Lợi thế cạnh tranh của ngân hàng TMCP đầu tư và phát triển việt nam trên thị trường ngân hàng bán lẻ

Rationale of the study The retail banking market in Vietnam is witnessing the competition of 43 commercial banks including state-owned commercial banks, state-owned joint stock commerci

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

LỢI THẾ CẠNH TRANH CỦA NGÂN HÀNG TMCP ĐẦU TƯ VÀ

PHÁT TRIỂN VIỆT NAM TRÊN THỊ TRƯỜNG NGÂN HÀNG BÁN LẺ

Chuyên ngành: Quản trị kinh doanh

Mã số: 60 34 01 02

TÓM TẮT LUẬN VĂN THẠC SĨ QUẢN TRỊ KINH DOANH

NGƯỜI HƯỚNG DẪN KHOA HỌC: TS.TRẦN HUY PHƯƠNG

HÀ NỘI - 2018

INTRODUCTION

1 Rationale of the study

The retail banking market in Vietnam is witnessing the competition of 43 commercial banks (including state-owned commercial banks, state-owned joint stock commercial banks, private joint stock commercial banks, joint venture banks and wholly foreign-owned banks), more than 40 branches of foreign commercial banks in Vietnam, lots of consumer financial companies and financial technology companies (Fintech) According to the research of consultancy companies, individual and household customers in Vietnam have better financial abilities They are more open-minded, but they are also more demanding in banking services, and their loyalty is decreasing These features make it more difficult to build sustainable competitive advantages and maintain the competitive advantages of retail banking services Michael Porter's (2011) point of view on the retail banking market of Vietnam is that commercial banks in Vietnam are the same in the directions, strategies, products, services, technology, distribution methods and advertising and promotion programs The failure to create outstanding competitive advantages will prevent the banks from reaching a higher competitive position, especially when Vietnam's banking market is deeply integrated into the world’s financial market

Joint Stock Commercial Bank for Investment and Development of Vietnam (BIDV), with more than 60 years of history of establishment and development, has built

up its reputation and a firm position in the market In the development strategy for the period of 2006-2010, BIDV orientated its development towards retail banking market in addition to the traditional wholesale market In the period of 2015-2020, BIDV aims to become the leading retail bank in Vietnam and will become a regional bank in 2030 BIDV has achieved some remarkable results in the activities of providing retail banking services such as having second largest scale and market share in the market (after Agribank)

The retail banking activities of BIDV have changed synchronously from orientations to strategies However, BIDV still has some limitations For example, the service quality is unequal Different values of the bank are not experienced and clearly felt by customers The number of products used by one customer is low (one customer only uses 3 of 12 basic retail banking services) The proportion of loyal customers is not high (about 30% of the customers have transaction time at BIDV from 3-5 years) The increase in sales and market share is not actually sustainable With the fierce competition and rapid changes in customers’ behaviors, if BIDV does not build and exploit its outstanding and sustainable competitive advantages, it is unlikely to maintain its rapid development and gain a leading position in the retail banking market in the future

From the above reality, the author chose the topic "Competitive advantages of

meaningful contributions in terms of both theory and practice to improve the competitive advantages of BIDV

2 Research overview

2.1 Some foreign studies

Porter (1980) proposed an approach in building competitive advantages based on market positioning Enterprises need to rely on their knowledge of business and competitors, and then build their value positioning strategy in the market The author presented a 5-force model and suggested that an enterprise could achieve competitive advantages from positioning itself in a particular industry by pursuing low costs, differentiation or centralized strategies In 1985, Porter introduced the concept of value chains and the conditions for maintaining competitive advantages In order to have a low cost advantage, it is necessary to have a scale advantage, relationship with the parent company, relationship with suppliers, continuous learning, technological process, timeliness and synchronization of strategic actions In order to have a differentiation advantage, there need to be unique resources, cost advantages, differentiation sources and conversion costs of customers

Zhou, Brown and Dev (2009) studied the impact of customer value on competitive advantages and behaviors of service enterprises If enterprises think that customers appreciate the use value, they would follow the customers and competitor orientation If enterprises thought that customers were sensitive to the purchase price, they would follow the competitor orientation The study also emphasized that competitive advantages through differentiation and innovation would lead to better business results Crook, Ketchen and Snow (2008) proposed a model of competitive advantages including the factors such as price, product quality, distribution channels, marketing activities, images, trademarks, and concepts, tools and figures These factors would give the managers an overall picture of what was going on inside and outside the enterprise through industry analysis, nation analysis, analysis of related parties and enterprise analysis

Al-Debi, Mustafa (2014) and Akroush (2011) studied the competitive advantages in Jordan's service sector The research by Al-Debi and Mustafa (2014) showed the role of mixed marketing strategy (7Ps) in building the competitive advantages of service enterprises Moreover, in the study of competitive advantages in the service sector, Akroush (2011) argued that the mixed marketing strategy with 7 factors (7Ps) in the service field could be replaced by the 5P marketing strategy in which three extended factors of service industry could be replaced by the service quality Accordingly, the model of competitive advantages that the authors proposed included the following factors: price, product, promotion, distribution, human resources, facilities and process of providing products and services

