Luận văn thạc sĩ Xây dựng chiến lược kinh doanh Thẻ ngân hàng Vietncombank THESIS Topic: “Build a card business strategy of Vietnam Joint Stock Commercial Bank for Foreign Trade of Vietnam (Vietcombank) in the period of 2011 – 2015” ACKNOWLEDGEMENT We would like to commit this is the research project of our group The published data of the organizations and individuals are referred and used under regulation The results in the topic are honest and have not been showed in any other projects yet Our group would like to thank Griggs University, representative of the University in Vietnam, ETC Center, teachers are considerate to teach us; thank people in the Center who have helped us during the studying process in the Center Group would like also to thank Vietnam Commercial Joint Stock Company (VCB); Vietcombank card Center which have supported us in the process of working and provided the data creating conditions for us to complete the research Hanoi, February 25th 2011 WRITERS’ GROUP TABLE OF CONTENTS ACKNOWLEDGEMENT Page TABLE OF CONTENTS LIST OF WORDS IN SHORT LIST OF TABLES LIST OF FIGURES PREFACE CHARTER I: THEORETICAL BASE 10 1.1 1.2 1.2.1 1.2.2 1.2.3 1.3 2.1 2.2 2.3 2.3.1 2.3.2 2.4 2.5 2.5.1 2.5.2 2.6 2.6.1 2.6.1.1 2.6.1.2 2.6.1.3 2.6.2 10 10 11 11 12 13 13 13 15 16 16 17 20 22 22 22 23 24 24 24 25 25 25 CONTEN Basic issues about strategy and business strategy Some concepts about strategy Business strategy and strategic choices The definition of business strategy Characteristics of business strategy Types of business strategy The role of business strategy The process of building up strategy Mission and strategic vision The strategic goal Analyzing outside environment Macro analyzing Analysis of micro environment (model of five competitive forces) Analysis of internal environment General Matrix SWOT General theory about SWOT SWOT Matrix Strategic selection Common competitive strategy Strategy as leading in expenses Strategy as difference in products Concentration strategy Model of analysis and selection of strategic alternatives according to weight method CHARTER II: THE REAL SITUATION OF CARD BUSINESS OF JOINT STOCK COMMERCIAL BANK FOR FOREIGN TRADE OF VIETNAM (VIETCOMBANK) General introduction about Vietcombank 1.1 General information about Vietcombank 1.2 Business scope 1.3 History of Establishment and Development 27 27 27 28 28 1.4 1.5 2.1 2.2 2.3 2.4 2.5 3.1 3.2 3.2.1 3.2.1.1 3.2.1.2 3.2.1.3 3.2.2 3.2.2.1 3.2.2.2 3.2.2.3 3.2.3 3.2.4 3.2.4.1 3.2.4.2 3.2.4.3 3.3 4.1 4.2 4.2.1 4.2.2 4.2.2.1 4.2.2.2 4.2.2.3 4.2.2.4 4.2.2.5 4.2.3 4.2.3.1 4.2.3.2 4.3 4.3.1 4.3.2 4.4 4.5 Organizational structure Income Statement of Vietcombank in the period of 2008 – 2010 Business strategy of Vietcombank in the period of 2011 – 2015 Strategic vision Objectives Business strategy Solutions for implementing Plan on implementation of main targets in the period of 2010-2015 Card business of Vietcombank The formation and development Vietcombank card Card business of Vietcombank in the period of 2006 – 2010 Issuance Issuance of international credit cards Issuance of international debit card Issue domestic debit card Payment operations Revenue on credit card payment Revenue on international debit card usage that Vietcombank issued Revenue on domestic debit card usage Network development Conclusion: Assess card business results by 2010 The results achieved by the end of 2010 Restrictions Reasons Competitive business card Card business strategy of Vietcombank period 2010 - 2015 Specific goals by 2015 Analysis of external factors affecting business operation of Vietcombank Analysis of macro environment according PESTLE model Analysis of micro environment (sector environment): 5-competitive force model of Michael E.Porter Potential opponents Opponents in the same sector Customers Suppliers Alternative products Summary of analysis results of external environment Opportunities Challenges Analysis of internal factors in the enterprise Strengths Weaknesses SWOT matrix Select card business strategies of Vietcombank under QSPM Matrix: 28 30 32 32 32 33 34 34 35 35 36 36 36 38 39 40 40 41 43 44 44 44 45 45 47 52 52 52 52 59 59 60 63 63 64 64 64 65 66 67 67 69 73 CHAPTER III: SOLUTIONS AND PROPOSALS FOR ESTABLISHING CARD STRATEGIES OF VIETCOMBANK PERDIOD 2011 – 2015 Some solutions to successfully implement selected strategy 1.1 Complete and rationalize card issuance process 1.2 Improve quality of credit verification 1.3 Intensify investment in technical equipments 1.4 Intensify risk management and prevention 1.5 Boost payment via card 1.6 Implement Marketing strategy 1.7 Human resources management Some proposals to develop card service in VCB 2.1 Proposals to the Government 2.2 Proposals with State Bank of Vietnam (SBV) CONCLUSION REFERENCES 75 75 75 75 75 76 77 78 80 81 81 82 84 85 LIST OF WORDS No Words in short CJSB VIETCOMBANK VSB Vietcombank BIDV Techcombank ACB HSBC, ANZ ATM Explanation Commercial Joint Stock Bank Vietnam Commercial Joint Stock Bank Vietnam State Bank Vietnfam Commercial Joint Stock Bank Bank for investment and development of Vietnam Vietnam Technical Commercial Joint Stock Company A Chau Commercial Joint Stock Company 02 foreign Banks operating in Vietnam’s market Automated Teller Machine or Automatic