RESEARCH DISSERTATION “CONSUMER BANKING BUSINESS STRATERGY OF ABBANK PERIOD 2010 - 2015”

RESEARCH DISSERTATION
“CONSUMER BANKING
BUSINESS STRATERGY OF ABBANK
PERIOD 2010 - 2015”
Author: Ms Phan Thu Hien
Program: MBA
14
th
Intake: 2005 – 2007
Tutor: Mr Vu Tri Dung
Adviser: Mr Pham Anh Dung
Hanoi: December 2009
STABLE OF CONTENT
COVER 1
TABLE OF CONTENT 2
LIST OF ABBREVIATIONS 4
LIST OF TABLES 5
PREFACE 6
CHAPTER 1: THEORETICAL BACKGROUND ON BUSINESS STRATEGIC MANAGEMENT.
1.1. Overview of strategic management 6
1.1.1. Definition 6
1.1.2. Strategic Management Process 8
1.2. Mission, Vision, Core Values 8
1.2.1. Vision 8
1.2.2. Mission 8
1.2.3. Core Values 9
1.3. Strategic Analysis 9
1.3.1. Macro Environment Analysis 9
1.3.2. Industry Environment Analysis 11
1.3.3. Internal Environment Analysis 14
1.3.4. SWOT Matrix 15

1.4. Strategic Selection 16
1.4.1. Corporate Strategy 16
1.4.2. Business Strategy 17
1.5. Implementation and Evaluation 19
1.5.1. Organizational structure 19
1.5.2. Controlling System 20
1.5.3. Building Action Plan 20
CHAPTER 2: SITUATION OF BUSINESS STRATEGY OF ABBANK
2.1. Business Overview 21
2.1.1. General Information 21
2.1.2. Organization structure 21
2.1.3. Product & services 22
2.1.4. Business situtation of year 2008 23
2.2. Influence of macro envirnment factors 25
2.2.1. Political, legal, policy factors 25
2.2.2. Economic factors 25
2.2.3. Social and cultural factors 26
2.2.4. Population & labour force 27
2.2.5. Technological factors 27
2.2.6. Integration factors 27
2.3. Analysis of industry environment factors 28
2.3.1. Threats from new banks 28
2
2.3.2. Threats of substitute 28
2.3.3. Threats of customers 29
2.3.4. Threats of suppliers 29
2.3.5. Industry rivalry 29
2.4. Comparison of ABBANK’s internal environment with two competitors 30
CHAPTER 3: IMPROVE THE BUSINESS STRATEGY OF ABBANK, PERIOD 2010-2015
1.1. Building and selecting the business strategy:

40
3.1.1. S.W.O.T Analysis 40
3.1.2. G.R.E.A.T Analysis
41
3.2. Implementation orientation and scope of the business strategy for card products and
services of ABBANK
42
3.2.1. Orientation of long term priority strategy 42
3.2.2. Objectives of the card business strategy of ABBANK 42
3.2.3. Implementation scope of the strategy 42
3.3. Detailed action plan 48
3.3.1. Plan of HR strategy 49
3.3.2. Plan for R&D team set up 49
3.3.3. Plan for cards product & services 50
3.4. Plan of R&D team set up: Supervision and evaluation of the business strategy
implementation
51
3.4.1. Supervision of business strategy implementation 51
3.4.2. Adjusting the business strategy and the action plan 52
CONCLUSION
REFERENCES
LIST OF ABBREVIATIONS
ACB Asia Commercial Bank POS Point of Service
ADB Asia Development Bank QD-NHNN Decision of VN State Bank
AFTA Asian Free trade Area SBV State Bank of Vietnam
ANZ Australia and New Zealand Bank ODA Official Development Assistance
ATM Automatic Transfer machine SIBOR Singapore Interbank offered rate
CD Certification of Deposit SMS Short Massage Service
GDP Gross Domestic Product SOCs State owner Companies
HSBC Hong Kong Shanghai Bank Corporate T.Os Transaction Offices

IMF International Monetary Fund WTO World Trade Organization
ISO International Standard Organization USD United State Dollar
IT Information Technology VND Vietnam dong
LIBOR London Interbank Offered rate NPL Non Performance Loan
L/C Letter of Credit ATM Automaticed teller machine
POS Point of sale
LIST OF TABLES
3
Table 2.1
Current organization of ABBANK
Table 2.2
Growth of fund mobilization and credit of ABBANK
Table 2.3
The business result of ABBANK
Table 2.4
Outlook of Vietnam economic period 2010 – 2013
Table 2.5
Market Opportunities
Table 2.6
Population growth rate
Table 2.7
Phân tích tổng hợp cơ hội & thách thức từ các tác động của môi trường vĩ mô
Table 2.8
Phân tích tổng hợp cơ hội & thách thức của các tác động đến từ môi trường ngành
Table 2.9
Comparison the performance of ABBANK and Competitors
Table 2.10
Comparison of core competencies among ABBANK and its competitors
Table 2.11
Evaluation and comparison of core competencies among ABBANK and competitors

