LUẬN VĂN THẠC SĨ Xây dựng chiến lược kinh doanh ngân hàng Nông Nghiệp AGRIBANK chi nhánh Yên Bái giai đoạn 2015-2020 THESIS MBA BUILD A BUSINESS STRATEGY FOR THE BRANCH OF THE BANK FOR AGRICULTURAL AND RURAL OF YEN BAI IN THE PERIOD FROM 2015 TO 2020 INTRODUCTION The necessity of the research Today, international economic integration is an indispensable trend of the countries having developing economy that want to access to advanced economies For Vietnam, international integration is the right direction and is important as prerequisites for creating the position in the international arena, and offers many opportunities for rapid growth and sustainable economy of the country However, international integration also sets for Vietnamese enterprises, especially to the commercial banks - especial enterprises trading in the field of currency - the credit facing to the great challenge To overcome these challenges and apply well the opportunities require Vietnamese commercial banks to analyze the strengths of the weaknesses to make appropriate strategy for each period, each stage of suitable development with the trend on the principle of national interests and enterprises In 2008 and the early months of 2009, World economy has strong fluctuations Breakup of a series of big names of Wall Street financial sector gives the signal of the great deep and wide crisis around the world Through this economic crisis, Vietnamese commercial banks have chance to look back the internal strengths as well as weaknesses Currently, Vietnam's economy in particular and the world economy in general tend to rehabilitate and develop, the important issues are that each economic organizations have to find themselves a suitable direction to create conditions for sustainable development in the future Vietnam is considered as the economy recovered rapidly through the solutions of the Government stimulating the economy to grow However, it is undeniable that the Vietnamese economy is growing below the potential effects to main resources including inefficient investment, poor infrastructure and the economy processing in low value From third quarter in 2007, the domestic enterprises have to undergo a toughest screening ever Through this selection, the existing and developed enterprises demonstrated their high adaptability, quick and flexible in their business activities For the developing countries, the banking sector is considered as lifeline of the economy, playing especially important role in economic and social development, especially in the period of industrialization and modernization of the country At present, Vietnam is actively implementing measures to reform the administrative, legal framework created equally, favorable investment environment to encourage and attract foreign financial institutions investing into Vietnam Competition rule does not exclude any units, any economic sectors in society and this rule existing in all areas Thus, the economic sectors in general and the banking sector in particular must also find themselves one direction, develop strategies and specific strategies in accordance to survive and grow The branch of Agricultural and Rural Development Bank of Yen Bai under the Agricultural and Rural Development of Vietnam established and put into operation in July 1988, with the direct function is to trade in monetary, credit and banking services in the area according to Decree No.53/HDBT of Council of Ministers in March 26 th, 1988 Before the fluctuations of the economy in the world and in the country as analyzed above, the most important issue for the Branch of the Bank for Agricultural and Rural Development of Yen Bai today is to plan the overall business strategy for all business activities to compete and dominate the market-share with the commercial banks in the area of Yen Bai province and neighboring provinces to achieve economic growth in all aspects in the period from 2015 TO 2020, creating the prerequisites for sustainable development in the coming years This is why the group of authors chooses this topic: "Build a Business Strategy for the branch of the Bank for Agricultural and Rural of Yen Bai in the period from 2015 TO 2020 Purpose and scope of the research The research on the basis to build the strategies, processes of building strategies and the method to select optimal strategies to help the branch of the Bank for Agricultural and Rural Development of Yen Bai determining their business strategy to match the conditions and the current context Applying the theory of building business strategic, applying the model of building and analyzing and choosing the business strategies in specific situations of the branch of the Bank for Agricultural and Rural Development of Yen Bai From the research above, propose a number of additional proposals and solutions to improve the process of building business strategy for the branch of the Bank for Agricultural and Rural Development of Yen Bai in the current conditions At the same time, point out implementing roadmap of selected strategy from 2015 TO 2020 Scope of research: Go deep into the analysis, construct and select the solutions implementing roadmap of business strategy for the branch of the Bank for Agricultural and Rural Development of Yen Bai in the period from 2015 TO 2020 Research Methodology The method of qualitative and quantitative: research the situations of the branch of the Bank for Agricultural and Rural Development of Yen Bai Specific research method: analyze, compare, synthetize the data The data: primary and secondary Method of data collection: Based on the published data on the mass media and documents introducing the capacity of the branch of the Bank for Agricultural and Rural Development of Yen Bai The structure of the research: Beside the introduction, conclusion and appendix, the big exercise is structured into three chapters Main contents of each chapter are as follows: Chapter 1: Theoretical basis of constructing business strategy Chapter 2: Analyze the foundation, base to construct business strategy for the Bank for Agriculture and Rural Development - Yen Bai Branch in the period from 2015 TO 2020 Chapter 3: Select strategy, the content of the strategy, organize to implement the strategy and the solutions to implement the strategy of the Bank for Agriculture and Rural Development of Yen Bai Branch period from 2015 TO 2020 CHARPTER I THEORETICAL BASIS OF CONSTRUCTING THE BUSINESS STRATEGY 1.1 OVERVIEW OF STRATEGY, BUSINESS STRATEGY AND STRATEGIC MANAGEMENT 1.1.1 The concept of strategy, business