Luận Văn Xây dựng chiến lược kinh doanh của ngân hàng nông nghiệp AGRIBANK chi nhánh yên bái giai đoạn 2015 2020

LUẬN VĂN THẠC SĨ
Xây dựng chiến lược kinh doanh của ngân hàng Nông Nghiệp AGRIBANK chi
nhánh Yên Bái giai đoạn 2015-2020

THESIS MBA
BUILD A BUSINESS STRATEGY FOR THE BRANCH OF THE
BANK FOR AGRICULTURAL AND RURAL OF YEN BAI IN
THE PERIOD FROM 2015 TO 2020

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INTRODUCTION
1. The necessity of the research
Today, international economic integration is an indispensable trend of the countries
having developing economy that want to access to advanced economies. For Vietnam,
international integration is the right direction and is important as prerequisites for creating
the position in the international arena, and offers many opportunities for rapid growth and
sustainable economy of the country.
However, international integration also sets for Vietnamese enterprises, especially to
the commercial banks - especial enterprises trading in the field of currency - the credit facing
to the great challenge. To overcome these challenges and apply well the opportunities require
Vietnamese commercial banks to analyze the strengths of the weaknesses to make
appropriate strategy for each period, each stage of suitable development with the trend on the
principle of national interests and enterprises.
In 2008 and the early months of 2009, World economy has strong fluctuations.
Breakup of a series of big names of Wall Street financial sector gives the signal of the great
deep and wide crisis around the world.
Through this economic crisis, Vietnamese commercial banks have chance to look
back the internal strengths as well as weaknesses. Currently, Vietnam's economy in
particular and the world economy in general tend to rehabilitate and develop, the important

issues are that each economic organizations have to find themselves a suitable direction to
create conditions for sustainable development in the future.
Vietnam is considered as the economy recovered rapidly through the solutions of the
Government stimulating the economy to grow. However, it is undeniable that the
Vietnamese economy is growing below the potential effects to main resources including
inefficient investment, poor infrastructure and the economy processing in low value. From
third quarter in 2007, the domestic enterprises have to undergo a toughest screening ever.

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Through this selection, the existing and developed enterprises demonstrated their high
adaptability, quick and flexible in their business activities.
For the developing countries, the banking sector is considered as lifeline of the
economy, playing especially important role in economic and social development, especially
in the period of industrialization and modernization of the country.
At present, Vietnam is actively implementing measures to reform the administrative,
legal framework created equally, favorable investment environment to encourage and attract
foreign financial institutions investing into Vietnam.
Competition rule does not exclude any units, any economic sectors in society and this
rule existing in all areas. Thus, the economic sectors in general and the banking sector in
particular must also find themselves one direction, develop strategies and specific strategies
in accordance to survive and grow.
The branch of Agricultural and Rural Development Bank of Yen Bai under the
Agricultural and Rural Development of Vietnam established and put into operation in July
1988, with the direct function is to trade in monetary, credit and banking services in the area
according to Decree No.53/HDBT of Council of Ministers in March 26 th, 1988.
Before the fluctuations of the economy in the world and in the country as analyzed
above, the most important issue for the Branch of the Bank for Agricultural and Rural
Development of Yen Bai today is to plan the overall business strategy for all business

activities to compete and dominate the market-share with the commercial banks in the area
of Yen Bai province and neighboring provinces to achieve economic growth in all aspects in
the period from 2015 TO 2020, creating the prerequisites for sustainable development in the
coming years. This is why the group of authors chooses this topic: "Build a Business
Strategy for the branch of the Bank for Agricultural and Rural of Yen Bai in the period from
2015 TO 2020.
2. Purpose and scope of the research
The research on the basis to build the strategies, processes of building strategies and
the method to select optimal strategies to help the branch of the Bank for Agricultural and
Rural Development of Yen Bai determining their business strategy to match the conditions
and the current context.
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Applying the theory of building business strategic, applying the model of building and
analyzing and choosing the business strategies in specific situations of the branch of the
Bank for Agricultural and Rural Development of Yen Bai.
From the research above, propose a number of additional proposals and solutions to
improve the process of building business strategy for the branch of the Bank for Agricultural
and Rural Development of Yen Bai in the current conditions. At the same time, point out
implementing roadmap of selected strategy from 2015 TO 2020.
Scope of research: Go deep into the analysis, construct and select the solutions
implementing roadmap of business strategy for the branch of the Bank for Agricultural and
Rural Development of Yen Bai in the period from 2015 TO 2020.
3. Research Methodology
The method of qualitative and quantitative: research the situations of the branch of the
Bank for Agricultural and Rural Development of Yen Bai.
Specific research method: analyze, compare, synthetize the data.
The data: primary and secondary.
Method of data collection: Based on the published data on the mass media and

