Construct business strategy for BIDV Quang Binh Within the period of 2013 - 2017

Construct business strategy for
BIDV Quang Binh
Within the period of 2013 - 2017
CAPSTONE PROJECT REPORT
Ho Chi Minh City, 2013


Group No.: 12
 Phan Xuân Hào
 Lê Tiến Dũng
 Nguyễn Minh Đức
 Hồ Anh Dũng


Class: GaBBA.SP0109


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TABLE OF CONTENTS

Page
TABLE OF PICTURE 4
LIST OF TABLES 4
LIST OF CHARTS 5
LIST OF ABBRIVATIONS 5
PREFACE 0019258190399 7
1. Necessity of the study subject 7
2. Objective of the subject 8
3. Mission of the study 8
4. Object and scope of the study 8
5. Method of the study 8
6. Theoretical meaning and realistics 9
7. Structure of the study: 9
CHAPTER I 10
CHAPTER I 10
THEORETICAL BACKGROUND ON STRATEGY ESTABLISHMENT FOR
ENTERPRISE 10
1.1. Concept of business strategy 10
1.2. Role of business strategy 11
1.3. Classification of business strategy 12
1.3.1. 1.3.1. Classification of business strategy based on the strategy level 12
1.3.2. 1.3.2. Classification of business strategy based on the strategy content . 12
1.3.3. Classification of business strategy based on the strategy process 12
1.4. Process of business strategy establishment 13
1.4.1. Mission and target of the Enterprise 13
1.4.2. Analysis of environment outside the enterprise 14
1.4.3. Analysis of environment inside the enterprise (internal environment) 16
1.4.4. Models of strategic analysis 16
1.5. Primary competition strategy 20
1.5.1 Cost leading strategy 20

1.5.2 Product differentiation strategy 21


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1.5.3 Centralization strategy 22
1.6. Selection of the strategy 22
CHAPTER II 23
ANALYSIS OF BUSINESS ENVIRONMENT OF COMMERCIAL JOINT STOCK
BANK FOR INVESTMENT AND DEVELOPMENT OF VIETNAM - QUẢNG
BÌNH BRANCH 23
2.1. General introduction about the Enterprise 23
2.1.1 Overview 23
2.1.2 Function, mission and business operation of BIDV Quảng Bình 24
2.1.3 Mission 25
2.1.4 Vision 25
2.1.5 Core value 25
2.1.6 Major products and service of BIDV Quảng Bình 25
2.1.7 Organizational structure of BIDV Quảng Bình 26
2.2. Analysis of business environment factors affecting operation of BIDV
Quảng Bình 27
2.2.1 Macroeconomic environment analysis 27
2.2.2 Micro-environment analysis 37
2.2.3 Analysis of internal factors of BIDV Quảng Bình 47
2.3. Necessity to be establishing business strategy of BIDV Quang Binh 63
CHAPTER III 64
BUSINESS STRATEGY OF BIDV QUẢNG BÌNH IN PERIOD OF 2013-2017 64
3.1. Selection of strategy plan 64
3.1.1 Analysis of SWOT matrix 64
3.1.2 IE matrix 66
3.1.3 Selection of QSPM matrix strategy 67

3.2. Content of business strategy of BIDV Quang Binh from 2013 through 2017
70
3.2.1 General business mission 70
3.2.2 Contents of business strategy of BIDV Quảng Bình from 2013- 2017 70
3.3. Solutions for performing the strategy of BIDV Quảng Bình 71
3.3.1 General solution group 71
3.3.1.1 Customer-oriented solution group 71
3.3.1.2 Product marketing and promotion solution group 73


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3.3.1.3 Package banking product and service development solution group 73
3.3.1.4 Expansion of distribution channel network 74
3.3.1.5 Personnel solution group 74
3.4. Process of strategy performance 75
3.4.2 Pan for strategic solution implementation 76
3.5. Risks during strategy performance 79
3.6. Proposal 80
3.6.1 BIDV proposal 80
3.6.1.1 Construction of technological infrastructure, fundamental factors for
deployment of bank product and service 80
3.6.1.2 Application of technology to risk management 81
3.6.1.3 Establishment of security policy of information technology system 82
3.6.1.4 Establishment of customer-oriented product and service development
strategy 82
3.6.1.5 Modernization of professional procedures 83
3.6.1.6 Improvement of technological risk administration role 83
3.6.1.7 Establishment of reasonable salary policy 83
3.6.2 Proposal to Government, State bank and authorities 84
IN CONCLUSION 85

