G1_00221 FORMULATION BUSSINES STRATEGY OF VIETNAM INTERNATIONAL JOINT STOCK BANK IN THE PERIOD 2011-2015 XÂY DỰNG CHIẾN LƯỢC KINH DOANH CỦA NGÂN HÀNG CỔ PHẦN QUỐC TẾ VIỆT NAM GIAI ĐOẠN 2011-2015

G1_00221 FORMULATION BUSSINES STRATEGY OF VIETNAM INTERNATIONAL JOINT STOCK BANK IN THE PERIOD 2011-2015 XÂY DỰNG CHIẾN LƯỢC KINH DOANH CỦA NGÂN HÀNG CỔ PHẦN QUỐC TẾ VIỆT NAM GIAI ĐOẠN 2011-2015

Andrews A Univ ersity

CAPSTONE PROJECT REPORT

2 Nguyén Manh Cuong

Global Advanced Master of Business Adnunetuitian

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ACKNOWLEDGEMENT sis unisiidisbbauaednundiagisanpdenaceudabebebieewacedacsemasecegecacbencconsneneosessseacences 6 LIST OR TABLES aianineiieoiobiondiiiadiasgiosssagiSS946444549/4663861/2036G46136620G8X2G4186sG824ùg806 7 LIST OF FIGURES, GRAPHS nan exasursn yEv49003999184/42920960/0/40)81002055 tăh48959600400/8506/56 8 INIRODDUCTIONN ca guuee: Su Qui (0G L0 440002s31sdssssssesesess TS 9

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1 CHAPTER 1: GENERALLY LOGICAL ISSUES ON STRATEGY

MANAGEMENT 0ïáši44xsujsitsg šG SH G0000 016344114666040162666snseseeesesse 12 1É; Theoretical background 6Ÿ strafèy manaØ€ITRL 5-5 5< 5 5< s5 xxx se se 12 tt: EXefiiilfiofis.ðf stfifcøV TìiHHABEHIEHIEscsesssssostsosvagslcis000a0k046006300300041QG01301A.066c2ss 12 h5, IS /ULSUNA0 VN 443 14 1.1.2.1 GIIEPDDORNMW SINH eens nensnscexivacanenceionntancuceasaa une seis NCA a ses conan at as I4 1.1.2 BiSINGGS SH“ (:sccridatpoitibi0i6iig00850835004402S006638630614406034030/0G0002 4 GoguAg: I4 L123, FHRHODBI 9U BC co nong án cá 0 10100 11424sssenossnessexnanzs05esgsa00.49 899244190 c9se.001 60x00 xg 5asree I4 1.2 1; PFBĐGW 0151 NA I6t—yv TDFHBIHHHEẨExeeeeeeeeieoeeoeeeeansiosonrrnaaaaoreneonaeooanrne 16 l2, SCION BOAIY SIS scvissiccecusncssarinvans usseavaninnacetstweeastvaknun 3455 gg55400u56835/60360/0/81564045008u612A14/đ005 16 E2:1:1: Analysis of Extemal EHGIPRGHIERELausgsoe ad de ddoototioytogiieqssdlyiRinsilsyesusae 16 Li2st tal Analysis of General environment (PEST Model) .ccccccscesceseesseseeseeseeseestseesceeees 16 I.2.1.1.2 Analysis of Industry Environment (Five forces Model) ccccccccccecesessescssescssesseseeees 17

1.2.1.1.4 Analysis of Competitive Profile Matrix (CPM) :ccceccecsescesescesceececescseescecesceveseeees 19

| 2.1.2 Analysis of Internal Factor Environimein - -‹- ¿+ c6 S111 vs kg 20 121/21 AndlWsls.&SIG ValGe CHĐÂ:.vá,ccccocoiniiooicdilbigiitcotiaiiididci60g0g06405965s6566i4035515648045.0s84g83358 20

122, Selection and construction of businness Straf€ØV s c Scn vs essrierrreerersee 2Ơ 1:2:2.1 Evaluation of the opportunities of strategy selection through SWOT matrix 24 12.222 strategy Seléction based on the OSPM Matrix isissscsccsaresecrreonmnnioninnainininned 1:3 Strategy deployment and €VaÏALIOII - 3213211211211 31211 11 11211111 re 27 123.1 The determination of Operational structure suitable with strategy -. 27 1232: The construction and deployment of strategy implementation process and regulation28 Lidia: The construction of strategy implementation control sVSte - cc s2 28

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BÙ) E(1owW[ilesorTfMfeeCV@RfOXT SITUATION OF BUSINESS STRATEGIES OF

VIETNAM INTERNATIONAL BANK IN RECENT YEARS 29

Overview Of banKing IRUSETV óc 63:52 2132112321121 5 151 11 1K TH ng 29 Overview or VIB #nd VINH? BuSsiiess CV seas icicsscsnascnccsanesarncvecussvoscwcacenveanonsnenaey: 29 Giếnepall iRifGPii(iffBiHfisooseoiesaaeoaasssitiusecsgtcdirgiG64604054031180683094364X05033AS.0086041006si 29 History on the establishment and developimein ¿5 5c zs xxx 3]

TH TH Hee iideraaeeeearaoraaroaeereaarrrrooroneeooeoeeeaoaaoEi NGIWGrK GE VOI OME tS aiscss sccssussesssvcccscencaucouccciat wawactais ats lanier RAN EAN mae: 34 The current organizational structure Of VIB .c.ccccccccesceseecessescesessearsecevevsetevseeeveees TỔ ERE AEE VI GoseoseseseststtriynavittuiitotrttofiatiEt001A00010100004001083g2anan6) 36 The evaluation on the current business aetivities of VÌH «s5 scccsccs<ceeseee 38 The current business Orientation Of VIB .ccccccccesceseeseseeseeseseeseeseseeseesceevacsecseveveseevens 38 Analysis of the current business activities Of VIB .cccccccccccecescescescsseseescsesevecrseseeees 39 Analysis OF External EAVirOnnign tisisccisessisssnancsanraccaswraesisinaieiiiccnccusntecburaniasvcsesaibictstss 40 Analysis of general environment (PEST +Model) cccceccssescescesceeesceecseecvecseeseeees 40 Analysis of Industry Environment (The Five Forces of Competition Model) 45

