Chiến lược kinh doanh của ngân hàng thương mại TNHH MTV xây dựng việt nam giai đoạn 2018 2022

ĐẠI HỌC QUỐC GIA HÀ NỘI
KHOA QUẢN TRỊ VÀ KINH DOANH
---------------------

BUSINESS STRATEGY
OF CONSTRUCTION COMMERCIAL ONE MEMBER
LIMITED LIABILITY BANK STAGE 2018 – 2022

Ạ
Đ Ạ

XÂY

LUẬ

Ă

– 2022

Ạ SĨ Q ẢN TRỊ KINH DOANH

Ộ - 2018


ĐẠI HỌC QUỐC GIA HÀ NỘI
KHOA QUẢN TRỊ VÀ KINH DOANH
---------------------

BUSINESS STRATEGY
OF CONSTRUCTION COMMERCIAL ONE MEMBER
LIMITED LIABILITY BANK STAGE 2018 – 2022

Ạ
Đ Ạ

– 2022

Chuyên ngành: Quản trị kinh doanh
Mã số: 60 34 01 02

LUẬ

Ờ

Ă

Ạ SĨ Q ẢN TRỊ KINH DOANH

ỚNG DẪN KHOA HỌC: PGS.TS. NGUY

Ộ - 2018

Ọ

NG


DECLARATION
The author confirms that the research outcome in the thesis is the result of
author’s independent work during study and research period and it is not yet
published in other’s research and article.

The other’s research result and documentation (extraction, table, figure,
formula,

and other document) used in the thesis are cited properly and the

permission (if required) is given.
The author is responsible in front of the Thesis Assessment Committee,
Hanoi School of Business and Management, and the laws for above-mentioned
declaration.
Date…………………………..

i


ACKNOWLEDGEMENT
To be able to complete the Master of Business Administration MBA with the
subject "Business Strategy of Vietnam Construction Commercial Joint Stock Bank
for the period 2018 - 2022" is the result of the continuous effort of and help and
encouragement of teachers, friends, colleagues and relatives. Through this article I
would like to thank the people who helped me during the study - recent scientific
research.
I would like to express my deep respect and gratitude to Professor Nguyen
Ngoc Thang for his direct guidance as well as providing necessary information
material for this dissertation.
Sincerely thank the leaders of Hanoi National University, Faculty of Business
Administration has made it possible for me to successfully complete my
dissertation.
Finally, I would like to express my sincere thanks to my colleagues and work
units who have helped me in the process of studying and doing Thesis.

Hà Nội, ngày … tháng … năm 2018
Học viên
Nguyễn Minh Công

ii


Contents
DECLARATION .......................................................................................................... i
ACKNOWLEDGEMENT ........................................................................................... ii
LIST OF TABLES..................................................................................................... vii
LIST OF FIGURES .................................................................................................... vi
INTRODUCTION ....................................................................................................... 1
1. Rationale of choosing research topic..................................................................... 1
2. Previous studies .................................................................................................... 3
3. Research objectives .............................................................................................. 5
4. Object of the study................................................................................................ 5
5. Scope of the study ................................................................................................ 6
6. Research methodology.......................................................................................... 6
7. Structure of the study ............................................................................................ 7
CHAPTER 1: LITERATURE REVIEW ...................................................................... 9
1.1. The definition of business strategy ..................................................................... 9
1.2. The definition of business strategic planning ....................................................10
1.3. The business strategic planning process ............................................................11
1.4. Tools used in business strategic planning ..........................................................16
1.4.1. SWOT matrix .............................................................................................16
1.4.2. Porter’s Five Forces Model.........................................................................17
1.4.3. PEST analysis.............................................................................................19
1.4.4. Value chain analysis ...................................................................................21
1.5. Related literatures .............................................................................................23

