Building the business strategy for bao minh phu tho during 2021 2025

ABBREVIATION ADB : Asian Development Bank ASEAN : Association of Southeast Asian Nations BH : Insurance BM : Bao Minh Joint Stock Corporation BMPT : Bao Minh Phu Tho Company DN : Enterpr

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

-

TRIỆU GIANG NAM

BUILDING THE BUSINESS STRATEGY FOR BAO

MINH PHU THO DURING 2021-2025

XÂY DỰNG CHIẾN LƯỢC KINH DOANH CHO CÔNG

TY BẢO MINH PHÚ THỌ GIAI ĐOẠN 2021-2025

LUẬN VĂN THẠC SĨ QUẢN TRỊ KINH DOANH

HÀ NỘI - 2021

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

-

TRIỆU GIANG NAM

BUILDING THE BUSINESS STRATEGY FOR BAO

MINH PHU THO DURING 2021-2025

XÂY DỰNG CHIẾN LƯỢC KINH DOANH CHO CÔNG

TY BẢO MINH PHÚ THỌ GIAI ĐOẠN 2021-2025

Chuyên ngành: Quản trị kinh doanh

Mã số: 8340101.01

LUẬN VĂN THẠC SĨ QUẢN TRỊ KINH DOANH

NGƯỜI HƯỚNG DẪN KHOA HỌC: PGS.TS.HOÀNG ĐÌNH PHI

HÀ NỘI - 2021

DECLARATION

I now undertake that it is my thesis work throughout the research and learning process

The data and results stated in the thesis (including evidence, diagrams, tables, pictures, and other documents) are truthful and have not been published in other works

If it does not comply with the above, I take full responsibility to the Thesis Appraisal Council, the Faculty of Management, and Business - Hanoi National University for my topic

ACKNOWLEDGEMENT

I would like to express my deep gratitude to the teachers and staff at the Faculty of Administration and Business - Hanoi National University to teach and create favorable conditions for me to take a master's class in Business Administration

I would like to thank my supervisors for their whole guidance and suggestions throughout the thesis making process Mostly my supervisor Associate Professor, Dr Hoang Dinh Phi was patient, motivated, inspired, passionate, with a vast source of knowledge, continuously supporting me throughout the process of studying and researching the thesis

Finally, I would like to thank the leader board and colleagues of Bao Minh Phu Tho Insurance Company for helping and facilitating me in collecting data to do this thesis

ABBREVIATION

ADB : Asian Development Bank

ASEAN : Association of Southeast Asian Nations

BH : Insurance

BM : Bao Minh Joint Stock Corporation

BMPT : Bao Minh Phu Tho Company

DN : Enterprise

DVBHHD : Modern Insurance Service

EFE : External factor evaluation

EVFTA : EU-Vietnam Free Trade Agreement

GDP : Gross domestic product

IFE : Internal factor evaluation

IMF : International Monetary Fund

PJICO : Petrolimex Joint Stock Insurance Company

PTI : Post and Telecommunication Joint Stock Insurance Corporation PVI : PetroVietnam Insurance