Matrix of External Factor Evaliiation (EEE) ssisescsscsssvenssisxasevavscsssssssuavsetarzaceateccetavasiewed 50

Analysis oí Competitive profile matrix (CPM) c.c.c C00000 000020001 006606 660066666666 5] Analysis of Internal Factor EnvironimenI ¿555555 csssseszseeseseeererseere.r 33 PSII ‡ HE aeeaestsentdenninggttntug0i00510310510000000100109103000100010000511)46400/0486601408100109/606130 53 DMáfTHUHdii TM lGEtsoauaesssoiiooaiaiodtciieortiitadtigtttstagtlis:6060054506034060400462,a0s8aaaxoxoau SÃ Human resources managerm€ni[ ÍACEOT: c1 1 21121321111 11 vn re 57 Marketing& Branding, ÍACẲOT ác 1221211212 1111 11 1 1g ngư 60 TEUDHD Of ssaneninaoinoeidrbdaVitG0014705.000k2ảun0iEsiäggidg0c80 25 Q2L384t66064485i44669056605518640006610480 62 Research & Development products and services FactOr -‹ c5 c5 c5 cczscxce<ccszs 62 Service QualÏtV ÍACẨOTF c5 2112112152 11 1 E11 11 1n TH HT nh ng rưy 68

KH TERIDRDEDEBEseeeenereoaospeornrturrotooiorartottirrtinirttatrvttgttntntg0040059001011005660010/000006646 69

2 Evaluation on the feasibility of business strategies of VIB in the period 2011-2015 72

3 CHAPTER 3: THE PROPOSAL OF STRATEGY AND SOLUTIONS TO STRATEGY

DEPLOYMENT FOR VIB IN THE PERIOD 2011-2015 x33211956)20550004đã có The proposal of VIB’s business strategy in the period 201 1-2015 - ««- 73 The orientation of VIB’s business development strategy in the period 201 1-2015 73 Evaluation of the opportunities of strategy selection through SWOT matrix 75 Strategy selection based on the OSPM Mawix sassccsscasccesscuscessncccesavsaiiehiantonsedivensonenasbes 77 Identify business strategy selection ïn the period 201 1-20 1 Š - -¿:csxcsxc-ss2 79

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BDF Conipsdssites ree thggassiotine period 201 1-2(015 -cs52csvcrcevvvreerrrre 80)

Sida 9/0020 000 an 80 S22 Business level strategy 5ã 6M6i090183a 6640365 satis tšš¡90pgi Eu300i/2%0802000/602g51 80) 3:23 FEAWRIC(OIf”@VEI SHHABUWỐ scacdiogc0iáisaogagoikilBousfliakkyysu Elili 6 ionll12ssE z5 sosmssssesveemseene 80 a3 Solutions to the effective implementation of VIB’s business strategies in the period

BOUTEZOLS scsscesessensoses etbiiiskt0ði)96489/0898/t010596066/0x434001ã48615ágk542i3018660336566sgsi896602362.602866689368 81 3.3.1 EẦMRIG SỐIUHOS no uueiiiirioiiccuigiicdtistGi569500006006G0GBGVEGMGES40S0SSGSEGSISISS6x336x8Ax461438x44 8] 3.3.2 Branchs Transformation system follow new sales& service model -cs-s: 83 a3 R08: £1ti8ciingfinENGIHNTEEsesesennnusneinsavetirnroratrtttiouttrtttrctiopicigiy0iiugca6sgnggg00 84 3.3.4 REED BfÐUGG /E/š6YViGè SGNIHBEcoaoadensosaassdsiiblspcidsssissv05908G36ã50101004g1006/860 88 IID Channel SOIUtIONS .cceccesecceseseeseeseseseeseecesteseeaessstessscsecstrsevsrsecscnccsarausavsevseeueevaceacares 90) 3.3.6 II TRE NT Enaaanairenaeaeesenstonuonrrrrrntrroargrtrotnttonps0t0000000100190010/0000150000100 9| Sida HữifãH f6SGU0068 SỐIGGIÍSicosoooeoosboosdiaoaoiottsaitsgblessXckssdcvl3018/080Gã4003 001243000586 92 3.3.8 Risk management SỌULÏOIIS 25c S2 1223522122111 E1 3 E1 1 kg ng ưu 94 3.4 The completion of operational structure to the strategy implementation _.= 9A 3.4.1 Operational structure re-adjustment in correspondence with business strategies 94 3.4.2 The construction of strategy implementation control system - s5 cccsssc: 95

Ni Roadmap of the strategic solution implenienfaafÏOR - s5 se eesse 96 3.6 PRO posal d RECOM MENDALON wissiessissssncsssissiacssecvsrcisssinscossicassssssiessdesvave £6¿yWcis6isãi/44 08 97 3.6.1 Proposals to The Vietnam International Bank( VIB) cccccccecccesesceseeseeseseeseeseeeees 97 3.62, Proposals to The State bank of Viethaim -.: c c ccs S2 x32 151111151 ee 98 3.6.3 Proposals to Govermnientol Viera sisicssesvccssscsncerensassnansnencvcesnoanenvuscevanesasenssaneuasvaxssns 98 CONCLUSION peices 3xk4gg4y26650945.6304340A31660045604050G4G01606i6034/440:G116 1669211300 xd6 99 REPRE Fe ticdaevuiccdcupdkeg 4619656154051 0556651244467134939402984ee443e43sossosesesopeosssnseee severe LOO