Table 2.12
Evaluation on the overwhelming competencies of ABBANK and competitors
Table 3.1 S.W.O.T Analysis of ABBANK
Table 3.2 Bảng tổng hợp phân tích mô hình G.R.E.A.T
Table 3.3 Phân tích mô hình BCG tiềm năng thị trường thẻ
Table 3.4 Phân tích phân khúc khách hàng mục tiêu sử dụng dịch vụ thẻ
Table 3.5 Phân tích cơ cấu khách hàng và kế hoạch phát triển trong 5 năm
Table 3.6 Bảng xây dựng kế hoạch triển khai nhân sự R&D cho khối bán lẻ
Table 3.7 Bảng xây dựng kế hoạch tổ chức công việc của R&D
Table 3.8 Kế hoạch phát triển sản phẩm, dịch vụ thẻ 2010 – 2015
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PREFACE
The financial market of Vietnam is now more and more developed in terms of scale, formulation,
quality and the market participation structure. According to the WTO road map and Vietnam
American commercial agreement, Vietnam commits to treat fairly among the domestic and foreign
banks on banking services, eliminating all limitations of access to the domestic banking market.
However, in comparison with the foreign banks, the Vietnam banking system is still weak in many
aspects such as capital, management experience, business, technology, quality and variety of
services and risk management as well. This requires each commercial bank to have suitable
solution for development and competitiveness enhancement, mastering the domestic market and
reaching to the international financial market. Among which, the formation of big banks with
multi-functions and diversified business, which can adapt well to quick changes in the modern
world is now becoming a rational demand and an indispensible tendency.
On the other hand, the competition among the domestic commercial banks as well as the rivalry
between domestic banks and financial institutions are aggressive now. On the banking and finance
market, more and more investment funds, insurance companies, urban banks are founded and the
Vietnam stock market is exciting. All those phenomenon result in many financial investment
channels which are of choice to the enterprises and individuals. Financial institution is fighting
directly with banks on fund mobilization and investment and the competition in the banking
sectors is tougher and tougher. In the light of the above practice, for sustainable survival and

development, Vietnamese banks need to build up a suitable development strategy which is
matching well with the practical features in every development stages.
Besides, the world financial crisis and the global economic downturn since end of 2007 has given
considerable impacts on Vietnam’s banking sector. This crisis is also a chance for us to have a
broader and more practical view on all the threats, opportunities, strengths and weaknesses of the
commercial banking sectors, which posed a critical need of commercial banks for reviewing and
planning their own development strategy.
With the topic of “Strategic Management”, I conducted this study on a bank, where I am now
working for, in an aim to apply knowledge obtained during the training program in analyzing and
suggesting solutions on business strategic management. With the above reasons, I decided to select
the title: “Improving the business strategy, duration 2010-2015 of the An Binh Joint Stock
Commercial Bank” in a wish to contribute to the sustainable development of the An Binh Joint
Stock Commercial Bank in such a trend of regional and global integration.
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CHAPTER I
THEORETICAL BACKGROUND ON STRATEGIC MANAGEMENT
ACTIVITIES OF AN ORGANIZATION
1.1. Overview of strategy and business strategy
1.1.1. Definition
1.1.1.1. What is a strategy?
The definition of strategy is a long term plan of action designed to achieve a particular goal or set
of goals or objectives. Strategy is management's game plan for strengthening the performance of
the enterprise. It states how business should be conduct to achieve the desired goals. Without a
strategy management has no roadmap to guide them.
Creating a strategy is a core management function. It must be said that having a good strategy and
executing the strategy well, does not guarantee success. Organizations can face unforeseen
circumstances and adverse conditions through no fault of their own.
Strategy can be simply defined as a plan aiming at achieving competitive advantage that cannot be
replicated by competitors. A good strategy with effective implementation can help managers and
staffs of all levels well define the objective, recognize the action orientation and contribute to the

success of the organization. On contras, an organization without a clear strategy and direction will
be a boat without the monitor. In order to better understand definitions of strategy, we can go
through some view points of famous economists:
View point 1: Strategy is a special plan
- G. Arlleret - “Strategy is the definition of roads and means to reach to an established
objectives through policies”
- Gluecl - “Strategy is a type of comprehensive and general plan which is designed to ensure
the achievements of organization’s objectives”
View point 2: Strategy is an art
- Alain Threlart said “Strategy is an art which the enterprise use to fight against competition
and win”
- M.Porter said “Strategy is the art of building sustainable competitive advantage to self
defense”
So, these authors consider strategy as an art of competition and business development
Viewpoint 3: Strategy is both a plan and an art.
- “Business strategy is an art of coordinating all the activities and controlling them in order to
achieve the long term objectives of the enterprise”.
- “Business strategy is an art of designing and organizing means in order to reach to long term
objectives of the enterprises, ensuring the adaptation to the change of business environment”
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Via above viewpoints, we can realize that the strategy relates to objectives of an organization,
strategies must be of helpful to the organization in obtaining established objectives. However, the
formulation and decision of strategy according to the objectives are not enough; the strategy
should put the concrete action into the right time with certain resources in order to realize the
objectives. The strategy of the organization includes not only what the organization wants to
perform, but also the approaches to complete the task. A separate action is simply not a strategy.
All strategies should heading for the objectives of the organization and are established on the basis
of internal resources (strengths, weaknesses), external factors (opportunities, threats)
So, in conclusion, we can define generally the strategy as followed:
“Strategy is a wide range of complex actions in order to mobilize all the resources of the

organization to achieve a certain goal”
1.1.1.2. What is business strategy?
Business Strategy is a term used in business planning that implies a careful selection and
application of resources to obtain a competitive advantage in anticipation of future events or
trends.
Business Strategy is concerned more with how a business competes successfully in a particular
market. It concerns strategic decisions about choice of products, meeting needs of customers,
gaining advantage over competitors, exploiting or creating new opportunities etc.
According to Fred R.David “Business strategy is a mean to achieve long term objectives”
We can say that the business strategy is actually means which enable the enterprise to achieve long
term goals. Business strategy does not aim at mapping out detailed action plan, but they are
general program, solutions on efficient mobilization of all resources in order to realized defined
goals.
In general, business strategy can be defined as followed:
Business strategy is a range of commitments and actions that a company uses to achieve a
competitive advantage by exploiting core competencies on a certain market
1.1.1.3. Fundamental issues of business strategy:
Business strategy needs to define 3 critical issues which are:
- Who to serve
- Which demand to satisfy
- How to satisfy the above demand
1.1.1.4. Role of business strategy:
- Business strategy help the enterprise to realize clearly their goals, objectives, direction which
will serve as the premises and lodestar for all the business and production activities of the
enterprise.
- Business strategy enables the enterprise to realize and capture all the business opportunities, at
and at the same time proactively overcome all the threats on the competitive market; working
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out policies and determinations on business and production activities which are going along
with the market movements.