documents introducing the capacity of the branch of the Bank for Agricultural and Rural
Development of Yen Bai.
4. The structure of the research:
Beside the introduction, conclusion and appendix, the big exercise is structured into
three chapters. Main contents of each chapter are as follows:
Chapter 1: Theoretical basis of constructing business strategy.
Chapter 2: Analyze the foundation, base to construct business strategy for the Bank
for Agriculture and Rural Development - Yen Bai Branch in the period from 2015 TO 2020.
Chapter 3: Select strategy, the content of the strategy, organize to implement the
strategy and the solutions to implement the strategy of the Bank for Agriculture and Rural
Development of Yen Bai Branch period from 2015 TO 2020.

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CHARPTER I
THEORETICAL BASIS OF CONSTRUCTING THE BUSINESS STRATEGY
1.1. OVERVIEW OF STRATEGY, BUSINESS STRATEGY AND STRATEGIC
MANAGEMENT
1.1.1. The concept of strategy, business strategy and strategic management
There is no general definition of strategies, depending on views and approaches of the
researchers that there are many different definitions of strategy.
The concept of "strategy" comes from the Greek word - Strategos and from ancient
Greece. As Alexander the Great around 330 BC, refers to the strategic management skills to
exploit these forces to crush the enemy and to develop a global system of domination.
Comment basis points of the strategy is the enemy could crush competitors - even more
powerful competitors, outnumber - if they can lead the battle and put opponents on the
battlefield facilitate the development operationalized their abilities.
Today, with the rapid growth of the economy in the world, dragging the growth and
development in the fields of politics, culture, society,... showing decisiveness and the effect

of economic sectors to social life, so the application of theory of "strategy" becomes popular
and improved range over many different ways to define the view with a modern and
consistent with the function resources make a difference and external environment.
Strategy is the direction and scope of an organization in the long term: to the strategy
will bring advantages to the organizations through the optimum arrangement of resources in
a competitive environment to meet demand and expectation of the capital contribution ... or:
Strategy is the business-orientation, the methods choosing the capable solution
solving the most effectively the business objectives that companies put out.
+ Chandler (1962): "Strategy is the determination of the objectives, basic long-term goals;
conduct to apply a series of actions and allocate necessary resources to carry out this goal"
(Chandler , A. (1962). Strategy and Structure).
+ Quinn (1980): "Strategy is a pattern or plan integrating the major objectives, policies and a
series of action into a closely cohesive whole" (Quinn, (J, B . 1980. Strategiesfor Change:
Logical Incrementalism)
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+ Johnson and Scholes: "Strategy is the direction and scope of an organization to gain long
term competitive advantage for the organization through the format of its resources in the
changing environment, to meet market demand and expectations of stakeholders ((Johnson
G., Scholes K. (1999). Exploring Corporate Strategy 5th Edition)
Michael L. Porter, famous professor of Business Strategy at the University of Harvard, in
1996 in the article: "What is Strategy?" He said:
• Firstly, the strategy is the creation of value and unique position, including different
activities.
• Secondly, the strategy is the choice, exchange in the competition.
• Thirdly, strategy is the creation of conformity between all the activities of the
company.
So first of all, the strategy relates to the objectives of the enterprise. Secondly,
strategy is the way to implement the actions and decisions closely related to each other, and