strategy and strategic management There is no general definition of strategies, depending on views and approaches of the researchers that there are many different definitions of strategy The concept of "strategy" comes from the Greek word - Strategos and from ancient Greece As Alexander the Great around 330 BC, refers to the strategic management skills to exploit these forces to crush the enemy and to develop a global system of domination Comment basis points of the strategy is the enemy could crush competitors - even more powerful competitors, outnumber - if they can lead the battle and put opponents on the battlefield facilitate the development operationalized their abilities Today, with the rapid growth of the economy in the world, dragging the growth and development in the fields of politics, culture, society, showing decisiveness and the effect of economic sectors to social life, so the application of theory of "strategy" becomes popular and improved range over many different ways to define the view with a modern and consistent with the function resources make a difference and external environment Strategy is the direction and scope of an organization in the long term: to the strategy will bring advantages to the organizations through the optimum arrangement of resources in a competitive environment to meet demand and expectation of the capital contribution or: Strategy is the business-orientation, the methods choosing the capable solution solving the most effectively the business objectives that companies put out + Chandler (1962): "Strategy is the determination of the objectives, basic long-term goals; conduct to apply a series of actions and allocate necessary resources to carry out this goal" (Chandler , A (1962) Strategy and Structure) + Quinn (1980): "Strategy is a pattern or plan integrating the major objectives, policies and a series of action into a closely cohesive whole" (Quinn, (J, B 1980 Strategiesfor Change: Logical Incrementalism) + Johnson and Scholes: "Strategy is the direction and scope of an organization to gain long term competitive advantage for the organization through the format of its resources in the changing environment, to meet market demand and expectations of stakeholders ((Johnson G., Scholes K (1999) Exploring Corporate Strategy 5th Edition) Michael L Porter, famous professor of Business Strategy at the University of Harvard, in 1996 in the article: "What is Strategy?" He said: • Firstly, the strategy is the creation of value and unique position, including different activities • Secondly, the strategy is the choice, exchange in the competition • Thirdly, strategy is the creation of conformity between all the activities of the company So first of all, the strategy relates to the objectives of the enterprise Secondly, strategy is the way to implement the actions and decisions closely related to each other, and select the method to coordinate those actions and decisions The strategy of the enterprise has to exploit the fundamental strengths (resources and capabilities) and to consider the opportunities and challenges of the external environment Managing strategy is a set of management decisions and actions determining the longterm performance of a business Managing strategy includes ongoing actions: Review the environment (internal and external), build strategy, implement strategy, evaluate and control the strategy Researching the strategy emphasizes on monitoring and evaluating the external opportunities and challenges in the context of the internal strengths and weaknesses 1.1.2 Basic characteristics of the business strategy We know that although there are many different views on business strategy, the basic characteristics of the business strategy are concept relatively uniform Those basic characteristics are: - Business strategy defines clearly the fundamental goals, business directions need to reach in each period - The orientation of strategy ensures the enterprise to develop continuously and sustainably in business environment constantly fluctuating - Business strategy just outlines the directions of the activities of the enterprise in long-term, framework of the business in the future - Business strategy is built on the basis of competitive advantage of the enterprise to ensure maximum mobilization and good combination with the exploitation and use of resources, core competence of enterprises at present and in the future to promote the advantages, seize opportunities to gain advantages in competition - Business strategy is reflected in the completely continuous process from building to organizing to the implement, evaluate, check and adjust the strategies - Business strategy always takes the thought of attacking to win the competition - Business strategy is often built in the long period (3 and 10 years) 1.1.3 Role and importance of strategy and strategy management In the market mechanism, building and implementing the business strategies increasingly plays an important role on the existence and development of enterprises Some organizations not have a strategy like the ship without rudder, most failures in the business are due to the lack of a proper strategy or lack of implementation strategies in the right direction The role of business strategy for enterprises is shown on the aspects: - Business strategy helps the enterprises identify the goals in each period and find clearly the direction to their future as guiding to all activities of the enterprises - Business strategy helps the enterprises capture and take advantage of business opportunities, and proactive measures to deal with and prevent the risks and threats in the competitive market - Help the enterprises exploit and use up their resources, promote the inherent strengths and overcome weaknesses surviving in the enterprises - Business strategy contributes to distribute resources logically in each period, strengthening the position of the enterprise to ensure the enterprises to develop continuously, stably and sustainably - Business strategy creates a solid basis for the enterprises to make the decisions in accordance with the fluctuation of the market It is solid foundation for researching, implementation, investment and development of human resources, technological innovation, expansion and market development, product development as well as increased labor productivity, increase management efficiency of the business - Beside, business strategy helps the enterprises increase cohesion and consensus of staff and leadership in implementing the