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VietnamInternational Commercial Joint stock Bank

No 198B, Thai Ha Street, Dong Da District Ha noi City

To:

Center for Educational Technology and Career

Hanoi National University

Global Advanced Master of business Administration Program

Griggs University

AGREEMENT

Company has create favorable conditions to collect and complete this capstone, but ask to keep confidential all information disclosed to concerning Company business

and will not make public of such information

We will consider such solutions and proposal would useful in actual business

strategies for upcoming years

5 |

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All members of Team 9, Class GaMBA.X0410, in the subject of Strategy

Management would like to say sincere thanks to:

he teachers who spend time and efforts and enthusiastically impart ideas and

instruct is to complete this report

They have imparted us useful knowledge and valuable lessons which help us enrich

a new understanding of the combination between theory and reality This plays an

important role in our completion of this report and our daily dealing with business issues

The Board of Managers of Vietnam International Bank has supported and consulted

us to complete this report

All members of Team 9, Class GAMBA.X0410

Table 2.2 Macroeconomic criteria in the period 2000 -201 1 (part 1) scccccssescsccssscsecssscsacsssscseescassane 39 Table 2.3 Macroeconomic criteria in the period 2000 -201 1 (part 2) sescsccscsscecsssessssesecesesesseeesscneeeee 39 Table 2.4: Some criteria of credit organization system in Vietnam ton 3L 12/2011) sua 49 Table 2.5 External Factor Evaluation maltrix (EF.E) Ytdläi6(6/015561354/0/6595144453443640⁄650i0308088 50 Table 2.6 Comparing financial criteria in the top 10 Vietnamese b@HẨN .eeec<cse<eceeseseeeseses 51 Tahle 3.7” Competitive Profile Afatriy (C PAW) “ 9A994989499900004010009009/0006/019154/0006 S146P0466i/2396060140% 32 Table 2.8 Summary result business VIB qmoHg fÏV€ VCQFS « «e«e.«<e<<e<<c<esesesses 3eb46366ã68031609/0904%4530748 53

Table 3.1 SWOT matrix — NB0900u00100100 1 Table 3.2 OSPM nìQIFÌV « « ««< \460104693/990/168965)40990801/01//61043430036649844000426 =1 77 Table 3.2 VIB roadmap to implement strategy su $6ix446601015924020(061ã6 \ši804000/ã46sie2s66sxi”% „ 9695 Table 3.3 Marketing tIỈX ÍOF S©ÐgM€HIQÏQNH cceceeesseesseseces se sesse se se eesee ee ky se 8887 Table 3.4 Bundle products for each segmentation srsscccccccseeeee — WGS009919//66640404.0600061199460/4055018 8988 Table 3.5 Branchs & Alternative channel soÌHfÏOM .«« ««««««« Gixsi3680v6612585 60545804ã55606)94401166101446% ,9190 Table 3.6 Compensation ĐỌÌCV ««.«««««««ee«ee««essee«« slipitauias š6466i0xÿesotxtxzV@eidtccsdisg Q6 QjG jự£g 9493 Table 3.7 VIB roadmap to implement SIFGÍCĐV.eeee«ee«eeeesseeseesessseeEssseeesseeeesessessse —

Global Advanced Master of Business Admiunuctration

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Pigtive 1:2! PEST MOGI swsssisscissccsscuscswenswesieneivacensiens 4294566 4614494465630366 Á3642666s3ees A9039990999912009400/701006 oh?

Figure 3.1 Vision, Mission and Core Value Statement scecscccrcceseeee tiie bis›iibtiäds@btsyyiskeœdvctixvc@st one

ii 3:2 TNHHOII SE QIÌN TÚ sụgsctotibatioiitgbsdbildbisodeosloliioigÐGjeqG\lijiltiSeaeslbssisesksee 8180 Figure 3.3 Branch Transformation system follow new sales& sorvice modlOl mm -Ö 9483

Figure 3.4 Segmented hy age QHd ÌHCOIHHC ««« «««e«««e««ees \fxiiet9184010i46566445554158443à6463/54886656 6ìx›zy0iáv6 -Ö„ 08S

Figure 3.5 Summary life-siage and apprede Sl¥ Aer y ssiccersessssssssisisusasssauenstesssveeccucacssesbssdessscicasiass SO8S

Figure 3.6 VIB organization F€-SIFHCEHFC.« « «««e đ4cáxsaen ——-——— mm sven are

Figure 3.7 The Priority implement tasks v0.00 sexeaive =5 .,, `

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banking integration and the construction of a transparent banking system to

become the pillar in capital circulation for the capital-demanding economy like Vietnam are significant strategies to gradually move capital structure based on the orientation of the industrialization and modernization

According to this tendency, since becoming one of WTO's official members on

11/01/2007, Vietnam is facing with many new challenges and opportunities The banking industry has witnessed a lot of basic changes when many foreign financial organizations can hold shares of Vietnam commercial banks Especially, the emergence of banks with 100% foreign capital in Vietnam will promisingly cause changes in the percentage of market share

The period 2007-2011 provides the most obvious picture of opportunities and challenges with Vietnam banking system The capital rapidly heated growth and dramatic decline, high inflation, the fluctuation in exchange rate, unemployment and business inequality, the competition among domestic nag foreign banks, the increasing trend of dissolution and mergence, a lack of efficiency in the operation of small banks, large banks under the pressure of the growth in capital, human and infrastructure to ensure their competitiveness in comparison with foreign banks All these factors are putting a great pressure on the local banking system, forcing domestic banks to quickly conduct plans in order to increase their competitiveness to deal with challenges