- The business strategy should contribute to the enhancement of efficiency in using resources;
strengthen the competitive position of the enterprise for the long term sustainable development
of the enterprise.
1.1.2. Strategic Management Process:
Strategic management process is a chain of activities, including commitments, determinations and
actions of an enterprise in order to obtain the strategic competitive advantage; sustainable
competitive advantage with the above average profit.
Strategic management process can be divided into 4 stages:
- Stage 1: Defining the objectives of an enterprise on the basic of building Mission, Vision, and
Core Value by reviewing and analyzing environment factors to identify threats, opportunities,
weaknesses, strengths, core competencies and competitive advantage.
- Stage 2: Building and Selecting suitable strategy for the enterprise
- Stage 3: Implementing the strategy
- Stage 4: Reviewing and evaluating the strategic management
1.2. Vision; Mission; Core Values
1.2.1. Vision:
Vision is a mental image of the possible and desirable future state of the organization. This image,
which we call a vision, may be as vague as a dream or as precise as a goal or a mission statement.
Vision which elevates the energy, enthusiasm and self-esteem of everyone in the company while
ensuring that everybody sees a benefit in following the vision...
So what is a vision? : Corporate vision is a short, succinct, and inspiring statement of what the
organization intends to become and to achieve at some point in the future, often stated in
competitive terms. Vision refers to the category of intentions that are broad, all-inclusive and
forward-thinking. It is the image that a business must have of its goals before it sets out to reach
them. It describes aspirations for the future, without specifying the means that will be used to
achieve those desired ends.”
1.2.2. Mission:
A mission statement is an organization's vision translated into written form. It makes concrete the
leader's view of the direction and purpose of the organization. For many corporate leaders it is a
vital element in any attempt to motivate employees and to give them a sense of priorities.

A mission statement should be a short and concise statement of goals and priorities. In turn, goals
are specific objectives that relate to specific time periods and are stated in terms of facts. The
primary goal of any business is to increase stakeholder value. The most important stakeholders are
shareholders who own the business, employees who work for the business and clients or customers
who purchase products and/or services from the business.
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So what is the mission? : The mission defines the fundamental purpose of an organization or an
enterprise, basically describing why it exists and what it does to achieve its Vision. A corporate
Mission can last for many years, or for the life of the organization. It is not an objective with a
timeline, but rather the overall goal that is accomplished over the years as objectives are achieved
that are aligned with the corporate mission”
Mission can be different about the length, business values and business objectives. The mission is
the reason for the existence of the company on the market, who you are and which product or
service you will bring to the customer and public. All the decision during the process of strategic
planning and the management of company should be always aligned with the mission statement”
The mission statement can be the motivation for the employees when the objectives and core
values of the company are communicated with the customer and public.
1.2.3. Core Value:
Core values are all for which the company can not pay with money or change. All core values will
create a premise to formulate the regulations of the company. The core values can be defined as
followed:
- A system of beliefs influencing the behaviors among people and groups of people.
- Core values are the soul of the organization;
- Efficient values which has been attached deeply within the organization.
- Core values are necessary and long term regulations:
+ Working out decision and action of an organization;
+ Not a cultural or detailed action;
+ Do not serve the financial objectives and short term advantages;
+ The organization will want to keep the core values even when the mission has been
changed.

Core values don’t care the population; they got the true value and huge importance for the insiders
of the organization.
1.3. Strategic Analysis.
All the activities of the organization are influenced by factors of macro environment (general
environment) and micro environment (industry environment and internal environment), so in order
to plan a strategy for the organization, we will need to analyze all the environmental factors and
their impact on the activities of the organization...
1.3.1. Macro environment analysis.
Macro environment analysis will help the organization to realize and evaluate: Opportunities (O)
of the environment which the organization can exploit and the Threats (T) which the organization
can overcome. Then, it enables the organization to build a clear business mission, identify the
long-term feasible objectives and design a suitable strategy with the business objectives.
We can use the PEST model to analyze the macro environment. This model use factors such as
Political, Economics, Socio cultural & Technological
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They are four factors which affect directly economic sectors, these are external elements of the
enterprise and the industry, and the industry must be affected as a natural element. Enterprises
which are based on the impacts will give out suitable policies and business activities.
1.3.1.1. Political and legal factors:
These are factors which can affect all the business sectors in a region, political and legal factors
can create danger for the survival and development of any industry. When doing business on an
administrative unit, enterprises will be forced to follow all the political and legal factors at that
region...
- Stability (politics, foreign affair): The regime with high stability will create good favor for the
business activities and on the other hand, it will give bad affect on the business performance on
its region.
- Tax policies (Import-export tariff, consumption tax, income tax…): will affect the revenue and
profit of the enterprise.
- Laws (Law of investment, Trade law, Labor law, Anti-monopoly law, anti-dumping law…):
which can have big affect on the enterprise?

- The government’s policy can have influence on the enterprise in a way that it can create
advantages or challenges for the enterprise. For example: trade policies, industry development
policies, economic development policies, tax policies, competition management policies,
consumer protection policies…
1.3.1.2. Economic factors:
Enterprise needs to pay attention to the economic factors in both long-term and short term and the
government’s intervention in the economy. Normally, enterprise will base on the economic factors
to decide investments on industries and regions.
- State of the economy: Every economy has its own circle, in certain stage of the economic
circle; the enterprise will have their own suitable decisions.
- Factors influencing the economy: interest, inflation…
- Government economic policies: law of basic salary, government economic development
policies, and preferential policies for industries: tax reduces assistance…
- Economic future prospects: GDP, GDP growth, GDP growth on investment…
1.3.1.3. Cultural and social factors:
Each nation or territory has its own cultural and social factors which are the features of the
consumers in that region,
Cultural factors are value which formulates the society, which can facilitate the survival and
development of the society. However, we can not deny the cultural exchanges of different cultures
and nations, which can change the consumption psychology, lifestyle and create the development
prospective for the industries.
10
Beside culture, social factors also draw interest of enterprise in market research, social factors will
divide the public in to different groups of customers, each group have its own feature, psychology,
income… such as:
- Average age, health state, nutrition condition, hygiene
- Average income, income allocation, living conditions
- Lifestyle, education, viewpoints on beauty, living psychology
1.3.1.4. Technological factors:
Relating to the degree and direction of the technological progress or innovation which happen in

