Developing business strategies of Vietnam Commercial Joint Stock Bank for Industry and Trade - Cua Lo Branch (VietinBank Cua Lo) in the period of 2011-2015

REA

TAT

SSE

ASS

ESE

GRIGGS UNIVERSITY

GLOBAL ADVANCED MASTER OF BUSINESS ADMINISTRATION PROGRAM

CAPSTONE

DEVELOPING

PROJECT REPORT

BUSINESS STRATEGIES

OF VIETNAM COMMERCIAL

JOINT STOCK BANK

FOR INDUSTRY AND TRADE CUA LO BRANCH

(VIETINBANK CUA LO)

IN THE PERIOD OF 2011 - 2015

Group No.11
Student’s name:

Hanoi, 2011

1.

Ho Xuan Bay

2h

Nguyen Ngoc Thanh

Be

Ha Xuan Quang

4.

Nguyen Tuan Dung


GaiGcs)

(CÍ

UNIVERSITY

TABLE OF CONTENTS

là

402030 00:9)

p4...

6

1. General context, the necessity and the urgency of the research ....ccccccccccccecsseseees 6
2. Subject and purpose of the research ......c.ccccccescsssssscsesseseetsvsseseseevecesestavsveveseseevens 7
3. Research methodology ......c.ceccceccssessseesesescsesesssscscsvsvsssecsssvsusassvavsvaseatavavaveseseevees 7
4. Structure of the Capstome? ......cccccccccccscscscscssscscsvsvsvsvsvessssscatscssacavavavacavavevevavevevees 7

0.9409.002... .
8
THEORETICAL FOUNDATION OF......ccccccssssssssscscsesssscsesessscsesecesecacessssececacacees 8
BUSINESS STRATEGY ou... essesssssssssessssssesscsssesssscsssscssssssesseaesessecesussesesaesesecaeesecs 8
1.1. Business strategy

0. .eccescscscscssessscssscscscscsvsvscscacsvavavavavavavessueversssasussessesesesenes 8

1.1.1. Definition of business strategy .....c.ccccecccscccscsessesesesesescsvsvsvevscsveveseseseseesees 8
1.1.1.1. Different definitions of business strategy .....c.cccccssssesesssssscstsessssceceessess 8
1.1.1.2. Basic characteristics of business strategy ......c.ccccccccssscscsssscscsssssscsceeeeeees 9
1.1.2. The role of business strategy for an enterprise: ....c.c.ccccccceccssescessssseseseeeeeees 9
1.1.2.1. Focusing development ........c.c.ccccccccssscssssssesecsesescesssacscssuescssscsvssesesvevees 10
1.1.2.2. Three competitive strategies .......c.ccsccssccscseseseseseesessesesvessscesescsessesees 10

1.1.2.3. Competitive strategies for enterprises based on market share and
POSTEO; as.msss icnsonsinenwe nonnen ngurrvesine grote Wis HEED HREENASOEERD Sash fuhaenneanenees gang uy g3 v6 II
1.2. Process oŸ developing, stFaf€gy................
St tt 1E HE .......11111111 11x --neo 11
1.2.1. Defining the mission and Objectives .......c.cccccccssssssessscsscsesecesestsesscseseavees 12
1.2.2. Analyzing external environMent.......c.c.ccccccscsccecsssssssecsesvsessscscetscsesescans 12
1.2.3. Analyzing the enterprise’s internal environment .......c.c.cccccscscscsseescecseeees 12
1.2.4. Developing the strategic alternatives ..........cccccccccssesssssesesesseeseessetesestestenes 13
1.2.5. Analyzing and selecting strategies ........cccccscssscsssesesessssssescsesesesesvecececeees 14
1.3. Tools for strategic analysis .........ccccccccescssssssseeseesessssesescessesesescessvavavavavavevevevs 15
1.3.1. Using PEST Method to analyze macro factors .....cccccccsssssscscscecececeveceseeees 15
1.3.2. Using Michael Porter’s Five Forces of Competition to analyze micro
E000... .