Teller Machine is a equipment of Bank for automatic transaction with the customers, implementing the EDC identification of the customers through ATM card Electronic data capture Is a high-level type of money counting machine used 10 POS (point of sale) for payment in the shop and used to manage in the ICO retail business and even in service business International Card Organization 11 LIST OF TABLES Table 1.1 Table 1.2 Table 1.3 Table 2.1 Table 2.2 Table 2.3 Table 2.4 Table 2.5 Table 2.6 Table 2.7 Table 2.8 Table 2.9 Table 2.10 Analyzing the macro environment SWOT matrix Choose strategic alternatives according to weight method Table of business results of Vietcombank in 2008 - 2010 Implementation plan of business targets in the period of 2010 – 2015 Activity of issuing international credit cards within years of Vietcombank Table 2.4: MasterCard and Visa Debit issuance of Vietcombank in the period of 2006-2010 Quantity of debit card issued of VCB in the period of 2006-2010 Revenue on credit card payment in the period of 20062010 Revenue on international card usage of VCB during 2006-2010 Revenue on domestic debit card usage of VCB during 2006-2010 GDP growth rate of Vietnam for the period 2005 to 2010 Position of Vietcombank in the market (until 31/12/2010) Page 19 23 25 30 34 36 38 39 40 42 43 54 68 LIST OF FIGURES Page Figure 1.1 Figure 1.2 Figure 1.3 Figure 1.4 Figure 2.1 Figure 2.2 Figure 2.3 Figure 2.4 Figure 2.5 Figure 2.6 Figure 2.7 Figure 2.8 Figure 2.9 Figure 2.10 Figure 2.11 Figure 2.12 Figure 2.13 Figure 2.14 Figure 2.15 Figure 2.16 Term “strategy” Process of developing business strategy The outside environment 5-force model of Michel Porter Model of VIETCOMBANK and subsidiary companies Total assets of Vietcombank in the period of 2008 2010 Pre-tax profit of Vietcombank in the period of 2008 2010 Diagram of credit cards issued by Vietcombank Chart on international debit card issuance of Vietcombank in the period of 2006-2010 Chart on domestic debit card issuance of VCB in the period of 2006-2010 Chart on international card payment of VCB during 2006-2010 Chart on revenue on credit card usage of VCB GDP growth in the period 2005 - 2010 GDP growth and GDP per capita from 1998 to 2007 (1) Exchange rate movement of USD / VND from 2006 to 2010 Market share of domestic card issuance Market share of international cards issued ATM sharemarket POS machine sharemarket Card sharemarket of Vietcombank in years 13 15 17 20 28 31 31 36 38 39 41 42 54 55 56 60 60 62 62 68 PREFACE The urgency of this topic Storing money at home has become dangerous and no longer preferred by people as before, but instead people look to the banks The explosion of the banking system and the introduction of a range of utility services make the demand for using banking services increase Of which card service is an advanced way of payment and a particularly important product for banks and customers For customers-users, cards provide the flexibility, safety, convenience, saving time This has helped to draw customers to use more cards and cards have become a vital part of life For banks, card business plays a very important role in the payment system and brings about large profits in retail operation Vietcombank is the bank which holds the forefront of cards in Vietnam, with a leading position in the cards market during years, Vietcombank has actively diversified products and credit cards services, invested in technology system, expanding network of using cards and implementing marketing programs, etc to enhance competitiveness and promote the development of card However, the boom of the banks makes the competitive pressure increase in the market, requiring VCB to have the right development strategy in order to mobilize resources for maintaining its leading position With the desire to apply the knowledge learned into practice, the group decided to choose topic: “Card business strategy of Bank for Foreign Trade of Vietnam period from 2011 to 2015” Through this subject, we want to systematize the theoretical issues of making and selecting business strategy, analyze the current status of business activities and strategic orientation to develop the Vietcombank card, then choose business strategy and propose solutions and recommendations to improve the competitiveness of Vietcombank card in 2015 Reason for research - Systematization of the theoretical issues of business strategy, selecting the effective analytical models for the establishment of business strategy - Applying the system of practical and theoretical basis to analyze and assess the inside and outside environment, advantages and disadvantages, thereby building business strategy for VCB card - To propose solutions and recommendations for completing the business strategy of VCB card Object and scope of study - Study object is credit card business at VCB Bank - Scope of the Study: Credit card service, status and analysis of the status and proposals of strategy for VCB credit card development Study method Methods of secondary data collection, data were extracted and compiled from statistical yearbooks, reports from the Bank's Website and annual Report of the Bank In addition, this assignment uses some references, books, magazines and other specialized teaching