CAPSTONE PROJECT REPORT BUSINESS STRATEGY OF NAM VIET COMMERCIAL JOINTSTOCK BANK- HAI PHONG BRANCH PERIOD 2012 - 2017 GROUP NO: 07 Class: GaMBA- M0210 HA NOI 2012 LIST OF ABBREVIATED WORDS NHNN State Bank of Vietnam HN Ha noi Navibank Nam Viet Joint Stock Commercial Bank Navibank HP Nam Viet Joint Stock Commercial Bank – Hai Phong Branch IT Information Technology BTA Bilateral Trade Agreement EFE External Factor Evaluation Matrix IFE Internal Factor Evaluation Matrix SWOT SWOT matrix (Strengths, Weaknesses, Opportunities, and Threats) SPACE SPACE matrix (The Strategic Position and Action Evaluation) QSPM Quantitative Strategic Planning Matrix Vietinbank HP Vietnam Industry and comercial Bank – Hai Phong Branch BIDV HP Bank for Investment and Development of VN – Hai Phong Branch Vietcombank HP The Bank for Foreign trade of Vietnam – Hai Phong Branch TCTD Banker LIST OF TABLES – FIGURES Table 2.1 Results of implementation of some operation norms for the 2005 – 2010 period Table 2.2 Results of business operation of Navibank in Vietnam for the 2005- 2010 period Table 2.3 Operating results of Navibank – Hai Phong branch Table 2.4 Data sheet of customers‟ deposit mobilzation Table 2.5 Loan and structure of outstanding credit in the 2007 – 30/09/2011 period Table 2.6 Services operations Table 2.7 The growth of number in banking industry Table 2.8 Growth of capital mobilization and credit Table 2.9 EFE matrix Table 2.10 Compatitive image matrix Table 2.11 IFE matrix Table 3.1 SWOT matrix for Navibank Hai Phong Table 3.2 SPACE matrix for Navibank Hai Phong Table 3.3 QSPM matrix for Navibank Hai Phong Figure 1.1 Business strategy formulation process Figure 1.2 External environment Figure 1.3 SWOT Matrix Figure 1.4 SPACE Matrix Figure 1.5 Grand Strategy Matrix Figure 2.1 Operational and institutional structure Figure 2.2 Map of transaction offices under the branch Figure 2.3 GDP growth speed of economic sectors in the 2000 – 2010 period Figure 2.4 Average GDP per capita in the 2000 – 2010 period INTRODUCTION Reasons for topic The financial crisis has rocked the globe and one again confirmed the special role of banks in the globalized economy in recent years Today, close the bank or weakened banking system not only disrupt the domestic economy but also quickly spread like infectious diseases Although Vietnam's economy is not really integrated into the regional economy, but the consequence of the financial crisis has left the Vietnam banking system, which to be solved The integrated trend is a objective process, time of integration is very near To integrate successfully requires the Vietnam banks improve their competitiveness quickly Currently Vietnam Commercial bank system includes five state-owned banks, 37 joint stock banks, joint venture banks and 48 foreign bank branches To be sure, with the easing route and banking liberalization for foreign banks, the competitive level will be increasingly fierce among banks In the extremely difficult period of the Vietnam banks when Vietnam integrates into the world economy, if business strategy of a bank executed well, it will be the determining factor to the survival, development or speed up of the bank With the knowledge gained from the MBA course of Griggs University and is one of the staff of Navibank Hai Phong with a desire to contribute to the Bank growing more and more, Group decided to select topic: “Building business stratery for NAVIBANK – Hai Phong branch for period 2012-2015” Purpose of research The topic is with a view to establish and select business strategy for Navibank Hai Phong branch period 2012- 2015 and propose solutions to implement this strategy, aiming at leading Navibank Hai Phong to be one of great branches among Navibank system and on the its area The great assignment is done by a group of most members who are working in banking and is investigated, analyzed based on the reality, therefore business strategy set up for Navibank Hai Phong by this group must make a positive contribution to the branch‟s activitites in the following years Research method Mainly based on knowledge of the economic subjects such as: strategic management, financial and monetary theory, marketing management, human resource management, financial management and practical knowledge application The data analysis according to historical materialism method and descriptive statistics based on the statistics, the figures reported by the State Bank and of the commercial banks Lay-out of the Capstone report Apart from introduction, conclusion, reference materials, the great assignment includes chapters: Chapter 1: Theoretical framework about business strategy formulation Chapter 2: Analysis of business strategy formulation for Navibank Hai Phong branch Chapter 3: Business strategy of Navibank Hai Phong branch for period 20122015 and solution for implementation CHAPTER 1: THEORETICAL FRAMEWORK OF BUSINESS STRATEGY 1.1 Concept of strategy and role of business strategy 1.1.1 Concept of strategy A strategy is a plan of action designed to achieve a vision Strategy is all about gaining (or being prepared to gain) a position of advantage over adversaries or best exploiting emerging possibilities As there is always an element of uncertainty about future, strategy is more about a set of options ("strategic choices") than a fixed plan Moreover, strategies are potential actions that require top management decisions and large amounts of the firm‟s resources In addition, strategies affect an organization‟s long-term prosperity, typically for at least five years, and