15

1.3.3. Using EFE Matrix to analyze the Opportunities and Threats.................... 15
1.3.4. Using IFE Matrix to analyze the strengths and weaknesses.................... l6
1.3.5. Using SWOT Matrix to qualitatively analyzing the strategy................... 16
V0110.CapstoneProjectReport.Group11

2


GriGcs)

G conan

UNIVERSITY

1.3.6. Using QSPM to analyze and select J0...

17

KG -FJgy0.¡ẽ
7. g...H,HHLĂHAĂ)ĂL)L)L..Ỏ..
BUSINESS ENVIRONMENT SITUATIONS OF ....ccsscssssssssssssssssessccscssessesscscesee
VIETINBANK CUA LO uuu. ccscesssssssessesssscsscsesusscacsussussusacsussecsussssssssssasensenseeseses
2.1. General introduction... cecccccccccscccsessssessessesessesssessesseevessesseseessesteevereescescesce

19
19
19
19

2.1.1. Establishment and development history .....cccccccccccsscssecsesscssesssecsceseesceeeee 19
2.1.2. Organizational Chart .......c.c.cccccccscsssssssesssvssessssseseeseseaveseeveeveseesesceteececcecee, 20
2.1.3. Distribution network .....0.cccccccccccscessssestesessessesesessessstesseseereescereeteetescesces. 21
2.1.4. SerVice OfẨErings...........
t1 .....
He
.....e
.----cc 21
2.1.5. Business performance throughout the VGBTN chinh cnasis Wt ennsreneanmnneewonen
tres 23
2.2. Analysis of factors affecting the operations of VietinBank Cua Lo.............. 24
2.2.1. Macro environment_

(PEST model).........sa.....
1n ........ 24

2.2.1.1. Economic environment.........
-sss tt 23212115111
.....
11 EE .....
HE
...

24

2.2.1.2. Socio-cultura]l environment....
-s. .....
c sc St E21 .....
1S Ho
.....

28

2.2.1.3. Political and legal environment.........
52 2s.....
ST
HE
.....
.... 28
2.2.1.4, Natural environment .........cccccccccsssssesesessescssessesseesssteseessersesserceseeeescescess 30
2.2.1.5. Technological environmenI....
5s .....
2s 5 2S .....
2n
.....

30

2.2.2. Micro environment (industrial) — M. Porter’s Five Forces...................... 31
2.2.2.1. COmp€tÏOFS.......................
S1 TT 11211111 TT Hee
33
2.2.2.2. CUSEOI€TS...................
2.2.2.3. SUPpII€TS....................

HH
2. Q.2. HS

111111111 CEnx TH HT ng

nề

HH Hee

36
37

2.2.2.4. Potential competitOFS.--....
se ct nt E21 221221111211
....2 ....
neo
...

38

2.2.2.5. SuSEÏẨU€S....................

39

. tt TH E1 TH

HH Hee

2.2.3. Evaluation of opportunities and threats...........5s......
s1 SEEnnn
......
nen 40
2.2.4. External Factor Evaluation (EFE) Matrix ..ccccccccccccccccsscssesceseeseccescecesccceee. 42
2.3. Analysis of internal factors of VietinBank Cua Lo ceecceccecsccsccesccscescescescesceccess. 43
2.3.1. Human resources ......ecccceccescssssssssssvssesresssssavssessssssesssessesaversesserceteetescescess 43
2.3.2. Mark€ting.......................

5c: tt T112 5111121111 1 1n

Hee

43

2.3.3. Organizational StTUCtUF€......t .....
E111 2t E1 221112
.....
ne
...-ocs 44
2.3.4. Management capability.................... cecsceccssesvssecsessecsesessesssesseteeteeseecesceseess 45

V0110.CapstoneProjectReport.Group! 1

3


GriGcs)

GC

UNIVERSITY

1.3.6. Using QSPM to analyze and select strategies ...c.ccccccccescecccscessesceseeseesessee 17

3030 .75ẶẤ........
19
BUSINESS ENVIRONMENT SITUA TIONS OE......................
se cecet
.....-2
set sEecsee 19
VIETINBANK CUA LO..........
5° 5°....
5656 StESESEEEESEE
....
EEESEEEEEESEE
....
eEESEESSetEei
.2-reee 19
2.1. General Introductio.....................

-:-csctn 1112112111125 21 211

19

2.1.1. Establishment and development history ....c..ccccccccssccsesssessecsesssecsessecsceseee 19
2.1.2. Organizational Chart .......c.ccccccccsssssssesssssestestesesstesessesetsessessesteeteeseesesceseees 20
2.1.3. Distribution network .......c.ccccccccscsscssssssssestsstesesseseessesessessesusseeserterseseeseees 21
2.1.4. Service OffETINGS oc eecececcescssesscssessessesessscsesstssssessasestessesssstesveseerseeseseees 21
2.1.5. Business performance throughout the years ....cccccscccssssssssessesssecsessececeseee 23
2.2. Analysis of factors affecting the operations of VietinBank Cua Lo.............. 24
2.2.1. Macro environment