CHAPTER 2: OVERVIEW OF CBBANK .................................................................25
2.1. The foundation and the development of CBBANK ...........................................25
2.2. CBBANK’s products and services ....................................................................26
2.2.1. Savings service ...........................................................................................26
2.2.2. Lending service ..........................................................................................26
2.3. Organization structure of CBBANK .................................................................28
2.4. Business performance of CBBANK ..................................................................29
2.5. Current strategy of CBBANK ...........................................................................30
CHAPTER 3: THE BASIS FOR NEW BUSINESS STRATEGIES
FORMULATION OF CBBANK ................................................................................36
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3.1. Evaluation of primary activities ........................................................................36
3.1.1. Operations ..................................................................................................36
3.1.2. Marketing and sales ....................................................................................37
3.1.3. Services ......................................................................................................38
3.2. Evaluation of support activities .........................................................................38
3.2.1. Infrastructure and technology .....................................................................38
3.2.2. Human resource management .....................................................................39
3.2.3. Procurement ...............................................................................................39
3.2.4. Risk management .......................................................................................40
3.3. External analysis...............................................................................................40
3.3.1. PEST analysis.............................................................................................40
3.3.2. Porter’s Five Forces analysis ......................................................................48
3.4. IFE analysis ......................................................................................................50
3.5. EFE analysis .....................................................................................................52
3.6. SWOT analysis .................................................................................................52
CHAPTER 4: PROPOSING NEW LONG TERM STRATEGIES FOR CBBANK ....54
4.1. Proposed business objectives, goals and missions .............................................54

4.2. Proposed new long term strategies ....................................................................54
4.3. Discussion of chosen strategies .........................................................................57
4.3.1. Strategy 1: To introduce product bundle and credit card in banking
products and services ...........................................................................................57
4.3.2. Strategy 2: To conduct marketing communication to the customers ............58
4.3.3. Strategy 3: To invest into high technologies in core banking and big data ..58
4.3.4. Strategy 4: To renovate HRM activities with best practices ........................59
4.3.5. Strategy 5: To expand coverage network in other areas of Vietnam ............59
4.3.6. Strategy 6: To strengthen risk management activities .................................59
4.4. Focus business strategies during 2018-2022......................................................61
CONCLUSION AND RECOMMENDATION ...........................................................65
1. Conclusion ..........................................................................................................65
2. Recommendation .................................................................................................66
REFERENCES ...........................................................................................................69
APPENDIX: SURVEY OF QUESTIONNAIRE.........................................................73

iv


LIST OF TABLES

Table 1: SWOT Analysis Matrix............................................................................ 17
Table 2: The history of development of CBBANK ................................................ 25
Table 3: Lending services of CBBANK .................................................................27
Table 4: Business performance of CBBANK from 2008 to 2010, VND billion ......29
Table 5: Frequency analysis ................................................................................... 32
Table 6: Mean value analysis ................................................................................. 33
Table 7: IFE analysis ............................................................................................. 51
Table 8: EFE analysis ............................................................................................ 52
Table 9: SWOT Matrix .......................................................................................... 53

v


LIST OF FIGURES
Figure 1: Porter’s Generic Strategies........................................................................9
Figure 2: Business Strategy Process by Hax & Widle II (2003) ............................. 12
Figure 3: Business Strategy Process by Chetthamrongchai (2009) ......................... 13
Figure 4: Business Strategy Process by Grunig and Kuhn (2010) ........................... 14
Figure 5: Porter’s Five Forces Model .....................................................................18
Figure 6: PEST Model ........................................................................................... 20
Figure 7: Value Chain Model ................................................................................. 22
Figure 8: CBBANK’s Organization Structure ........................................................ 28
Figure 9: Average processing time of CBBANK, in comparison with other banks .37
Figure 10: Vietnam’s Political Stability Index ....................................................... 41
Figure 11: Vietnam’s GDP growth rate and inflation rate ......................................42
Figure 12: Registered Capital of FDI in Vietnam, US$ billions.............................. 43
Figure 13: FDI inflows to Vietnam by Country, %................................................. 44
Figure 14: Vietnam’s GDP per capita growth rate .................................................. 45
Figure 15: Framework of proposing long term strategies .......................................55
Figure 16: Framework of risk management in CBBANK .......................................60