common objectives of the enterprises Therefore, the strategy is the tool expressing specifically the long-term goals of the organizations or enterprises Thus, the strategy will help the enterprises quickly achieve the goals The core cause of success or failure of an enterprise depends on one important factor that is an enterprise has a business strategy like what That helps enterprises quickly achieve the goals 1.1.4 The system of business strategy in the enterprise Business strategy can be divided into many different strategies depending on the classification base However, within this article, we refer to all levels of business strategy, competitive strategies based on competitive advantage and competitive strategies according to the position of market-share in the market 1.1.4.1 Classify the strategies according to the levels of building strategies 1.1.4.1.1 Strategies for the enterprises Strategies for the enterprises are always the general strategies and towards coordinating business strategy in relation to the expectations of the owner The strategies for the enterprises can also be approached in the following ways: - Growth Strategy: The strategies aim at achieving "goals of growth of the enterprise including: focused growth strategy, growth strategy by way of integration (linking), growth strategy by diversification - Withdrawal strategy: This strategy is appropriate when the enterprises need to restructure to increase efficiency after a period of rapid growth, the industry is no longer an opportunity to grow and break even - Strategy of innovation: strategy of innovation may be considered as a strategy having a strong external impact, innovation can restore growth of the enterprises 1.1.4.1.2 The strategies for business units The strategies for business units are the strategies applied specifically to each business area of the enterprise and strategic business unit (SBU) These are the specific competitive strategies and associated with combinations of products and markets identified Strategies for business unit can be approached in the direction such as: strategies based on competitive advantage; strategies to compete according to market share position in the market 1.1.4.1.3 Strategies of functions The strategies of functions are strategies directing to improve the performance of parts of the functions in the enterprise like manufacturing, marketing, material managing, researching, developing human resources These strategies may focus on a defined function However, it needs a close coordination between the functions together to deliver efficient, quality, innovation and customer satisfaction at the highest levels across the enterprise 1.1.4.2 Classify the strategy based on competitive advantage 1.1.4.2.1 Strategy of leading costs Strategy of leading costs is total of actions to provide the products or services with features accepted by customers at the lowest cost in relation to all competitors This strategy is appropriate for the business units on a large scale having ability to reduce costs in the process of activities, thereby increasing the competitiveness because of lower cost than that of competitors However, strategies of leading cost have the risk of competitiveness by the process to produce and distribute goods and services may become obsolete because: The renewal of competitors; competitors can mimic the strategy of the company leading market on cost; Focus on cost reduction may exchange customers’ awareness in creating the difference 1.1.4.2.2 The strategies of difference The objective of the strategy of difference is to achieve the competitive advantage of companies by creating products (goods or services) that customers realize that some unique characteristics are important Companies making a difference try to satisfy customer’s needs in ways that competitors cannot with the intention would require a price increase (a price significantly above industry average) To pursue strategies of competition by differences, the enterprises often use the strategic solutions as follows: - The differentiated product company selects high differentiation to make competitive advantage Differentiation can achieve three main ways: quality, innovation and adapt to customers - Company pursues strategies of differentiating in products trying to differentiate goods as many as possible - The differentiated product company divides the market into many sections The company supplies the products designed specifically for each segment and becomes more extensive The company can only choose to serve only selected market segments where there are special advantages of differentiation - The company must control all of the costs to detect factors that are not really affecting to their advantages of differentiation, just so can make the price of the product does not exceed than what the customers willing to pay Business strategy based on differentiation provides a competitive advantage for the enterprises, helping protect businesses against competitors thanks to the loyalty of customers with brand name of the enterprises; differentiation and loyalty with the brand create a barrier to the other companies trying to penetrate the sectors, reducing the threat from substitute products and reducing the power of the suppliers and the buyers’ However, strategy of product differentiation is at risk of competition due to: the difference in price between the products of the company having different product and company leading the cost maybe too large; to any time differentiated products will not create value that customers are willing to pay; when having more experience, the customers will have different perceptions of the value of different features; having trouble Title copied, counterfeit goods 1.1.4.2.3 The strategy of centralization The strategy of centralization will direct at slots of specific markets that can determine in the terms of geography, type of customers, or by segments of the products Once selecting a market segment, the company pursues a strategy centralization using approaching ways of differentiation, or low costs Basically, a centralized company is a person creates a difference by specialization or a leader of costs 1.1.4.2.4 Combining low-cost strategy and strategy of differentiation 10 charge of mobilizing capital activities - The Directors of Representative office Strategy of differing the - Deputy Director for From early 2010 to the products and services Marketing and Customer end of 2015 on the basis Services directly responds of one year having the