the society, including products, technological process, new materials, general degree of the
scientific activities, basic scientific innovations.
Beside fundamental factors according to the above PEST model, nowadays, when doing the
market research, people normally bring about the global factors (integration factors) which
become the micro economic factor influencing on the industry.
1.3.1.5. Integration factors:
No one can deny the globalization trend and this trend does not solely create opportunities for
enterprises, nations in the business and production development.
- Globalization created competitive pressure, with competitors comes from all the regions. The
integration process enables the enterprises to adjust in order to suit with the comparative
advantages, labor allocation of the region and the world.
- What important is that integration process will facilitate the elimination of trade barriers.
Enterprise will have opportunities to engage in business with partners who are far away in term
of geography; customers of the enterprise are not only domestic market where the enterprise is
operating, but also customers from all around the world.
1.3.2. Industry environment analysis.
There are many models for industry environment analysis, among which the five competitive
forces model of M. Porter is the most popular.
This model analyzes the industry environment via the evaluation of 5 forces which influence the
activities of organization, including:
11
1.3.2.1. The Bargaining Power of Suppliers:
The bargaining power of suppliers is also described as the market of inputs. Suppliers of raw
materials, components, labor, and services (such as expertise) to the firm can be a source of power
over the firm. Suppliers may refuse to work with the firm, or, e.g., charge excessively high prices
for unique resources.
Suppliers, if powerful, can exert an influence on the producing industry, such as selling raw
materials at a high price to capture some of the industry’s profit. Their influence depends on the
products and services provided by them. The degree of influence depends very much on following
factors:

- Supplier switching costs relative to firm switching costs
- Degree of differentiation of inputs
- Presence of substitute inputs
- Supplier concentration to firm concentration ratio
- Employee solidarity (e.g., labor unions)
1.3.2.2. Bargaining power of customers:
The bargaining power of customers is also described as the market of outputs: the ability of
customers to put the firm under pressure, which also affects the customer's sensitivity to price
changes.
The power of buyers is the impacts the buyer has on a producing industry. In general, when the
buyer is strong, the buyer sets the price.
- Buyer concentration to firm concentration ratio
- Degree of dependency upon existing channels of distribution
New Entrants
Rivalry
(Internal competition)
CustomersSuppliers
Substitutes
The Threat of New
Entrants into the Industry
Threat of Substitute
Products or Services
Bargaining
Power
Bargaining
Power
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- Bargaining leverage, particularly in industries with high fixed costs
- Buyer volume
- Buyer switching costs relative to firm switching costs

- Buyer information availability
- Ability to backward integrate
- Availability of existing substitute products
- Buyer price sensitivity
- Differential advantage (uniqueness) of industry products
- RFM Analysis
1.3.2.3. The Threat of New Entrants to the Industry:
A new entrant to the industry is a brand new competitor or maybe a new brand from on old
competitor. A new competitor to your industry may erode some of your customer base, your
challenge is to determine if it is likely that a new competitor will come along and try to steal your
customers away.
New competitors are restricted by up front capital costs, access to technology or requirements to
obtain licenses then your market position is likely to be protected. However, if there are no barriers
to entry your position could be weakened.
Profitable markets that yield high returns will draw firms. This results in many new entrants,
which will effectively decrease profitability. Unless the entry of new firms can be blocked by
incumbents, the profit rate will fall towards a competitive level.
Entry barriers are:
- The existence of barriers to entry (patents, rights, etc.)
- Economies of product differences
- Brand equity
- Switching costs or sunk costs
- Capital requirements
- Access to distribution
- Customer loyalty to established brands
- Absolute cost advantages
- Learning curve advantages
- Expected retaliation by incumbents
- Government policies
1.3.2.4. The threat of substitute products:

The existence of products outside of the realm of the common product boundaries increases the
propensity of customers to switch to alternatives:
- Buyer propensity to substitute
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- Relative price performance of substitutes
- Buyer switching costs
- Perceived level of product differentiation
1.3.2.5. Competitive Rivalry:
What is important here is the number and capability of the competitors – there are many
competitors, and they offer equally attractive products and services.
In tradition economic model, competition among rival firms drives profit to zero. But competition
is not perfect and firms are not unsophisticated passive price takers. Rather, firms strive for the
competitive advantage over their rivals. The intense of rivalry among firms varies across the
industries.
In pursuing a competitive advantage over their rivals, a firm can choose from several following
competitive moves:
- Changing the price – raising or lowering the price to gain a temporary advantage
- Improving product differentiation – improving feature, implementing innovations in the
manufacturing process an in the product itself.
- Creatively using the distribution channels – using a distribution channel that is novel in the
industry
- Exploiting the relationship with suppliers.
The intensity of rivalry is influenced by following industrial characteristics: a large number of
firms, slow market growth, high fixed cost, high storage cost or high perishable products, low
switching costs, low level of product differentiation, high strategic stakes, high exist barriers, a
diversity of rivals, industry shakeout
1.3.3. Internal Environment Analysis.
The Internal Analysis of strengths and weaknesses focuses on internal factors that give an
organization certain advantages and disadvantages in meeting the needs of its target market.
Strengths refer to core competencies that give the firm an advantage in meeting the needs of its