(PEST model).....ccccccccsccsssscessssesssesecsessececeveceescescees 24

2.2.1.1. Economic environment .......c.cccccscsssscssssesssssstesesvessesessesessesvessereeveceseees 24
2.2.1.2. Socio-cultural environMent.........cccccccscesssssscsseesesceseesssteseeseevescesescesecceses 28
2.2.1.3. Political and legal environment..........cccccccsssssssssescssesscesecseesecsesseseceseceees 28
2.2.1.4. Natural environment ..0......ccccccccccsscsssesssssssessessessesessessessesessseeseseceveeseevees 30
2.2.1.5. Technological environmenI.......
s5:......
s1 2v 2 21151112121
......
11 ...- 30
2.2.2. Micro environment (industrial) — M. Porter`s Five Forces.................s. 3]
2.2.2.1. COmp€fÏ{OFS...................
SG...

na

cố

2.2.2.3. SUPPÏI€TS...................

S2 2t 21 1 1110112112112 21 1E nen

33

CỐ aadi.

36

CỐ

0Q... vn HT

2.2.2.4. Potential CoImpetÏtOFS................
2.2.2.5. SuSEÏẨUẨŒS.....................

0111 n1 1c

HH

rrnere

.- tt St E121 21215111121 1E nen
Q0. 22t n1 1112112 1x TH

Hee

37
se 38

39

2.2.3. Evaluation of opportunities and threats...........
2. 2s ......
SE nen
... 40
2.2.4. External Factor Evaluation (EFE) Matrix............... Tnhh
42
2.3. Analysis of internal factors of VietinBank Cua Lo................ nen

43

2.3.1. Human r€SOUFC€S.......
5 St tt ....
12121111111....
11 EE TEEEnEnn
....
neo
.--

43

2.3.2. Mark€ting...................

43

.c. cccc 2t

n1 Hee

2.3.3. Organizational Structure .......c.cccccccsecesscscsssssstessseecessssesessevesceveresceveesececesees 44
2.3.4. Management capability 2.2... .cccccceccccsccsecscstssessesessssvesesseevesseesceseveecescees 45

V0110.CapstoneProjectReport.Group11

3


Z
GRIGGS

Global Advanced
MINDS

UNIVERSITY

JN THE

MAKING

3.4. Implementation progresses .......c.cccccccccscsssssssssssessstesesesseseeesesesveseeeseeveeevereees 64
3.5. Potential problems and solutions.........ccccscccccssessecsecsessesveseeseeseesesseesesseceeeveesee 65

CONCLUSION ........ HD.
66
BIBLIOGRAAPHIIES ..........5-5.....
Gv
.....
E1 HE.....
HE SE ...sen nesey 67

LIST OF TABLES AND FIGURES
Figure

Ll

‘Table 1.1
Tablel2

F.David’s Model of Strategic Management

| EFE Matrix
|IFEMatrix

1¬

-

Sóc
1¬

/

‘Table 1.3. |SWOTMatrix
:
‘Figure
1.4 | Quantitative Strategic Planning Matrix
| Figure 2.1
Figure 2.2

7

|
|

Organizational chart of VietinBank system

CO

Organizational Chart of VietinBank Cua Lo

|
_

|

Table2.1

| GDP growth rate of Vietnam and regions including Nghe An and
Cua Lo as a function of time

‘Table 2.2
Figure 2.3

| CPI of Nghe Anasafunctionoftime =~
| Summary of the macro factors influencing Vietinbank CuaLo _

‘Table 2.4

Comparison of Vietinbank branches in Nghe An

| Table 2.5

Comparison of Vietinbank Cua Lo with branches of
Vietcombank, BIDV, Agribank in Nghe An

| Figure 2.6

Summary of micro factors influencing Vietinbank Cua Lo

‘Table 2.7

| TheEFEMatixofVieinBankCualo

| Table 2.8

The IFE Matrix of VietinBank Cua Lo

-

_Table 2.9 _ | The SWOT Matrix of VietinBank Cua Lo
| igure 3.1

Internal - External Matrix (IE) of VietinBank Cua Lo

V1 10.CapstoneProjectReport.Group1 1

7

ˆ

Gigs)

@ Bi

UNIVERSITY

INTRODUCTION

1. General context, the necessity and the urgency of the research
The current context of global economic crisis such as debt ceiling issues in the
United