materials Comparative method, synthesis method, the methods involved In the process of analysis, the authors have used the method of comparing and synthesizing the data from the VCB in the past and present, as well as compare indicators and data of business results between VCB and some other commercial banks, and also consulted experts on the evaluation of points when analyzing the matrix Structure Besides the introduction, conclusion, reference materials, the research consists of three chapters: Chapter I: Theoretical base Chapter II: Current situation of the card issued by Bank for Foreign Trade of Vietnam Chapter III: Solutions and recommendations for the development of Vietcombank card business strategy period 2011 – 2015 Hanoi, dated February 25th 2011 WRITER’S GROUP 10 integration international card organization improve marketing operation O5 Legal documents in to issue more new card types O1,4,6 + W4,7 financial, bank field have Work as agent for several Attract, train and educate been completed more and international card organizations development of human resource more O 4,6 +S5,10 to meet development of the bank O6 Information technology Strengthen modern technology Standardize the filing system and has been developed quickly investment to meet more and update information of customer more demand of customer and increase competition capability with other banks O1,2,4,6 + S5,9,4 Open Pos net of payment for domestic card, focusing on uncompetitive payment fields (health, education, bridge, etc) Expanding online payment service Strategy (T) Combine S – T Combine W – T T1 Proportion of S1,3,4 + T3,9 T3,7,8 + W1,2,3,4,6 population using card is Remain the exclusive position in Innovate management work in low card issuance and Amex card order to make the best of T2 Inflation rate is high payment management process to reduce T3 Increase in competition S1,2 + T1,5,8 operation cost pressure in bank field: Continue to develop EMV T2,3,8 + W2,4,5,6 T4 Collection of ATM standard chip card to ensure the Keep more than million transaction fee meets safety and confidentiality of customers who use Connect 24 obstacles card products products of Vietcombank with the sale of more than 100,000 billion T1,7,9 + S1,2,5,6,8 dongs/year This is the noble T5 Criminal in Remain the issuance property source of Vietcombank international credit card sharemarket, using and payment has trend to increase of card T6 Technology link is the T3,9 + S1,2,4 same Focus in units which accept T7 Habit of using card is card with high sale, not dead popular units T8 Loyalty of customer is T1,3,8 + S1,2,4,5,8 weak Develop value added service T9.Power of supplier is 72 great attached with card products in order to improve competition of card products SUMMARY S – T Combination creates  FOCUS STRATEGY Combination between W-O and S-O creates  DEVELOPMENT STRATEGY Combination between S-O and S-T creates  DIFFERENTIATION STRATEGY W-T Combination creates  COST-LEADERSHIP STRATEGY After combining SWOT Matrix, we suggest strategies as follows:  Focus strategy (Strategy 1): Renovate managerial works in order to optimize the management process Use all available resources with the aim of maintaining above million clients who used card products of Vietcombank, holding the share-leading position of revenue on card issuance, revenue on card usage and revenue on card payment Hold the exclusive position for Amex card  Differentiation strategy (Strategy 2): Strengthen to invest in modern technology in order to satisfy higher and higher needs Develop VAS, increase utilities, improve the quality of customer services with products of the bank Continue to develop EMV in order to ensure the safety and enhance the security for card products  Development strategy (Strategy 3) : Diversify products in order to satisfy all clients Expand and strengthen cooperation, act as agents for international card organizations with the aim of issuing more types of new cards Widen POS network Attract, train and cultivate human resources to meet the development demand of the bank Standardize archive system and update customers’ details  Cost-leadership strategy (Strategy 4): Cut down expenses Select strategies according to weight method: 73 QSPM MATRIX MAIN FACTORS Basis of attractive points Replaceable strategies Classify Differentiation strategy Cost-leadership strategy SA TAS SA TAS Internal factors Prestigious on the market Modern technology basis Effective distribution channel system Rich products and services Always take the lead on card share Low Charter capital Low marketing efficiency Lack of human resources Low quality of banking products and services External factors Political – social stability Ceaseless growth and high speed of the economy 3 2 2 4 4 2 2 16 12 12 12 16 4 4 3 3 1 16 9 12 2 Advantage Advantage Advantage Advantage Advantage Disadvantage Disadvantage Disadvantage Disadvantage 4 3 12 12 3 12 12 Globalization and international economic integration Legal documents in the field of finance, banking are more and more perfect Population scale and structure is favorable for banking services development 3 9 Advantage Advantage Advantage 3 9 3 9 IT develop very fast Perform international commitments in the field of banking Competition between