thus are future-oriented Strategies have multifunctional or multidivisional consequences and require consideration of both the external and factors facing the firm 1.1.2 Strategic management Strategic management can be defined as the art and science of formulating, implementing and evaluating cross-functional decisions that enable an organization to achieve its objective Strategic management focuses on integrating management, marketing, finance/accounting, production/operations, research and development, and information system achieve organizational success Strategic management process consists stages are formulation, implementation and evaluation of strategies Each stage based upon set of activities performed by the individual working in the organization + Strategy Formulation: Strategy formulation is the first stage of strategic management, this stage includes developing vision and mission statement, identifying external opportunities and threats, evaluating company internal strengths and weaknesses, developing alternative strategies, selection strategies which benefits the business Strategy formulation issues include deciding what new business to enter, what business to abandon, how to allocate resources, whether to expand operation or diversify, whether to enter international market Whether to merge or form a joint venture No organization have unlimited resources, strategists must go with the strategies which are most feasible and beneficial for the business Strategy formulation commits an organization to specific products, services, markets, resources and technologies over an extended period of time Strategies are developed for long term competitive advantage over its competitors + Strategy Implementation: Strategy implementation is the second stage of strategic management Strategy implementation can be only proceeds after completion of strategy formulation stage, when strategists are done with strategies selection This stage includes number of activities such as defining policies, building organizational structure, allocating resource to implementing strategy, assigning tasks to each functional area employees and tracking the progress of strategy implementation + Strategy Evaluation: Strategy evaluation is the last stage of strategic management, the purpose of this stage to monitor the implemented strategies and find out whether they are working or not to achieve organization objectives Strategy evaluation consists of three fundamental activities reviewing external and internal factors that are bases for current strategies, measuring performance and taking corrective action Each implemented strategy is evaluated to determine the outcomes, if the outcomes are meeting the expectation it means strategy is successfully otherwise corrective action is required + Role of a strategic management: Strategic management allows an organization to be more proactive than reactive in shaping its own future; it allows an organization to initiate and influence activities and thus to exert control over its own destiny Historically, the principle benefit of strategic management has been to help organizations formulate better strategies through the use of the more systematic, logical and rational approach to strategic choice Research indicates that organizations using strategic management concepts are more profitable and successful than those that not Businesses using strategic management concepts show significant improvement in sales, profitability, and productivity compared to firms without systematic planning activities Besides helping firms avoid financial demise, strategic management offers other tangible benefits, such as an enhanced awareness of external threats, an improved understanding of competitors‟ strategies, increased employee productivity, reduced resistance to change and a cleared understanding of performance-reward relationships Strategic management enhances the problem-prevention capabilities of organizations because it promotes interaction among managers at all divisional and functional levels Firms that have nurtured their managers and employees, shared organizational objectives with them, empowered them to help improve the product or service and recognized their contributions can turn to them for help in a pinch because of this interaction In addition to empowering managers and employees, strategic management often brings order and discipline to an otherwise floundering firm It can be the beginning of the efficient and effective managerial system The strategic-management process provides a basis for identifying and rationalizing the need for change to all managers and employees of firm; it helps them view change as an opportunity rather than as a threat 1.1.3 Classification of strategy Depending on the different criteria strategies can be classifed differently In real estate field, our group relize some type of classification should be studied as follows: Classifying by managerial level - Company: Strategy at the company level is to identify and define the purposes and objectives of the company, identifying the business activities pursued by the company, create policies and plans to achieve the company's goals, allocating resources between businesses activities Company strategy is applied to the entire enterprise - Business: Strategy at business level is planned to determine the selection of products for private business within the company In the strategy at business level, people must determine the way that each business unit must be completed to contribute to