select the method to coordinate those actions and decisions. The strategy of the enterprise
has to exploit the fundamental strengths (resources and capabilities) and to consider the
opportunities and challenges of the external environment.
Managing strategy is a set of management decisions and actions determining the longterm performance of a business. Managing strategy includes ongoing actions: Review the
environment (internal and external), build strategy, implement strategy, evaluate and control
the strategy. Researching the strategy emphasizes on monitoring and evaluating the external
opportunities and challenges in the context of the internal strengths and weaknesses.
1.1.2. Basic characteristics of the business strategy
We know that although there are many different views on business strategy, the basic
characteristics of the business strategy are concept relatively uniform. Those basic
characteristics are:
- Business strategy defines clearly the fundamental goals, business directions need to reach
in each period.
- The orientation of strategy ensures the enterprise to develop continuously and sustainably
in business environment constantly fluctuating.
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- Business strategy just outlines the directions of the activities of the enterprise in long-term,
framework of the business in the future.
- Business strategy is built on the basis of competitive advantage of the enterprise to ensure
maximum mobilization and good combination with the exploitation and use of resources,
core competence of enterprises at present and in the future to promote the advantages, seize
opportunities to gain advantages in competition.
- Business strategy is reflected in the completely continuous process from building to
organizing to the implement, evaluate, check and adjust the strategies.
- Business strategy always takes the thought of attacking to win the competition.
- Business strategy is often built in the long period (3. 5 and 10 years).
1.1.3. Role and importance of strategy and strategy management
In the market mechanism, building and implementing the business strategies

increasingly plays an important role on the existence and development of enterprises. Some
organizations do not have a strategy like the ship without rudder, most failures in the
business are due to the lack of a proper strategy or lack of implementation strategies in the
right direction. The role of business strategy for enterprises is shown on the aspects:
- Business strategy helps the enterprises identify the goals in each period and find clearly the
direction to their future as guiding to all activities of the enterprises.
- Business strategy helps the enterprises capture and take advantage of business
opportunities, and proactive measures to deal with and prevent the risks and threats in the
competitive market.
- Help the enterprises exploit and use up their resources, promote the inherent strengths and
overcome weaknesses surviving in the enterprises.
- Business strategy contributes to distribute resources logically in each period, strengthening
the position of the enterprise to ensure the enterprises to develop continuously, stably and
sustainably.
- Business strategy creates a solid basis for the enterprises to make the decisions in
accordance with the fluctuation of the market. It is solid foundation for researching,
implementation, investment and development of human resources, technological innovation,
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expansion and market development, product development as well as increased labor
productivity, increase management efficiency of the business.
- Beside, business strategy helps the enterprises increase cohesion and consensus of staff and
leadership in implementing the common objectives of the enterprises.
Therefore, the strategy is the tool expressing specifically the long-term goals of the
organizations or enterprises. Thus, the strategy will help the enterprises quickly achieve the
goals. The core cause of success or failure of an enterprise depends on one important factor
that is an enterprise has a business strategy like what. That helps enterprises quickly achieve
the goals.
1.1.4. The system of business strategy in the enterprise

Business strategy can be divided into many different strategies depending on the
classification base.
However, within this article, we refer to all levels of business strategy, competitive
strategies based on competitive advantage and competitive strategies according to the
position of market-share in the market.
1.1.4.1. Classify the strategies according to the levels of building strategies
1.1.4.1.1. Strategies for the enterprises
Strategies for the enterprises are always the general strategies and towards coordinating
business strategy in relation to the expectations of the owner.
The strategies for the enterprises can also be approached in the following ways:
- Growth Strategy: The strategies aim at achieving "goals of growth of the enterprise
including: focused growth strategy, growth strategy by way of integration (linking), growth
strategy by diversification.
- Withdrawal strategy: This strategy is appropriate when the enterprises need to restructure to
increase efficiency after a period of rapid growth, the industry is no longer an opportunity to
grow and break even.
- Strategy of innovation: strategy of innovation may be considered as a strategy having a
strong external impact, innovation can restore growth of the enterprises.
1.1.4.1.2. The strategies for business units
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The strategies for business units are the strategies applied specifically to each business
area of the enterprise and strategic business unit (SBU). These are the specific competitive
strategies and associated with combinations of products and markets identified. Strategies for
business unit can be approached in the direction such as: strategies based on competitive
advantage; strategies to compete according to market share position in the market...
1.1.4.1.3. Strategies of functions
The strategies of functions are strategies directing to improve the performance of parts
of the functions in the enterprise like manufacturing, marketing, material managing,