banks and financial institutions is more and more severe Cash habit is still popular Total attractive points 3 9 3 6 6 165 147 MAIN FACTORS Advantage Advantage Advantage Disadvantage Disadvantage Disadvantage Replaceable strategies Classify Development strategy Focus strategy SA TAS SA TAS Internal factors Prestigious on the market Modern technology basis Effective distribution channel system Rich products and services Always take the lead on card share Low Charter capital Low marketing efficiency Lack of human resources Low quality of banking products and services External factors Political – social stability Ceaseless growth and high speed of the economy Globalization and international economic integration Legal documents in the field of finance, banking are more and more perfect Population scale and structure is favorable for banking services development 3 2 2 3 3 2 12 9 12 4 4 3 2 2 16 12 9 16 4 4 Advantage Advantage Advantage Advantage Advantage Disadvantage Disadvantage Disadvantage Disadvantage 4 4 16 16 12 4 16 16 12 3 9 Advantage Advantage Advantage Advantage 3 9 IT develop very fast 3 12 Advantage Advantage 74 Perform international commitments in the field of banking Competition between banks and financial institutions is more and more severe Cash habit is still popular Total attractive points 2 4 158 169 Advantage Disadvantage Disadvantage 4.5 Select card business strategies of Vietcombank under QSPM Matrix: Through the above table of QSPM Matrix, we find that the focus strategy (strategy 1) gets 169 points; the differentiation strategy (strategy 2) gets 165 points; the development strategy (strategy 3) gets 158 points; the cost-leadership strategy (strategy 4) gets 147 points Due to human resource limit, the business can’t concurrently pursue many different strategies In the viewpoint of our group, Vietcombank should select the most appropriate strategies in accordance with its condition in order to earn the highest economic efficiency Based on achieved points from QSPM Matrix, our group suggests that Vietcombank should select 03 of 04 mentioned strategies; strategies are arranged under the following order of preference:  Focus strategy (Strategy 1): Renovate managerial works in order to optimize the management process Use all available resources with the aim of maintaining above million clients who used card products of Vietcombank, holding the share-leading position of revenue on card issuance, revenue on card usage and revenue on card payment Hold the exclusive position for Amex card  Differentiation strategy (Strategy 2): Strengthen to invest in modern technology in order to satisfy higher and higher needs Develop VAS, increase utilities, improve the quality of customer services with products of the bank Continue to develop EMV in order to ensure the safety and enhance the security for card products  Development strategy (Strategy 3) : Diversify products in order to satisfy all clients Expand and strengthen cooperation, act as agents for international card organizations with the aim of issuing more types of new cards Widen POS network Attract, train and cultivate human resources to meet the development demand of the bank Standardize archive system and update customers’ details Selecting 03 above strategies creates conditions for VCB to develop towards “Sustainable, safe and effective”, our group thinks that this is the strategy in conformity with the strengths and weaknesses of Vietcombank and in conformity with the trend of 75 the current age CHAPTER III: SOLUTIONS AND PROPOSALS FOR ESTABLISHING CARD STRATEGIES OF VIETCOMBANK PERDIOD 2011 – 2015 Some solutions for successful implementation of selected strategy Through analysis in Chapter 2, selected strategy for card products pursued by VIETCOMBANk from now to 2015 is that “Maintain the leading position in card business in Vietnam both in terms of issuance and payment” and be one of best retail banks in Vietnam by 2015 To this, the Company needs to implement some following specific solutions: 1.1 Complete and rationalize card issuance process To increase quantity of card issued, VCB needs to well carry out some following activities: - More simplify card issuance process and give clearer regulations about self- operation process, forms of banks needs to be adjusted towards simplification to be more convenient for customers but still ensure safety, efficiency in card business operation - VCB needs to quickly post forms of credit card to internet sot han customers can study and fill in the form, they will not have to come to bank’s office to register for card issuance 1.2 Improve quality of credit verification - Improve verification by establishing verification process based on regulated limit frame as a base to identify limit for customer Currently, card verification of VCB is very spare, mainly base on information provided by customers Credit limit is mostly base on subjective factors and feelings of 76 Leaders of Card Division - To increase quantity and issuance and sales through increasing secured credit for customers through development of personal account network and coordination with some enterprises, so those enterprises will pay wage for their staffs into bank account - Intensify credit information as base for