accomplishing the goal of the company - Function: In strategy at function level, people focused on supporting company‟s strategy and focus on areas of operational business areas such as finance, human resources, marketing Classification of strategy based on the way companies build competitive position - Cost - leading : As a result, businesses have more profits than the average one of the whole fiel The total cost based on the scale of production efficiency, cut costs sharply based on experience, control cost tightly and minimize the cost of the parts such as: research and development, sales, advertising … - Characterized differences through the creation of the distinct attributes of the products or services with other businesses in the same fiel, such as quality, brand image, technology, features, customer service or dealer network This strategy will help businesses get profits above the fiel‟s average one because it established a solid position to deal with competition in the same fiel - Focusing on the group of customers, product segment or a specific geographic market This strategy is built around serving a particular target well and each of the policies is developed with the direction The strategy gives business unique characteristics due to better meet the requirements of specific targets or have lower costs in the service of that goal, or both From this, enterprises can get profits above the fiel‟s average one Classification of strategies based on performance way The combined strategy group includes: Combined forward; combined back; combined horizontally Intensive strategy group includes: Market penetration, market development; product development Group strategy to expand activities includes - Diversify concentric activities: put on the existing market products or services related to the current products - Diversify activities horizontally: put on the existing market for the current customer group of new products or services, not related to the current products - Diversify mixed activities: put on the existing market with the products or services, not related to the current products Other strategy group include: - Joint ventures strategy: when one or more businesses unite with each other to pursue a certain goal - Narrow operating strategy: when businesses need to restructure, conducting to remove a number of products or activity areas to save the position of the business - Liquidation strategy: the sale of assets of the business Enterprises accept defeat and try to save up maximum all the things they can 1.2 Tool, Models of strategic analysis and evaluation 1.2.1 Analyze the business environment Environmental analysis for a business looks at the factors inherent in a business's environment that may have some impact thereof This type of analysis is relatively qualitative and involves the identifying, scanning, analyzing and forecasting of the environmental variables Some frameworks of environmental analysis have received large amounts of attention in the world of business management literature, such as SWOT analysis and PEST analysis 1.2.1.1 Analyze the micro environment - PEST model: PEST analysis stands for "Political, Economic, Social, and Technological analysis" and describes a framework of macro-environmental factors used in the environmental scanning component of strategic management It is a part of the external analysis when conducting a strategic analysis or doing market research, and gives an overview of the different macro environmental factors that the company has to take into consideration It is a useful strategic tool for understanding market growth or decline, business position, potential and direction for operations + Political factors are how and to what degree a government intervenes in the economy Specifically, political factors include areas such as tax policy, labor law, environmental law, trade restrictions, tariffs, and political stability Political factors may also include goods and services which the government wants to provide or be provided (merit goods) and those that the government does not want to be provided (demerit goods or merit bads) Furthermore, governments have great influence on the health, education, and infrastructure of a nation + Economic factors include economic growth, interest rates, exchange rates and the inflation rate These factors have major impacts on how businesses operate and make decisions For example, interest rates affect a firm's cost of capital and therefore to what extent a business grows and expands Exchange rates affect the costs of exporting goods and the supply and price of imported goods in an economy + Social factors include the cultural aspects and include health consciousness, population growth rate, age distribution, career attitudes and emphasis on safety Trends in social factors affect the demand for a company's products and how that company operates For example, an aging population may imply a smaller and less-willing ... about business strategy formulation Chapter 2: Analysis of business strategy formulation for Navibank Hai Phong branch Chapter 3: Business strategy of Navibank Hai Phong branch for period 20122 015... Matrix Vietinbank HP Vietnam Industry and comercial Bank – Hai Phong Branch BIDV HP Bank for Investment and Development of VN – Hai Phong Branch Vietcombank HP The Bank for Foreign trade of Vietnam...LIST OF ABBREVIATED WORDS NHNN State Bank of Vietnam HN Ha noi Navibank Nam Viet Joint Stock Commercial Bank Navibank HP Nam Viet Joint Stock Commercial Bank – Hai Phong Branch IT Information