Before these difficulties and challenges, Vietnamese commercial banks, especially joint stock banks, including Vietnam International Bank need to have

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PDE¿@ipressortidteelXefSlofẰion to enhance their competitiveness in order to

sustain and develop in the new period

fn this common wend, the Vietnam International Bunk is step-by-step making efforts to affirm its position in the top Vietnamese commercial banks and

strengthen its competitiveness in the financial and banking market

from this reality our team has researched and finally decided the project * The

construction of business strategies of Vietnam International Bank in the period 2011-2015” with hope of contributing to the evaluation of the current business strategy deployment in recent years and the construction of the business strategies of Vietnam International Bank in the period 2011-2015

Systemize the generally logical issues on strategy management

Analyze and evaluate the situation of strategy implementation at Vietnam

International Bank in the period 2008-2011 through achievements and obstacles Propose solutions to construct and complete strategies of Vietnam International Bank in the period 2011 — 2015

The project uses quantitative and qualitative methods and comparison and statistical methodology combined with diagrams and tables to present the theoretical and factual contents Then, we draw a conclusion and select business strategies at Vietnam International Bank (VIB)

Analyze and evaluate the current business strategy deployment of Vietnam International Bank

Propose solutions and business strategies for Board of Managers of Vietnam

International Bank (VIB) to have an overview of the current business in order to

make more efficient policies in the period 2011-2015

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CHAPTER 1: GENERALLY LOGICAL ISSUES ON STRATEGY MANAGEMENT CHAPTER 2: THE CURRENT SITUATION OF BUSINESS STRATEGIES OF VIETNAM INTERNATIONAL BANK IN RECENT YEARS

CHAPTER 3: THE PROPOSAL OF STRATEGY AND SOLUTIONS TO

STRATEGY DEPLOYMENT FOR VIB IN THE PERIOD 2011-2015

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|

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Definitions of strategy management

Ihe terminology “Strategy” originates from military art in the past which is

considered as the art of leading vehicles to gain victory There are many viewpoints

of strategy such as:

e Strategy is the art of building up firm competitive advantages to self-protect and

detend (M.Porter)

policies (General Aileret)

Strategy is the art of action combination and control in order to achieve long- term objectives (G.Hirsch)

In another approach, Strategy is one way by which enterprises can answer the question: Where do we want to go? How do we do to get there’? Which recourses

do we have to go and what are obstacles that we need to overcome in the road?

In short, business strategy is the art of the optimal combination of resources, proposals and suitable decisions implementation with the fluctuations in environment to gain victory in the competition in order to reach long-term objectives in business

Roles of business strategy:

Business strategy helps corporate acknowledge obviously the purpose and direction which are considered as a basic compass for all their manufacturing and business activities

Business strategy helps enterprises catch up and seize business opportunities, and at the same time, have active solutions to get over threats and hazards in the competitive market

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e Business strategy contributes to the efficiency enhancement of resource uses and strengthens corporate’ competitive position in order to ensure their sustainable development

e Business strategy creates a basic foundation for policies and decisions of suitable business and manufacturing with fluctuations in the market

The process of strategy management includes three main phases:

e lhe phase of building up and selecting suitable strategies with organizations (strategy formulation)consists of:

- Determining the vision, mission and core values of organizations Setting up objectives and making suitable policies

- Analyzing external and internal environment based on the following models: PEST+, Porter's five forces SWOT, QSPM to set up strategies for enterprises

e The phase of strategy implementation includes the determination of operational structure suitable with strategies and making plans and management process of budget, technology, human

e The phase of evaluation and control (Strategy evaluation) consists of building up the control and evaluation system of strategy implementation and providing necessary changes

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Corporate strategy is the strategy at the corporate level aiming to the objectives aid

overall range of a corporate to meet the expectation of shareholders It contains specific activities that a company implements to gain the competitive advantages by selecting and managing a group of different business activities and competing in some certain industries and markets For example: Strategies of differentiation, ['ocused growth strategy, Integration development strategy, Decline strategy

1.1.2.2

Business strategy is more related to how a corporate can successfully compete in a

certain market Based on available advantages, the corporate will choose strategies such as low cost strategy, differentiation strategy and focusing strategy

1.1.3.3

Function strategy is strategy supporting the efficient implementation of business

and corporate strategies thanks to contributors in the fields of human resources, process and necessary skills This is the strategy which is set up in order to support

the implementation of business and corporate strategies For instance, strategy of

product research and development, marketing strategy and human resource strategy,

etc

lable / L Overview of ven ‘ral business-k vel VIP BIS

group strategies strategies

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2 Integrate below (Enterprise —

Distributor)

3 Horizontally integrate (Enterprise

— Competitor)

1 Concentric Diversification (New products with available technology)

2 Horizontal diversification (new products different from current products)

3 Mixed diversification (New

products, new fields)

Enhance available

products and services

to be suitable with interest

Merge or add more benefits for material suppliers

Merge or add more benefits for distribution and marketing intermediary

Cooperate and compromise with competitors

Invest and develop new products on the basis of current products

Research and develop new technology in the current fields

Orient towards business and new customers

Products innovate and

support current

products Advantages in terms

of technology High-pressure suppliers, potential business and unique requirements of raw materials supply

Inadequate distribution channels, competition

is often fierce, dominant intermediate and high profitability

Stable demand, not serious competition, enterprise with financial strength

Current products start

to be saturated, seasonal and not seriously competitive

New products can overcome “seasonal” and be competitive with advanced technology, suitable marketing and distribution system This market is saturated and many changes to innovate emerge

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1.2 The process of strategy formulation