decision in issuance and approval of credit limit for customers Establish divisions and general information teams who will be in charge of collecting and providing credit information These are divisions/organizations being equipped with modern machines and equipments 1.3 Intensify investment in technical equipments - Apply modern technology: This is an important perquisite for the bank to continue to implement a series of advanced application such as: • Electronic bank: Being apply in providing card service as it is very convenient for customers, they can sit at their house and carry out transactions such as payment for buying goods, services or pay regularly arising expenses such as electric bill, phone bill, internet via intranet • Expand ATM system • Intensify customer’s information management system • Have technical solutions and privacy to ensure rights for card owners when they make payments via intranet - Invest synchronized equipments, non-continuous to update and innovate modern technology It is needed to respect consistency of technical system, including equipment of testing machines, ATM, POS with selection payment card type which is the electric chip card technology to match with the world’s system - Well equip machines, equipments, it should equip POS machine in stead of bill machine to ensure safety for card accepting points and make customers feel secured - Set up prevention system for credit card service: VCB needs to equip prevention machines (especially for transactions made by customers) to promptly replace when there are incidents As card printing machine is a special machine, it is difficult to overcome its incidents – sometimes it has been out of order for months - Quickly carry out full automation of debt collection and debt management of credit card This will bring benefits for card holders, allow them to make copy payment 77 at all branches of VCB nationwide and payment limit will be recovered after card holders make copy payment Concentrated copy payment also helps to save strength for debt collectors in branches as automatic system will be in charge of a part of accounting entry 1.4 Intensify risk management and prevention - Establish marking system and customer classification: In face of growing competitiveness in the market, expansion of card issuance under the form of secured credit is an indispensable trend which VCB has to apply upcoming time To verify accurately a customer, choose best customers with real demands, it has to establish credit marking system and customer classification for card operation - Guiding information for cardholders to use card safely: Right use of cardholders will ensure successful and safe transaction In fact in Vietnam, most of cardholders in Vietnam are not fully aware of functions and maintenance of card Thus, VCB should print guiding documents as well as give warnings for cardholders during their use Especially direct transaction officers must give adequate information about card to customers - Re-systematize risk management process; identify clearly functions and tasks in the relation of Card Divisions of Branches and Card Centers In fact, in the relation of Card Centers and Card Divisions in Branches, Branches are still very passive Branches are not active in coordinating with Card Center in risk management -> Base on reports, analysis and assessment of branches, Card Center will have overview about risks in card markets in Vietnam, so that it can make correct policies, orientations promptly and efficiently - Continue to carry out issuance of chip card according to standard of EMV of International Card Centers, thus, making contribution to ensure safety and intensify confidentiality for card products issued by VCB 1.5 Boost payment via card - Accept all types of card having trademark of International Card Centers - Expand payment network POS for domestic card, focus on payment areas which have not much competition such as education, health, electric services, water, telecommunications, oil and petrol, road charge collection… 78 - Continue to boost online card payment service via intranet for domestic and international cards - Develop mobile payment service, making contribution to provide for customers a new payment method which is safe and convenient - Develop network of card accepting units Network of card accepting facilities is an indispensable owner in the card payment process; it is direct communicating place with customers and is starting point of card payment operation Thus, when there are more and more card accepting points in many areas and belonging to different business types, benefits of card using become increasing - It is needed to have regulations about award or promotion program to encourage card accepting units to reach great sales - Rationalize card using fee: currently, in terms of service fees for using international credit card in VCB is quite reasonable However, it is also needed to study to give much more reasonable fees to attract customers Apart from annual fee, cardholders also have to pay other fees such as fee for slow payment, cash withdrawing fee, fee for informing card losing, interest rate…These fees will make the card using more expensive compared to consumption in cash Under the motto of “collect