researching, developing human resources... These strategies may focus on a defined function.
However, it needs a close coordination between the functions together to deliver efficient,
quality, innovation and customer satisfaction at the highest levels across the enterprise.
1.1.4.2. Classify the strategy based on competitive advantage
1.1.4.2.1. Strategy of leading costs
Strategy of leading costs is total of actions to provide the products or services with
features accepted by customers at the lowest cost in relation to all competitors.
This strategy is appropriate for the business units on a large scale having ability to
reduce costs in the process of activities, thereby increasing the competitiveness because of
lower cost than that of competitors. However, strategies of leading cost have the risk of
competitiveness by the process to produce and distribute goods and services may become
obsolete because: The renewal of competitors; competitors can mimic the strategy of the
company leading market on cost; Focus on cost reduction may exchange customers’
awareness in creating the difference.
1.1.4.2.2. The strategies of difference
The objective of the strategy of difference is to achieve the competitive advantage of
companies by creating products (goods or services) that customers realize that some unique
characteristics are important. Companies making a difference try to satisfy customer’s needs
in ways that competitors cannot do with the intention would require a price increase (a price
significantly above industry average).
To pursue strategies of competition by differences, the enterprises often use the
strategic solutions as follows:
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- The differentiated product company selects high differentiation to make competitive
advantage. Differentiation can achieve three main ways: quality, innovation and adapt to
customers.
- Company pursues strategies of differentiating in products trying to differentiate goods as
many as possible.

- The differentiated product company divides the market into many sections. The company
supplies the products designed specifically for each segment and becomes more extensive.
The company can only choose to serve only selected market segments where there are
special advantages of differentiation.
- The company must control all of the costs to detect factors that are not really affecting to
their advantages of differentiation, just so can make the price of the product does not exceed
than what the customers willing to pay.
Business strategy based on differentiation provides a competitive advantage for the
enterprises, helping protect businesses against competitors thanks to the loyalty of customers
with brand name of the enterprises; differentiation and loyalty with the brand create a barrier
to the other companies trying to penetrate the sectors, reducing the threat from substitute
products and reducing the power of the suppliers and the buyers’. However, strategy of
product differentiation is at risk of competition due to: the difference in price between the
products of the company having different product and company leading the cost maybe too
large; to any time differentiated products will not create value that customers are willing to
pay; when having more experience, the customers will have different perceptions of the
value of different features; having trouble Title copied, counterfeit goods.
1.1.4.2.3. The strategy of centralization
The strategy of centralization will direct at slots of specific markets that can
determine in the terms of geography, type of customers, or by segments of the products.
Once selecting a market segment, the company pursues a strategy centralization using
approaching ways of differentiation, or low costs. Basically, a centralized company is a
person creates a difference by specialization or a leader of costs.
1.1.4.2.4. Combining low-cost strategy and strategy of differentiation

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Recently, due to the change of production technology, especially the development of
flexible production technology, made the selection of low-cost strategy or strategic

differences not clear anymore. Because the development of technology businesses that can
easily benefit from both strategies. The flexible technology allows companies to pursue
different strategies with low cost.
1.1.4.3. Classify the strategies according to competitive position
1.1.4.3.1. Strategies of the leading enterprises
The enterprises are recognized as the leader who will be more dominant in terms of
the same force in the industry, creating many advantages and a strong competitive position in
the market. To protect the market, the leaders of enterprises use the following strategies:
- Strategy of innovation: always try to lead the industry in areas such as developing
new products, services and channels, new distribution methods.
- Strategy of consolidation: the focused thing is to keep prices at a reasonable level and offer
products with new scale, form and models.
- Strategy of leading: usually include the quick and direct reflects to the competitors: the
form of this strategy maybe the "war" on price and promotions.
- Strategy of harassment
1.1.4.3.2. Strategy of the enterprises at the challenging position
This could be big enterprises but not the number one in the market, the objectives of
growth at the enterprise level and centralized growth strategy is very suitable for
implementing growth target to gain more market share.
Depending on the win market share from competitors, but how business challenges
can use one of the following ways: attacking the opponent leads the market directly and area;
snatching market share from competitors other than their small and weak world; seek to
avoid direct confrontation.
The challenging enterprises can focus on the most important five strategies: Keep the
price at a lower level than competitors; renovate (or improve) new products or stimulate new
demands; Improve delivery service faster until the customer does have the highest demand
for services; layout sales force better and broader or building distribution system better, and
enhance improved work advertising promotions.
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1.1.4.3.3. The strategy of the late enterprises
These enterprises often have smaller market shares than the market-leading businesses
and not challenges to the business leader in the market. For this business objective is to
protect their existing market share.
1.2. THE PROCESS OF PLANNING BUSINESS STRATEGY
Typically, strategy is understood as the result of a process of planning reasonably
arranged carefully. Until now, the administrative scientists, strategy scientists and
administrators have proposed many models of strategy planning. In each model is a
framework for the entire process of strategic management based on a concept that we
mentioned above. However, the review process of planning as the starting point is useful for
our journey into the world strategy.
The process of strategy planning in the enterprises can be divided into six steps,
including:
- Step 1: Choose the mission and main objectives of the company;
- Step 2: Analyze the external environment to identify opportunities and threats;
- Step 3: Analyze the internal environment in order to identify the strengths and weaknesses
of the enterprises;
- Step 4: Select the strategies based on the search for resources, capabilities and core
capabilities and develop it to neutralize the risk, take advantage of opportunities from the
external environment;
- Step 5: Implement the strategy will include designing organizational structure and
controlling system suitably for inclusion in the strategy implementation.
- Step 6: Evaluate the results of the strategy implementation.