The process of strategy analysis is a chain of logic activities based on methodology

in order to determine business objectives, find out advantages and disadvantages, accurately evaluate the internal capability and give ways to deploy and control stated objectives

1.2.1 Strategy analysis

Strategy analysis is the process of analyzing influential factors from external environment, evaluating the organizational internal capability to seek new business

Opportunities, control risks in current business activities

1.2.1.1 Analysis of External Environment

Analysis of External environment is the process of analyzing impacts from macro environment through Pest plus Model, then analyzing opportunities and challenges from industry environment through The Five Forces of Competition Model and determining primary competitors of the organizations through CPM matrix, and finally providing comments on opportunities and challenges from external factors through EFE Matrix (External factor Evaluation matrix)

Macro economy including many factors, institutions outside the enterprise has a great impact on the organizational operation They are politics, legal system, social, economic, social/culture, Technology, Demographic, global:

* Age structure * Income distribution + Geographic distribution

Economic Segment + Inflation rates * Personal savings rate

* Interest rates * Business savings rates Demographic - + Trade deficits or surpluses + Gross domestic product

, P + Budget deficits or surpluses

+ Taxation laws * Educational philosophies and policies

* Deregulation philosophies Sacocyltural Segment * Women inthe workforce + Cancems about.the environment,

+ Workforce diversity + Shifts in work and career preferences

% + Attitudes about the quality + Shifts in preferences regarding

* Applications of knowledge supported R&D expenditures

Y * New communication technologies

Global Segment * Important political events * Newly industrialized countries

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Research on macro economy is a very important and indispensable in the process of strategy management Macro environment which is also called competitive environment/industry environment, is the environment directly related to each enterprise Most of operation and competition of the enterprise occur in this environment

Michael E.Porter, a famous professor of business strategy of Harvard Business School, provided the model of 5 Competitive Forces in order to help strategy managers analyze microenvironment and identify opportunities and threats from this environment According to Porter, 5 competitive forces are:

Threat of Substitutes

* Protection against unports of substitutes

Existing Competitors

* Protection limits foreign entry

Ihe matrix of EFE is used to synthesize summarize and evaluate main Opportunities and threats from external environment (such as economy, culture, society, demography politics law technology and industry competition) that have

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PDA fam presson kredvessigherprise It helps Board of Directors evaluate the

adjustment of the enterprise to opportunities and threats, and at the same time

hp

ucknoWledge benelicial factors and difficulties of the enterprise in business

eny jronment

Building up the matrix of EFE requires 5 steps:

Step 1:Make a list of main opportunities and threats that have great influence on the success and business field of the enterprise

Step 2: Sort the significance level from 0.0 (not important) to 1.0 (very

important) for each factor The significance of each factor depends on its

influence on the success of the enterprise in its business field Normally, the significance of opportunities is often higher than that of threats However, some threats are considered to have high significance if they can put serious impacts

on the enterprise Sorting level is determined on the basis of making comparison with competitors or group discussions; the result is based on the agreement among team members The total sorted level fixed for factors is equivalent to 1.0

Step 3: Determine the sorting coefficient from | to 4 for each factor; coefficient

of each factor depends on the response of the enterprise to that factor, in which:

4 — good response, 3 — over average response, 2 — average response, | — weak

response These coefficients are determined by the expert method on the basis of outcome (the efficiency of current strategies) of the enterprise Therefore, sorting the significance at Step 2 is based on the industry while the sorting coefficients at Step 3 is based on the current situation of the enterprise's response

Step 4: Multiply the significance of each factor to its coefficient in order to determine the enterprise’s score of significance

Step 5: Sum all scores of significance of all factors to determine the total score

of significance for the enterprise Whatever the sum of main opportunities and

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PDHit.ampressamkree, Versi@Qimum total score that an enterprise can gain is

only 4.0 and the minimum is 1.0 The average total score of significance is 2.5,

Key External

factors

Opportunities

Weighted score

211.4 Analysis ðO£ComfetMHive Profile Vfatfrix (C P1)

Among influential factors from industry environment, competition is considered as the most important Competitive Profile Matrix helps identify main competitors of a company, both advantages and disadvantages of competitors and its competitive advantages and shortcomings Competitive Profile Matrix is different from External Factor Evaluation Matrix in analyzing and comparing the significance of internal factor of each enterprise such as financial capability, stability, trademark, customers’ loyalty, etc, direct competitors in the same reference system with different proportions

There are 5 steps to make the Competitive Profile Matrix:

the enterprise within the industry

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Important) lor each factor The significance of each factor depends on its miluence on Lic Competitiveness of the enterprise within the industry The total

sorted level fixed for factors is equivalent to 1.0

e Step 3: Sort from 1 to 4 for each factor; type of each factor depends on the response of the enterprise to that factor, in which: 4 — good response 3 — over

average response, 2 — average response, | — weak response

e Step 4: Multiply the significance of each factor to its type in order to determine the score of significance

e Step 5: Sum all scores of significance of all factors to determine the total score

of Competitive Profile Matrix for each compared enterprise

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I Mernal environment analysis requires collecting and processing of invisible and Visible values in terms of operation and analyzing of value chains (infrastructure human resources technology finance research and development, marketing and business situation of enterprises) The process of analyzing internal environment of enterprises is described as the following diagram:

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Internal environment analysis also requires the participation of leaders, manager's

staff and customers through collecting secondary and primary information processing and analyzing in order to identify basic advantages and disadvantages of enterprises

The outcome of internal environment analysis is the determination of resources and

core capability, then building up competitive advantages and strategic competitive strategies of enterprises

Il summarizes briefs and evaluates basic strengths and weaknesses of the

enterprise The matrix show strengths that the enterprise should foster and

weaknesses that should be improved in order to enhance its position and achievement

