Hoàn thành chiến lược kinh doanh của ngân hàng BIDV chi nhánh thăng long

THIESIS SUBJECT

COMLETION OF BUSINESS STRATEGY OF THANG LONG BRANCH OF BANK
FOR INVESTMENT AND DEVELOPMENT OF VIETNAM

1


TABLE OF CONTENT
TABLE OF CONTENT...............................................................................................................2
ABBREVIATION........................................................................................................................4
LIST OF TABLE.........................................................................................................................5
LIST OF FIGURE........................................................................................................................5
PREAMBLE................................................................................................................................6
CHARTER 1................................................................................................................................8
BASIS OF THEORY OF ENTERPRISES’ BUSINESS STRATEGY......................................8
1.1 Business strategy of enterprises.........................................................................................8
1.1.1 Concept.......................................................................................................................8
1.1.2 Business strategy at business enterprises....................................................................9
1.2 Process of setting up strategy...........................................................................................12
1.2.1 Determining business duty........................................................................................12
1.2.2 Evaluating external factors.......................................................................................12
1.2.3 Assessing internal situation of enterprises................................................................13
1.2.4 Analyzing strategy and selection..............................................................................13
1.3 Tools to set up business strategy......................................................................................14
1.3.1 Collecting and systematizing information................................................................14
1.3.2 Process of combination.............................................................................................16
1.3.3 Decisive Process.......................................................................................................18
1.4 The characteristics of banking sector impact on strategic management..........................19
1.4.1 The potential need for usage of banking service......................................................19
1.4.2 The management of the SBV....................................................................................20

1.4.3 Development of related and supported industries.....................................................20
1.4.4 Competitors...............................................................................................................21
1.4.5 Internal factors of banking........................................................................................22
CHAPTER II..............................................................................................................................24
THE CURRENT SITUATION OF BUSINESS ENVIRONMENT OF BANK FOR
INVESTMENT AND DEVELOPMENT OF VIETNAM-THANG LONG (BIDV TL).........24
2.1 Introduction of Bank for Investment and Development of Vietnam – Thang Long
(BIDV TL).............................................................................................................................24
2.1.1 History of establishment and development...............................................................24
2.1.2 Distributing Network................................................................................................24
2.1.3 Products and Services...............................................................................................25
2.1.4 The Business Result..................................................................................................26
2.2 The analysis of environmental factor impacts on the operations of BIDV TL................34
2.2.1 Macro-environment...................................................................................................34
2.2.2 Micro environment....................................................................................................41
2.2.3 Evaluating opportunities and threats.........................................................................47
2.2.4 External factor evaluation matrix (EFE)...................................................................48
2.2.5 Matrix of competitive image.....................................................................................50
2.3 Analyzing internal factors of BIDV Thang Long............................................................53

2


2.3.1 Human resources.......................................................................................................53
2.3.2 Marketing..................................................................................................................54
2.3.3 Organizing Structure.................................................................................................55
2.3.4 Management capacity...............................................................................................55
2.3.5 Financial capacity.....................................................................................................56
2.3.6 Research, development.............................................................................................56
2.3.7 Information technology.............................................................................................57

2.3.8 Evaluating strong and weak points...........................................................................57
2.3.9 Internal factor evaluation matrix (IFE).....................................................................58
2.4 Necessity of building up business strategy for BIDV Thang Long.................................59
CHAPTER III............................................................................................................................61
COMPLETION OF BUSINESS STRATEGY OF BIDV TL BY 2012....................................61
3.1 Business target of BIDV TL by 2012..............................................................................61
3.1.1 General target............................................................................................................61
3.1.2 Detailed target by 2012.............................................................................................61
3.2 Analyzing feasible business strategy...............................................................................62
3.2.1. Analyzing SWOT matrix.........................................................................................62
3.2.2 Analyzing SPACE....................................................................................................64
3.2.3 Analyzing large strategy matrix................................................................................66
3.2.4 Determining substitution business strategy..............................................................66
3.3 Quantitative strategic planning matrix (QSP)..................................................................67
3.4 Solutions to implement strategy.......................................................................................69
3.4.1 Solutions to develop human resources......................................................................69
3.4.2 Marketing Solutions..................................................................................................72
3.4.3 Technological solution..............................................................................................74
3.4.4 Restructuring solution of organization......................................................................75
3.4.5 Building up culture of organization..........................................................................78
3.4.6 Building up material facilities...................................................................................80
CONCLUSION..........................................................................................................................80
REFERENCE.............................................................................................................................82