Gomes and Romao (2015) argued that competitive advantages were formed not only from fixed capitals but also from intangible assets such as intellectual property, employee

balanced scorecard as a good tool to help enterprises achieve superior business results For example, it helps managers see the impact of investment in learning and development processes (including investment in staff, IT system) to the outputs of enterprises

When studying the competitive advantages of commercial banks in the retail banking market, Backstrom and Johansson (2006) stated that the attitudes of employees, the quality

of services, and the interior decoration of the branch had the most important influence on customers’ experiences at the branch The friendliness of the bank staff, the knowledge and skills of selling services, the pleasant atmosphere and openness at the branch could increase the level of satisfaction, commitment and loyalty of customers

2.2 Some domestic studies

Issues related to competition, competitive capacity and retail banking have been studied by some authors in their doctoral dissertations and master theses However, these researches have only focused on some related aspects such as competitive capabilities of commercial banks, factors leading to the satisfaction of individual customers and effectiveness of banking operations and there have been no systematic studies about competitive advantages There were some related studies as follows:

Nguyen Thu Hien (2012), in the doctoral dissertation entitled "Improving the competitive capabilities of state-owned commercial banks in the process of international economic integration", systematized the theories on competitive capabilities and evaluated the competitive capabilities of state-owned commercial banks in Vietnam based on financial indicators (sales turnover, product market share, number of products, number of customers, profit from business operations) and non-financial indicators (customer satisfaction, reputation of the bank) The subject, scope as well as the approach of the dissertation was completely different from the author's research idea

Nguyen Thi Hoai Thu (2013), in the doctoral dissertation entitled "Models for analyzing competitive capabilities of Vietnamese commercial banks", studied the models for analyzing competitive capabilities of commercial banks, then proposed the model for analyzing competitive capabilities for commercial banks including the following factors: price of services, product system, quality of human resources, facilities of the bank, marketing policy and distribution channels The research focused

on building a system of criteria and standards to rank the competitive capabilities of commercial banks in the current conditions

Do Thi To Quyen (2014), in her doctoral dissertation entitled "Investment to improve the competitive capabilities of Joint Stock Commercial Bank for Foreign Trade

of Vietnam", focused on studying investment activities to improve the competitive capabilities of commercial banks, including investment in upgrading the technology level, investment in brand development and sales promotion, investment in improving human resources and investment in infrastructure

conversion, social responsibility of the banks It was noteworthy that the hypothesis that the price had a positive impact on the customers’ loyalty was not accepted This was a surprising conclusion as it might be a suggestion for building competitive advantages of commercial banks

Pham Thi Tam and Pham Ngoc Thuy (2013), in the research entitled "Factors affecting the trend of choosing banks of individual customers", conducted a survey with

350 individual customers in Da Lat city The results showed that the brand recognition had the strongest impact on trend of choosing banks The next factors included convenient locations, problem resolution, influence of relatives, appearance and attitude towards marketing These results could also be a hint for commercial banks to build their competitive advantages in the retail market

2.3 Research gap

The review of previous studies showed that although there have been many studies related to the thesis topic, there were still some research gaps as follows:

- There was no agreement on the criterion system for assessing competitive advantages

of commercial banks on the retail banking market Most studies on competitive advantages only evaluated competitive advantages of commercial banks in one or more aspects and had not based on a complete theoretical framework

- There was no agreement on which competitive advantages would be the most valuable in the retail banking market of Vietnam, especially in the stage when consumer behaviors were changing rapidly and the competition among financial institutions (banking and non-banking) was increasingly fierce

In summary, of the previous domestic and foreign studies, no studies have directly and systematically focused on the development of competitive advantages of commercial banks

in the retail banking market The published researches were useful references for the author

to form the research ideas and contents The thesis hoped to partly address the mentioned research gaps

- Proposing solutions to build up and strengthen BIDV's competitive advantages

on the retail market at present and in the future

4 Research subject and scope

The subject of the thesis was BIDV’s competitive advantages on the retail banking market

Research scope:

- In terms of time: The research was conducted from 2015 to 2017

- In terms of space: The number of commercial banks being reviewed, compared and analyzed was 5 banks with the largest chartered capital in the Vietnamese market

- In terms of contents: The research focused on analyzing BIDV’s competitive advantages in banking services for individuals and households in the period of 2015-

2017 on the basis of comparing BIDV with other commercial banks in the market

- Data sources used in analysis included data collected from the reports of Vietnam’s commercial banks in the period of 2015-2018, data from surveys, interviews customer and data from secondary sources (the study also referred to the data BIDV hired Nielsen to conduct a survey on customer satisfaction with BIDV in 2015-2017)

- Research conducted primary data collection by issuing a total of 350 survey forms via counters and google driver tools, including 150 questionnaires of BIDV’s customers, and 200 questionnaires of other banks The survey results collected total 280

questionnaires, including132 BIDV clients, 148 from other banks The data collected from these surveys were aggregated and analyzed for the content of BIDV's competitiveness with other banks