target markets. Any analysis of company strengths should be market oriented/customer focused
because strengths are only meaningful when they assist the firm in meeting customer needs.
Weaknesses refer to any limitations a company faces in developing or implementing a strategy (?).
Weaknesses should also be examined from a customer perspective because customers often
perceive weaknesses that a company cannot see. Being market focused when analyzing strengths
and weaknesses does not mean that non-market oriented strengths and weaknesses should be
forgotten. Rather, it suggests that all firms should tie their strengths and weaknesses to customer
requirements. Only those strengths that relate to satisfying a customer need should be considered
true core competencies.
The internal analysis is a comprehensive evaluation of the internal environment's potential
strengths and weaknesses. Factors should be evaluated across the organization in areas such as:
- Valuable ability and trade secret
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- Valuable tangible assets
- Valuable human assets
- Valuable intangible assets
- Alliance or partnership with the partners
- Key competitive capacity
Results from internal environment analysis are the definition of resources and core competencies
from which the enterprise can build the competitive advantage and strategic advantage for the
enterprise.
1.3.4. SWOT matrix:
1.3.4.1. SWOT matrix and selection of an optimum strategy
SWOT matrix is a strategic planning method used to evaluate the Strengths, Weaknesses,
Opportunities, and Threats. The SWOT analysis provides information that is helpful in matching
the firm's resources and capabilities to the competitive environment in which it operates. As such,
it is instrumental in strategy formulation and selection.
If the analysis target of SWOT is a business strategy, the research objective is improving the
enterprise performance; SWOT can be understood as followed:
- Strengths: Maintain, develop, use as leverage

- Weaknesses: Improve attributes of the person or company that are harmful to achieving the
objective.
- Opportunities: Good anticipation of external conditions that is helpful to achieving the
objective.
- Threats: external conditions which could do damage to the objective.
SWOT is a very powerful tool enabling the enterprise to find out the problem or make decision,
reviewing the decision in business organization and management. On the fact, the SWOT
application in building business plan, strategic planning, competition evaluation, market survey,
product development and also in the study reports…which are selected by many enterprises.
SWOT analysis can build a better understanding for the enterprise on its: resource strengths,
resource weaknesses, best opportunities and basic threats.
Via SWOT analysis, enterprise can draw out a conclusion on the approach to mobilize resource in
a certain internal and external situation of the enterprise.
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Table 1.3.4. SWOT Analysis Synthesis:
SWOT matrix
O: Opportunities
- Serving more groups of
customers
- Expanding to the new
geographic regions
- Expanding the product line
- Moving the skills to a new
products
- Vertical integration
- Expanding to gain more
market share from the
competitors
- Buying the competitors
- Alliance or join-venture to

enlarge the coverage
- Expanding to exploit new
opportunities.
- Expanding to improve the
brand/image
T: threats
- More new competitors
entering the market
- Losing revenue to the
substitute products
- Slow market growth
- Conflict in movements
of foreign exchange
rate and commercial
policies
- New expensive
regulations
- Vulnerability in front
of business
- Customer or buyer
have more advantages
- Transition of
customers’ demand
- Demographic changes
S: Strengths
- Strong strategy
- Strong finance
- Good reputation
- Market leading
- Core competencies

- Price advantage
- Strong advertisement
- Production innovation skills
- Good customer relationship
- Good product quality
- Alliance or joint venture
SO Strategy
Using strengths to capture the
opportunities
ST Strategy
Using strengths to limit
the affect of threats
W: Weaknesses
- No clear strategic orientation
- Out-of-date equipments
- Poor accounting, high bad debts
- Total spending is higher than the
competitors
- Lack some fundamental skills
and resources
- Loss
- Production troubles
- Poor R&D
- Narrow product lines
- Poor marketing skills
WO Strategy
Limiting the weakness and
capture the opportunities
WT Strategy
Limiting the weaknesses

and avoiding threats
1.4. Selecting the priority strategy:
1.4.1. Corporate strategy:
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Corporate strategy refers to the overarching strategy with regard to long-term aims and objectives
of a company and ways of achieving them by allocation of resources in order to meet the
expectation of shareholders.
Corporate strategy includes detailed actions which a company carries out to gain the competitive
advantage via selecting and managing a group of different business activities and competition in
certain industries and product market.
1.4.1.1. Differentiation strategy:
This strategy is suitable for enterprise which can not achieve their growth objectives in the current
production industry with current products on the market.
This type of strategy include: Vertical differentiation strategy, horizontal differentiation strategy,
combined differentiation strategy
1.4.1.2. Focus growth strategy:
They are key strategies aiming at improving popular products or markets without change of the
input elements.
Three strategies to select focus growth include: market penetration strategy, market development
strategy, product focus strategy.
1.4.1.3. Integration development strategy:
This strategy is suitable for organization within strong production industry, with a fear that focus
growth can not be realized due to the market saturation.
Two corporate strategies heading for integration growth include: Forward integration strategy and
backward integration strategy.
1.4.1.4. Decrease strategy :
This strategy is suitable when the enterprise need to concentrate to enhance the productivity after a
period of fast development, when the longer term development opportunities are no longer
available in the period; other more attractive opportunities are following.
There are 4 types of this strategy: Simple justification strategy, capital withdrawing strategy,