3


ABBREVIATION
SBV State bank of Vietnam
Vietcombank Vietnamese Commercial Bank

Vietinbank Vietnamese trade bank
Agribank Agriculture and rural development bank
BIDV Banks of Investment and development of Vietnam
SACOMBANK Saigon Thuong tin Commercial Bank
BIDV TL Banks of Investment and development Thang Long
ATM Automatic transferring machine
EFE External factor evaluation
IFE Internal factor evaluation
SWOT Strengths, weakness, opportunities and threats
SPACE Strategic Position & Action Evaluation
BCG Boston Matrix
IE Internal external

4


LIST OF TABLE
Table 2.1 ATM network..................................................................................
Table 2.2 Business Report..............................................................................
Table 2.3 GDP growth rate.............................................................................
Table 2.4 import export turn over…………………………………………...
Table 2.5 Populations scale and structure…………………………………..
Table 2.6 Structure of total instruments paid by 2002-2006……………….
Table 2.7 Comparison Norm………………………………………………..
Table 2.8: EFE Matrix………………………………………………………
Table 2.9: Matrix of competitive pictures…………………………………
Table 2.10: IFE Matrix………………………………………………………
Table 3.1 SWOT Matrix…………………………………………………….
Table 3.2 SPACE Matrix……………………………………………………
Table 3.3 SPACE Matrix……………………………………………………

Table 3.4 Selected strategies………………………………………………...
Table 3.5: Steps for implementation

25
26
34
35
36
38
46
48
50
58
62
63
67
69
80

LIST OF FIGURE
Figure 1.1 SWOT Matrix
Figure 1.2 SPACE matrix
Figure 1.3 Matrix of large strategy
Figure 2.1 Export import turn over
Figure 3.1 SPACE matrix

16
17
18
35

64

5


PREAMBLE
1. The necessity of selecting subject
According to Vietnam’s pledge with WTO and bilateral agreement, Vietnam has
duty to remove commercial and financial barriers for foreign investors. Hence,
Vietnamese enterprises are facing difficulties due to strong competition when opening
its market.
By the end of 2011, foreign banks will be treated as Vietnamese ones, resulting
that they will face fierce competition. Up till now, banks are promptly founded,
expanded their scale to confirm sustainable position. Setting up suitable business
strategy for each bank is vital for survival, development and enhancement.
As a result, Subject “Completion of business strategy of branch of Bank of Investment
and Development Vietnam Thang Long by 2012” is selected.
2. Study object and scope
Study object: Business strategy of BIDV Thang Long
- Scope: business activities of BIDV Thang Long, comparing with competitors
in banking sector including: Viectcombank, Vietinbank, Agribank
3. Study goal and target
Goal of Group 8 is to set up business strategy for BIDV Thang Long to 2012
and propose solutions to make BIDV Thang Long one of strong banks in BIDV
system.
Targets:
- Overview basic theory of business strategy processes of building up the
strategy, tools, and characteristics of banking sector affecting to strategy.
- Analyze external and internal factors to find strengths, weakness, opportunities
and threats of BIDV Thang Long

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- Determine business targets based on SWOT, set up strategy and solutions to
implement the strategy.
4. Methodology
- Resources of references: banking newspapers and magazines, books, website
(asset.com, bidv.com.vn, vietcombank.com.vn…), report of Vietcombank, Vietinbank,
Agribank.
- Approaching method: All methods are used. When analyzing current situation
of BDIV Thang Long, particular approach method is used. When analyzing internal
and external factors affecting business activities of BIDV Thang Long, historical,
qualitative and quantitative approach method are used.
- Primary information collecting method: Observation, interview, expert
methods are used.
- Information handling method: Modernizing method, result-reason analyzing,
statistics are used. Methods of subjects: Strategy management, HR management,
Marketing…are combined to analyzed.
5. Meaning of subject
The capstone project is base on theory relating to strategy management and uses
it to analyze SWOT of BIDV Thang Long, setting up business strategy and solutions to
implement this strategy, mostly in the context of Vietnam entry into WTO and
Vietnam must pledge to implement regulations in banking by 2012.