vi


INTRODUCTION
1. Rationale of choosing research topic
Recently, Vietnam banking industry has met the high growth rate of which the total
saving amount and total lending amount have been anticipated at annual growth rate
of 13% and 10% respectively. In more detail, the customer loan is estimated to grow

from VND2,475 trillion to VND5,149 trillion while the customer deposit is
anticipated to grow from VND2,209 trillion to VND3,975 trillion in the period of
2010-2017 (Business Monitor International, 2017).
Among the overall banking businesses, retail banking service is determined as primary
source for banks’ profitability in the long run (Kalra, 2012). The evidence is that
Vietnam’s population is more than 86 million of people with the GDP per capita has
been increasing on yearly basis, now is more than US$1,500. Vietnam retail banking
market is also considered the fertilize land for card business development as Cimigo
(2009) reports that the future attention of the individual consumers to debit and credit
card shall be upward from 23% and 1% of debit and credit card ownership in 2009 to
24% and 7% in the years to come. Another evidence for the development of retail
banking market in Vietnam is through the frequency of ATM using. Nielsen (2017)
indicates that Vietnamese individual consumers are now utilizing the ATM service
offered by both of local and foreign commercial banks at the frequency rate of 9% for
once a week, 50% for 2-3 times a months, 37% for once a month, and 4% for once
every 2-3 months; and those frequency rate has been becoming shorter.
Although retail banking service is blooming in Vietnam, the local banks are still
facing several problems. The first problem is that local banks are now competing
fiercely with each other due to there are about 35 joint stock commercial banks and 5
state-owned banks in Vietnam (Kalra, 2012). Furthermore, it is worth to indicate the
potential threat from foreign banks who are considering Vietnam banking as high
potential growth market and they are more toward Vietnam banking market with high
investment and diversified products.
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Furthermore, Vietnam banking market is now being dominated by state-owned banks
that have advantages of high capital density and the support from Vietnam
government. Vietcombank Securities (2017) reports state-owned banks dominate both
of deposit and lending market with the shares of 47.7% and 49.3% respectively. Joint

stock commercial banks, however, only consume for 43.4% and 37.1% of the deposit
and lending market share. Additionally, Kalra (2012) asserts that the individual
customers attempt to choose the banks who are not only provide attractive interest rate
but also have better customer services.
According to State Bank of Vietnam, Vietnamese local banking system now has 05
State-owned banks, 35 joint stock commercial banks. In addition, this market is also
covered by joint-venture banks and foreign banks’ branches. The listed problems in
the previous section (e.g. low liquidity, shortage capital adequacy ratio and higher bad
debt outstanding) are the result of unsustainable business model. The business models
of Vietnamese commercial banks are rated as unsustainable growth expectation and
non-core/non-centralized businesses. Furthermore, the future development of the
Vietnam banks is put under questionable as the increase of the competition in the
banking market. When Vietnam joined in WTO, Vietnam has to open the financial
market as the WTO rule for trade liberalization. Thus, the entry for the foreign bank
will be more visible. In the author’s opinion, the foreign banks have the advantage of
higher technology and more diversified product with higher quality compared to the
domestic banks.
To cope up with the new situation, the commercial banks have to formulate the
business strategies with the planning for long term vision (i.e. 5 years). However,
during the time of working for CBBANK, the author has identified that the bank has
only established the business strategies for short term (3 years) but there is no specific
business strategic planning for long term business strategies. In addition, the tools for
formulating the business strategies are not sufficient as the bank only focused on the
external environment but internal environment. Therefore, the author believes that the
current business strategies of CBBANK are not reliable and the author proposes to redefine the business strategies of CBBANK in long term vision.
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Construction Commercial One Member Limited Liability Bank (CBBANK) is
established after transforming operations and businesses of its precedents named as