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Map 1.1: MODEL OF STRATEGY MANAGEMENT
Mission and objectives

Analyzing external
(opportunities and
threats)

Analyzing internal
(Find capable
resources and core
capacity)

Select and build
strategies
Strategy of functions
Business strategy
Gobal strategy
Strategy for company

Organizational structure

Matching strategy,
structure and control

Design the control

Change the strategy

(Source: Associate Professor, Dr. Le The Gioi; Dr. Nguyen Thanh Liem, MA. Tran
Huu Hai (2007), Strategic Management, Statistical Publishing House)
The strategic plan is created by this process usually covers the period of 3 years, 5
years or 10 years and is updated annually. Thus, strategic planning is oriented allocation of

resources in the organization. Detail the steps in the constructing business strategy as
follows:
1.2.1. Define mission, business objectives
- The first step of the strategic planning process is to identify mission and main objectives of
the organization and the opening phase is very important in the entire process of strategic
planning. The mission presents the reason existing of the organization, and what it will do.
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The main objectives determine what the organization hopes to meet within the medium and
long term.
- The first elements of the manifesto of the business mission is to define clearly the tasks of
the business. Determine the duties of the enterprises to ensure some following requirements:
Clearly defined tasks must notify all businesses and the public outside of that; mission must
be clearly defined right and reasonable; Tasks must reflect the vision of the enterprise vision
and ensure the broad sustainable development of enterprises; Identify tasks of the business is
not too broad and general.
- Vision and strategic objectives expressed in the mission declaration is the clear speech of
ambition the enterprises pursuing and is expected destination of the business. The strategic
objectives are influenced by many factors, such as the external environment; The resources
within the enterprise; the value and purpose of the leader; strategies that companies pursue
past and its development trend.
- The identification of targets should ensure the following requirements: The target must be
clear; the goal must ensure the link and reciprocally; must determine the priority.
1.2.2. Analyze the external environment to identify opportunities and threats
The external environment is the main factors could affect the implementation of the
objectives the enterprises want to achieve. The objectives of the external analysis are to
aware opportunities and threats from the external environment of the company. Analyzing
external environment includes: analyzing the macro-environmental and environmental
sectors. Analyzing these factors helps the enterprises to identify the location and

characteristics of their environment, but their times exist, the effects of the external
environment to the enterprise's business objectives, and since then have decided the strategic
business plan to make the most of opportunities and minimize challenges, and there are
management decisions accordingly.
1.2.2.1. Macro Environment
Macro-environmental is aspect of huge society affecting to an industry and companies
in the industry, it is economy; Politics and legality; Culture and society; Technology; natural
factors
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Map 1.2: The factors of macro environment
Economy