7


CHARTER 1
BASIS OF THEORY OF ENTERPRISES’ BUSINESS STRATEGY

1.1 Business strategy of enterprises
1.1.1 Concept
“Business strategy of enterprises is a general action plan to implement target of
enterprises” In order to gain such targets, it does not depend on business strategy; they
are variety of support programs, functional strategies. Business strategy creates
guideline framework for implementation.
* Business strategy in general is determined by three levels:
+ Company – level strategy: Determine and show purposes in detail, targets and
business activities of a company, create policies and basic plan to gain targets.
+ Business – level strategy: Determine selection of products and particular type
of products for business activities inside company; determine methods for every
business units to complete their targets to distribute to company’s target fulfillment.
+ Function- level Strategy: Determine solutions, plan for every business
industry.
* Some concepts closely related to concept of business strategy
+ Duty Report: Report about long term purpose, which represent business
mission of company by products and services providing customers, making difference
between this company and that company. It describes values and priorities of company,
determine general development of company.
+ Long term targets: Results which enterprises gain from completing their main
duty. Long term targets are lengthened over one year with criteria: challenge,
measurable, suitable and clear. Long term targets are set up for enterprises and their
units. Long term targets play an important role in period of strategy’s establishment.

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+ Annual targets: Milestone which enterprises must achieve to meet long term
targets.

Annual

targets

include

types

as

follow:

management,

marketing,

finance/accounting, producing/managing, developing study and information system.
Annual targets play an important role in period of strategy’s implementation.
+ Policies: Tools to gain targets, guideline for making decision and
implementing repeat or frequency circumstances. Policies play an important role in
period of strategy’s implementation.
+ Opportunities and challenges: Such factors depend on external environment,
out of control of enterprises, which may harm or make profit.
+ Strong and weak point: Such factors depend on inside environment, in control
of enterprises. They are determined in the connection with competitors.
1.1.2 Business strategy at business enterprises
1.1.2.1 Centralizing growth strategy
It is able to apply every enterprise’s strategy to their units. However, at business
units, centralizing growth strategy must be firstly focused on because central object of
strategy is products and marketing.

This strategy mainly improve status of competition of enterprises with their
existing products in the marketing, on the basis of strengthening marketing activities or
changing current marketing strategy without changing products. There are three main
strategies:
+ Market penetration: Looking for market share for increasing current products
and services at existing market through marketing effort.
+ Market development: Introduce current products, services to new area.
+ Product development: Increasing revenue by improving and renewing current
products, services.

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1.1.2.2 Competitive strategy base on M Porter’s ideal
Michael E.Poter – Harvard University’s professor defined basic competitive
strategy in the book: “Competitive Strategy”.
1. Low cost leadership strategy
Such strategy creates competition by two ways:
- Valuating is lower than that of competitors to attract targeted customers who
are sensitive to prices to increase total profit. It is suitable for enterprises with large
scale, which have ability to reduce cost in activities.
- Controlling not to reduce totally, satisfying current market share and using
lower costing tools to gain profit margin higher for every product.
2. Differentiation strategy
Enterprises will focus on making more clearly different types of products and
marketing programs than competitors to gain the top position. After that, fixing higher
price than normal products, increasing revenue through attracting customers with
remarkable characteristics such as: unique taste, storage to distribute products to
customers

everywhere,

scientific

applying

into

designing

and

managing

implementation, optimal service, high service, prestige and easy to differentiating with
other products…
3. Strategy focusing on main points
Enterprises focus on narrow market segments. Such segments are determined by
geographical area, products, and customers. Attractive segment selected are areas
without competitions or competitors not meet all customers’ need and wants.
1.1.2.3 Competitive strategy for business enterprises based on market share
Although every business units depend on enterprises, their market share is
different.