harvesting and payment.
1.4.2. Business strategy:
Business strategy refers to the aggregated strategies of analysis single enterprise in order to
achieve a sustainable competitive advantage and long-term success in its chosen arenas or
industries.
1.4.2.1. Cost Leadership Strategy:
This generic strategy calls for being the low cost producer in an industry for a given level of
quality. The firm sells its products either at average industry prices to earn a profit higher than that
of rivals, or below the average industry prices to gain market share. In the event of a price war, the
firm can maintain some profitability while the competition suffers losses. Even without a price
war, as the industry matures and prices decline, the firms that can produce more cheaply will
17
remain profitable for a longer period of time. The cost leadership strategy usually targets a broad
market.
Some of the ways that firms acquire cost advantages are by improving process efficiencies,
gaining unique access to a large source of lower cost materials, making optimal outsourcing and
vertical integration decisions, or avoiding some costs altogether. If competing firms are unable to
lower their costs by a similar amount, the firm may be able to sustain a competitive advantage
based on cost leadership.
Firms that succeed in cost leadership often have the following internal strengths:
- Access to the capital required making a significant investment in production assets; this
investment represents a barrier to entry that many firms may not overcome.
- Skill in designing products for efficient manufacturing, for example, having a small
component count to shorten the assembly process.
- High level of expertise in manufacturing process engineering.
- Efficient distribution channels.
Firms that succeed in cost leadership often have the following internal strengths:
Each generic strategy has its risks, including the low-cost strategy. For example, other firms may
be able to lower their costs as well. As technology improves, the competition may be able to
leapfrog the production capabilities, thus eliminating the competitive advantage. Additionally,

several firms following a focus strategy and targeting various narrow markets may be able to
achieve an even lower cost within their segments and as a group gain significant market share.
1.4.2.2. Differentiation strategy:
A differentiation strategy calls for the development of a product or service that offers unique
attributes that are valued by customers and that customers perceive to be better than or different
from the products of the competition. The value added by the uniqueness of the product may allow
the firm to charge a premium price for it. The firm hopes that the higher price will more than cover
the extra costs incurred in offering the unique product. Because of the product's unique attributes,
if suppliers increase their prices the firm may be able to pass along the costs to its customers who
cannot find substitute products easily.
Firms that succeed in a differentiation strategy often have the following internal strengths:
- Access to leading scientific research.
- Highly skilled and creative product development team.
- Strong sales team with the ability to successfully communicate the perceived strengths of the
product.
- Corporate reputation for quality and innovation.
The risks associated with a differentiation strategy include imitation by competitors and changes in
customer tastes. Additionally, various firms pursuing focus strategies may be able to achieve even
greater differentiation in their market segments.
18
1.4.2.3. Focus strategy:
The focus strategy concentrates on a narrow segment and within that segment attempts to achieve
either a cost advantage or differentiation. The premise is that the needs of the group can be better
serviced by focusing entirely on it. A firm using a focus strategy often enjoys a high degree of
customer loyalty, and this entrenched loyalty discourages other firms from competing directly.
Because of their narrow market focus, firms pursuing a focus strategy have lower volumes and
therefore less bargaining power with their suppliers. However, firms pursuing a differentiation-
focused strategy may be able to pass higher costs on to customers since close substitute products
do not exist.
Firms that succeed in a focus strategy are able to tailor a broad range of product development

strengths to a relatively narrow market segment that they know very well.
Some risks of focus strategies include imitation and changes in the target segments. Furthermore,
it may be fairly easy for a broad-market cost leader to adapt its product in order to compete
directly. Finally, other focusers may be able to carve out sub-segments that they can serve even
better.
1.5. Implementation and Evaluation:
1.5.1. Organizational structure:
All organizations need an organizational structure to carry out and manage its strategies. The
structure of an initial organization is shaped according to the strategic options of the organization
and when it’s established, the structure will give impacts on current strategic performance as well
as future strategic selection. The organizational structure will figure out:
- Relationship, procedures, control system, responsibility and decision making process which
feature the organizational structure.
- The job need to be done and how to do it when the organization built up strategy or strategies.
- The organization want to realize its mission, vision need to build up an efficient organizational
structure, which will bring about:
- Stability: The ability which is necessary for managing daily fixed process as well as the
forecasted process.
- Flexibility: Bring about the ability to develop competitiveness, at the same time being flexible
in allocating resources for activities to achieve necessary competitive advantage.
Organization usually changes their structure when its size and complication are increasing. There
are 3 fundamental types of structure:
- Simple structure: In this structure, the enterprise owner who is also the direct managers of all
the important decision, and the supervisor of performance of all staffs. This structure is
suitable for the focus strategy and business strategy.
- Functional structure: The role of Chief Executive Officer (CEO) and functional managers will
appear in this model. This structure will be suitable with both corporate strategy and business
strategy.
19
- Multi-sections structure: in this structure, the managers of all levels in the organization will

divide the responsibility of all functional managers in daily activities and business strategy.
Functional departments will operate like centers of profit/ cost. This structure will be working
well in an organization via diversifying.
1.5.2. Controlling system:
An organization needs controlling activities in order to guide the strategic implementation,
enabling a good comparison between the practical results with the expectation. At the same time,
suggest solutions to improve and prevent when the organization achieve the results which do not
meet the expectation.
Normally, there are two ways to control the organization:
- Strategic control: Referring to the matching between what the organization should do
(Opportunities from external environment) and what the organization can do (competitive
advantage of the organization). The strategic control will evaluate the focus of organization on
procedure to implement the strategies.
- Financial control: Via measurement of financial ratios such as: ROI, ROA… These ratios are
better than expectation and on growth trends; the organization can implement the strategy
successful.
Depending on the strategic option, organization can have different controlling methods, example:
big multi-businesses corporation using cost leadership strategy to focus on finance control, while
the company and business units use the differentiation strategy to focus on strategic control.
1.5.3. Building action plan:
In order to implement the strategy, organization need to work out the detailed action plan for each
stage.
Action plan building will help the organization to control the progress and results of each strategic
stage, then make necessary adjustments to keep track with the strategic objectives. The action plan
will help the organization to prepare and allocate resources investment proactively and efficiently.
20
CHAPTER II
CURRENT BUSINESS STRATEGY OF AN BINH JOINT STOCK
COMMERCIAL BANK OVER THE LAST PERIOD
2.1. Overview of the AN BINH joint stock commercial bank.