Techno
logy

Internal
Environmen
t

Politics
and
Legality

Society
and
Culture

Natural

Factors

(Source: Associate Professor, Dr. Le The Gioi; Dr. Nguyen Thanh Liem, MA. Tran
Huu Hai (2007), Strategic Management, Statistical Publishing House)
- Economic Environment: economic factors have a strong influence on the enterprises, this is
also the most often mobilizing factor, the most difficult to predict of the macro factors. Its
movement always contains both opportunities and challenges for the enterprises in which
prominent is the movement trend of : The trend of total domestic product and total national
product; interest rates; inflation; balance of payments, exchange rate; the economic policies
the realization of the government in the development sector.
- Environment of politics - law: The elements of political and legal work to a large extent the
opportunities and threats from the environment, so influential to the operation of enterprises,
it includes: political stability, the system point of government policy, the current legal
system, the trend of government diplomacy, the political evolutions in the country, region
and the world...
- Environment of culture - society: the cultural and social environment includes the norms
and values accepted and respected by a specific society or culture. Cultural – social
environment is strongly influenced to the enterprises, usually the following elements: The
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change of the age tower, the rate of marriage and childbirth, the attitudes of consumers, the
notion of aesthetics, ethics, lifestyle, occupation; the customs, habits, traditions; concerns
priorities of society; level of awareness and general education of society, ...
- Natural environment: Natural conditions include: geographical location, climate, natural
landscapes, land, river and sea mineral resources in the earth, the sea, the forest resources, in
the clean water, air...
Their impact to the policies for the business has been recognized by the enterprises for
a long time. In many cases, the natural conditions become a very important factor to form the
competitive advantage of products and services. The problem of environmental pollution,

poor quality products, waste resources with growing demand for limited resources makes the
business decisions to change and measures related activities.
- Technological environment: Technological environment includes institutions, activities
related to create new knowledge, shift that knowledge to the outputs, products, processes and
new materials. This is one of the dynamic factors containing many opportunities and threats
for the enterprises. Therefore, the enterprises must alert for new technology because it can
make products obsolete directly or indirectly, in addition to the benefits of technological
developments bring.
1.2.2.2. Industry environment
They are a series of factors that influence directly to a company and competitive
actions and competitive reactions of that company. The major technique used to analyze the
competitive environment in the industry is the model of five competitive forces of the
professor Michael Porter. He pointed out a model of five competitive forces within the
industry, they are: (1) The threats of potential competitors, (2) The levels of competition
among available companies in the industry; (3) negotiation power of buyers, (4) negotiation
power of sellers; (5) Threats of substitute products.

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Map 1.3: Model of five competitive forces by M. Porter
The threats of potential
competitors

Negotiation
power of
sellers

The levels of
competition

among

Negotiation
power of
buyers

available
companies in
the

industry

Threats of substitute
products

(Source: Michael Porter, "Competitive Strategy: Techniques Analyzing Industries and
Competitors)
- Potential competitors: is the enterprises are not competing in the same industry, but
their competitiveness if they join the industry. Ability to penetrate the opponents of this
potential depends on the barrier penetration industry. If the enterprises have a strategy to
enhance the barrier penetration sector will limit the risk of penetration of potential rivals.
- Suppliers: These suppliers may increase pressure on threatened when they are able
to increase or decrease in price in the quality of products and services they provide. Thereby,
reduce the ability to find profit of the enterprises. On a certain aspect, that threat creates less
or more dependence for many enterprises.
- The substitute products: substitute products are the other products can meet the
needs of consumers. Its basic characteristics have more advantages than those of the normal
products in the individual characteristics. This threat requires the enterprises to have the
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analysis, frequent monitoring of scientific technology, which directly related to technological
innovation and product innovation.
- Analyze customers: Customers are individuals or organizations that demand for
products or services of the enterprises. Customers can be viewed as a threat of competition
when they are in the position of requirement for a lower price or when they request better
service. Customers can pressure for suppliers in the following circumstances: The buyer is a
small number of large-scale and while there are many suppliers of small and medium scale;
Customers buy a large quantity; providers depend on customers with large rate % of total
orders; Customers have full information.
- The competition among competitors in the industry: The business enterprises in an
industry often differ in the market, distribution channels, product quality, technology, price
and advertisement. However, in the same sector, there are some enterprises together pursue
and implement a strategy or similar strategies forming strategic groups in the industry.
Number and capacity of companies in the industry determine the nature and intensity of
competition in the industry.
Thus, by studying the external environment, companies can decide what they can do.
For successful companies, either their strategies must be consistent with their operating
environments, or the companies can shape the environment to the advantage of it through
selecting the strategy.
1.2.3. Analyze the internal environment in order to identify the strengths and
weaknesses of the enterprises
The ability of the enterprise is a key factor to decide whether the companies can do,
the business strategy of the business has successfully implemented or not. To ensure the
viability of the strategy, when developing the strategies we have to evaluate the situation,
identify strengths, weaknesses, thereby determining the real ability of the enterprises. The
purpose of the analysis within the business is to identify potential and existing sources
creating sustainable competitive advantage for the enterprises, also identifying obstacles in
maintaining a sustainable competitive advantage. The contents of internal analysis include
analysis of sustainable competitive advantages, analysis of strategies and analysis of