States and

many

European

countries have

strong impact

on the world’s

financial market.
Because of the fact that Vietnam gradually integrates into the world’s economy,
all the

fluctuations

of global

economy

also have

impacted

significantly

to the

economy of Vietnam. The banking system of Vietnam has faced many difficulties
since early 2001 till now.
Firstly, it is the force to reach the target of controlling the increasing inflation.
Banking system has to face liquidity difficulties, and it is difficult for every bank,
even the biggest ones, which are considered to be the market makers.
Secondly, if the interest rate was completely decided by the banks in the past,
this role, now, is transferred to customers, especially customers who hold a huge
amount of Vietnam Dong (VND). However, it is the state organizations that bargain
for interest rate the most. There is institution that organized bidding for capital cost
for deposit, and the winner would be the bank that offers the hi gher payment.
Thirdly,

it is merging

observing the low
resulted
ratio,

from
many

acquisition,

and

liquidity and weak

unhealthily
people

resale

acquisition

quick

have

growth,

asked

or announce

for,

in banking

financial

bankruptcy

For

situation of many

under-standard
in these

sector.

cases,

lending

years,

banks, which
and

to conduct

in order to make

many
low

safety

merging

the market

and
grow

strongly again, however, it has never happened since.
Fourthly, the foreign currency exchange market, after few years of chaotic rate
variability, it is now

settled down

behind that success

was

through series of decisive action. However,

the power

of the administration,

far

instead of tools with

regulating senses.

In this context, many banks have to develop or adjust their business strategies to
suit the market conditions. Vietnam Joint Stock Commercial Bank for Industry and

V0110.CapstoneProjectReport.Group 11

6


x
GRIGGS

_
G seals

UNIVERSITY

Trade - Cua Lo Branch (Vietinbank Cua Lo) is one of the best-operated branches in
the Vietin Bank system of Nghe An province and the whole Vietin Bank in general.
However,

in the volatile situation of the market and severe competition, Vietinbank

Cua Lo has to build their own business strategy to develop and compatible with the
strategy of the Bank’s overall system.

2. Subject and purpose of the research
- Subject of the research: Vietinbank - Cua Lo Branch
-

Purpose of the research: Developing business Strategies for Vietin Bank Cua

Lo in the period of 2011 — 2015 and propose solutions to make it become the

1“ ranking branch in the Vietinbank system.
3. Research methodology
- References: primary

Vietinbank

Cua

Lo,

and

secondary

Reports

data,

of the

data

People’s

of Vietinbank

Committee

Vietnam,

of Nghe

An

Province
-

Analyzing

technique:

IFE,

EFE,

SWOT

and

QSPM

matrices,

Michael

Porter’s five forces model of competition
4. Structure of the capstone:

Chapter 1: Rational foundation of business strategy
Chapter 2: Business Environment situations of Vietin Bank Cua Lo
Chapter 3: Business strategy selection and implementation solutions of VietinBank

~ Cua Lo for the period of 2011 - 2015.

V0110.CapstoneProjectReport.Group 11

7


Gries)

G2

UNIVERSITY

CHAPTER I
THEORETICAL FOUNDATION
BUSINESS STRATEGY

OF

1.1. Business strategy
1.1.1. Definition of business strategy
1.1.1.1. Different definitions of business strategy
Alain Threlart stated that "Strategy is the art that an enterprise uses to stand
against competition and win"
According

to M. Porter, "Strategy is the art of building solid competitive

advantages to defense"
For these reasons, the authors considered business strategy as a kind of art to

compete in the market and develop the enterprise.
According to the viewpoint of management, business strategy is a kind of plan:
- G. Arlleret stated that "Strategy is the determination of the roads and the
means to achieve the objectives defined by the policy"
- D. Bizrell et al defined strategy “as a general plan or direction that leads the
enterprise to the desired goal. It is the basis for the elaboration of the policies and
operational measures. "
-

Gluecl

integrated

plan

stated

that:

designed

to

"The

strategy

ensure

that

is
the

consistent,

comprehensive

enterprise’s

objectives

will

be

controlling

them

to

and

implemented.

According to the perspective of consistency:
- "Strategy

is the art of coordinating

activities

and

achieve long-term goals of the enterprise".
- Chandler defined that “strategy involves defining basic long-term goals of
the enterprise and in the same time choosing the mode or courses of actions and
allocate the necessary resources and implement those goals”
In an

enterprise:

"Strategy

is the art of organizational

design

aimed

to

facilitate long-term goals of the business and it has the relationship with the change

of business environment and competitiveness”.

V0110.CapstoneProjectReport.Group11

8


fo
GRIGGS

—_
G seni

UNIVERSITY

There are many definitions of Business strategy and each scholar has his own
approach and research method. However, it can be seen that all of these definitions
have a common

point “Business strategy involves competing to achieve business

goals”. In this capstone project, we synthetize and apply the concept of business
strategy through its characteristics and role.

1.1.1.2. Basic characteristics of business strategy
- Business strategy determines the basic objectives and business direction of the
enterprise in a specific period.
- The

orientation of the strategy

is to ensure the continuity and

firm of the

development in the constantly fluctuating business environment.
- Business strategy ensures to mobilize at het maximum

and combines

at the

optimal of extraction and use of enterprise resources at the present and in the future.
It also promotes the advantages and seizes the opportunity to competition.
- Business strategy an enterprise is reflected throughout a continuous process.
- Business

strategy always

peruses attacking thoughts

in order to win in the

marketplace.
- Business strategies are often built in a long period of time (3, 5 to 10 years).

1.1.2. The role of business strategy for an enterprise:
- Business strategy helps the enterprise to identify the purpose

direction as the guideline

for all manufacturing

and business

and its basic

activities of the

enterprise. Business strategy plays an orienting role in the long-term operation of
the business; it is a solid basis for the deployment of the operation. The lack of
strategy or when strategy is unclear or when there is no solid argument will make
the operation of the enterprise lost its way. There are many problems that can only
be seen in the immediate future but could not be associated with long-term plan and
cannot be seen as the main role in the whole activities of the enterprise.
- Business
business

strategy

opportunities,

helps

the

enterprise

and in the same

time take measures

and threats in the competitive marketplace.

V0110.CapstoneProjectReport.Group! 1

understand

9

and

take

advantage

to overcome

of

the risks


Về”

_

GRIGGS

G BS

UNIVERSITY

- Business strategy contributes to improve the efficient use of resources, enhance
the competitive position of the enterprise and ensure its sustainable development.
- Business strategy creates a solid basis for the proposal of policies and decisions
for suitable production that work in accordance with the fluctuation of the market. It
forms a solid basis for research and development, investment and development of
personnel training, expanding the market and product development. In fact, most of
the mistakes in investment, technology, markets come from developing strategy or
any problems in determining strategic objectives.
The foundation for success or failure depends on an important factor of how the
enterprise’s business strategy looks like.

1.1.2.1. Focusing development
This strategy is to improve the competitive position of enterprises in comparison
with the existing products based on enhancing marketing activities or changing the
existing market

strategy without

changing

the product.

It comes

in three main

strategies:
- Market

penetration:

increase

the market

share

for available

products

and

services available in the market through marketing activities.
- Market development: Provide products and services available in the new area.
- Product development: Increasing in sales, innovating in available products and
services.

1.1.2.2. Three competitive strategies
Cost-leading strategy
1.
Cost-leading strategy is driven by the overall action to provide products or
services that have the characteristics accepted by customers with the lowest cost
compare to all competitors.
Z,

Product differentiation
The

objective

of the

differentiation

strategy

is to gain

the

competitive

advantage for the enterprise through creating products (goods or services) that is
unique

in

some

features

to the

customers.

V0110.CapstoneProjectReport.Group 1

10

Enterprise

that

tries

to make

the


⁄
GRIGGS

S
G sonal

UNIVERSITY

difference to satisfy the customers in a way that no competitors cannot offer higher
price (a significantly price that is above the industry’s average)
Sy

Focus strategy
Focus strategy is the third among three generic competitive strategies. The

main difference with the two strategies is that it is directed to serve the needs of a
group of customers. A focus strategy will work on a specific market gap that can be

determined in terms of geography, customer type, or by product segment.
1.1.2.3. Competitive strategies for enterprises based on market share and
position:
Although they are in the same industry, but each enterprise has a different
market share position:
- The leader in the market
- The enterprises that challenge the market
- The enterprises that follow the market
- The enterprises that lurk in the market

1.2. Process of developing strategy
Figure 1.1 F.David Model of Strategic Management

\

External Factorz

Evaluating to find our

\

||

Setting up

'

long-term

Opportunitie: &Threatz

' | Setting up

Goal

‘ |

Specify

exizting

a
objectiv
e

and strategv

„ị

'

'

Review the

'

Company's
°

R

2|

Ägsiynmeuts

‘

:

Source | t

4

Internal Factors

Evaluating co find out

Strength: & Weaknezze:
4

Selecting
Strateøx

`

|

ge

4

:

DEVELOPING
STRATEGY

V0110.CapstoneProjectReport.Group] 1

'

‘

:

‘

Meazure and

Adjusting the level

of Implementation

|

Department
Policy

‘

:

4

IMPLEMENTING
STRATEGY

II

'

Distribution

i

q

`...