IF: matrix is an important tool to build up strategies for the enterprise and requires

5 steps to take shape:

- Step 1: Make a list from 10-20 factor, including basic strengths and weaknesses which have a great impact on the development of the enterprise

- Step 2: Sort the significance from 0,9 ( not important) to 1,0 ( very important) for each factor The significance of each factor depends on the level of its influence on the success or failure of the enterprise in its business field Whatever they are strengths and weaknesses, the factor which has the greatest influence on the operation of the enterprise will be sorted to be of the highest

level of significance The sum of all level of significance fixed for all factors must be 1,0

- Step 3: Identify sorting coefficient from | to 4 for each factor, the coefficient for each factor depends on the level of strength and weakness of the enterprise, in which: 4 — very strong; 3 — fairly strong; 2- fairly weak; | — very weak These coefficients are determined by the expert methods, based on the evaluation of

internal environment of the enterprise

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P-DIRGpmpMfe$spK: MreeiM#fisl@fc of each factor with its coefficients to determine the score of significance

Step 5: Sum all scores of significance of all factors to determine the total significance score of the enterprise

The highest total score that an enterprise gains can be only 4,0 and 1,0 for the lowest The average score of significance is 2,5 The total score of significance

of the enterprise staying at 4,0 shows that the enterprise obtains good internal environment, this means current strategies of the enterprise has fostered its

strengths and improve current weaknesses By contrary, the total score being |

shows that the enterprise is weak at strengths and cannot improve weaknesses

from internal environment

ID Key internal factors Weight Rating Weighted score Strengths

strategies which can be replaced through the overall evaluation of competitiveness

of enterprises

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SWOT analysis will create the most effective matrix to serve leaders to make decisions quickly and efficiently This is the technique of analyzing organizational

internal strengths and weaknesses to find out opportunities and threats in business environment In addition, SWOT analysis helps companies evaluate their main

competitors to build up suitable strategies to ensure their effective competitiveness

in the market

Effective methods to conduct SWOT analysis include:

Strengths:

e What can you do better than others?

e What are your strengths in the market?

e Considering this issue needs to base on an internal aspect, and views of customers and others in the market

e Should imagine and compare relatively with competitors

Weaknesses:

e What do you have to improve?

e What do you have to avoid?

e What are things that people often consider as Weaknesses?

e Do others see your Weaknesses but you don’t?

e Are competitors doing better than you?

Opportunities:

e What are the best opportunities?

e Look at strengths to find out opportunities

Threats:

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Are there any weaknesses of the company that influence seriously business

activities?

Strengths Weaknesses SWOT matrix SĨ WI

ST strategy: use a firm’s Threats strengths to avoid or reduce the

impact of external threats

matrix QSPM

This technique objectively shows that all strategies can be replaceable because they

use input data from analyzing the matrices such as EFE, IFE, CPM and SWOT

There are 6 steps to form the QSPM Matrix

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PDI Com pressoexeeppyenwi*les and threats, internal strengths and weaknesses

from EFE and IFE matrix

Step 2: Sort externa! and internal factors contributing to success

Step3: Study the matrices including SWOT to provide a list of replaceable

strategies

Step 4: Identify the score of attraction which illustrates the relativity of each

strategy

Step 5: Calculate the total score of attraction

Step 6: Calculate the sum of scores of attraction, then find out which strategy

has higher score of attraction which has higher attraction

The list of corporate strategies in a descending order as follows:

Function strategy: Strategy of product research and development, marketing

Strategy, human resource Strategy

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The bigger the organizational scale becomes, the more complex relationships are It requires enterprises to have different organizational models to guarantee the efficiency of strategies There are 3 organizational structure models as

follows:

Simple structure: In this structure, the entrepreneur being direct manager takes responsibility for making all important decisions and supervising all activities while staff supports the manager to carry out his supervision This structure is suitable with focusing strategy and business strategy

Functional strategy: The function of Chief Executive Officer (CEO) and Heads

of functional departments in this structure This structure is suitable with both corporate strategy and business strategy

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P)RGlùmlppessomkrdeiWereioim this structure the executive leaders of the

enterprise appoint responsibility hierarchy for Heads of departments in daily work and even in business strategy Functional departments operate as Centers

of profitcost This structure is suitable when the enterprise grows through

diversity strategy

It is necessary to make a roadmap of the deployment of each task in the strategy

to ensure the feasibility of strategy deployment

It requires the combination process between functional departments to conduct strategies

The criteria system for each period of strategy implementation is very important

Regulation of assigning responsibilities to each division and functional department to oblige strategy orientation and process

In common, there are two ways to control an enterprise:

Strategy control: relates to the examination of suitability between what the enterprise should do (opportunities from external environment) and what the enterprise can do (competitive advantages of the enterprise) Strategy control will evaluate to what extent the enterprise focuses on procedure to implement strategy

Financial control: is conducted through the measurement of financial criteria such as: Return on Equity, Return on Assets, etc If these criteria are better than they are expected and tend to grow, the enterprise is implementing strategy well

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STRATE OF MIETNAVEINTERN AVTLO PANKINR i

2.1.1

The banking industry is a special industry which is conducted based on a certain

“goods” called “money” in order to ensure flows of valuable activities in the economy through a complex structure including State banks commercial banks, financial firms, insurance companies, etc, with individuals and other organizations

in the economy

Commercial bank is one kind of financial firms providing a list of the most diversified financial services, especially credit, savings and payment, and doing the

most financial functions in comparison with any organization in the economy

Commercial banks play a key role in generating capital for business and manufacturing activities, contributing to the economic growth and solving social issues Commercial banks are tools that Government uses to regulate macro and microeconomic activities From the macro aspect, this movement will create a

balance between criteria such as economic ones — growth — inflation — employment

From the micro view, the process of movement will generate income for owners (entrepreneurs and individuals) in the form of profit and fee