financial performance.
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1.2.3.1. Analysis of sustainable competitive advantages
There are two ways to analyze the sustainable competitive those are resources
analysis and value chain analysis. Analyzing resources helps identify core capabilities in
range of the company, while analyzing the value chain helps companies understand the cost
advantages or the differences in the business units.
Analyze the resources
Analyzing the resource shows the reserves of resources, capabilities and available
assets to business units or entire company.
- Resources: The resources, in term of broad definition, include a series of elements of
the organizations, technique, material and human resources, finance of the company. The
resources can be divided into two categories: tangible resources and intangible resources.
The tangible resources can be seen like the financial resources, organizations, physical and
technological facilities. Intangible resources include human resources, improving ability and
reputation.
- The potential capability: the potential capability is the ability of the company to use
the integrated resources with an aim to achieve the state of desired goal. More general,
potential capability of a company is the product of organizational structure and control
system.
- The core capability: is the resources and capabilities of the company to use as
sources to create competitive advantages. Create a competitive distinction of a company and
reflects the character of the company that, through activities that a company conduct
surpasses the competition and activities thereby creating unique value for the type of
products and services through its long time.
Analyze the value chain
The value chain analysis allows companies to understand the link to create value for
their products and link does not create value. The term "value chain" refers to the idea as a

company is a series of activities in the metabolism of the added output value to customers.
That process includes the activities and support activities, each activity increases the value to
products. Complementary activities occur inside each type of activity.

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- The main activities: The activities associate with products and services of the
enterprises. Those are activities in purchasing and managing inputs, marketing activities and
services activities of customer care after that. These activities save, enhance quality and
satisfy the needs of the customers, the value chain of the company is increasingly
appreciated and the company has advantages in competition.
- The supporting activities: Help the main activities of the enterprises done better,
more effectively. Activities we are talking to is the activities of personnel management,
technology development, and procurement.
Map 1.4: Model of the company value chain by Michael E. Porter

(Source: Michael Porter, "Competitive Strategy: Techniques Analyzing Industries and
Competitors)
Therefore, analyzing the sustainable competitive advantage is the result of the
resources and unique ability to use creative activities according to the ways that competitors
cannot imitate or imitated by other partners. The factors creating sustainable competitive
advantages are efficiency, quality improvement and meet the demands of the customers.

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Map 1.5: The basic blocks to create competitive advantage

Dominated quality

Competitive
advantages
and different
low cost

Dominated
efficiency

Meet the
dominated
demands of
the
customers

Dominated
improvement

(Source: Associate Professor, Dr. Le The Gioi; Dr. Nguyen Thanh Liem, MA. Tran Huu Hai
(2007), Strategic Management, Statistical Publishing House)

1.2.3.2. Analyze the strategies
All enterprises have strategies and tasks of the analyst are to describe the current
strategy of the enterprises. The description of strategy is focused towards product strategy customers, competition points and logical strategy. The content of analysis will focus on
analyzing strategies of the company; strategies of products - customers; point of competitive
strategies; function strategies and consistent of available strategies of the enterprises.
1.2.3.3. Analyze financial performance
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The purpose of the analysis of financial performance is to evaluate financial
performance of the enterprises through analysis of financial parameters, the current standards
and over time: the profitability, liquidity, effective leverage, through the operation data.
Simultaneously, analyze the economic value increasing or its fluctuation, measuring the
direct value to the shareholders...
Conclusion: By studying the internal environment, the enterprises will determine what
they are able to do.
1.2.4. Select the strategy
Selecting the strategy is the forth step in the process of planning strategy in enterprise.
This is an important factor in all processes of planning business strategy.
1.2.4.1. The basis to select the strategy
When selecting strategies, the enterprises should consider a number of factors
affecting to the selection of strategy. The factors such as: strengths of industry and
enterprises; The strategic objectives of the enterprise; attitude of the Chief Executive;
financial resources; capability and qualification of administrators; The reflection of the
concerned objects and the issue of time.
1.2.4.2. The requirements when selecting the strategy
To ensure the selection strategy to be right, in accordance with the market, the process
of selecting business strategy needs to grasp thoroughly the following requirements:
- Strategy selection has to ensure to compliance with environmental conditions.
- Strategy must be consistent with foreign policies, views and management
methodology of the manager board.
- Strategy must be consistent with the financial capacity, material and personnel of the
enterprise.
1.2.4.3. Some models of analyzing and selecting the strategy
SWOT Analysis Technique:
After analyzing the factors of macro environment, business industry environment, the
enterprises often determine clearly the opportunities and threats from external environment,
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strengths and weaknesses from the internal environment to make basis considering and
building orientation and strategic project. The techniques are widely used are analysis
technique of the strengths - weaknesses, opportunities and threats (SWOT).
SWOT matrix is used to form the strategic plans as the following steps:
- Step 1: Synthesize the analyzed result of the business environment - opportunities
and threats.
- Step 2: Synthesize the analyzed results of internal business environment - strengths
and weaknesses.
Groups of strategic project formed:
- S - O Strategy: To use strengths of the enterprises to take advantage of external
opportunities;
- W - O strategy: To overcome weaknesses to take advantage of external
opportunities;
- S - T Strategy: To use strengths of the enterprises to deal with the external threats;
- W - T strategy: To overcome weaknesses in order to reduce the external threats;
Map 1.6: SWOT Matrix
Internal environment