'

Goal

|

—|

"

EVALUATING

STRATEGY


GriGcs)

G alee

UNIVERSITY

The process of developing is the first stage in strategic management. There

are four steps in building up the strategy:

1.2.1. Defining the mission and objectives
Vision: Claims of enterprise on their position in business environment in a
certain period of time — is guidelines for company’s

action in all the times and

circumstances.
Mission: The mission of an organization is actually its business purpose, its
reason

for the establishment,

organization

survival

answer the question:

and

What

development.

is the reason

Business

mission

of an

for an organization to be

established and exist?
Objective:

The

objective

is

the

state,

the

specific

organization wants to achieve over a period of time. Most

results

that

the

organizations pursue

profit and goals of excellence and leading position. The second objective is the goal
that the organization thinks it is necessary to achieve remarkable capacity.

1.2.2. Analyzing external environment
They are the elements, these forces and the alternatives that locate outside that
the enterprise that the administrators could not control, but they have strong effect
on the operation and performance of the enterprise.
The environment of an enterprise includes:
+ Macro-environment (general environment) includes factors like the economy,
politics, legislation, technology, culture and society, nature.
+ Micro-environment

(specific environment)

includes

factors like customers,

suppliers, industry competitors, potential competitors, replacement products.
The
conditions

aim

here

to clarify

is to

identify

and

the environmental

understand
factors

the

related

environmental

that are likely to influence

the

decisions of the enterprise.
Evaluating the opportunities and challenges from the external environment
that affect the enterprise will allow the enterprise to build a suitable business task
and set out clear policies to achieve the goals.

1.2.3. Analyzing the enterprise’s internal environment
V0110.CapstoneProjectReport.Group11

12


GriGcs)

G2

UNIVERSITY

Analyzing the internal environment of the enterprise in order to find out the
strengths and weaknesses, ways to achieve competitive advantage, and the role of
different capacities, resources and capacity to build and maintain sustainable
competitive advantage for the business.
The internal environment is analyzed based on functional activities such as
human resources, technical infrastructure, technology and finance.
1.2.4. Developing the strategic alternatives
After analyzing the factors of the macroeconomic and business environment,
the

enterprise

environment,

often

has

to

identify

opportunities

the strengths and weaknesses

and

risks

from

external

from the internal environment of the

enterprise used as the foundation for developing orientation and strategic plan. The
main technique that used is analyzing the strengths, weaknesses, opportunities and
threats. (SWOT Matrix)
SWOT analysis provides useful information for connecting the resources and

capabilities of the enterprise within the competitive environment that it operates. It
is also the tool to set up and selecting the strategy. SWOT

Matrix is a method of

analyzing the strengths, weaknesses, opportunities and threats.
Analyzing SWOT
evaluating
SWOT

the position

is suitable

planning,

Matrix provides tools for strategic analyzing, review and
and the orientation

for working

strategy

of an enterprise

and analyzing

development,

in groups,

competitor

or a business

it is used

evaluation,

plan.

in business

marketing,

product

development and services.
SWOT

Analysis is the assessment of data held by a SWOT

to understand,
SWOT
analysis

present,

is an extension
can

be

used

discuss,

and

apply.

of two-dimensional
for

any

decision

and

Four-dimensional
"strengths"
the

SWOT

and

model in order

evaluation
"weakness".

model

allows

of the
SWOT
positive

thinking, beyond any framework of habit or instinct. When analyzing SWOT,

we

need to identify clearly the purpose of the target, and then we can expect others to
contribute to the analysis process. The people who see the results of the analysis

V0110.CapstoneProjectReport.Group11

13


GriGcs)

@ VN

UNIVERSITY

could understand the purpose of analytical methods, evaluation and the relationship

between the SWOT factors. This is a simple method in business that is easy to apply
and can be used in many areas of business.

1.2.5. Analyzing and selecting strategies
When choosing a strategy, an enterprise should consider a number of factors
that affect the strategic choices. These factors include both objective and subjective
factors, namely the strengths of the industry and enterprises, strategic objective of
the enterprise,

leaders’

attitude

in the enterprise,

financial

sources,

ability

and

capacity of the managers, the reflection of the subjects and the deadline.
Some foundations for selecting strategies
- The

power

of the enterprise

and

the

industry

in comparison

to other

competitors that may influence the strategic choices.
- Tasks and objectives: The system of goals that the board of directors has
given that could directly affect the choice of strategy. The point here is to choose
the appropriate strategy for the target and duties of enterprises rather than only the
profit or growth.
- The viewpoint of the executive director has a direct effect the choice of the
strategy, especially the attitude of the executives towards risk.
- Financial capacity of the enterprise also has the influence and some of them
even put pressure on the strategy selection. The bigger and convertible the capital
an enterprise has, the easier for it to pursue opportunities, but some have to give up
due to insufficient financial capacity.
- Capabilities

and

qualifications

of business

administration

staff of the

enterprise also govern the sclection of strategy. This factor plays a more or less a
role in the implementation of the strategies and to the success of a strategy.
- The

time

factor:

The

success

of a strategy

identifying the right time for implementation.