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1. Leadership business units
Strategy widening total market demand: Looking for new geographic area to sell
products, looking for new customers, developing new tools, encouraging customers to

use further products.
- Defensive strategy: Help units to maintain their position at current market.
They are always threatened by other competitors, especially units keeping challenging
position with market. Hence, units must continuously defend prior to competitors.
- Market share widening strategy: Re – purchasing business units of
competitors, attacking to holding market share of weak competitors.
2. Business units challenging to market.
Attacking leadership business units and other competitors to increase market
share or doing business activities with competitors and no competing with others. In
order to implement strategy of attack, steps must be as follow:
- Determine competitors to attack and targets of strategy
- Selecting suitable strategy of attack: attacking ahead, adjacent, surrounding…
3. Business units following market
They do not want to face leading competitors or challenging competitors
because they are lack of human resource, afraid of damage, wastage of cost…They will
only go follow leadership competitors through imitating strategy:
- Imitating absolutely products, distributing mode, advertising and marketing
activities, supplying products for targeted market with low price.
- Imitating some main content in marketing mix of leadership competitors and
keep differences about packing, price, advertising, selling network….
- Imitating creatively to adapt to demand and wants of market by depending on
marketing mix of leadership competitors

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4. Market hidden business units
They always look for some safe segment and able to make profit. In order to be
successful at narrow segment, typical specializing strategy is implemented.
- Specializing based on last customer: depending on industry which units are

hiding at the market, they select customers with demand of using products or service.
- Specializing based on processes of producing, distributing products: they
select details, component of one perfect product, goods to supplement main products.
- Specializing based on customers: Selecting customers based on demography
such as customers with high, average or low income, or children, teenage…
- Specializing based on selling area: Selecting area such as inland, local market,
international area….

1.2 Process of setting up strategy
Setting up business strategy is the first process of strategy management. It
includes 4 steps, each contains major activities:
1.2.1 Determining business duty
Ideal of report of business duty of Peter Drucker in the mid-70s was resulted
from his study at General Motors and 21 books and hundreds of his articles. He said
“Report of business duty is the declaration “survival reason” of one organization. It
answers the question of what is the center of business working. It is very vital to set up
target and draw up strategies efficiently” [2,93]
1.2.2 Evaluating external factors
Environment of an organization includes factors, forces, and institutions…
which can not be controlled by managers. However, they affect enterprise’s activities
and results. Enterprises’ environment can be divided into 2 levels: micro and macro.

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Macro environment affects all business industries, but not necessary to follow
totally, include: (1) Economic environment, (2) Leal, governmental and political
environment, (3) Social and cultural environment (4) Natural environment (5)
Technological environment.
Micro environment is determined by specific industry. Enterprises in industry

will suffer from micro environment of such industry, including (1) Competitors; (2)
Customers; (3) Providers; (4) Potential competitors; (5) Substitution products.
Analyzing environment’s factors allows enterprises to determine where are
opportunities which they can take chance and where are threats they must face.
Identifying and assessing opportunities, threats from external environment
affecting them, which allow them to set up clear duty, to determine feasible long- term
target, to design suitable strategy and to make policies to gain such targets.
Analyzing external factors is sensitive and difficult to image. In managing
strategy, researchers show out two tools allowing enterprises to rate and estimate
effects of environment to enterprises’ activities. EFE matrix and matrix of competitive
picture are used.
1.2.3 Assessing internal situation of enterprises
It is assessed through functional factors: Finance, human resources,
management, organization structure, marketing, study/development, IT.
Analyzing internal situation of enterprises allows to determine strengths (S) and
weakness (W). As a result, selected business strategy will develop S and overcome W.
IFE is used.
1.2.4 Analyzing strategy and selection
Analyzing strategy and selecting are making subjective decision based on
objective information to select processes to complete responsibilities and targets.