generally and responds to first time specific the Director on the results evaluation of implementing the strategies - Marketing and Customer Service Department directly associated with focal and Computer Department, Credit Department, Department of Planning and capital sources, Department of Accounting and Funds organize to implement - The Directors of Representative office Strategy of building and - Deputy Director for From early 2010 to the developing the brand Marketing and Customer end of 2015 on the basis Services directly responds of one year having the generally and responds to first time the Director on the results evaluation of implementing the strategies - Marketing and Customer 82 specific Service Department directly associated with focal and Computer Department, Credit Department, Department of Planning and capital sources, Department of Accounting and Funds organize to implement - The Directors of Representative office Strategy of capital safety, - Deputy Director for From early 2010 to the reducing the risks in the Marketing and Customer end of 2015 on the basis business Services directly responds of one year having the generally and responds to first time the Director on the results evaluation of implementing the strategies - Marketing and Customer Service Department directly associated with focal and Computer Department, Credit Department, Department of Planning and capital sources, Department of Accounting and Funds organize to implement - The Directors Representative office 3.4 The solutions to implement the strategies 83 of specific All four optimal strategies the branch selected having dialectical relationship with each other Implement well this strategy will make benefit for the other strategies Therefore, implementing the strategy must occur simultaneously and continuously Within the contents of this thesis, we not offer the specific solutions to each strategy, but we offer the group of common solutions to the group of strategies that Agribank Yen Bai selected 3.4.1 The group of solutions promoting strengths, overcoming weaknesses, taking opportunities, overcoming threats of Agribank Yen Bai Promoting the strengths: Nowadays, when the competitive pressure in the banking business is rising, the commercial banks are always looking for ways to improve their competitive strengths in which utilizing the available advantages to promote power is the shortest and the most effective way The advantages Agribank Yen Bai will promote are: First, take advantage of wide network to develop the products and services, guide Agribank to become the leading retail bank Diversify the products, deposit, and capital mobilization, card products, high-tech products Second, continue to strengthen and develop the retail market in rural areas, towns and townships based on the brand is known for long times by the farmers Third, win the support of the Government and international organizations to access and use the capital resource of "cheap price" to develop the technology, improve the quality of personnel, and promote and develop the market share Overcoming the weaknesses: Not only Agribank Yen Bai, but any Credit Organization also exists the certain weaknesses Therefore, overcoming their weaknesses and turn them into advantages, opportunities to promote the competition for development is the thing any organization desires To that Agribank needs to: First, improve the quality of personnel on the basis of building and training a staff with a new thought, understanding and recognizing the importance of customers for the survival and development of the bank Train a team of workers with body and soul working spirit, devote for the career of Agribank Yen Bai 84 Second, diversify the products and services, improve quality of services on the advantages of the network, brand and support of the Government Third, to overcome the credit risk Agribank Yen Bai is bearing in recent years caused by the investors of Agribank Yen Bai, Agribank Yen Bai must take the best the advantages of the Government to overcome these weaknesses, by transferring the risks to another object that is the insurance company In addition, Yen Bai Agribank must create the mount more closely with local government, the Unions, the Organizations, the Associations to well the role of the agricultural credit Fourth, perfect the infrastructure, ensure the uniform in the field of technology Reduce the branches and transaction offices to make it easy to invest in developing technologies and create a face for the bank Avoid the condition of too much transaction offices, branches, the infrastructure, equipments those are low because this will reduce the position of Agribank Yen Bai to customers Fifth, raise the quality of reports to make the basis for forecasting and development orientation of the Agribank based on the development of the industry, trends and the guidelines of the Party and Government Take the advantages: Integration not only opens for the Vietnamese economy the new opportunities but also creates numerous opportunities for the banking industry in general and Agribank in particular However, how to take those opportunities? to turn them into strengths and use them as a tool for increasing strength in the new competition is important To turn these opportunities into key of success, Agribank Yen Bai must: First, rapidly develop the high-tech product lines (e-banking product line, mobile – banking product line, internet – banking product line); Promote and develop business trend of bank to modern retail bank based the available advantages (wide network) Second, court the cooperation of foreign banks to access professional management methods, new technologies In addition, the need to court the interest and support on finance and technology of the international financial organizations like WB, ODA to strengthen and upgrade the system of information technology, quality of human resource to enhance the level of competition 85 Overcome the threats: Perhaps what the commercial banks in general and Agribank Yen Bai in particular is how to with those strengths? on the understanding of the weaknesses existing with taking advantage of opportunities of the market to overcome all challenges are and will face to To turn the available advantages, the opportunities created by the market by the weaknesses to overcome the challenges of the market to create competitive advantages, Agribank Yen Bai needs to: First, increase the financial strength to invest in developing new technologies, improve the infrastructure