V0110.CapstoneProjectReport.Group 11

14

may

depend

heavily

on


GriGes)

G sala

UNIVERSITY

- Results of the current strategic review

of your business:

Identifying the

exact current strategy of the enterprise as a basis for choosing the new strategy and
confirm the current strategy.

1.3. Tools for strategic analysis
1.3.1. Using PEST Method to analyze macro factors
PEST studies the impacts of the factors in the macro environment.

Those

factors are:
Political factors
Economic factors
Socio-cultural factors
Technological factors
These four factors have a direct impact to the economy. Other than that, there

are natural conditions which are external factors of the enterprise and the industry
which must take the effects it provides as objective element. The enterprises will
base on these impacts to create suitable policies and business activities accordingly.

1.3.2. Using Michael Porter’s Five Forces of Competition to analyze micro
factors
Porter’s Five Forces Model was first printed in the Harvard Business Review
in 1979 with the content is to understand the factors that create profits in business. It
is called Porter’s Five Forces Model and considered as a useful and effective tool to
learn about the source of profits. More importantly, this model offers competitive
strategies for the enterprise to maintain and increase business profitability.
1.3.3. Using EFE Matrix to analyze the Opportunities and Threats
The specialists have come up with the EFE Matrix to evaluate the external
factors

V0110.CapstoneProjectReport.Group] 1

15


Global Advanced
MINDS

Table

1.1:

EFE

IN

THE

MAKING

Matrix

External Factors

Weigh

Rating

Weighted Score

(1)

(2)

(3)

(4)

List all the external

Grading from 0 to

1 = low reaction

factors of the

1, the higher the

2 = average reaction

enterprise

weight, the more

3 = above average

(international, local,

important the

reaction

industry)

factor

4 = good reaction

Total = 1

(4) = (2)x(3)

Total = X

1.3.4. Using IFE Matrix to analyze the strengths and weaknesses

Specialists have come up with the IFE Matrix to evaluate the internal factors:
Table 1.2: IFE Matrix
Internal Factors

Weight

(1)
Listing all the

internal factors

Rating

Weighted Score

(3)

(4)

(2)
Grading from 0 to 1,

1 = weakest point

(4) = (2)x(3)

| the higher the weight, | 2 = weak

of the enterprise | the more important

3 = strong

the factor

4 = strongest point

Total = 1

Total = Y

1.3.5. Using SWOT Matrix to qualitatively analyzing the strategy
Analyzing the Strengths - Weaknesses — Opportunities — Threats
SWOT stands for Strengths (S), Weaknesses (W), Opportunities (O) and Threats
(T). This is a very useful matrix that helps us to study an issue or make decision in
managing or organizing in business.
Table
Internal Environment

1.3:

SWOT

Matrix

Strengths (S)

Weaknesses (W)

List all the important

List all the important

External

strengths from the Table of

weaknesses from the Table of

Environment

internal factors of the

internal factors of the

of the enterprise

enterprise

enterprise

of the enterprise

V0110.CapstoneProjectReport.Group1 1

16


Global Advanced
MINDS IN THE MAKING

Opportunities (O)

Combination S-O

Combination W-O

List all the important

Make advantage of the

Make use of external

opportunities from the

enterprise’s strengths to

opportunities to overcome the

Table of external factors

develop the opportunities in

internal weaknesses of the

of the enterprise

the external environment

enterprise

Threats (T)

Combination S-T

Combination WE.

List all the important

Make use of the internal

threats from the Table of

strengths to reduce the

strategies, which iis overcoming

external factors of the

impact of external threats

weaknesses and reduce or

Combination of ‘protecting

enterprise

..

avoid external threats

S-O Strategy: using the strengths of the enterprise to make advantages of
the external opportunities
W-O

Strategy:

overcome

the weaknesses

to make

advantage

of external

opportunities
S-T Strategy: using the strengths of the enterprise to deal with the external
threats
W-T Strategy: overcome the weaknesses to reduce the external threats

1.3.6. Using QSPM to analyze and select strategies
Quantitative Strategic Planning Matrix - QSPM uses the in-put data from the
above analysis (mentioned in the previous chapters) to help strategists subjectively
determine which strategy in a alternative set of strategies is the most appropriate for
the company to pursue in order to successfully accomplish its objectives.