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Enterprises’ strategy, targets and mission, internal and external controlling
information assist foundation and assess feasible strategy.

1.3 Tools to set up business strategy
According to Fred R. David, there are 3 phases to set up strategy and each phase
use each tool.

Phase 1: Collecting and systematizing information. This phase summarize basic
information collected and systematized to set up business strategy. This phase use 3
tools: EFE matrix, competitive picture matrix and IFE matrix.
Phase 2: Combining process
This process will select, arrange, and combine external factors, inside factors to
set up feasible strategy. This process will include matrix tools: SWOT, SPACE, large
strategy matrix.
Phase 3: Decisive process
Only tool used in this process is QSPM matrix. QSPM matrix is used
information of phase 1, assess objectively selected business strategy of phase 2 to
decide which business strategy is best for the enterprise.
1.3.1 Collecting and systematizing information
1.3.1.1 EFE Matrix
There are 5 steps for EFE matrix:
- Step 1: Listing decisive factors for industry which enterprises are doing
business, including O and T.
- Step 2: Assessing important level of each factor with point from 0 to 1
(increasing important level) and total point is 1. Important level is based on industry
which enterprises are doing business.
- Step 3: Rating each factor from 1 to 4 for enterprises’ response Point 4 for
good response. Point 3 is above average. Point 2 is average. Point 1 is weak response

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- Step 4: Determine total point for each factor (by multiplying step 1 and step 2).
- Step 5: Determine total point of important level of enterprises by total point of
step 3.
Highest point is 4 and the lowest is 1. Average is 2.5. The higher point is, the
better external factors are responded by enterprises.

1.3.1.2 Matrix of competitive image
This matrix identifies major competitors. It is broadness of EFE matrix with
important level of each factor, meaning of points of each factor, total important points
with same meaning.
It has some differences with EFE: some internal factors with decisive level are
input to compare. Total points to assess competitors will be compared with enterprises
selected as the sample.
1.3.1.3 IFE Matrix
There are 5 steps:
- Listing decisive factors.
- Assessing important level of each factor with point from 0 to 1 (increasing
important level) and total point is 1. Important level is based on which factor is
important to enterprises, not differentiating which factors are strengths or weakness.
- Rating from 1 to 4 for each factor. Point 1 is the most weakness, point 2 least
weakness, point 3 is least strengths, point 4 is most strengths.
- Determine total point for each factor (by multiplying step 3 and step 2).
- Step 5: Determine total point of important level of enterprises by total point of
step 4.
Highest point is 4 and the lowest is 1. Average is 2.5. The important total point
lower than 2.5 shows the internal weakness of enterprises, higher 2.5 show the internal
strengths of enterprises.

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1.3.2 Process of combination
1.3.2.1 SWOT Matrix
It is combined by S, W, O and T to make 4 types of strategy.
- SO strategy: Using internal strengths of enterprises to explore external
opportunities.

- WO strategy: Taking chance internal opportunities to improve internal
weakness
- ST strategy: Using strengths of enterprises to avoid or reduce external threats.
- WT strategy: Defending to reduce internal weakness and external threats
SWOT is illustrated as follow:
S

W

Listing strengths

Listing weakness

O

S – O strategy

W – O strategy

Listing Opportunities
T

S – T strategy

W – T strategy

Listing threats
Figure 1.1: SWOT Matrix
1.3.2.2 SPACE Matrix
SPACE includes 2 internal factors: Financial strengths (FS) and competitive

advantage (CA), two external factors: environment stability (ES) and industrial
strengths. (IS)
SPACE is built up through steps as follow:
- Selecting a group of representative variable of FA, IS, ES and CA
- Rating value from 1 (worst) to 6 (best) for FS and IS, from -1 (best) to -6
(worst) for ES and CA.
- Calculating average point for FS, IS, ES and CA
- Rating average point for each factor.