and upgrade facilities to improve "speed" of transferring the data between the branches and the offices, the branches and transaction offices to ensure accuracily, safely and quickly in all transactions Avoid congestion when transacting, causing the damages to customers and affecting to the prestige of the Bank In addition, should pay attention to the work of network administration, because once the high-tech products are used, the problem of "stealing" information, property of the customers will be more serious Second, perfect and improve the role of management in banking business activities such as managing the asset of debt, risk management, human resources management Because once the competitive trend is increasing between banks, the risks in the banking business activities will continue to increase In addition, not only the banking sector facing to the new competition trend, but all other sectors in the economy must also bear the same pressure, so the breakup of the market will also increase This is indispensable to make banking sector unavoidably involved, so perfecting and enhancing the role of risk management is important requirement Third, continue improving the wage regime, the regime of treatment, the recruitment to attract the human resources having "grey matter" ensuring to create a staff of full energy, full capabilyty to manage and administrate the current period and future inheritance Finally, make a difference in the business activities based on the products, human and quality of the services 3.4.2 The Group of solutions to implement the strategies 3.4.2.1 Strengthen financial power 86 As presented in the chapter one and two, we see the important role of capital owned for commercial banks is very large, it contributes to healthy financial capability of commercial banks according to international standards Although one of the commercial banks in country with the strong financial capacity, the financial capacity of the Agribank is still quite low compared with the other commercial banks in the region As the regulations of the Law of Credit Organizations of the Socialist Republic of Vietnam, a commercial bank can not invest in its fixed assets exceeding 15% of capital owned of the that commercial bank and other matters related to the business activities of the commercial banks such as: credit issuing, guarantee Therefore, increasing the capital is what Agribank must currently Some ways to increase capital in the current period of Agribank are: - First, increase the capital at the first level: + Increase chater capital from applying for additional capital from the state budget; recover outstanding debts; accounted debt and has been supplied the solution resource by the Government + Increase the fund added to the first level capital such as: resered fund supplementing the chater capital, fund for financial reserve, fund for investing in professional development - Second, increase the capital at the second level: + Continue to issue bonds with competitive interest rates to increase the second level capital + Organize to evaluate the fixed assets This is a solution can perform actively, fastly and effectively in increasing the second level capital because most of the fixed assets Agribanki are real estates Therefore, if the fixed assets of Agribank are reevaluated, the second level capital of Agribank will increase significantly 3.4.2.2 Improve the management of debt assets – available assets Manage the debt and available assets is an indispensable part for the existence of a bank The natures of the debt and available assets affect strongly to the success or failure of that Bank Specifically: debt and available assets affect to the liquidity, profitability, competitiveness when using the prices as a competitive tool Meanwhile, most Vietnamese Commercial Banks not really pay attention to this administration In fact, most 87 Vietnamese Commercial Banks after 2007, the year was considered as the successful year of the Commercial Banks due to the strong growth in all aspects However, in the early of 2008, the Vietnamese Commercial Banks had to face to a situation of lack of liquidity (due to curb the inflation by the Government), and race of interest was formed Not stop there, the interest rate is pushed up too high will be seriously hard for the enterprises and individuals having credit relations In addition, the deposits of the property market, stocks will push the credit risk of the Vietnamese Commercial Banks to rise in upcoming period The impacts above come from the work of managing the debt and available assets which are still weak of Vietnamese Commercial Banks including Agribank Vietnam in general and Agribank Yen Bai in particular Therefore, strengthen the work of managing the debt and available assets is the issue that Agribank needs to focus on To make the work of managing the debt and available assets become more efficient Agribank should: - Improve and promote the work of statistical reports, ensure accurately the reported data - Build and apply models of managing the debt and available assets in the business activities Bring the work of managing the debt and available assets to a new position, need to establish the importance of this work of administration - Coordinate rhythmically and synchronously between credit risk management - risk management of liquidity in the management of debt – available assets 3.4.2.3 Complete the credit work Currently, the lending proportion of the Commercial Banks of Vietnam make up a very high percentage of the total assets of the Commercial Banks of Vietnam, so the main source of revenue of the Commercial Banks is still from the credit To December 31st, 2007, the lending proportion made up 80% of the total profitable property and revenues from the credit made up over 93% However, this item is the item contains many risks most and affect powerfully to the business activitives of the bank Although many readers have offered the solutions to limit credit risk Based on the actual status of Agribank Yen Bai, our group offers a number of solutions to improve the credit work in Agribank Yen Bai as follows: - First, build, review the list of customers based on the actual strength to issue and manage the credit best Should build the list of customers as the lending industry, ensure a 88 certain safe percentage avoiding the situation of investing too much into a specific sector to limit the risks when that sector has difficulties - Second, build the staff in charge of doing the research and developing the