6 Organization of the thesis

Apart from the Introduction, Conclusion, List of references, the thesis was divided into 3 chapters:

Chapter 1: Theoretical framework on competitive advantages of commercial banks

in the retail market

Chapter 2: Reality of competitive advantages of BIDV in the retail banking

market

Chapter 3: Solutions to develop competitive advantages of BIDV in the retail

banking market

CHAPTER 1: THEORETICAL FRAMEWORK ON COMPETITIVE

ADVANTAGES OF COMMERCIAL BANKS IN THE RETAIL BANKING

MARKET 1.1 Retail banking market and retail banking services of commercial banks

1.1.1 Concepts, characteristics and role of retail banking market

1.1.1.1 Concepts of retail banking market

Therefore, retail banking market is the market providing small value banking services mainly for individuals and households Buyers in the retail banking market are individuals and households who have demand for banking products and services to meet the needs of life, consumption, small business or to implement other personal plans in accordance with the law Sellers in the retail banking market include commercial banks and non-banking financial institutions Retail banking products are usually small, simple and attached to the life of customers

1.1.1.2 Characteristics of the retail banking market

1.1.1.3 Role of retail banking market in the business operations of commercial banks

1.1.2 List of retail banking products of commercial banks

1.1.2.1 Deposit products

1.1.2.2 Retail credit products

1.1.2.3 Payment products

1.1.2.4 Electronic banking products

1.1.2.5 Other service products

1.2 Competitive advantages of commercial banks in the retail banking market

1.2.1 Viewpoint on competitive advantages of commercial banks in the retail market 1.2.2 Criteria for evaluating competitive advantages of commercial banks in the retail banking market

1.2.2.1 Evaluation through financial results of retail banking activities

1.2.2.2 Evaluation through the number of customers

1.2.3 Benefits of competitive advantages for commercial banks

1.2.4 Competitive advantages of commercial banks in the retail market

1.2.4.1 Competitive advantages thanks to good prices

1.2.4.2 Competitive advantages thanks to differentiation

1.2.5 Factors affecting the competitive advantages of the banks in the retail banking market

1.2.5.1 Internal factors

1.2.5.2 External factors

CONCLUSION OF CHAPTER 1

In chapter 1, the thesis provided detailed explanations of retail banking activities and competitive advantages of commercial banks in the retail market The author systematized and developed the theories on competitive advantages in the retail banking market including the concept of competitive advantages in the retail market, the role of competitive advantages, the contents and criteria for evaluating competitive advantages of commercial banks in the retail market At the same time, the author clarified the factors affecting competitive advantages of commercial banks in the retail banking market The theoretical contents in Chapter 1 were the basis for the author to analyze the reality of competitive advantages in the retail banking market of BIDV in the next chapter

CHAPTER 2: REALITY OF COMPETITIVE ADVANTAGES OF BIDV

2.1 Introduction of the bank

2.1.1 History of foundation and development

2.1.2 Business results of the bank

Table 2.1: Business results of the bank

Unit: billion VND Indicator 2015 2016 2017 Difference 2016/2015 Difference 2017/2016

Amount Proportion Amount Proportion

(Source: Annual report of BIDV in the period of 2015-2017)

2.1.3 Organization model of retail banking of BIDV

2.2 Reality of competitive advantages of the bank

2.2.1 Key elements of competitive advantages of the bank

2.2.1.1 Competitive advantages in prices

2.2.1.2 Competitive advantages in products

2.2.1.3 Competitive advantages in place (distribution channels)

2.2.1.4 Competitive advantages in advertising and promotion

2.2.1.5 Competitive advantage in process

2.2.1.6 Competitive advantages in image of the bank and serving styles of the staff

2.2.2 Results of criteria showing the competitive advantages of the bank

2.2.2.1 Sales of retail banking

Table 2.8: Results of capital mobilization of the bank

Unit: trillion VND

Indicators 2015 2016 2017

Difference 2016/2015

Difference 2017/2016 Absolute

Number

Relative number

Absolute Number

Relative number

(Internal reports on business results of the bank over the years)

Structure of capital mobilized from retail banking

Annual outstanding retail credit

In the operation process, BIDV has strictly followed the directions of the State Bank of Vietnam on credit activities in general and retail credit in particular The bank tightly controlled credit growth in each period, regularly inspected and evaluated the value of assurance assets, reviewed and classified loans and set up risk provisions in accordance with Circular 02/2013/ TT-NHNN dated 21 January 2013 (and amendments and supplements) of the SBV and rated enterprise credit in accordance with regulations Thanks to the strict implementation of credit regulations, the outstanding retail credit of BIDV increased steadily over the years, namely:

Table 2.10: Outstanding credit of the bank

Unit: trillion

Indicators 2015 2016 2017

Difference 2016/2015 Difference

2017/2016 Absolute

Number

Relative number

Absolute Number

Relative number

Outstanding retail credit of other banks:

Table 2.11: Outstanding retail credit of other banks

Unit: trillion, %

Banks

Outstanding loans Proportion

Outstanding loans Proportion

Outstanding loans Proportion