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TABLE OF PICTURE
Picture 1. 1: Strategy administration model of F.David 13
Picture 1. 2: External environment 14
Picture 1. 3: Five forces model of M. Porter 15
Picture 1. 4: Steps for constructing EFE, IFE matrix and competitive image 18
Picture 1. 5: SWOT matrix 18
Picture 1. 6:: IE matrix 19
Picture 2. 1: Headquarter of BIDV Quảng Bình 23
Picture 2. 2: Organizational structure chart of BIDV Quảng Bình 26
Picture 3. 1: IE matrix of BIDV Quảng Bình 66

LIST OF TABLES
Table 1. 1: Competitive image matrix establishment model 17
Table 1. 2: EFE matrix establishment model 17
Table 1. 3: IFE matrix establishment model 17
Table 1. 4: QSPM matrix establishment model 20
Table 2. 1: Number of credit organization in Quang Binh province in 2011 38
Table 2. 2: Market share of BIDV Quảng Bình in comparison with its competitors 40
Table 2. 3: Competitive image matrix 41
Table 2. 4: Number of customers of BIDV Quảng Bình in 2007 through 2011 43
Table 2. 5: EFE matrix of BIDV Quảng Bình 46
Table 2. 6: Operational results in 2007-2011 and sive early months of 2012 52
Table 2. 7: Capital mobilization and share of BIDV Quảng Bình from 2007 until 30
June 2012 52
Table 2. 8: Debt balance, credit structure of BIDV Quảng Bình in period of 2007 – 2011,
updating on early sixe months of 2012 54

Table 2. 9: Pretax profit and appropriation for risk provision in period of 2007-201157
Table 2. 10: IFE matrix of BIDV Quảng Bình 62
Table 3. 1: SWOT matrix 64
Table 3. 2: QSPM matrix 67
Table 3. 3: Strategy selected according to preferental order 68


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LIST OF CHARTS
Chart 2. 1: Economic growth rate of Quảng Bình in 2006 – 2011 (%)Error! Bookmark
not defined.
Chart 2. 2: Economic structure of Quảng Bình in 2011, and by 2015 29
Chart 2. 3: Growth and structure of Quảng Bình population in period of 2006 -2011 and
for period of 2015 and 2020 32
Chart 2. 4: Market share shifting in Quảng Bình bank system 39
Chart 2. 5: Growth and structure of human resources qualifications of BIDV Quảng
Bình 48



LIST OF ABBRIVATIONS

Abbreviations
Interpretation
CB
Commercial bank
SB
State bank

Vietcombank
Quảng Bình
Joint stock commercial bank for Foreign trade of Vietnam – Quảng
Bình branch
Vietinbank
Quảng Bình
Vietnam joint stock commercial bank for Industry and Trade - Quảng
Bình branch
Sacombank
Quảng Bình
Sai Gon Thuong Tin Commercial Joint Stock Bank – Quảng Bình
branch
VPBank Quảng
Bình
Vietnam Prosperity Bank – Quảng Bình branch
ACB Quảng
Bình
Asia Commercial bank - Quảng Bình branch


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AgriBank
Quảng Bình
Vietnam bank for Agriculture and Rural development – Quảng Bình
branch
BIDV Quảng
Bình
Vietnam bank for Investment and Development - Quảng Bình branch
BIDV
Vietnam joint stock bank for Investment and Development

S&ME
Small and medium scaled enterprise
CJS
Commercial Joint Stock
Bac A Bank
Quảng Bình
Bac A Commercial Joint Stock Bank –Quảng Bình branch
MaritimeBank
Quảng Bình
Maritime Commercial Joint Stock Bank – Quảng Bình branch
PC
People’s credit
IT
Informatics technology
I-M
Industrialization – modernization
S&T
Science and technology