less from customers, but they will have much more customers” VCB needs to consider some following issues: + VCB can reduce interest rate of credit card lend to lower level than or equal to interest rate of other lending form + Study to reduce fees such as fee for slow payment, fee for informing card losing…For example: Fees for informing card losing of VCB is 200 000 VND/card, this fee can be reduced to 50 000 VND/card… - Improve quality of services and increase utility for card products VCB pays attention to improvement of quality of services and attach customers to products of bank VCB brings customers with many convenient payment performances: inter-bank transfer, online payment…It is needed to give out new products (prepaid) to expand customer types so that they will see that VCB non-continuously develops its utilities and always targets its customers 1.6 Implement Marketing strategy Identify market and target customers: 79 Marketing of card should focus on target customers who are people living in cities, working in foreign organization, joint venture organization, Vietnam-based representative office of foreign companies or people working in sector having high income such as oil and petrol, post, airline, owners of enterprises…These people have high and stable income, have conditions to travel abroad, go on business in the country and to foreign countries, stay in hotels…In addition, there is also a part of foreign people who are investors, foreign experts having great daily consumption demand An other part which on the increasing trend is pupil and students studying overseas Pupils and students in the country are also potential customers in the future Carry out product policy, study customer’s demand to diversify products and make original and suitable patterns - VCB needs to classify existing customers according to the criteria of average credit deposit Informatics system supporting for making customer groups having same credit deposit (for example 10 million dong, 20 million dong, 50 million dong…) Base on this, VCB studies demands of each group and give them suitable credit card services - With the goal to diversify card product, make good use of different market segment, so as to maximize income and profit for card operation Intensify customer care and keep old customers In parallel with development of new customers, VCB needs to keep old customers as expense for old customers are less than development of new customers Expand distribution channel, outlets of credit card product - VCB needs to intensify product selling channel: through partners, coordinate with enterprises to cross selling their products….Normally, for a customer as an enterprise, VCB will provide lump sum service for the enterprise: give loan, international payment…and offer credit card This has many benefits such as creating close ties with the enterprise, making its products be consistent with enterprise, creating competitive advantage… Implement the expansion and advertisement strategy - Credit card service seems to be new to Vietnamese people Most of consumers and most of suppliers of services and utilities in the country are not familiar with card payment in stead of cash payment Moreover, advertisement of credit card products in mass media are not much, thus VCB needs to use means of communication such as newspaper, radio station and television station, intranet, advertisement panels along 80 streets, advertisement on intranet, leaflet introducing card products, letter offering customers for introduction, organizing workshops to meet people who will be likely to use cards such as workshop on studying aboard, coordinating with tourism companies… to introduce card products Those activities are necessary and VCB should focus on advertisement to customers following typical features of credit cards: + Convenience (‘Buy now, pay later’) + Time of no interest, can be up to 45 days + Safe (‘remove risks of bringing cash along’) + Easy to access (‘No need deposit and mortgage’) + Allow them to buy what they want/need + Modern, convenient when shopping - Base on psychology of customers in which customers want to buy goods at cheap price, VCB can sign contract with some supermarkets, shops so as those shops will accept sale off if customers make payment through credit card of VCB In turn, VCB will have award mechanism for card accepting points base on % of amount in bill paid through cards Card accepting points will be introduced to customers by VCB By doing like this, it not only helps to encourage customers to use card, but also helps card accepting points increase sales as cardholders will receive sale off Of course, this solution is only implemented in short time until card issued by VCB become familiar with customers 1.7 Human resources management Banking sector is one of sector having to face up with fiercer and fiercer challenges and competition All services being provided to customers by the bank will sooner or later be imitated Main factor to attract customers is transaction style of staffs in bank, in which the most important factor is communication skill of each staff in the bank Thus, VCB should have adequate investment in human resources; prepare them all professional skills and code of ethic and