Construction Joint Stock Commercial Bank under Decision 250 of State Bank of
Vietnam (SBV) issued on March 05th 2015. The bank has more than 25 years of
doing business in Vietnam with capital value of VND3 trillion and 112 branches
nation-wide. SBV is owner of CBBANK and CBBANK is receiving supports from
Vietcombank in term of management, technology, customer service, and payment
services. The business goal of CBBANK is to become retail banks with modern
technology and the bank commits to deliver diversified services to its customers.
2. Previous studies
During the time, there are many empirical evidences about formulating business
strategies for a bank.
 Alves, A, J., Gary, Jr., Dymski, A. and de Paula, L-F. (2012). Banking Strategy
and Credit Expansion: A Post Keynesian Approach.
Alves et al. (2012) conduct this study with the objective of identify current banking
strategy under a situation of credit expansion. These researchers rely on a post
Keynesian approach to obtain this objective. They identify that the balance sheet
structure of the banks are under influence of management decision during the time of
credit expansion and the aggressive level of management decision will have certain
influence accordingly. Alves et al. (2012) also highlight the importance of economywide money multiplier as control variable toward banking strategy. These researchers
also conclude that Keynesian approach can be utilized to conduct banking analysis
accordingly.
 Chen, T-Y. (1999). Critical success factors for various strategies in the banking
industry. International Journal of Bank Marketing, 17/2 (1999), pp. 83-91.
Chen (1999) utilizes an approach named Critical Success Factor (CSF) to identify
which strategies to be suitable in banking industry. Chen (1999) provides some CSFs,
including how the ability of managerial level, the bank’s reputation in the market,
3


marketing efforts, and financial management capabilities. It is asserted that these
CSFs have heavily influencing on banking operations and the operations of these

CSFs have certain influence on the banks’ choices of business strategies.
 Leichtfus, R., Messenbock, R., Chin, V., Rogozinski, M., Thogmartin, S. and
Xavier, A. (2010). Retail Banking: Winning Strategies and Business Model
Revisited. The Boston Consulting Group.
Leichtfus et al. (2010) provide winning strategies to the banks along with suitable
business models. These researchers highlight some issues in strategies of examined
banks with strong focus on retail banking strategies. They assert that the performance
of the banks is depended on economic regions where the banks are doing businesses
and economic regions can simply be separated into the Middle East, Australia,
Americas, Asia, and Europe. The banks should develop banking strategies by the
differences of each economic region.
 Lowth, G., Prowle, M. and Zhang, M. (2010). The impact of economic
recession on business strategy planning in UK companies. Chartered Institute
of Management Accountants, 6 (9), pp. 1-9.
Lowth et al. (2010) examine the impact of economic recession on business strategy
planning in UK. These researchers identify that economic recession impacts
negatively to overall economic performance of UK in both short and long term
perspectives although UK firms take some positive effects from accessibility to
foreign markets, better relationship with the customers, and higher innovation in
products delivering. Lowth et al. (2010) address that UK firms need robust business
strategies to survive through economic recession period. Lowth et al. (2010) identify
that UK firms are now applying many changes in their business strategic planning
such as reduction of fixed cost, narrowing of products to be offered, reduction of
staffing ratio, etc. However, UK firms are still facing up with the limitation of capital
accessibility since economic recession impacts negatively to capital injection and
lower liquidity level.

4

 Roengpitya, R., Tarashev, N. and Tsatsaronis, K. (2014). Bank Business
Models. BIS Quarterly Review, December 2014.
Roengpitya et al. (2014) develop a study about banking business models and they
indicate that banking business model has been changing over the last 10 years. They
also address about the popularity of retail-funded banking model which is now widely
accepted in major banks in the globe. Roengpitya et al. (2014) also highlight the
stability of trading banks which is nominated through stable return-on-equity (ROE).
However, Roengpitya et al. (2014) pose a concern about under determination of the
value of shareholders and the raise of cost-to-income ratio.
3. Research objectives
Upon on rationale of choosing research topic and research gap above, research
objectives will be proposed as below:
 To get in-depth understanding about business strategies of commercial banks.
 To analyze external market situation in case of Vietnam banking industry.
 To analyze internal situation of primary and support activities of CBBANK.
 To provide SWOT analysis for CBBANK.
 To determine business strategies for CBBANK upon on SWOT analysis.
 To provide recommendations to guide how CBBANK can implement selected
business strategies.
4. Object of the study
The object of the study is one bank in Vietnam and the bank is Construction
Commercial One Member Limited Liability Bank (CBBANK).
Location of conducting the study: Hanoi, the capital of Vietnam.
Time of conducting the study: From August 2017 to September 2017.

5


5. Scope of the study
Due to time constraint, the study is developed with specific scope of work. The study

employs conceptual framework and toolboxes to analyze current situation of
CBBANK. It includes internal and external analyses to recognize the strengths, the
weaknesses, the opportunities, and the threats towards CBBANK. Moreover,
competitive analysis will be conducted to capture what the competitive position of
CBBANK compared to other banks in Vietnam. On the other hand, CBBANK is case
study and other banks in Vietnam will not be put into respective analyses.
6. Research methodology
The study is developed with qualitative research method. In more detail, the data is
collected from two sources: primary and secondary data. Primary data is collected
from well-structured survey with the employees of CBBANK. It is denoted that the
survey requires the involvement of managerial and supervisor position. On the other
hand, it means that the study does not include those who are officer in the bank. Since
survey of questionnaire is main primary data collection instrument, the questionnaire
design is important step and its objective is to design survey of questionnaire to collect
the assessment from the respondents. Survey of questionnaire is collected by either
self-administered or interviewer administered questionnaire. In this study, selfadministered questionnaire is chosen due to it is cheap and easy to conduct with low
time consuming. Moreover, self-administered questionnaire ensures anonymity to the
respondents and it also brings the convenience to the respondents due to they can
answer the questionnaire anytime. Survey of questionnaire is designed with two parts.
The first part is to collect the respondents’ assessments towards each step in business
strategy and its effectiveness during implementation. The assessment is conducted
through a Likert scale of 5 points: 1 – strongly disagree, 2 – disagree, 3 – neutral, 4 –
agree, and 5 – strongly agree. Secondary data is collected from books and journals
about business strategies in other banks. In addition, secondary data is also collected
from reports about operations of CBBANK recently.
The research process includes several steps:
6


 The first step is to identify research problem which is stated in Chapter I. Then,

research objectives are delivered in order to get understanding about current
setup in business strategic planning at CBBANK.
 The second step is to conduct literature review with clear understanding about
business strategies as well as collection of previous studies about business
strategic planning. The outcome of Chapter II is to propose business strategy
process, including mission formulation, internal and external market scanning,
formulation strategy, implementation process, and feedback and control.
 The third step is to choose the right research methodology for this study,
including qualitative research method and quantitative research method.
According to Alwood (2012), the difference between quantitative and
qualitative research method is abstract and unclear and the wrong selection
among these research methods can lead to unexpected outcomes. Quantitative
research method is considered as the process of applying natural sciences with
numeric data to be collected and it addresses the concerns of the researchers
who want to analyze the relationship between dependent and independent
variables (Bryman and Bell, 2007). In the contrast, qualitative research method
aims to analyze social phenomenon through non-numeric data and key finding
is collected from self-arguments and subjective point of view (Mack et al.,
2005). In this study, quantitative research method will be applied and the
researcher would like to analyze the impact from each step of business strategy
planning to the successful of business strategic implementation at CBBANK.
 The fourth step in research process refers to the data collection, data cleaning,
and data analyses. Data collection refers to the actions of collecting secondary
data and primary data. In this study, data cleaning is also conducted to ensure
that collected data is worth for using and to reduce the bias from wrong data
number.
7. Structure of the study
This study is developed with 05 chapter.