2.1.1. General information:
An Binh joint stock commercial bank (ABBANK) was found according to the Permission Certificate No
0031/GP-NHNN dated 15/04/1993 by the General Director of The State Bank of Vietnam.
Full name : An Binh Joint Stock Commercial Bank
Abbreviation : ABBANK
Website : www.abbank.vn & www.youcard.vn
Charter Capital : 2.850 billions dongs
Head quarter : No 170 Hai Ba Trung, District 1 , HCMC
Logo :
Slogan : Our solutions, Your smiles
ABBank’s current network includes 82 branches and transaction offices (01 transaction center, 11 branches,
and 70 branches and sub-branches) cover almost all the big cities and provinces of Vietnam.
Strategic partners of ABBank are big corporations and banks which are operating in Vietnam and abroad
such as: the biggest bank of Malaysia – May bank, EVN, Gleximco…
ABBANK strives to build a strong brand with internal strengths, transparent performance, and social
associations in business activities. With the objectives of becoming one among the five leading joint stock
commercial banks in Vietnam and striving for the 1
st
position in terms of modernization, professionalism
and prestige after 5 years. ABBANK has put the whole system online through modernization with the core
banking software, which is in partnership with Temenos in 2008.
Step by step, ABBANK has built and improved the regulations on professional performance and procedure.
It also pays special attention to risk management as well as modernization of domestic international
payments procedure.
2.1.2. Organizational structure of ABBANK
The current organizational chart of ABBANK is multifunctional form. The detailed functions of
departments are following:
21
Table 2.1: Current organization of ABBANK
BOARD OF CONTROLLER

SHAREHOLDERS’
MEETING
EXECUTIVE SECRETARY
BOARD OF
MANAGEMENT
BOARD OF
DIRECTOR
Main Branch HR Core banking Center
Hanoi Branch A&F Department IT center
Da Nang Branch Retail Banking Card Center
Can Tho Branch Corporate Banking
International payment
center
Vung Tau Branch Law & Compliance Accounting Dept.
Binh Duong Branch External affairs Operation Division
Bac Lieu Branch Internal control Risk Management
Gia Lai Branch Financial Investment
Sơn La Branch
Board of strategic client
development
Hai Phong Branch Admin Dept.
Quang Ninh Branch
- Shareholders’ meeting: The highest powerful agency, the shareholder meeting is conducted one a
year when the fiscal years is finished or unexpected meeting according to the regulation.
- Board of Management: The board of management is working according to the principle, based on
the combination of the collective management with the management and direction of the Chairman of
Management Board and strengthens the responsibility of each management board member.
- Chairman of the Management Board: Chairman of the Management board is the legal
representative of ABBANK.
- Management system of ABBANK includes:

+ Board of Management includes the General Director, Deputy General Directors, Chief accountant
and the supporting system includes operation director, departments, and boards, headquarter and
centers.
+ Professional divisions include 9 fundamental divisions: Corporate banking, retail banking, risk
management, Capital source and investment, Core banking system, IT center, Card center, HR…
Leading each division is a division manager elected by the general director. The general director
will assign the deputy general directors to take over the functions of division managers.
2.1.3 Products and Services of ABBANK:
Products, services of ABBANK are established and divided into groups according to the classification of
customers. The corporate banking, individual banking, investor banking..
- Corporate banking: ABBANK provides corporate with all-in financial-banking products and
services such as loans, factoring, guarantee services, import/export financing, account services, trade
services…
22
- Individual banking: ABBANK provides individuals with fast and complete credit products as well
as flexible savings products such as installment loan for house/land purchase or house renovation;
installment loan for house/land purchase with tenor up to 30 years and life insurance for consumer;
installment loan for car purchase; unsecured loan for consumption; installment loan for
manufacturing; working capital financing; flexible secured loan for consumption; YOU saving
products: interest rate based on actual deposit days, escalating savings,… and payment services,
internal and external remittance…
- Investor banking: ABBANK provides individual and corporate investors with authorized services as
well as investment consultancy. ABBANK particularly provides corporate investors with services
such as financial consulting, consulting and guarantee on bond issuance, acting as agent of bond
issue. ABBANK’s competitive features are recognized by the provision of flexible, effective and safe
financial solutions with friendly service; focus on customers’ needs and satisfaction in the
development of any business models and organizational structure; ensuring of excellent and
consistent service delivery based on standard technology and process as well as skilled staffs
2.1.4. The business situation and result in 2008 and first 6 months of 2009:
Up to 30/06/2009, the performance of ABBANK is following:

- Total Asset : 13.747 billions dongs
- Fund mobilization : 7.245 billions dongs
- Total credit : 6.538 billions dongs
- Rate of profit/ charter capital : 273.10/ 2.705 (10,60%)
- Over due debts : 2,5%
- Bad debts : 0.8%
2.1.4.1. Fund mobilization and credit:
Table 2.2: Growth of fund mobilization and credit of ABBANK (Unit: billions dongs)
No Ratio
Up to Up to Plan of
Growth on
31/12/2008
31/12/08 30/6/09 30/6/09 Absolute %
% of
plan
1 Fund Mobilization
By term
- Non term
- Term of less 12 months
- Term of over 12 months
By client
- Corporate
- Individual
7.245,356
1.304,112
5.578,702
362,253
3.802,121
3.443,235
11.658,451

2.331,690
8.160,916
1.165,845
6.138,727
5.519,724
8.756,876
1.751,375
3.940,594
3.064,907
4.037,808
4.719,068
3.827,644
1.027,
578
2.582,214
803,592
2.336,606
2.076,489
53%
78%
46%
221%
61%
60%
133%
133%
207%
38%
152%
117%

2 Credit activities
By Terms
- Short-term
- Medium-term
- Long-term
By customer
- Corporate
- Individual
6.538,980
3.391,161
1.421,688
1.726,131
4.117,438
2.421,542
8.618,731
4.476,332
1.876,628
2.265,771
6.055,056
2.563,674
7.780,354
4.034,946
1.691,584
2.053,823
5.115,943
2.664,411
2.079,751
1.349,141
646,807
83,802