good management and controlling skills for young staffs of the banks In addition, VCB needs to well carry out activities relating to officers operating in the card profession Organize competitions for members in the Card division to encourage creativeness and non-continuously strive to gain achievements of the whole division with high self-consciousness and responsibility Giving members 81 activeness in their work, open short term training course to improve skills and profession for them Hire domestic and international experience experts to consult the implementation of big card projects As Marketing is very necessary for operation of the banks in general and card division in particular, so establishment of marketing division specializing in card operation with the task to establish efficient card marketing strategy for the bank VCB must spread the thought “he himself is a marketing staff of the bank” to all of its staffs and officers Some proposals to develop card service in VCB 2.1 Proposals to the Government  Complete legal environment - Card is a new business type, thus there are lots of problems in regulating about it The Government has promulgated Decision No 44/2002/QD-TTg about the allowance of using electric documents to make accounting records This is a firs step, however, in order for Vietnam banks to release modern banking services, provide new utilities for customers, it requires more specific regulations about legality of electric documents, electric signature, forms and methods identifying customers and regulations about online payment - Currently, number of crime tends to increase with more and more complicated violation and beyond of control Thus, the Government needs to continue to accelerate legislation construction, legal documents in the field of economy, supplement of existing legislations, criminal code also needs to soon release clear and transparent punishment frame for card-relating criminals such as making counterfeiting cards, using counterfeiting cards, stealing cards and PIN code… - Coordinate with functional agencies such as Ministry of Public Security, economic polices to promptly detect and prevent and treat card-relating criminals Invest in constructing infrastructure, creating firm foundation for the  development of credit card services - The State should have orientation for the development of national information and technology, carry out guidelines and policies of taking a short cut to make all 82 available resources In the short term, the Government needs to improve communication system as in Vietnam expense for telecommunication is high but the quality of service is low - For the card operation, the State needs to have policies to encourage banks to invest and develop and equip machines for payment and card issuance which the bank has not enough finance capability to meet demands Card technology is a new one in Vietnam, equipments are modern which Vietnam has not enough competence to have, and even accessories of those equipments are all imported Thus, the State should consider reducing import tax of machines and equipments in the card technology of Vietnam and creating favorable conditions for this import - The Government also needs to play as an instructor, investing and creating favorable conditions for banks in Vietnam soon narrow technological gap with banks in the region and in the worlds (such as inconsistency, not making good use of available technology, many existing problems in operation), especially the Government must have adequate investment in traditional infrastructure as the fast or slow peed of transmission will directly affect payment permission, and process of providing personal information of cardholders to card accepting points to ensure safety and confidentiality  The Government should have policies encouraging credit care services in Vietnam Card is a non-cash payment which needs to be encouraged to be applied in Vietnam because of economic and social feature of this service - The State should encourage people to use personal bank accounts This will help banks to control income information of customers so that bank will issue suitable credit cards for them 2.2 Proposals with State Bank of Vietnam (SBV)  Complete legal documents about card services - Currently VCB is strictly managed by SBV but there is no consistent ordinance about card with strict articles and relating documents relating to exchange and credit policies Thus, SBV should soon promulgate complete legal documents for credit card service of banks - SBV continues to consolidate and complete legal corridor for payment via card, especially sanctions used to handle with counterfeiting , defrauding in card transaction in accordance with international practices, card criminals, revealing and 83 stealing information of customers used in card fraudulent  Strategic planning in card operation for commercial bank system - To ensure healthy competition – driving force for socio-economic development, it requires common strategic orientations for the whole commercial bank system To support for commercial banks, the birth of association of banks having card payment in Vietnam has make remarkable contribution for development of card service in Vietnam This association has direct