business with the strategic vision, ability to analyze and predict the trend of the market, industry trends to support the Chamber of Credit to offer the group of customers, group of prospected industry to prioritize for issuing the credit and developing the supplementary products - Third, apply thoroughly the work of grading and classifying customers into allocating the credit Create linkages between the credit scoring software and credit issuing software from which limit the branches, transaction bureaus providing credit to customers with low credit quality In addition, the work of grading to classify the customers need applying impartially and doing in time as the regulations, especially before issuing the credit - Fourth, improve the quality of assessment of the credit department, aiming to ensure to evaluate correctly and fully the factors affecting to the effectiveness of the project, especially those belonging to the development programs of the Government to avoid the widespread investment, leading to excess, inefficience - Fifth, continue to develop the rural credit markets, although this is a field of wasting many costs and containing many risks (small customers, the risks of natural disasters), this is a potential market for the development of the network of the professional retail banks as well as utilizing the advantages well that Agribank Yen Bai is available (wide network, understand the customers for quite long) Besides, this is the market supported highly by the government and ODA capital resource To ensure this market’s growth and limit the risks, the bank can create linkages between Bank - Company - Farmer; Bank - Insurance - Farmer; Bank - Local Government – Farmer to transfer credit risks that can occur when lending the farmers - Sixth, study the model of analysis and risk assessment in the credit activities, as it helps us measure accurately the level of risk from wich offering the right and appropriate policies for the credit allocation 3.4.2.4 Diversify the traditional products and develop the new products Compared with the real situation of traditional products and services that Agribank is using such as deposits, loans, accounting services the nature on diversification of 89 traditional products of Agribank is too low (for example: as the product of capital mobilization, Sacombank has 11 products on savings deposits, while Agribank has only six kinds) Besides, the Commercial Banks always release to the market the new high-tech product lines meeting more needs of consumers such as managing funds, homebanking, renting safes, Therefore diversifying the products and services of Agribank is necesary Follow is some solutions to develop and diversify the products and services of Agribank - First, establish the department of market research and new product development in addition to Marketing department to research the needs, tastes and trends of the consumers based on the available advantages of Agribank Yen Bai to release the new product lines meeting the needs of the consumers - Second, diversify the new product lines on the basis of traditional products to adapt to many different customers; analyze the market to provide the products relevant to the needs of customers and the advantages of Agribank Yen Bai - Third, develop new products based on the available advantages of Agribank Yen Bai or on the available basis of the other Credit Organizations applying such as: mobilizing and lending gold to diversify the forms of mobilixation, creating revenue for the Company - Fourth, improve the quality of marketing department, build a suitable marketing strategy to each product to help customers understand and access new product lines effectively Especially, improve marketing capacity in the heart of each staff of the bank, not just the marketing department - Fifth, complete the best the infrastructure, information technology ensuring the development of the high-tech product lines Ensure the consistency in terms of technology between the branches and transaction offices, avoid the congestion in the transmission lines causing not good psychology for the consumers, as well as making the basis for the development of the new product line 3.4.2.5 Improve the quality of services Nowadays, the quality of services is also considered as an important criteria in order to attract customers to the bank In years past, when the banking market underdeveloped, consumers only know the bank with the role of "ask – give” Nowadays, the banking industry is considered as the most powerful competitive industry with development of the 90 Commercial Banks with a range of new products and services, quality always pushes to the top this has made market share of Agribank Yen Bai devrease continuously last few years What we can easily is that why the income of the services of Agribank Yen Bai is only 5% of total income from a lot of advantages Therefore, one of the important factors affecting to the rate above is the too low quality of service of Agribank Yen Bai, Agribank Yen Bai has not paid attention to this issue To improve the quality of services, contributing to increase competitiveness of Agribanki]nrt, we need to: - First, build a qualified transaction staff who have a good sense of responsibility; have good morality; strict working manners, truthful characteristics, always consider the customer as "God" Banking employees have to understand and identify the survival of the bank is the customers sympathy and take care to the regular customers, as well as new customers This will help customers feel friendly when transacting and help them become traditional customers and sticking long-term with the bank - Second, improve facilities and technology, good infrastructure; equipment and modern technology; ideal business location, cool polite and civilized space transactions This will help customers feel more secure when transacting with the bank - Third, continue to complete technology, the quality of professional of the staff ensuring the accuracy, timeliness, security and safety for customers' assets when transacting - Fourth, each branch, office transaction ensure staff of guidance answers and solve the problems of complaints from the customers quickly, ensuring the rights of the customers on the harmonization on the benefit of the bank Avoid causing discontent, apathy or evade to answer the complaints from customers, a banking employee should not argue with customers despite any circumstances, but he must guide and explain to customers know what customers not understand