Strengths (S)
List

the

Weaknesses (W)

most

importantList

the

most

important

External

strengths from the table ofweaknesses from the table of

environment

general internal environmentgeneral internal environment

Opportunities (O)

of the enterprise
SO Strategy

of the enterprise
WO Strategy

List the most importantUtilize the strengths of theTake advantage of external
opportunitíes from the tableenterprise
of

general

environment
enterprise

Threats (T)

to

exploitopportunities to overcome

externalopportunities in the externalweaknesses
of

thebusiness environment
ST Strategy

within

the

enterprise
WT Strategy

List the most importantTake advantage of strengths inStrategies

are

combined

threats from the table ofthe enterprise to reduce thenature defensive effort to
general

externalimpact of external threats
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overcome weaknesses and


environment

of

the

reduce the threats of external

enterprise

impact

(Source: Associate Professor, Dr. Le The Gioi; Dr. Nguyen Thanh Liem, MA. Tran Huu Hai
(2007), Strategic Management, Statistical Publishing House)

Use the GREAT model to calculate the points for the strategy and select the
optimal strategy
- Based on the principles and standards set out, we conduct to compare the found
strategies, then find the best strategy to implement.
- Can apply the GREAT model to select the optional business strategy from the
analyzed and selected basic strategies
(Source: Strategy Management by A. Chardler 2004.2006)
- GREAT model is a model used in the analysis of strategy management, strategy of
competition. GREAT means as follows:
G: Gain
R: Rick

E: Expense
A: Achievability
T: Time – Allowed time to carry out the goals set out
Apply the method of weight - consider the importance to the company.
Step 1: Select the criteria to evaluate the strategy add glue weight to the criteria:
Based on the nature of the business operations of the company, the criteria defined the
appropriate score, total points of the criteria is 01 point.
Figure 1.7: Weight point according to the criteria of GREAT model
Criteria
Gain (G)
Risk (R)
Expense (E)
Achievability (A)
Time (T)
Total

Point

1.0
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Step 2: Scoring the criteria
Scoring the criteria with a scale from 1 to 10, each point shows the level of meeting
standards setting out the principle of the higher point, the higher level applied (the more
Gain
- the higher point; the less Risk – the higher point; the less Expense- the higher point;
the higher Achievability - the higher point; the shorter Time - the higher point).
Figure 1.8. GREAT model to calculate the points for the strategy and select the optimal
strategy

Crit We
eria igh
t

St 1
Po Pro

St 2
Po Pro

St 3
Po Pro

St 4
Po Pro

St 5
Po Pro

St6
Po Pro

St 7
Po Pro

int duc

int duc

int duc

int duc

int duc

int duct

int duc

t
G
R
E
A
T
Tot
al

t

t

t

t

ố

t

1.0
Step 3: Determine the total points of the strategies
- The product = weight * point.
- Plus the points in the column of product, we get points for each strategy.
Step 4: Select the optimal strategy:
Choose the strategy having the highest point, the second highest, and the third

highest ... as the optimal strategy.
1.2.5. Organize to implement the strategies
Organize the implementation of strategy is fifth step in strategic planning process.
This is an important stage means to ensure the success of the entire strategic planning
process.
1.2.5.1. The requirement of organizing the strategy implementation
To organize the successful implementation of strategies, the enterprises need to ensure
the following requirements:
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