7

 Introduction section includes the reasons of choosing researched topic as well
as research objectives. Moreover, location and time of conducting this study
are both presented in this chapter along with chosen research methodology.
 Chapter 1 is about literature review and it discusses about the definition of
business strategy and business strategic planning and business strategic
planning process. In addition, this chapter provides tools that are being used by
strategic managers during the process of developing and implementing
business strategies.
 Chapter 2 refers to current performance of business strategic planning in
CBBANK, including the foundation and the development of the bank,
organizational structures and current selling points, primary activities and
support activities.
 Chapter 3 refers to the analysis of internal and external factors influencing on
the business and the operations of CBBANK. It helps the researcher to
formulate business strategies in the long-run.
 Chapter 4 is about the proposal of new long-term business strategies of
CBBANK with statements about mission, vision, and SWOT analysis. It is
notable that SWOT analysis comes up with the outputs of proposing new
business strategies for the bank given to the facts in strengths, weaknesses,
opportunities, and threats of CBBANK.
 Finally, the conclusion and recommendation is prepared with the objective of
summarizing key findings in previous chapters. This section also provides the
implementation plans for carrying out new business strategies of the bank.

8


CHAPTER 1: LITERATURE REVIEW

1.1. The definition of business strategy
Business strategy is defined as set of actions related to the businesses of the
companies in both short and long term perspectives (Grunig & Kuhn, 2011). In earlier
studies, Porter (1980) highlights three important business strategies, including
differentiation strategy, low-cost strategy, and focus strategy.

Figure 1: Porter’s Generic Strategies
Source: Porter (1980)
According to Besanko et al. (2014), the companies who are doing business in
industrial level can adopt either differentiation strategy or low-cost strategy and they
have different characteristics compared to each other. In more detail, while
differentiation strategy is conducted with the objective of creating products and
services with unique characteristics compared to other competitors’ products and
9


services, low-cost strategy is deduced under the objective of selling products and
services at lower cost than average price in the market (Porter, 1980). Hall (1980)
concludes that differentiation strategy helps the companies to win the market share
through distinguished features of products and services and the low-cost strategy
allows them to get more customers from lower segments and mass-production at
lower operating cost. The last business strategy is focus, according to Porter (1980),
and it is used by the companies with the objective of focusing on specific market
segment and then they can apply either differentiation or low-cost strategy to get
higher market share. Focus strategy is often carried out by the companies which want
to explore very new market with different customer segment than normal ones
(Horsky & Nelson, 1993).
1.2. The definition of business strategic planning
After understanding about business strategy, it is required to have clear understanding
about business strategic planning. Herein, the understanding of business strategic

planning is provided by Nickolas (2016) and it is perceived as a defined, recognizable
activities related to the businesses of the companies. According to Mintzberg (1994),
business strategy is defined as actions and plans that allow the companies to obtain
strategic position in the market within specific period. It is denoted that business
strategy is lower level than corporate strategy. According to Grunig & Kuhn (2011),
corporate strategy explains the business direction of the companies in the long run and
it is often stated in broad manner while business strategy is addressed particular
business segment or particular activities and business strategy must be set in line with
corporate strategy accordingly. Moreover, Grunig & Kuhn (2011) separate business
strategy into intended and actualized business strategy. While intended business
strategy addresses the perception of the companies’ managers or their expectation of
business orientation in certain time, actualized business strategy is the correction or
the amendment of the businesses along with the changes from the market. Moreover,
Hoffer & Schendel (1978) indicate that corporate strategy supports the top managers
of the companies in term of long vision while business strategy aligns the business and
ensure that business or function to support long vision of the top managers.
10


1.3. The business strategic planning process
The business strategic planning process is provided by different researchers over the
time. In this section, there are three process of business strategic planning that are put
into examination. The first process is proposed by Hax & Widle II (2003). The first
step refers to mission definition and which products and services that the companies
will sell to the market. The managers must recognize what their products and services
are differentiated to others. The second step is to conduct proper scanning on internal
and external market. It means that the strategic managers need to perceive about
current performance in internal activities to identify the strengths and the weaknesses
of their companies. Then, they scan external market to identify the opportunities and
the threats from the market. The third step is to provide which business strategies that

the companies need to carry out and the last step is to provide action plans to
implement chosen business strategies. Hax & Widle II (2003) emphasize that each
action plan should be taken in certain time frame and it is often ranged from 6 to 18
months at least.