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- Adding 2 points on axis X and marking result, adding 2 points on axis Y and
marking result. Marking co-ordinate of this new point.
- Drawing vector from origin to new vector from the center of SPACE to your
point
FS
Conservative

6

Aggressive
5
4
3
2
1

CA

-6

-5

-4

-3

-2

-1

0

1 2 3

4

5

6

IS

-1
-2
-3
-4
Defensive

-5

Competitive

-6.
ES
Figure 1.2: SPACE Matrix
If vector is at Aggressive: enterprises are at best position to use internal
strengths. Strategies: market penetration, market and product development, ahead
combination, behind combination, width combination are feasible.
If vector is at Conservative: enterprises should do business according to their
ability. Strategies: market penetration, product and market development, centralized
diversification.

17


If vector is at defensive: enterprises focus on improving weakness and
avoiding external threats. Strategies: costing limitation, reducing, and centralized
specification.
If vector is at competitive: strategies: ahead, behind, width combination,
market penetration, product and market development, join venture.
1.3.2.3 Large strategy matrix
It includes: Axis X show competitive position of enterprises in the market (strength or
weakness) and axis Y show growth of market (Fastness or slowness). Suitable
strategies are listed as follow:
Fast
1.
2.
3.

4.
5.
6.

Corner II
Market development
Market penetration
Product development
Width combination
Reduction
Liquidation

1.
2.
3.
4.
5.
6.
7.

Corner I
Market development
Market penetration
Product development
Ahead combination
Behind combination
Width Specification
Centralized specification

Weak

1.
2.
3.
4.
5.
6.

Strong
Corner III
Costing reduction
Centralized specification
Width specification
Combined specification
Reduction
Liquidation

1.
2.
3.
4.

Corner IV
Centralized specification
Width specification
Combined specification
Joint venture

Slow
Figure 1.3: Large strategy matrix
1.3.3 Decisive Process

QSPM method uses the inputs of three matrixes of phase 1 (the collection and
systemization of inputs) and those of three matrixes of phase 2 (the combination), so
that the alternative strategies are objectively evaluated.
The strategies put into QSPM are not overall those which are found at phase 2.

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Six steps need to construct QSPM:
- Step 1: Provide a list of factors - S, W, O, T- taken from EFE and IFE
matrixes.
- Step 2: Identify each factor in order to match with EFE and IFE matrixes
- Step 3: Research the matrixes at phase 2 and indicate the replaceable
strategies.
- Step 4: Determine the Total Attractiveness Scores (TAS) according to such
factors as: the range for Attractiveness Scores is 1 = not attractive, 2 = somewhat
attractive, 3 = reasonably attractive, and 4 = highly attractive.
- Step 5: Calculate the Total Attractiveness Scores (TAS) which are defined as
the product of multiplying the weights (step 3) by the Attractiveness Scores (step 4) in
each row.
- Step 6: Calculate the Sum Total Attractiveness Score of each strategy. The
most attractive strategy has highest TAS of step 6.

1.4 The characteristics of banking sector impact on strategic management.
Banking sector is specific with differences from other businesses, and has
impact on the strategic management process of the banks.
1.4.1 The potential need for usage of banking service
The potential demand has large effect on other business sectors. Analyzing such
below factor can show future demand for banking service.
- The population structure changes, the population growth (especially in urban

area), and increase in industrial zones and new urban areas will increase demands for
banking service of individual and enterprises
- Annual people’s average income. When income is raised, the banking services
will also develop.
- Business performances with foreign partners

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- The Structure Index of total payment instruments, this index reveals the using
level of banking service of people.
Demand scale of customers is large, the commercial banks can take advantage
of scale; improve business performances and its services.
1.4.2 The management of the SBV
The SBV is a state organ managing currency. This state organ is responsible for
currency issue and management. It also consults the government on such currency
policies as currency issue, exchange rate, interest rate, the management of foreign
currency reservation, the edition of banking business and credit organization law, the
foundation supervision of the banks and credit organizations, and commercial bank
management…For example, when the inflation is high, the State Bank uses the
financial tools to withdraw money out of circulation: in 2007, increase the obligatory
reservation rate by 11%; issue the obligatory treasury bill and collect 46 thousands
billions VND in August 2007, 19 thousand billions VND in September 2007 and 30
thousand billions VND in October 2007. The State Bank adjusted the basic interest rate
two times in 2008 from 8.75% per year to 12% and to 14% per year. According to that,
the lending ceiling interest rate is 21% per year, the ceiling of mobilizing interest rate
is removed, and commercial banks themselves fix the mobilizing interest rate to
balance cost. These measures have direct impact on the liquidity, the risk level and the
benefit capability of commercial bank system. Therefore, commercial banks are
conveyor belts to transfer the currency policies in the economy. When building

strategies, banks have to follow laws and regulations issued by the State Bank.
1.4.3 Development of related and supported industries
The development of banking can not be separated from related and supporting
industries such as securities, insurance and information technology. Trend of cooperation between such industries is developed rapidly worldwide.

20


The development of these branches has direct impact on that of banking sector,
for example creating new mobilizing and investing capital channel for banking sector,
decreasing the risk, minor transaction fees. Information technology plays a very
important part in creating useful products of banking sector such as credit card,
automated teller machine…
The appearance and development of related and supported branches will
increase productivity and competitiveness of commercial banks in this information era.
1.4.4 Competitors
According to the possessiveness, until August 2008, commercial bank system of
Vietnam includes: (internal resources of BIDV)
- 5 state commercial banks with the total of 4.000 branches: Vietcombank,
Vietinbank, Agribank, BIDV, MHB.
- 2 banks with hundreds branches for the policy of the poor
- 36 join-stock Commercial banks.
- 6 join-venture banks: Vinasiam Bank, Indovina, Chohungvina Bank,
VIDPULIC Bank, Vietnam Laos bank, Vietnam Russia bank.
- 44 branches of foreign banks
- 1 Central Credit Fund with over 30 branches in 25 provinces and 998 People
Credit Funds at communes and provinces… Competitors understand clearly each
other: financial efficiency, operating net, Operating market share, lending and
mobilizing interest, kinds of service fees. Therefore, it is easy for them to have the
strategies for confrontation. In the other word, the commercial banks are both

competitive and cooperative because of the banking system prestige. The failure of one
bank will have bad influence on the whole credit organization system. This will spread
quickly, effect seriously on areas outside banking. Let’s take financial crisis in 19981999 as an example.

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1.4.5 Internal factors of banking
Banking is a complicated and much risky service sector. Therefore, it has high
requirements of human resources, capital resources, science and technology base…The
internal factors of banking are evaluated according to such requirements as:
The human resources: Human resources are indispensable to any organization.
The competitive efficiency of human resources is represented by such factors as:
training level, professional level, working motive, loyalty to the enterprise, sense and
working manner.
The technology efficiency: Technology is the most important part in banking
infrastructure. Automatic machine and equipment help to decrease time of
manipulation and to increase accuracy and convenience of banking service.
Technology is a basic criterion for banks to deploy modern services. Banking
technology also consists of managing information system, risk warning system inside
banks..
The banking prestige: The banking prestige makes the customers believable for
their transaction. Therefore, if one bank is prestigious, it will have the competitive
advantage to attract the customers.
The diversification of product and service, and customer service quality
One bank with many kinds of products and services which meet market demand and its
managing capacity will be an advantageous bank. The diversification of products and
services makes the bank develop more stable and improve advantages thanks to scale.
However, diversification must be suitable with human and financial resources, or it
brings little effectiveness.

The operating network system is of business advantages based on scale. It is
also important to banking operation, especially when traditional banking services are
developing and the information technology system hasn’t met need of the
implementation of the modern banking system.