relation with SBV, maintain good relationship with International Card Organization in order to boost the development of card service in Vietnam The association has attracted many commercial banks to the association, then to agree about fees, common policies to ensure revenue for member banks and create healthiness and equality in competition in card market but not staying away from State’s management  Have policy to encourage credit card services - SBV needs to encourage commercial banks to invest in card technology and expand card services by supporting for commercial banks, then create conditions to compete with foreign banks penetrating into Vietnam’s market at the same time set forth strict and clear punishment for violations in card operation regulations - Moreover, SBV should regularly organize courses, workshops to exchange experience in credit card so that commercial banks will have more knowledge and experience to ensure development of credit card service - Make proposal to submit to Government so as to make policies to promote POS payment, and payment of expense via card  Proposals with Vietnam Association of Bank Card Vietnam Association of Bank Card is a profession association directly under Vietnam Bank Association Up to now, it has total 23 members Over the past 12 years of establishment and development, it has made active contribution to the development of bank card service However, with tremendous development of bank card service in current time, it requires this association to have strict regulations and sanctions, making more active contribution to development of card service in Vietnam - Intensify function as linking bridge between members with State’s management agencies: propose with SBV to allow commercial banks to collect ATM transactions in the same banking system to make up for a part of investment expense in card operation and encourage people not to se cash 84 - Expand and increase efficiency of comprehensive cooperation with Bank Card Association in the region and in the world, with International Card Organizations to support for members to intensify training, experience exchange to improve skills, management and business in the field of bank card; propose International Card Organizations to reduce interchange fee for reimbursing banks in Vietnam CONCLUSION Payment card service becomes more and more popular, step by step replace the non-cash payment method In the context of developing economy and international integration, development of card payment is indispensable Commercial banks are aware of that card products and its convenience is not little, together with cards, name and trademark of commercial banks become popular among people and enterprises In face of this, research and development of card development strategy of Vietcombank by 2015 is very necessary Strengthen card business brings card holders and economy with may benefits such as reducing cash circulation expense, stimulating consumption in the country and exporting goods to foreign countries, saving payment time, brining safety and convenient in payment….Card service business will change income structure of banks towards increasing density of service revenue in total revenue, at the same time promote trademark, position and competition of banks during international economic integration From now to 2015, for economy in general and banking sector in particular, there will witness many changes both in terms of quantity and quality Future is promising with many opportunities and challenges This will not allow enterprises to be slow and indifferent in upcoming road and Vietcombank is also not the exception In the trend of development and integration, it requires Vietcombank to have prompt adjustment so that it can stand stably and develop in the rotary of competition Therefore, Vietcombank needs to establish a competent internal strength, a right orientation to integrate in a common environment 85 In limit time, group No has tried our best to finish this topic well However, it is unavoidable to make mistakes and shortcomings Thus, our group wishes to receive constructive ideas, help of lecturers as well as students in our class and in other classes REFERENCES Strategic management course book by Associate Professor – Doctor Le The Gioi, Doctor Nguyen Thanh Liem, Master Tran Huu Hai (2009), Statstics Publisher Lecture slide for subject Strategic management MBS Griggs 2010 Abraham, 1999: “Strategic Alternatives and Choice – The Heart of Strategic Planning” Raymond- Alain Thietart.1999 Strategy of enterprise (translation version) Griffin, 2005: “Competitive Strategy” Strategic draft for socio-economic development period 2011-2020 baodientu.chinhphu.vn dated 16th October 2010 Announcement No 191 - TB/TW of Political Bureau about targets, solutions for development of banking sector by 2010, orientation by 2020 Bank for foreign trade of Vietnam (2009), process of card operation Annual report of VCB, Card center, Card Association of years 10 http://www.vietcombank.com.vn/ 11 Websites of other banks 86 ... 1.General introduction about Vietcombank 1.1 General information about Vietcombank Vietnamese name NGÂN HÀNG THƯƠNG MẠI CỔ PHẦN NGOẠI THƯƠNG VIỆT NAM English name JOINT STOCK COMMERCIAL BANK FOR FOREIGN