11


The mission of the business

1. Definition of business scope: products,
markets, and geographies
2. Identification of unique competencies

Environmental scan at the business level

Internal scrutiny at the business level
1. Identification of internal critical factors to
achieve competitive advantage

1. Identification of external factors contributing
to industry attractiveness

2. Overall assessment of competitive advantage

2. Overall assessment of industry attractiveness

Definition of Strengths and Weaknesses

Definition of Opportunities and Threats

Formulation of the business strategy
A set of multiyear broad action programs

Strategic Programming
Definition and evaluation of specific action
programs (6-18 months)

Budgeting
Strategic funds programming and operational
budgets

Figure 2: Business Strategy Process by Hax & Widle II (2003)
Source: Hax & Widle II (2003)
The second process is found in the study of Chetthamrongchai (2009). This researcher
provides a process which involve 7 steps. The first step is the same as Hax & Widle II
(2003) proposing and it addresses the importance of choosing business mission. The
second step refers to the internal and external scanning with the application of
strategic analysis toolboxes such as PEST analysis and Porter’s Five Forces Model.
12


The next step is to deliver the business goals that must be obtained by the companies
in both short and long run perspective. The fourth step is to roll out chosen business
strategies while the fifth step is to develop programs to ensure that business goals will
be obtained accordingly. The sixth step is to roll out plans to implement chosen
business strategies and the last step is to put all actions into closed monitoring to
ensure that chosen business strategies will be implemented correctly and the timeline
will be maintained accordingly.

External
environment
(Opportunity
and Threat)
Goal
formulation

Business
mission

Strategy
formulation

Program
formulation

Implement
ation

Feedback
and
Control

Internal
environment
(Strengths
and
Weaknesses)

Figure 3: Business Strategy Process by Chetthamrongchai (2009)

Source: Chetthamrongchai (2009)
The third process of business strategic planning is delivered by Grunig & Kuhn (2011)
and it has seven subsequent steps. Unlike previous researchers, Grunig & Kuhn (2011)
consider business strategic plan as a project plan and the first step is to determine what
the main goals and missions. The second step is to detect what are happening in the
market. The third step is to determine corporate strategy which is determined as high
level of recognition of business direction of the companies in the long run. The fourth
step is to propose business strategies which are aligned with corporate strategies. The
fifth step comes up with implementation plan while the sixth step is to assess the
13


implementation process. The last but not least is documentation process whether all
business strategic points are documented well and they are published to certain parties
to ensure that people who are involved into business strategic planning process can
understand thoughtfully.

Strategic
management
Strategic
planning

Implementation of
strategies

Strategic control
Daily
business

Figure 4: Business Strategy Process by Grunig and Kuhn (2010)

Source: Grunig and Kuhn (2010)
In this study, business strategy process of CBBANK includes following steps:
Step 1: Mission formulation
This step is required to choose right missions for the operation of the enterprise.
According to Hax and Wilde II (2003), mission is a statement which show up the main
activities of the enterprises in the long run and what the expectation in term of market
share is. It is notable that mission is formulated upon on the enterprises’ competencies
or the capabilities that help the enterprises to compete well with the competitors from
the market. Grunig and Kuhn (2010) denote that mission should be valid within three
years.