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PREFACE 0019258190399
1. Necessity of the study subject
In early years of the twenty first age, Vietnam economy has remarkably changed
into market economy and globally integrated, especially Vietnam becomes a full member
of WTO. Therefore, to exist and develop, Vietnamese enterprises must well prepare for
business and production operations in the future.
Priorly, that is short-term plans for the coming targets and further the strategies
must be established for long-term targets. For the industry with high competitiveness and
large initial investment, the establishment of development strategy is very important and

especially meaningful for the enterprise’s operations.
Bank industry is a special business section, has a paramount importance during
development of country economy but is also sensitive for variances of domestic and
international social-political-economic environment. That is why operation of the
commercial banks are always taken into account and strictly inspected. Besides,
competitive pressure inside the industry is more and more severe, together with that
integration process of country economy has been widely and deeply happening. Hence,
each bank must establish its own strategy to stably operate and develop on the basis of
opportunity maximization and risk minimization of integration process.
Global competition and integration require commercial banks to ever renovate and
develop all aspects such as capital, technology, organizational structure, management
ability and operation quality of risk control system as well as to continuously increase its
prestige and brand and have orientations to meet with increasing requirements and to
attempt to become a modern bank having key and decisive role in monetary finance
market, having high position in region, competitive strength and prompt adaption during
integration and development.
In such a circumstance, to success banks must well organize the establishment and
administration of strategy. Business strategy shows the competitive way and method that
bank enterprises must apply. Strategy administration is a way to direct the bank to a right
route and adjust this in association with change of input factors.
Successful establishment and performance of business strategy is an urgent
requirement and is also a mission for existence and development of banks in general and


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BIDV Quảng Bình in particular. Provide realistic situation, study group selected the
subject “Establishment of BIDV Quang Binh business strategy in period from 2013
through 2017” with aim to contributively improve business efficiency and bring BIDV
Quảng Bình to a new position in BIDV system in particular and in CB system of Vietnam
in general.

2. Objective of the subject
Based on theoretical methods of the study, the group thoroughly analyzes and
generalizes fundamental theory of business strategy as well as analyzes business
environment of BIDV Quảng Bình, and then establishes business strategy for BIDV
Quảng Bình in period of 2013-2017 and proposes some solutions to execute it in order to
make BIDV Quảng Bình become one of the leading branch of BIDV system and in
Quảng Bình province.
3. Mission of the study
To generalize theories of strategy model; analyze business environment, internal
and external environment impacting strategy establishment and propose business
strategy for BIDV Quảng Bình in period of 2013 – 2017 and solution for performance.
4. Object and scope of the study
Object of the study refers to theoretical matters on strategy administration,
operation of BIDV Quảng Bình and some banks in Quảng Bình province affecting
operation environment of BIDV Quảng Bình.
Scope of the study is restricted to the bank industry and business strategy
establishment for BIDV Quảng Bình in period of 2013-2017. Simultaneously, analysis
data is mainly of BIDV Quảng Bình and some other banks in the same province together
with analysis and statistics date of the State bank in period of 2006-2011.
5. Method of the study
- Approach methods: using combined approach methods such as individual
approach, historical approach, and quantitative and qualitative approach.
- Data processing and analysis method: using description statistics, analysis
and summary when evaluating operational results of BIDV Quảng Bình; employing
analysis matrixes including EFE, IFE, SWOT, IE, QSPM.
- Information sources: Using secondary information from newspaper, internet,
report and fifty-five years history of BIDV Quảng Bình, and Quảng Binh state bank.


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6. Theoretical meaning and realistics
The subject depends on theories relevant to strategy
administration and employs it to analyze strengths-weakness,
opportunities-threats of BIDV Quảng Bình, business strategy is established
thereof and solutions are proposed to execute this strategy.
7. Structure of the study:
Including three chapters
Chapter 1: Theoretical backgrounds on business strategy of the enterprise
Chapter 2: Analysis of business environment of BIDV Quảng Bình during 2007 –
2011 and updating until 30 June 2012.
Chapter 3: Business strategy of BIDV Quảng Bình in period of 2013 – 2017 and
solutions of performance.



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CHAPTER I
THEORETICAL BACKGROUND ON STRATEGY ESTABLISHMENT FOR
ENTERPRISE
1.1. Concept of business strategy
The strategy is an overall action program to obtain a specific mission. It is
common knowledge that strategy of a certain organization refers to that organization
must determine what mission it wants to reach, how to execute it and what resource must
be reliably provided.
Until now there are many different concepts of business strategy according to
various approaches.
Alfred Chandker stated “Strategy comprises determination of long-term
fundamental missions for the industry, simultaneously select method of action process
and distribute essential resources to execute those missions”
According to Wiliam.J.Gluech: “Strategy is a plan of unitedness,

comprehensiveness and coordinateness designed to ensure fundamental mission of the
enterprise performed”.
In “Concept on strategy administration”, Ferd RDavid stated: Strategy is means to
reach long-term missions. Business strategy may include geographic development, activity
diversification, ownership, product development, market penetration, expense reduction,
liquidation and joint venture.
Strategy is also thought to be a collection of missions and policies as well as major
plans to obtain those missions; it shows what section the enterprise are operating or will
operate and which section it will belong to.
In addition, business or competition strategy is defined according six following
factors:
- Product market: Opportunity of the enterprise depends on its products,
market that it serves, competitors that it faces or avoids and its integration level.
- Investment degree: it is necessary to select either expansive investment, or
product market penetration, or current position maintenance, or investment minimization
for withdrawal or liquidation for the enterprise disintegration.


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- Functional strategy: Competitive manner can concentrate on one or more
functions including product strategy, price strategy, distribution, production, informatics
technology, segmentation, and global strategy.
- Strategic assets and ability: strategic ability indicates outstanding aspects
of the enterprise. Strategic assets are resources strength of the enterprise in comparison
with that of other competitors. When releasing a strategy it is necessary to pay attention
to charge as well as possibility to create/ maintain asset and ability to serve as a ground
for long-term competitive advantage of the enterprise.
- Resources distribution: financial resources and non-financial ones such as
plant, equipment, and human are all distributed. Decision on distribution is a key factor
for strategy.

- Impact contracting between enterprises: only enterprises that obtain
contacting impacts have outstanding advantage compared to ones that disregard or do not
employ this contracting effect.
- Generally, strategy is a collection of actions and decision that are closely
associated in order to help an organization to achieve the targets. And it must be
established so as to make use of fundamental strengths including resources and ability of
an organization as well as regarding opportunities and challenges of environment.
- Business strategy is considered as a principle and guideline in business.
Therefore, the prerequisite condition is about to have a business strategy or organize a
good implementation of strategy to reach succeed in business.
1.2. Role of business strategy
In the market mechanism, business establishment and performance has an
importance for survival and development of the enterprise. Role of business strategy for the
enterprise is manifested on the following aspects:
- Planning role: Business strategy helps the enterprise to know its mission
and direction in the future and serves as guidance for all operations of the enterprise. It
shows administers to consider and determinate which direction his organization should
follow and when it can obtain the expected results.
- Forecasting role: in an ever-changing environment, opportunities as well as
threats always appear. Strategy planning enables the administrator to analyze the


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environment and have forecasting to make reasonable strategies. Therefore, he is able to
better take advantage of all opportunities and reduce threats relevant to the environment.
- Directing role: Business strategy helps the director optimally use and
distribute resources as well as effectively combine functions in the organization in order
to achieve missions.
1.3. Classification of business strategy
1.3.1. 1.3.1. Classification of business strategy based on the strategy level

Based on the strategy level, the strategy is classified into the following:
- Corporation-level strategy (Overall strategy) is the one established for the
whole company in all sections that it involves in. Mission in this strategy indicates that
the goal to be achieved is overall considered on all operations that the company pursues
as well as shows direction and measures to reach that goal.
- Business-level strategy (Section) is established for the specialized line. In
case the company takes part in only one section, the strategy is also a corporation-level
one.
- Function-level strategy refers to that of each individual function in the
company such as finance, marketing, personnel, etc. Function-level strategies can be
considered as supporting one for successfully execute the corporation-level and business-
level one.
1.3.2. 1.3.2. Classification of business strategy based on the strategy content
Depending on contents of the strategies, French managers classify the business
strategy into the following:
- Commercial strategy;
- Financial strategy;
- Human strategy;
- Technique and technology strategy.
1.3.3. Classification of business strategy based on the strategy process
Based in this way, the strategy includes
- Orienting strategy mentions significant orientations on mission of the
enterprise, direction and measures to obtain them. The strategy orients the fundamental