or misunderstand, make sure to keep the peace between the customers and the bank - Fifth, continue to complete the schedule of transaction fee to ensure high competitiveness, there are policies of promotion, presenting the gifts to the traditional customers and the potential customers 3.4.2.6 The solutions on the internal audit 91 Starting from the work of internal audit is very important stage in the banking industry because it can prevent, detect and treat timely the risk can occur in the bank (credit risk, loss Risk of assets) objectively or subjectively (the axis acts benefit, deliberately left, fraud in the banking sector) The work of internal audit works well will help indirectly the bank increase profitability and improve their competitiveness However, currently the work of internal audit of the Agribank Yen Bai has not been promoting its all roles and there are still inadequacies, the inadequacies of the internal audit department are derived a part because of the mechanics of management and administration of Agribank Yen Bai, particularly: - Although the department has the independent nature, its staff of internal audit exists at that bank and seems to be governed by the Board of Directors of that branch, so their activities not take objectivity anymore - The principle the staff of the internal audit of the bank must be the high baning professional persons, understanding the regulations of the law and regulations of the bank In fact, internal audit department does not really achieve that requests This is understandable, since the current management regime of the Agribank Yen Bai, how to find people meeting the conditions above to work and dedicate Therefore, to overcome exists above, and contribute to improve the work of internal audit become increasingly effective support for the leadership we need: - There are different treatment regimes for those who the work of internal audit at the branch to recruit qualified individuals to work and stick long-term with Agribank Yen Bai - Move the internal audit department of the branch to a head agency such as moving to the Representative Office of each region, operating under the supervision of Agribank Vietnam - For each area, the activities of the bank need building in writing regulating the specific processes, this process combines skillfully the key block for the staff to control easily the process of cooperation 3.4.2.7 The other solutions 92 - Make a difference: Once the competition of the banks have been pushed up, the Commercial Banks use all different methods to increase their competitive power, sometimes the Commercial Banks not pay attention to the characteristics, the available advantages to make a difference, or create itself a difference to make highlights in the competition This difference is shown in the brand, the logo, the slogan, the business culture, breakthrough on the technology, novelty of the products, the links, the cooperation between the banks - Create the link between Bank - Insurance - Customer With the unique features of the Agribank is to loan the business household and rural agriculture making up the high proportions However, this is sector having the highest risk Therefore, to limit the loss can happen to the bank and customers, should build linkages between the Bank – Insurance Customer (especially farmers borrowing money to grow ) Can be described simply as follows: Bank lending farmers to buy seed, fertilizer (farming), food (raising), on that basis the customer will sign an insurance contract with the insurance company that the insurance value is not less than the loan amount, the beneficiary is the bank (the insurance free can be supported by the Government) - Create the link between the Bank and Insurance Company to create a competitive strength through diffusing the brands for each other; increase the income for the bank due to sell insurance products, lease working places; increase the deposit of Insurance Company at the bank 3.4.2.8 Complementary solutions from the Government and the State Bank In our country currently, the State Bank and the Government remains an important role in regulating the macro economy, a proper economic policies, a flexible monetary policy of the Government and banks to ensure economy to develop sustainably, ensure the orientations, strategies and forecasts of the banking sector in particular go in the right orbit This contributes a non-small part to the Credit Organizations in building business strategies, development orientation Moreover, the role of the State Bank and the Government become increasingly important when the economy goes into deeper integration, the commitments of the WTO is able to operate, the breakup and competitive pressure also increase highly, the instability of the economy will increase To ensure sustainable development, Yen Bai Agribank should: 93 - First, enhance the performance of operating indirect monetary policy (open market operations, re-projection, refinancing ), and closely coordinate between the monetary policy and accounting policy Control the whole flow of money in the economy, especially the cash flow related to field of state budget and the non-financial banking institutions - Second, strengthen the role of inspectors and supervisors of the bank for the business activities of credit organizations, ensure the banks operate safely and efficiently, avoid unfair competition between the Credit Organizations - Third, quickly complete the system of law of the State Bank and the Credit Organizations as the movement changing the State Bank into the Central Bank Empower independent position of the State Bank and the Government to improve effectiveness and efficiency of monetary policy, establish the role and autonomy of the Sate Bank in building and operating the monetary policy - Fourth, modify and improve the system of law, operation mechanism of the monetary market, limit the overlap between laws and regulations on the bank with laws and other regulations at the national and international levels 3.5 The conclusion Chapter III closes with the group of solutions promoting strengths, overcome weaknesses, take Opportunities, Overcome Threats of Agribank Yen Bai and the group of solutions implementing the strategies to improve the competitiveness of Agribank Yen Bai in the integration trend Although the solutions mentioned above are only in general, not really go into each specific solution However, that is the basis foundations for the development orientations and specific measures for the development of