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The managing efficiency and organizing structure: The managing efficiency is
represented by the target; the motive and the commitment of executive board to
maintain and improve the operating efficiency of banking. In addition, those are salary
policies for the staffs, business process and policies as well as internal controlling and
risky managing process.
The organizing structure is an important target. It reveals whether the
distributing mechanism of baking resources is suitable with scale and managing level
of banking as well as characteristics of banking sector and requirements of market or
not. The banking organizing structure is represented by division of functional
department and board, the combination among departments and board, belonging units,
the relationship among departments…
In summary, the enterprises during the business process have to determine their
annual target and long term target. The business strategy is the way to gain those
targets.
In this capstone project, determining business duties, analyzing of external and
internal factors of BIDV Thang Long will be solved in Chapter II. Chapter III is the
determination and selection of business strategies.

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CHAPTER II

THE CURRENT SITUATION OF BUSINESS ENVIRONMENT OF
BANK FOR INVESTMENT AND DEVELOPMENT OF VIETNAMTHANG LONG (BIDV TL)
2.1 Introduction of Bank for Investment and Development of Vietnam –
Thang Long (BIDV TL)
2.1.1 History of establishment and development
Bank for Investment and Development of Vietnam – Thang Long (BIDV TL) was
established and developed from a department under the Central Bank of Construction
(that was later renamed Bank for Investment and Development of Vietnam– BIDV) to
issue, investigate and pay basic building capital for Thang Long bridge construction. In
1991, it was renamed Bank for Investment and Development of Vietnam – Thang Long
(BIDV TL) directly under Bank for Investment and Development of Vietnam (BIDV).
According to Business Registration Certificate numbered 315370, dated January 12 th
2009, BIDV TL was one of 108 member units of BIDV. , BIDV TL traded in multisectors such as finance, credit, currency, baking service and non- banking in
accordance with state law. BIDV TL has constantly improved profit, contributed to
implement national monetary policy and develop the national economy. At the time of
being established, BIDV TL had 3 functional departments with the property total of
200 billions dong and 22 staffs. The head quarter was located on Pham Van Dong road
– Tu Liem Dist – Hanoi.
2.1.2 Distributing Network
The head quarter of BIDV TL is currently located on 8 Pham Hung road, Cau
Giay, Hanoi. 10 transaction offices are in turn on Nguyen Chi Thanh, Tran Dang Ninh,
Ho Tung Mau, Kim Ma, Trung Hoa, Lac Long Quan, Hoang Cau, Nguyen Khanh
Toan, Pham Van Dong. These are the satellites going around the bank. In addition,
BIDV TL has 16 Automated Teller Machines (ATM) located in following places:

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Table 2.1: ATM network
Location

The number of
ATM
8 Pham Hung road, Cau Giay, Hanoi
02
HC supermarket, Pham Van Dong road, Tu Liem Dist
02
Vietnam National University
01
Academy of Finance, Dong Ngac, Tu Liem Dist
02
Vietnam Commercial University, Ho Tung mau, Tu Liem Dist
02
The Manor building
01
Transaction Office 10, Pham Van Dong, Tu Liem Dist.
01
Transaction Office 2, Tran Dang Ninh, Cau Giay Dist
02
Hanoi University of Mining and Geology
01
The People’s Police Academy, Co Nhue, Tu Liem Dist
01
109 Nguyen Chi Thanh
01
Total
16
In addition, BIDV system has payment connection with other banks via
Banknetvn:Vietnam Join Stock Commercial Bank for Industry and Trade (Vietinbank);
Saigon Join Stock Commercial Bank for Industry and Trade (Saigonbank); An Bình

Join Stock Commercial Bank (ABBank); Vietnam Bank for Agriculture and Rural
Development (Agribank); Hanoi Housing Development Commercial Joint Stock Bank
(Habubank); Mekong Housing Bank (MHB); Vietnam Technical Commercial Bank
(Techcombank); Joint stock Bank for Foreign Trade of Vietnam (Vietcombank);
Vietnam Russia Bank (VRB).
2.1.3 Products and Services
BIDV TL is making effort to diversify the financial and banking services and the
products. It not only has the traditional services such as deposits and lending but also
supplies many modern baking services and various products for the market. The main
services can be divided into 3 groups:
Group 1: Debit property management: payment deposit, savings deposit in term or
in no term, award savings, ATM payment, interbank saving deposit …

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