1.937,618
2.322,105
32%
39%
45%
4.8%
47%
96%
111%
87%
91%
66%
118%
96%
3 Credit quality
- Over due debts(%)
- Bad debts (%)
- Medium & long term credit
(%)
2,95%
1,5%
48%
2,5%
0,8%
45%
2,2%
0,5%
55%
-0.45%
-0,7%

7%
-15%
47%
(91%) 29%
23
No Ratio
Up to Up to Plan of
Growth on
31/12/2008
31/12/08 30/6/09 30/6/09 Absolute %
% of
plan
1 Fund Mobilization
By term
- Non term
- Term of less 12 months
- Term of over 12 months
By client
- Corporate
- Individual
7.245,356
1.304,112
5.578,702
362,253
3.802,121
3.443,235
11.658,451
2.331,690
8.160,916
1.165,845

6.138,727
5.519,724
8.756,876
1.751,375
3.940,594
3.064,907
4.037,808
4.719,068
3.827,644
1.027,
578
2.582,214
803,592
2.336,606
2.076,489
53%
78%
46%
221%
61%
60%
133%
133%
207%
38%
152%
117%
- Short term credit(%)
- Risk provision deduction
52%

81.229
55%
4.740
45%
4.034
3%
(73.845)
123%
39%
104%
117%
On fund mobilization:
- Total mobilized fund up to 30/6/2009 reached 8.618,731 billions dongs, 2.901,575 billions dongs
more than plan (The plan up to 30/6/09 is expected 7.780,354 billions dongs), went up 111% the
whole year plan (The plan until the end of the year for mobilized fund is 11.073.000 billions dongs).
In the total outstanding mobilized fund, the exceeding amount is mainly coming from the corporate
fund mobilization (increase by 2.100,919 billions dongs) The mobilized fund structure include
mainly the term of less 12 months, amounted to 6.882 billions dongs/ 7.245 billions dongs
(accounting for 95%).
On Credit:
- Outstanding credit up to 30/6/2009 is 8.618,731 billions dongs, exceeding 838,377 billions dongs
over the plan (The expected figure to 30/6 is 7.780,354 billions dongs) and reach 111% the whole
year plan (Total outstanding credit according to the whole year plan is 10.460.000 billions dongs).
The total exceeding outstanding credit come mainly from corporate clients ( amounted to 2,100.919
billions dongs).
- In the credit structure, the proportion of long term credit accounts for 48%.
2.1.4.2. Payment activities:
- ABBANK built and completed the domestic payment system in the whole system via channels such
as CITAD, AGRIBANK. For international payment, transactions are totally handled at the payment
center, which marks ABBank among the first commercial banks in Vietnam conducting central

international payment activities, handling transactions at the center. Thanks to that, the risk is
minimized, the payment service quality is increased, and the prestige of ABBANK is therefore
strengthened on the international market.
24
2.1.4.3. Business results:
Table 2.3: The business result of ABBANK (Unit: millions dongs)
No Ratio Up to
31/12/08
Up to
30/6/09
Difference
(Absolute)
Difference
(%)
1 Total revenue
- Revenue from interest and similar sources
- Revenue from services
- Revenue from foreign currency trading
- Revenue from securities trading
- Revenue from securities investment profit
- Revenue from stock buying profit
- Others
1,671.980
1,494.819
45.785
6.548
5.695
56.098
34.862
7.463

1,877.116
1,644.301
52.653
7.203
7.404
75.732
50.550
8.209
205.136
149.482
6.868
0.655
1.709
19.634
15.688
0.746
12%
10%
15%
10%
30%
35%
45%
10%
2 Total spending
- Spending for interest and similar items
- Spending for services
- Spending for trading foreign currency
- Spending for securities trading
- Spending for securities investment

- Spending for stock buying
- Others
- Operational spending (Besides staff spending)
- Spending for staffs
- Spending for other activities
1,560.838
1,223.980
24.001
11.498
30.373
9.660
14.152
0.773
126.363
92.362
27.676
1,699.132
1,285.179
30.001
15.522
34.929
17.685
19.485
0.812
145.317
115.453
34.595
138.294
61.199
6.000

4.024
4.556
8.025
5.333
0.193
18.954
23.091
6.919
8%
5%
5%
35%
15%
83%
38%
25%
15%
25%
25%
3 Profit before tax 86.124 175.991 89.867 104%
(Source: Report on business result 6 months of 2009 of ABBANK)
Up to 30/6/2009, the profit gained is 175 billions dongs/ 215 billions dongs as planned, reached 82%,
mainly focus on the deposit interest, credit interest and profit from investment and bond trading.
2.2. Analysis the influence of the macro environment factors:
2.2.1. Political, legal, policy factors:
- Vietnam is always ranked at the high level in terms of political stability in comparison with some
other countries in the region and all over the world. Besides, over the last few years, the legal system
is continuously improved, which lay a good premise for FDI attraction and bring about good
opportunity for credit organization to expand customer network.
- Due to international integration requirements, over the last few year, policies on tax, financial

management, State Bank, Government is more and more improved and gradually adapt to the
international public, which create favorable conditions for credit organizations to enjoy a more and
more transparent legal system, and at the same time they can prepare necessary conditions to compete
with the strong foreign competitors.
- On the other hand, policies which adjust the financial market of Vietnam are still not completed and
changing. This can be considered a disadvantage of the banking operation.
2.2.2. Economic factors:
- In the end of 2006, when Vietnam officially became WTO member, the economy saw tremendous
growth. However, on the verge of 2008, the macro economy experienced instability. The unexpected
price increase and fluctuation of steel, petrol, cement, fertilizers, processing materials…. caused
many difficulties for the economy. Besides that, the monetary tightening policy by the government
has limited the credit source provided to the economy, the banking system faced difficulty in terms of
liquidity, mobilized fund and credit as well. The credit growth rate in 2008 is lowest in the last 5
years, increased only 14.32% compared to 2007. Regarding the credit quality, the over due debts
25