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strategy plan of the enterprise. It is established from results of environment analysis and
internal enterprise analysis.
- Action strategy indicates action plans of the enterprise in a specific situation
and estimation of strategy adjustment. It can be selected from strategies that have been

made up when the orienting strategy and also from those emerged during implementation
of orienting strategy.
1.4. Process of business strategy establishment

Picture 1. 1: Strategy administration model of F.David
1.4.1. Mission and target of the Enterprise
Mission is a statement of long-term nature on purpose. It distinguishes this
enterprise with others. Such statements can be considered as an enterprise’s one on
business philosophy, principles and reliance. All determines operational field of the
enterprise namely product category, basic service, fundamental customer group, market
demand, technical sectors or their combination. It overall contains expected achievement
externally announced to be a public image that the enterprise wants to set up.
Mission of the company needs to be employed and drafted as specific targets.


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Targets refer to statuses and specific results that the organization achieves in a certain
period.
1.4.2. Analysis of environment outside the enterprise
1.4.2.1 Macro-environment
Analysis of macro environment is to answer the questions: what is the enterprise
facing up? Four principal factors of macro-environment that the enterprise must face up
are:
- Lawful and political factors have been
increasingly affecting operation of the enterprise. The
enterprise shall comply with regulations on
legislation, policies, rules, preferential regimes, and
procedures, etc.
- Economic factors have direct influence
on potential attraction of strategies. These are

economic growth, inflation rate, economic cycle,
variation of interest rate, share price, trend on value
of United States dollar, tariff system and tariff level, etc.
- Social and cultural factors mainly affect aspects including concept of living
standard, morality standard, business community and female labor force, change in
consumption habit, etc. Social factors that slowly vary are difficult for realization but
have significant effect on most of decisions on products service, market and consumers.
- Technical and technological factors have enormous effect on the enterprise;
existence of many advanced technologies brings about both opportunities and threats for
all industries and enterprises. Development of new technologies can create new market,
resulting in appearance of new products and then change of competitive relationship in
the industry and making the existing products lag behind.
The aforementioned factors impact the organization independently or in
combination with other factor. In addition, there are natural condition and international
factors. These are external factors of the enterprise and industry whose effect serves as
objective factor.
1.4.2.2 Micro-environment (Industry environment)


Picture 1. 2: External environment



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Apart from factors of macro-environment, the enterprise is also affected by industry
environment where it operates, which is shown in model of M. Porter.
Five principal factors of industry environment have different impacts on the
enterprise:
- Pressure from suppliers:
suppliers are able to be a threat pressure

for production sector when they increase
selling prices, limit quantity and unfit
quality. The enterprise needs to pay
attention to negative impacts from
suppliers. However, supplier can create
pressure against enterprises only when:
+ There are a few of suppliers
for production industry;
+ There are a few of substitute products or service.
+ There is an advantage of specialized products and services.
+ It is able to agreeably integrate and close products.
- Pressure from customers: customer is a common noun indicating people or
organizations using products or services of the enterprise. It is possible to divide
customers into five objects including end-consumers, agent distribution, and agents,
wholesale and industrial buyers. Customers are main objects participating in consumption
of product, identification of customer objects and impacting on customers in order to
determinate product and service market and necessary investment structure. Customer
demand is the most fundamental factor concerned by production and business operators to
determine whether it is necessary to maintain long-term competitive advantage for that
product or not. The higher the pressure-from-customer possibility of customers is the larger
the disadvantageous threat for the enterprise is. Customers normally cause pressure on the
enterprise in the following cases:
+ They purchase an enormous quantity
+ Many suppliers provide one same product, there are many choice.
+ It is able to counter-integrate to own the whole or one part of production.