2.1.2

The Vietnam International Joint Stock Bank (called shortly Vietnam International

Bank — VIB Bank) was founded according to the Decision 22 on the 25/01/1996 of

the Vietnam State Bank Governor

Short name in English : VIB Bank

Website > www.vib.com.vn

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Hanoi city

By 20th October 2011, after 15 years of operation, VIB has become one of the

leading commercial joint stock banks in Vietnam, with total assets of more than VND 100,000 billion The bank’s charter capital is now VND 4.250 billion while its

shareholders* equity is more than VND 8,200 billion Currently, the bank has 4.300

people working at 150 branches and transaction offices in 27 key provinces/ cities across the country During its operation, VIB has won a range of titles and awards from prestigious organizations nationally and internationally, including "Strong Brand of Vietnam", "Bank with The Most Satisfying Retailing Services" and "Bank

with Excellent International Payment", and ranked the 3rd among 500 biggest

private enterprises in Vietnam in terms of revenue as voted by VietnamNet

2010 marked a significant development milestone of VIB by a strategic partnership

with the Commonwealth Bank of Australia (CBA) - the Number One retail bank in

Australia and the world’s leading bank with over 100 years of experience CBA has

officially become a strategic shareholder of VIB with an initial stake proportion of 15% After one year of being an official strategic shareholder, on 20th October 2011

CBA made an additional investment of 1,150 billion dong in VIB, increasing its stake to 20% from 15% in order to further strengthen the capital base and capital adequacy ratio (CAR), and expand business opportunities and operation scale for VIB This strategic partnership facilitates VIB*’s improvement in capital, technology, and risk management in order to successfully implement the long- term plans in the bank’s business strategy and especially to improve the customer service quality in line with international standards

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PRL onepresko*pkyneerY ¢hsi@@rming business activities VIB always takes its

customers as the focus and its service quality and innovative solutions as the

ousiness motlo, with the determination to “become the mosi innovative aid

customer-centric bank in Vietnam" Since its foundation, one of the missions defined by the bank’s leaders is to be “excellent in providing innovative solutions to

satisfy customers” maximum needs” Therefore, VIB has been enhancing its efficiency in the use of capital and management capacity and continuing to focus on

the development of retail banking networks and new products through diversifying distribution channels in order to provide financial solution packages to focused customer groups, and simultaneously improving the service quality to increasingly betler serve customers

The founders and shareholders of Vietnam International Bank include individuals and businessmen achieving a lot of success in Vietnam and in the world, VietcomBank and Agribank Until 20/10/2011, the strategic shareholder, Commonwealth Bank Australia (CBA), in the top 10 global banks, has owned 20%

of the VIB total shares

On 18/9/1996:

International Joint Stock Commercial Bank of Vietnam, abbreviated as Vietnam International Bank (VIB) started its operation with initial capital of VND 50 billion and 23 staff The first head office was based at No 5 Le Thanh Tong, Hanoi

In 2006:

* Successfully implemented the Banking Technology Modernization Project

* The charter capital was increased to more than VND 1,000 billion

* Became an official member of the International Organization for Visa and

MasterCard cards

¢ Established VIB Card Centre and independently issue the local debit card VIB

Values

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Vietnam

VIB's AIM system was officially put into cperation

In 2007

The charter capital was increased to VND 2.000 billion

Signed Cooperation Agreements with leading Groups and Corporations such as Petro Vietnam, Insurance Joint Stock Corporation, Petro Vietnam Finance Corporation, ete

The number of agents reached 82

Ranked 3 out of 500 leading private enterprises in Vietnam

Opened the new head office at Viet Tower, 198B Tay Son, Hanoi

Launched the online banking services VIB 4U

Issued VIB Chip MasterCard

Established the Banking Technology Division with enormous efforts to turn VIB into the bank with the most modern technology in the market

In 2009

Signed the Cooperation Agreement with Commonwealth Bank of Australia

(CBA)

Officially launched the new brand re-positioning project

Increased the charter capital to VND 3,000 billion

Implemented the business strategy (2009 - 2013), with an aim to become the

most customer-centric bank in Vietnam.

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P4)HitQjdeajanesaoyahipee W@j8QM for the new business strategy: Retail Banking Space, Human Resource Management System and Performance, Technology Strategy Project, Branch System [Transformation Progran

In 2010

Commonwealth Bank of Australia (CBA) - Australia's leading bank has

officially become a strategic shareholder of VIB with an initial share proportion

of 15%

lis charter capital was increased to VND 4,000 billion

Continued implementing projects to serve VIB’s critical business strategy (2009

- 2013)

The number of branches and transaction offices reached over 130 in 27

provinces and cities nationwide

December: VIB gets top Trade Service award Total assets top VND90,000

management, lending and treasury

Corporate: VIB offers corporate services including: credit, export-import financing, guarantee services, domestic and international payment foreign currency trading, etc

consumption credit, payment, financial proof confirmation, card, foreign currency trading, and remittance

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Until 11/2011, in addition to Headquarter in Hanoi, VIB has over 150 business units

at 27 provinces aiid cities in the whole country such as Hanoi, Ho Chi Miuh City, Hai Phong Quang Ninh, Hai Duong, Vinh Phuc, Phu Tho, Thai Nguyen Thai Binh,

Ha Tay Thanh Hoa, Nghe An, Hue, Da Nang, Quang Ngai, Binh Dinh, Khanh Hoa,

Dac Lae, Dong nai, Binh Duong, Vung Tau, Can Tho, An Giang Kien Giang, Tay

Ninh

Network of branches/ transaction offices

| Head Office (HO)

| Main Transaction Office

150 branches, transaction offices and savings funds

In 27 provinces/ cities nationwide

In the North:

Hanoi: Ho, Main transaction office, and 33 branches and transaction offices Hai phong: 2 branches and 4 transaction offices

Hai Duong: | branch, | transaction office and 1 savings fund

Thai Binh: 1| transaction office

Quang ninh: 2 branches and 6 transaction offices

Thai nguyen: | branch and | transaction office

Vinh phuc: | branch and | savings fund

Phu tho: | transaction office

Thanh Hoa: | branch and 2 transaction offices

In the Central:

10 Nghe An: | branch, 2 transaction offices and | savings fund

11 Hue: | branch and 2 transaction offices

12 Da Nang: 2 branches

13 Quang ngai: | branch and | transaction office

14 Binh Dinh: | branch

15 Daklak: | branch and | transaction office

16 Khanh Hoa: | branch and | transaction office

17 Lam Dong: | transaction office

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PAF OPERAS OF HET VRESERMAnsaction office

21 Tayninh: | transaction office

22 Ho Chi Minh City: 1] branches and 29 transaction offices

23 An Giang: | branch

24 Kien Giang: | branch

25 Can tho: | branch and | transaction office

26 Dong Thap: | transaction office

27 Ca Mau: | transaction office

The current organizational structure of VIB obliges Law of Credit Organizations, Enterprise Law and Organizational and Operational Vietnam International Bank According to the factual situation, Vietnam International Bank established its

organizational structure based on the matrix model of business divisions, business units and departments, as follows:

« Business points: Head quarter, Main branches, Local branches and

Transaction Offices

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<I — |Pppmwms ma da | li ] L | General | Development

1 Center eee | + “vn Market Marketing | F Sales +4Cred@ policies) + | Rocruimedwd - ‘brand

: Finance Anelyss

LÍ —== ai Product ` | Product | Foresgn H Guaranteed || wqqeý | and

| {Technology w ` | Ly 6m LÌM | [ Assets |" : + Mees Comenurscaton

Figure 2.1: Current Organization chart

2.1.3 [he business performance of VIB

Performance in 2010 demonstrates positive and impressive results — with basic performance _ indicators achieved or exceeded against targets set by the Board of Director Total assets stand at approximately VND94,.000 billion, an increase of 65.9% compared to 2009; outstanding loans stood at above VND43,000_ billion, up57.6% against 2009; mobilized funds topped VND 61,000 billion, a 78.3% increase in comparison to 2009 Pretax profit for the year was VND1,051 billion,

up 72% over 2009 and 11.2% higher than the target set by the Board of Director

In 2010 also marked substantial progress in implementing Business Strategies that lay the foundation for VIB’s accelerated growth phase in 2011-2013 This is evidenced by the positive achievements of — projects including: Structural transformation: branch — transformation — roll-out) (BIR); and performance

36 |

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as new sales and service models, refurbished offices, better products and services,

well-outlined procedures, improved interaction with customers, performance- oriented and customer-centric culture have generated substantial changes in VIB’s services and business activities With rapid acceptance by the public and customers, and strong, positive feedback, VIB’s image and reputation in the market has been markedly elevated All these elements contribute to setting up VIB as an innovative and customer-centric brandheading towards international standards, and

as a bank of public choice

2010 also witnessed a momentous event for VIB On01/09/2010, Commonwealth Bank of Australia (CBA) officiallybecame VIB’s foreign strategic shareholder

with an

Initial stake of 15% this strategic shareholding partnership enhances VIB’s ability

to raise capital, acquire and apply technology, manage risk, implement —long- term projects under the bank’s Business Strategies and _ especially, effect improvements in customer service quality towards reaching international

standards

Key operational directions in 2011

In 2011, the Vietnamese economy is expected to confront different challenges and difficulties While further engagement with the global economy by the banking sector In particular and the financial service sector in general generates increasingly fierce competition, a bank with consistent strategies, best services and a customer- centric approach will outperform the competition

VIB has set a challenging goal in 2011 of earning pre-tax profits of VND 2,024 billion (up 91.5% against 2010) We are certain this can be attained with sound

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consensus amony Customers, partners and shareholders Key orientations for 2011 wwards achieving the targeted goals and affirming VIB sstatus ia the current competitive market have been identified as follows

to Enhanced satety in the bank’s operations

ai Reinforced business performance

4 Becoming an “employer of choice”

2.2: Ì

Vision: VIB becomes one of the leading joint stock banks in the market, providing multi-financial services for target customers at the main economic areas of Vietnam”

Mission:

Sustainably develop with emerging small and medium enterprises

Being creative and diversifying products and services for individuals with stable income and flexible and safe business

Comprehensive banking financial services

Cooperating and becoming strategic partners with financial institutions

Core values (5 values)

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PODS 2 IVE Pile criteria in the period 2000 “(111

xvhiunge

Mar - 2011

2

Eitiuait 5.80% 90 19.0% 21,006 12/00% 13.50% 3.50%

Table 2.3Macroeconomic criteria in the period 2000 -2011(part 2)

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percentage of individuals and enterprises, etc make conditions for current

banks to seize chances to foster business and keep market share

Threats:

- In the process of WTO participation, the Government should remove old mechanism to allow world financial corporations to participate and put more pressure on domestic banks in the financial market

- Uncompleted legal system with overlapping regulations causes obstacles to business activities of banks In addition, the implementation of law and regulations has not been taken into account yet

- Subsidization policy still back up and protect domestic banks

- Macroeconomic policies are always adjusted suddenly, creating difficulties to banks in the construction and implementation of long-term strategies and plans specifically

Social and economic conditions

Opportunities: