitive price
and profitability for the company.
2.1.4.2- Assessment of environmental impacts:
To assess the impact of the environment, people often use the method of
quantifying the impact of environmental factors on the operation of the enterprises,
then they synthesize all of the elements. The process is conducted through five steps:
Step 1: To make a list of factors that play a decisive role for the success of the
enterprise.
Step 2: To determine the importance of each factor to the industry.
Step 3: To determine the weight of each factor in relation to the reactivity of
the current strategy of the company or the importance for enterprises.
Step 4: To calculate each element point.
Step 5: Calculation of total points.
After calculating the total points, we will see the impact of the environment on
business, so we can identify opportunities and challenges that enterprises need to
overcome. This is the basis for business strategy to ensure compatibility of strategies
with environmental advocacy.
2.1.4.3- Internal analysis:
Ability of the enterprises is fundamentals to decide what they can do, wherther
the strategy has successfully implemented or not. To ensure the viability of the
strategy, we have to assess the actual situation, identify strengths and weaknesses
thereby determine the capacity of discrimination or competitive advantages of
enterprises. Internal analysis was conducted on the following aspects:
2.1.4.4- Value chain of the organisation analysis:
Value chain is all activities that increase business value. Organization's value
chain is composed of two activities: primary and support activities.
2.1.4.4.1- The primary activities:
The activities associated with products and services of the enterprises. It is the
purchasing operations and management of inputs, services marketing and customer
care operations later. These activities are evaluated as regards whether it contribute to
cost savings, enhance product quality satisfy customer requirements the best or not.
When these activities are sucessful, the company's value chain is increasingly
appreciated and competitive advantage will be powerful.
2.1.4.4.2- Support activities:
These activities indirectly impact to the products and services. They Giúp to
support the primary activities of the enterprises better and more effective. It is the
human resources management, technology development, acquisition ect ...
2.1.5- Financial analysis:
Financial situation and indicators reflect the financial performance and
capability of the organization. Financial situation of the company reflects not only the
operational capacity of the company in the past but also the ability of the company's
development in the future. The financial ratios are often interested in performing the
financial analysis and strategic formulation include:
2.1.6- The rotation index: reflects the company's ability to meet financial
obligations in the short-term , it is only the ability of the current and quick liquidity, in
addition to other indicators such as debt indicators, ROA, ROE, ...
2.1.7- Organizational culture and reputation analysis: Organizational culture
plays an important role in the formation of the organization. Every company needs to
make its members understand the operation objectives and views of their companies.
That will boost the company's members commitments to common objectives of the
company.
The company's reputation also contributes significantly to the successful
implementation of the objectives of the company. Reputation is a form of intangible
value that the company has formed in the process of long-term development.
A company with a good reputation in the market will more easily reach new
markets, and their new products are easy to accept ... However, it’s very difficult to
creat a reputation as well as to maintain and strengthen that reputation.
In addition to internal company analysis, we also care other factors such as the
legality of the company's activities, cultural leaders ...
After analyzing the internal capacity of the company, the planners make
meaningful comparisons. That comparison reflects the company's growth and its
strength in relation to competitors in the industry.
2.2- Implementation of strategy
This is often the hardest content. When a strategy has been analyzed and
selected, then the task is to convert it into action in the organization, including the
following steps:
- Preparing resources for strategy implementation. By this step, enterprise
must plan detailed resources such as: human resource, technology, finance, facilities
ect ..... for adapting to the implementation.
- Strategic selection. This step is related to understanding the nature of the
expectations of the capital contributors ("basic principles") to identify strategic
options, and then evaluating and selecting strategies.
- Setting up the targets for every year. This step is based on the strategy of
enterprise to make the specific annual plan.
II - The methods of research
1, Method of data collection: Data collection plays an important role in
scientific research activities. Its purpose is the basis of scientific reasoning or
argument to prove the hypothesis or to find a problem that needs study.
There are three methods of data collection:
collections, cash flow management, arragement of funds for electronic projects,
investment consulting, guarantee for issuing bonds ect. Besides, ABBank plans to
develop a special kind of card which is used for payment of electric bills, overdraft
account, salary payment and e-banking services such as: internet banking, home
banking, phonebanking ect....
3.3.3- Solutions for products quality
a, Improving services quality in the process of creating products and
providing services to customers including:
Control and rebuild process of creating product and providing service in line
with customer demand, the focus of which is on:
+ Developping specific standards for banking products and services providing to
customers to meet customer expectations. Products and services must conform to
management requirements, domestic regulations and international practices.
+ Assigning of specific responsibilities and powers to each department, each
individual involved in different stages of product creation process.
+ Determining the time required and service quality in line with
+ Setting method of measurement and test in each specific stage of the process.
+ Conducting investigation and evaluation after each step of the plan in terms of
achieving the standards of quality and in accordance with the plan.
+ Setting the necessary operation to rectify any unsatisfactory inspection.
b, For quality of products
- Improving the quality of guidance and counseling for clients with issues
related to the establishment and management of investment projects as well as a way
to use capital efficiently.
- Banking services to customers must have specific criteria such as the time of
operation for each different type of products, requirement for operational quality ect...
with exact and clear information for each product or service.
- The feedback from customers is the basis of solutions to the enhancement of
banking service quality.
c, Enhancing and promoting the information technology system for the
development of electronic trading products.
- Improvement of technology systems:
As the orientation of State bank of Vietnam is Building a system of strong,
dynamic credit institutions and financial infrastructure support sufficient capacity to
meet the full requirements of banking services for a economic growth of Vietnam, for
further integration into international and regional markets, and development on part
with the leading nations in the group of countries with average incomes in the region,
for ABBank’s targets such as diversification of products and services), it is necessary
to invest more in banking technolgy and software packages enhancing competitiveness
and integration into the community of world banking, in which joining the global
payment network SWIFT is a step in the implementation of modern banking projects.
On basis of corporation with Maybank, ABBank will receive many supports in
advanced technology from this bank as operation manegement systems including:
credit management system for individuals, centrelaized information management
system, credit rating system ect for futher services quality and safety of asets.
- Improvement of customer information systems:
Customer information system plays a very important role in serving the needs
of management in the operation of a bank. In particular, the focus is on the
formulation of periodical reports so as to analyze, evaluate and classify clients using
advanced software packages meeting modern international standards.
3.3.4- Solutions of human resources development
In banking,personnel is the face and the cultural image of the bank. Assets,
image, cultura anf brand of the bank,. Therefore, the personnel activities and human
resource training are also one of the main solutions of ABBank to implement business
strategies 2011-2015. In particular, focus on the following issues:
- Differentiate clearly between ownership and management rights in order to
avoid unnecessary intervention by a shareholder or group of shareholders (for their
benefit) in the conduct of banking activities.
- Training for human resource
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