Picture 1. 3:Five forces model of M. Porter


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When customers have more advantage than sellers, they must reduce the price and
increase product and service quality, i.e. the profit is reduced.
- Substitute products are not severely competitive but able to affect market
profitability, which is a threat for the enterprise. It is necessary to pay special attention to
substitute products that can be easily improved or changed with technological advance.
Mostly, only substitute products are resulting from technological bloom. To obtain
success in operations, enterprises must spend necessary resources to develop new
technologies to development strategy.
- Competitors: competitive degree of the existing competitors is shown in
concentration level of the industry, withdrawal difficulty, fixed expense, reinforcement of
the industry, capacity in excess, differentiation of products, conversion charges,
characteristics of brand, diversification of competitors, selecting status in the industry.
- Potential competitors: according to Michael Porter, potential competitors
refer to enterprises that have not existed in the industry but can have influence on the
industry in the future. Threats from potential competitors are manifested in factors
including absolute expense advantage, policy of Government, scale economics, capital
requirements, characteristics of brand, and conversion charges of the industry, ability to
approach distribution channel, possibility to be retaliated, and exclusive products.
1.4.3. Analysis of environment inside the enterprise (internal environment)
Internal environment of the enterprise refers to what belongs to its own, directly
associated with its operation, enabling realization of its strengths and weaknesses as
ground for business planning and implementation. Objects that are considered are main
factors happening inside the enterprise and within its control. Those factors include
human resources, financial ability, marketing, informatics system and organization.
1.4.4. Models of strategic analysis
1.4.4.1 Competitive image matrix
The analysis of external environment requires establishment of competitive image
matrix to form the strategy. The establishment of competitive image matrix aims to
identify main competitors together with advantages and special weaknesses and
simultaneously help the administrator define his enterprise position in competitive map.

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Table 1. 1: Competitive image matrix establishment model
Evaluatio
n factors
Import
ance
level
Sample
enterprise
Competitor 1
Competitor 2
Competitor n
Classifi
cation
Import
ance
point
Classifi
cation
Importa
nce point
Classifi
cation
Importa
nce point
Class
ificat
ion

Import
ance
point
1
2
3
4=3x2
5
6=5x2
7
8=7x2
9
10=9x2
Listing out
factors









Total
1

X

X

X

X
1.4.4.2 External environment factor evaluation matrix (EFE)
EFE matrix allows the strategy administers to summarize and evaluate social,
cultural and economic information, population, geography, politics, law, technologies
and competition, etc. Therefore, they can identify external opportunities and threats
affecting their companies.
Table 1. 2: EFE matrix establishment model
No
Mainly external factors
Important
level
Classification
Important
point
1
2
3
4
5=4*3

Listing out factors of external
environment



*
Total

1.00

X
1.4.4.3 Internal environment factor evaluation matrix (IFE)
IFE matrix allows the strategy administrators to summarize and evaluate
important strengths and weaknesses of functional departments; simultaneously it serves
as a basis to determine and evaluation relationship between these departments.
Table 1. 3: IFE matrix establishment model
No
Mainly external factors
Important
level
Classification
Important
point
1
2
3
4
5=4*3


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Picture 1. 5: SWOT matrix

Listing out factors of internal environment
X
X
X

*
Total
1.0

X
1.4.4.4 Steps for establishing an EFE, IFE matrix and competitive images

Picture 1. 4: Steps for constructing EFE, IFE matrix and competitive image
1.4.4.5 SWOT matrix
This is an analysis model based on strengths, weaknesses, opportunities and
threats that are combined to
determine the business strategy
for the company.
- S-O combination
helps the enterprise to make use
of its strengths to grasp the
opportunity.
- S-T combination:
the enterprise uses strengths to
overcome threats
- W-O combination:
the enterprise should take advantage of opportunity to overcome weaknesses.
- W-T combination: the enterprise shall surmount or minimize weaknesses
to avoid threats.
1.4.4.6 IE matrix