14


Step 2: Internal and external market scanning
This step includes fundamental analyses on both of internal and external environment.
There are several tools that help the strategic managers of the enterprise to conduct
internal and external scanning, including PEST analysis, SWOT analysis, and Porter’s
Five Forces model. (Porter, 1980; Doole and Lowe, 2008). PEST analysis is defined
as generic analysis on current situation of politics, economy, society, and technology
(Johnson et al., 2002). SWOT analysis is used to determine current strength and
weakness of the enterprises as well as to determine opportunities and threats from the
market (Terrados et al., 2007). Porter’s Five Forces model is delivered by Porter
(1980) and it requires the analyses on bargaining power of suppliers, bargaining
power of buyers, threat of substitute products, threat of new entrants, and rivalry
among existing competitors. The objective of this step is to provide in-depth
understanding on either external market such as competition situation or internal
operation performance of the enterprise (Hax and Wilde II, 2003).
Step 3: Formulation strategy
This step is conducted with the objective of formulating which business strategies that

should be carried out in order to obtain the main business goals and objectives (Grunig
and Kuhn, 2010). Formulation strategy, at first, should cover the statement of
competencies of the enterprise and the main goals. In addition, this step covers the
plan programming with separated phases to obtain business purposes (Grunig and
Kuhn, 2011). Hax and Wilde II (2003) emphasizes that formulation strategy needs to
come up with action plans for each business strategy.
Step 4: Implementation process
This step refers to the implementation process and it is conducted by strategic team
within the enterprise in order to ensure that formulated business strategies in previous
step are carried out. According to Grunig and Kuhn (2010), implementation process
consists of frequent reports and meeing between strategic managers and the followers
in order to address emergent issues.
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Step 5: Feedback and control
The last step refers to feedback and control during the time of implementation.
Strategic perception and strategic realization are two contexts within this step (Grunig
and Kuhn, 2010). Strategic perception is defined as the widespread of formulated
strategies to all level of businesses at the enterprises while strategic realization is
determined as feedback after actual operation and implementation (Grunig and Kuhn,
2010). It is notable that all feedbacks should be captured as historical data and reports
and they are the inputs for corrective actions in time.
1.4. Tools used in business strategic planning
1.4.1. SWOT matrix
According to Ommani (2011), SWOT analysis is a strategic analysis toolbox that
allows the companies’ managers to recognize and to evaluate current strengths and
weaknesses in current operations of the companies as well as opportunities and threats
from the external market. SWOT analysis plays important role of helping the
companies to conclude about possible solutions to overcome current issues and to

leverage current advantages in order to gain higher business performances and profit
(Nouri et al., 2008). In more detail, SWOT analysis is operated with identification of
strengths and weaknesses of the companies as well as opportunities and threats from
the market; then all identification is combined to assist the companies to obtain their
business objectives (Singh, 2010). In short, SWOT analysis is often stated in a table
matrix and strategic managers will answer the question in each box as below:

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Table 1: SWOT Analysis Matrix

Opportunities

Strengths

Weaknesses

How do I use these

How do I overcome the

strengths to take advantage

weaknesses that prevent

of these opportunities?

me from taking advantage
of these opportunities?

Threats

How do I use my strengths

How do I address the

to reduce the impact of

weaknesses that will make

threats?

these threats a reality?

Source: Whalley (2010)
1.4. . Porter’s Five Forces

odel

Porter’s Five Forces Model is an analysis which is belonged to industrial
organizational theory (Dalken, 2014). This analysis is reasonable due to the
companies are doing business in either particular or cross-sectional industries and
their business performances are highly depended on participators of the industries
(Johnson et al., 2008). Moreover, it is notable that the companies can conduct Porter’s
Five Forces analysis to get deeper understanding on the industries and therefore
endurances for business performance (Johnson et al., 2008). Dalken (2014) indicates
that the business of the companies are depended on many factors and Porter (1979)
groups many factors into five most important ones, including the power of the
buyers/the customers, the power of the suppliers, threat from new players into the

industries, the competition among players in the industries, and how the threats from
alternative products and services. Porter (2008) affirms that these factors are
interacting with each other and the interaction results the opportunities and threats to
the companies’ business performances.

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