Agribank Yen Bai in the future 94 CONCLUSION Integrating the international economy is indispensable and compulsory to Vietnam on the development step We are involved in organizations and associations of the world economy such as ASEAN, ASEM, APEC, Vietnam-USA trade agreement and especially WTO Integration will not only open for us a lot of opportunities, but it also has many commitments and challenges Banking industry in general and Agribank Yen Bai in particular does not escape from that trend With the low point of departure, having just gone through the process of restructuring and rearranging, although there have been the certain success, in general the foundation factors of competition is still limited, not catching up with the requests of modern banking industry Building the correct business strategies to create competitive advantages is considered as the survival of each organization, to be able to compete well in the domestic market creating the basis to reach out to overseas markets Agribank Yen Bai must also actually have more efforts in strengthening and improving financial capability, improving their quality of management and human resources, applying the modern technology to develop and diversify the products and services and promote to building the brands on both domestic market and the international orientation 95 With limitation in many aspects, the group of authors also point out some business strategies and some general solutions to improve and further enhance the competitiveness of Agribank Yen Bai on the basis of strengths, weaknesses, opportunities and threats in relation of "power" between the bank in the province of Yen Bai and throughout the country, along with the new trend of integration that the banks will direct to, to make the position on the market Although we have made the great efforts to complete our research well, we are sure to have the inevitable shortcomings We hope to receive the suggestions of the Teachers and the colleagues to make our research better Our group would like to thank the Teachers, and the staff of ETC Center for Educational Technology and Career Development – Hanoi National University Hanoi for having created the favorable conditions for us to approach to the knowledge of the most advanced business administration in the World today Simultaneously, complete well the whole training program of Master of International Business Administration MBA organized by the Center / 96 [...]... period from 2015 TO 2020 in Chapter III 28 CHAPTER 2 ANALYZE THE FOUNDATION, BASE TO CONSTRUCT BUSINESS STRATEGY FOR THE BANK FOR AGRICULTURE AND RURAL DEVELOPMENT – YEN BAI BRANCH IN THE PERIOD FROM 2015 TO 2020 2.1 General introduction of AgriBank Yen Bai 2.1.1 Process of establishment and development of Agribank Yen Bai Agribank Branch in Yen Bai province is a unit directly attached to Agribank Vietnam... cứ theo mục đích sử dụng vốn vay thì hiện tại sản phẩm tín dụng của Agribank gồm có: Cho vay tiêu dùng (mua xe, mua nhà trả bằng lương, bằng thu nhập, mua sắm vật dụng gia đình ); Cho vay kinh doanh bất động sản; Cho vay kinh doanh chứng khóan; Cho vay du học; Cho vay đi lao động nước ngòai; Cho vay bổ sung vốn lưu động sản xuất kinh doanh; Cho vay lưu vụ; Cho vay tài trợ xuất nhập khẩu; Cho vay mua... of Vietnam 2.1.2 Organizational structure, management apparatus of Agribank Yen Bai branch - Name: Bank for Agricultural and Rural Development of Yen Bai - Business name: AGRIBANK YEN BAI BRANCH - Main office address: Number 41 - Đinh Tiên Hoàng - Yên Bái city - Yên Bái province - Tel: 0293.851.088 Fax: 0293.852.453 - Website: http:/ /agribank. com.vn - Organizational structure: + Office groups: Planning... objectives of the Agribank Yen Bai Branch Mission, vision and business culture - With the motto for the prosperity and sustainable development of customer and bank, AGRIBANK goal is to continue to maintain the position of the leading commercial bank in Vietnam, advanced in the region and the high prestige over the world - Implementing the AGRIBANK business culture content that executive leaders of AGRIBANK. .. Board, Chief Executive Officer, assisting apparatus, including internal controls apparatus, dependent accounting plan units, independent accounting plan units, business units, to distinguish clearly the management and administration, Board Chairman is not CEO On November 15, 1996, authorized by the Prime Minister, Governor of State Bank of Vietnam signed Decision No 280/QD-NHNN renamed Agribank Vietnam Agribank. .. Bank Governor issued Decision No 18/NHQD establishing Agribank representative offices in Ho Chi Minh City on June 24, 1994 On July 30, 1994 in Decision No 160/QD-NHN9, Governor of the State Bank approved model of innovation management system of the Agricultural Bank of Vietnam On 07/3/1994 according to Decision No 90/TTg of the Prime Minister, Agribank operates under the model of State corporation... banks in general and Agribank Yen Bai in particular All commercial banks must base on this indicator as well as predict this indicator in the following years to build the business plans How it affects to Agribank Yen Bai? - GDP increases leading to capital requirements of economic sectors increases→loan demand increases → competitive pressure among banks reduces → opportunities for Agribank Yen Bai expands... some policies affecting directly to the operation of Agribank Yen Bai: - The monetary - credit policy of the Government: 34 The credit policy of the Government directly affects the lending operations of the commercial banks in general and Agribank Yen Bai in particular The rate of credit growth allowing in this year is 30%, mostly was used up by Agribank Yen Bai in the first 9 months of 2009 Therefore,... THREATS FOR AGRIBANK YENBAI BRANCH 2.2.1 Macro environmental analysis 2.2.1.1 Economic environment International economic environment - International economic growth rate: This is the indirect factor but increasingly having strong influence to the situation of economic development of Vietnam in general and banking industry in particular In the coming years, the most important thing for AgriBank Yen... China ) completely escape from the crisis and the immediate impact, as well as its long-term impact to the economy of the world Currently, the economic situation is rather positive, but some macroeconomic indicators such 32 as GDP growth, unemployment rate, indicators of stock market still have many bad factors Therefore, none of the countries claims to have overcome this crisis How it affect to Agribank