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Picture 1. 6: IE matrix

IE (Internal – External Matrix) indicates different capacities of an enterprise in a
table of nine cells. It depends on
two principal aspects:
- Total important points
of IFE matrix are shown on X axis
- Total important points
of EFE matrix are shown on Y axis
- The enterprise must
establish IFE and EFE matrix
serving as a basis to establish its IE
matrix.
+ X axis indicates total
importance scores of IFE matrix, in
which total scores from 1,0 through 1,99 means internal weakness, total scores from 2,0
through 2,99 is at average, and from 3,0 – 4,0 refers to pow erful strength.
+ Y axis shows total importance scores of EFE matrix, in which total scores
from 1,0 – 1,99 is low, from 2,0 – 2,99 is average and from 3,0 – 4,0 is strong.
- If the enterprise is in cells no. I, II, IV: recommended to develop and
construct
- If the enterprise is in cells no. II, V, VII : recommended to hold and
maintain
- If the enterprise is in cells no. VI, VIII, IX : recommended to gain or reject
1.4.4.7 QSPM matrix
QSPM matrix can be employed to select and determine a business strategy; this
matrix use date collected from the input stage in order to evaluate feasibility of strategies
mentioned in the combination stage. Necessary steps for forming QSPM matrix are
- Listing external opportunities/ threats and internal strengths/ weaknesses of
the enterprise; evaluating importance of each factor listed upon a certain score (from 1 to
4), in other words determining the importance evaluation weight of each factor for the
enterprise.

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- Selecting the outstanding strategies mentioned in the combination state;
evaluating each strategy based on opportunities/threats/strengths/weaknesses listed upon
score from 1 to 4.
- Calculating all scores of each strategy by summing products between
importance evaluation score of each factor and evaluation score of each strategy.
Comparison, evaluation and selection of the strategy depend on total scores of each
strategy, the strategy of highest score are given priority
Table 1. 4: QSPM matrix establishment matrix
No.
Major factors
Import
ance
level
Strategies
Strategy 1
Strategy 2
Strategy n
AS
TAS
AS
TAS
AS
TAS
I
Internal factors

1
Listing internal factors







2
….







II
External factors

1
Listing external factors







2
….







*
Total







Of which: AS is attraction score; TAS is total attraction score

1.5. Primary competition strategy
Michael Porter said that advantages of any enterprise always lie in two aspects:
cost advantage and product differentiation. By applying these advantages, companies will
pursue three common strategies: costing leading, product differentiation and
centralization.
1.5.1 Cost leading strategy
This strategy is oriented to the aim that the manufacturer has low cost among the
industry with a certain quality standard.
And then the company shall sell products either at average price of the whole
industry to obtain higher profits than its competitors or at lower price to get more market.
This cost leading strategy is usually applied to enormous market.


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Enterprises that succeed in employment of the cost leading strategy have the
following characteristics:
- Being able to successfully access the capital to invest production equipments. It
is a barrier that many companies can not overcome;
- Being capable of designing products to increase production efficiency, for
example, creating any certain detail to shorten erection progress.;
- Having high qualification in production;
- Having effective distribution channel.
Any strategy including cost leading has latent risks. With backing of modern
technologies, competitors can have sudden turnings in production and remove competitive
advantages of cost leading enterprises. In addition, some companies pursue the strategy of
narrow market concentration, which is not difficult to achieve lower cost level in their
traditional communications, thence form a group controlling multiple-larger market share.
1.5.2 Product differentiation strategy
This strategy aims to develop products or services having original and unique
characteristics and evaluated higher than those of competitors. Added value based on

product uniqueness allows the enterprise to set up a higher price that is still accepted by
customers. They hope that such a higher price shall not only allow to cover incremental
costs during supply of products, but also depend on different characteristics of products,
if the supplier increases the price, the enterprise can transfer that variance to customers
because their customers can not easily find out the substitute.
Enterprises that succeed in employment of the product differentiation strategies
have the following characteristics:
- Having ability to study and approach the leading scientific achievements;
- Product research and development group (R&D) have high creativeness and skills.
- Dynamic sales group has ability to impart strengths of products to customers
successfully;
- Having reputation for quality and innovativeness.
Risks attached to product differentiation strategy are the likely imitation of
competitors or change in consumers’ taste. Besides, many companies pursue
concentration strategy to be able to achieve higher product differentiation in their market.


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1.5.3 Centralization strategy
This strategy focuses on innovation of products or there is no change in other
factors in market. The company attempts to exploit all opportunities about the existing
products, service and market.
1.6. Selection of the strategy
In order to select the strategy for the enterprise, we must determine selecting criteria
ensuring requirements: dependence on analysis results, evaluation of internal and external
(IE matrix) factors and SWOT matrix, the strategy that is selected must be reliably
conformable with environment condition, with policy of foreign affairs, management
concept of Executive board and directorate, with financial capacity, material and human
resources of the Enterprise.
If strategic position of the enterprise lies in three blue cells of quick growth, the

enterprise is recommended to select SO strategy in SWOT matrix. If the strategic position
lies in 3 yellow cells of selective growth or stable strategy, the enterprise should select only
ST and WO strategy in SWOT matrix chart. If its position is in three red cells, it is
recommended to select WT strategy in SWOT matrix table, orienting obtainment and
gradual withdrawal or possibly flee to preserve forces.


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Hình 2. 1: Trụ sở BIDV Quảng Bình
CHAPTER II
ANALYSIS OF BUSINESS ENVIRONMENT OF COMMERCIAL JOINT STOCK
BANK FOR INVESTMENT AND DEVELOPMENT OF VIETNAM - QUẢNG
BÌNH BRANCH
2.1. General introduction about the Enterprise
2.1.1 Overview
Enterprise name
COMMERCIAL JOINT STOCK BANK FOR
INVESTMENT AND DEVELOPMENT OF
VIETNAM - QUẢNG BÌNH BRANCH
Transaction name
Joint Stock Commercial Bank for Investment and
Development of Vietnam – Quang Binh Branch
Abbreviated name
BIDV Quảng Bình
Logo

Slogan
Opportunity sharing and successful cooperation
Headquarter

189 Hữu Nghị - Đồng Hới city - Quảng Bình
province
From early days of the North revival after resistance against the French colonialists, in
26th April 1957, government of Vietnam People's Democratic Republic signed decision
no. 177/TTg regarding establishment of
Vietnam Construction Bank – forerunner of
BIDV – with mission to provide and
manage the State capital for country
construction work.
In Quảng Bình, with requirement of
economic revival and development of the
province, in 26
th
April 1975 department of
capital construction allotment under
Finance service – forerunner of BIDV


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Quảng Bình was established. In 20
th
April 1964 Quảng Bình Construction Bank, was
established from the capital construction allotment group. Right after being established,
personnel of Quảng Bình Construction Bank had proactively participated in revival and
rebuilding of the province and played a role in directly manage investment funds and
distribute capital in fundamental construction sector.
In 24
th
June 1981, Quảng Bình Construction bank was renamed Quảng Bình
Investment and Construction Bank directly under Vietnam Investment and Construction

Bank, full member of Vietnam bank system. Its mission is to maintain capital allotment
for investment and lend circulating capital and operational investment funds in the
region.
In November 1990, Quảng Bình Investment and Construction Bank was renamed
Quảng Bình Investment and Development Bank, and all operations were moved from
state subsidy mechanism to borrowing-for-lending mechanism, taking the initiative in
seeking capital source and customers, linking self-financing with implementation of
customer and region based business policies, seeking the effective projects to invest,
moving all operations into multi-functional operation as per nature of a modern
commercial bank, attaching credit supply to product and service diversification, strongly
develop guarantee products, international payment, domestic payment, Overseas national
currency exchange together with e-banking services based on modern technology, highest
meeting with customer and market demand and turning to deeply and widely integrate the
economy.
In April 2012, Bank for Investment and Development of Vietnam finished capitalization
and officially became a commercial joint stock bank according to permit no. 84/GP-
NHNN of the State bank regarding establishment and operation of Commercial joint
stock Bank for Investment and Development of Vietnam, Quảng Bình bank for
investment and development was renamed Commercial Joint Stock Bank for Investment
and Development of Vietnam - Quảng Bình branch thereof and operates under a joint
stock form.
2.1.2 Function, mission and business operation of BIDV Quảng Bình
According to Decision no. 1153/QĐ-HĐQT dated 22 August 2012, BIDV Quảng
Bình implements functions and missions including monetary business, capital and credit