Table 1.4 Quantitative Strategic Planning Matrix
Rating
(2)

Alternatives
Alternative | Alternative | Alternative
l
A

2
B

A

3
B

A

B

Internal factors
External factors
Total

¥0110.CapstoneProjectReport.Group11

S

17

S

S


GriGcs)

(GF mee

UNIVERSITY

In principle, a QSPM can include any group of strategies in an alternative set
of strategies which include any strategy; but only strategies in the same group can
be evaluated and compared. These groups of strategies are different and a QSPM
can only evaluate strategies in the same group.
It should be noted that QSPM

shows the comparative attractiveness of the

alternative strategies; and more importantly it provides subjective bases to consider
and determine

the most appropriate product

strategy. However,

QSPM

also has

some limitations and it must have certain conditions to be used in practice. One of
the biggest drawbacks is that in the process of developing the matrix, intuitive

judgement is required to give the factors the attractiveness score - although based on
the

environmental

analysis

effectively use QSPM,
consensus

on

each

information

conducted

before.

Therefore,

in order to

strategists are required to discuss thoroughly and reach a
number

in

the

matrix

by

adding

scoring

bases

in

the

attractiveness score column.

Strategy selection is the final determinant step of the strategy development
and

also the first step in the strategy

implementation

process.

Developing

and

selecting strategies can identify steps required to have a feasible business strategy.
However, to be successful in the marketplace, selecting the appropriate strategy is
essential and crucial. And with the selected strategy, the company must implement
it

effectively.

This

is

a

critical

stage

to

expectations into reality.

V0110.CapstoneProjectReport.Group11

18

translate

the

company’s

strategic


GriGcs)

Ga

UNIVERSITY

CHAPTER II
BUSINESS ENVIRONMENT SITUATIONS OF
VIETINBANK CUA LO

In this

chapter,

the

report

concentrates

on presenting

the current

business

environment situations of Vietinbank Cua Lo. This part also analyzes the external
and

internal

environment

of Vietinbank

Cua

Lo

directly

affecting

the business

performance and evaluates the actual opportunities, challenges as well as strengths
and

weaknesses

of Vietinbank

Cua

Lo

in

order

to

formulate

the

appropriate

business strategies for the period 2011 -2015.
2.1. General introduction
2.1.1. Establishment and development history
The Cua Lo branch of Vietnam Joint Stock Commercial Bank for Industry and

Trade (VietinBank Cua Lo) was previously a second-level branch of Nghe An bank
of Industry and Trade. On August

IŸ 2006, VietinBank Cua Lo was upgraded into

one of the first-level branches of Vietnam Bank of Industry and Trade (VietinBank),
according to the decree No. 197/QD-HDQT-NHCT1

on July 4" 2006.

The responsibilities of VietinBank Cua Lo include: trading of currencies, credit,
banking services and other activities such as trading of foreign currencies and gold;
financial consultancy;

commercial

commission

and receiving commission;

bank related fields; providing

being a agency

in

insurance services in accordance with

legal requirements; providing services of preserving valuable possessions, valuable
documents; leasing lockers; mortgage and other services in accordance to with the
legal regulations of Vietnam.
In the period of establishment, net balance of VietinBank Cua Lo was 35,000
million Vietnam dong and the capital raised was 26,000 million Vietnam dong; the
total number of staffs was 35, the head office was located at No.190 Binh Minh
Street, Cua Lo town, Nghe An, with 5 departments and sections at the head office
(including Administration, Accounting, Customer Service, Currency Treasury, Risk

Management)

V0110.CapstoneProjectReport.Group11

19

Gries)

CG Di

UNIVERSITY

2.1.2. Organizational chart
Figure 2.1: Organizational chart of VietinBank system

f
ETT)
F
Hee

i
a

i

1st level
Seance

¬
;
Underlying
re
bề

a

:
Reprcsentative
ratio

Career Tìm Units

Mission
Being a

leading financial - banking group of Vietnam with versatile operations,

the bank’s mission is to provide customers with international standard products and
services in order to improve the value of life.
Vision
To

become

a leading,

modern

and

effective

financial

- banking

group

in

Vietnam and in the world
Core values
- All activities are customer-oriented;
- Dynamic, creative, professional, dedicated, transparent and modern;

- The employees are encouraged to strive, work hard and contribute - They have
the right to be rewarded

according

individual

-

contributions

to the quality,

Outstanding

and

results

and

hard-working

appropriately honoured
Business philosophy
- Security, efficiency, sustainability and international standards;
- Solidarity, cooperation, sharing and social responsibility;
- The prosperity of customers is the success of VietinBank.

Slogan: Improving the value of life.
V0110.CapstoneProjectReport.Group1 1

20

effectiveness
individuals

of
are