SMEs : Small and medium business

SOEs : State enterprises

SWOT : Strengths, Weaknesses, Opportunities, and Threats

TTP : Trans-Pacific Partnership

WTO : World Trade Organization

TABLE OF CONTENT

DECLARATION i

ACKNOWLEDGEMENT ii

ABBREVIATION iii

LIST OF TABLES vi

LIST OF FIGURES vii

INTRODUCTION vi

1 Rationale 1

2 Aims of the Research 2

3 Survey and research methods 3

3.1 Data collection methods 3

3.2 Objectives of the survey 4

3.3 Data synthesis method 6

4 Object and scope of research 8

CHAPTER I: BASIC THEORY OF BUILDING STRATEGY 11

1.1 Business strategy 11

1.1.1 The concept of business strategy 11

1.1.2 Characteristics of business strategy: 12

1.1.3 The role of business strategy 12

1.2 The role and objectives of the strategy management: 13

1.2.1 The role of business strategy management 13

1.2.2 The system of strategic objectives 14

1.2.3 Principles when defining goals 14

1.3 Classification of business strategy 14

1.3.1 General business strategies 14

1.3.2 Segment (functional) business strategies 19

1.4 Main tools for building a business strategy 22

1.4.1 External Factor Matrix (EFE) 22

1.4.2 Internal Factor Matrix (IFE) 22

1.4.3 SWOT Matrix 24

1.5 Building and Selecting Business Strategies 25

1.5.1 Quantitative Strategic Planning Matrix (QSPM) 25

1.5.2 Organization and implementation 27

1.5.3 Evaluate the setup strategy performance 27

2.1 Overview of the Vietnam Insurance market 28

2.1.1 Overview of economic development in Phu Tho province 28

2.1.2 Development trend of Vietnam Insurance market and Phu Tho province 30

2.2 An overview of Bao Minh Phu Tho Company 39

2.2.1 Brief Introduction of Bao Minh Phu Tho Company 39

2.2.2 The current business performance of Bao Minh Phu Tho Company 44

2.3 Analysis of factors affecting business strategy of Bao Minh Phu Tho 55

2.3.1 Macro environment analysis 55

2.3.2 Micro environmental analysis (insurance industry) 60

2.4 Synthesize results of environmental analysis and building SWOT matrix formation 66

2.4.1 Analyzing big competitors and generalizing competitors’ matrix 66

2.4.2 Generalizing the competitors’ matrix 70

2.5 Assess the impact of factors external and internal factors that impact on BMPT 71

2.5.1 Assessment of external factors (EFE) of the Company 71

2.5.2 Evaluation of internal factors (IFE) of Bao Minh Phu Tho 72

CHAPTER III: BUILDING BUSINESS STRATEGIES FOR BAO MINH PHU THO COMPANY 75

3.1 Strategic objectives of Bao Minh Phu Tho in the period 2021 - 2025 75

3.1.1 General objective 75

3.1.2 Development Strategy 76

3.1.3 Business philosophy 76

3.2 Building general business strategies 77

3.2.1 Centralized stability strategy 77

3.2.2 Integrated Development Strategy 79

3.3 Building functional Business Strategies 80

3.3.1 Selecting and building a strategy for Bao Minh Phu Tho until 2025 applying the SWOT matrix model 80

3.3.2 Basic solutions to building the business strategy of Bao Minh Phu Tho to 2025 84

CONCLUSION AND RECOMANDATIONS 95

CONCLUSION 95

RECOMANDATIONS 96

REFERENCES 102

APPENDIX 1: SURVEY BOARD 104

APPENDIX 2: RESULTS OF DATA PROCESSING 106

LIST OF TABLES

Table 1 1 External factor matrix 22

Table 1 2 Internal Factor Matrix 24

Table 1 3 SWOT Matrix Table 24

Table 2 1 Human resource situation of Bao Minh Phu Tho 45

Table 2 2 Current status of agent system development in Bao Minh Phu Tho 50

Table 2 3 Some fundamental financial indicators of Bao Minh Phu Tho 52

Table 2 4 Some indicators of insurance premium revenue of Bao Minh Phu Tho 54

Table 2 5 Some indicators on the cost of insurance claims of Bao Minh Phu Tho 55

Table 2 6 Portfolio of Non-life Insurance Market in Vietnam 2018 57

Table 2 7 Some key business indicators of Phu Tho province's insurance companies in 201964 Table 2 8 Competitive image matrix of Bao Minh Phu Tho 70

Table 2 9 Matrix of evaluating external factors of Bao Minh Phu Tho 72

Table 2 10 Matrix of evaluating internal factors of Bao Minh Phu Tho 73

Table 2 11 SWOT analysis table of Bao Minh Phu Tho Company 81

LIST OF FIGURES

Figure 2 1 Total life insurance premium revenue in Vietnam 2016-2019 33

Figure 2 2 The proportion of premium revenue by operation of insurance in 2019 34

Figure 2 3 Market share of Vietnam non-life insurance 34

Figure 2 4 The proportion of premium revenue by operation of insurance in 2019 36

Figure 2 5 Market share by premium revenue in 2019 36

Figure 2 9 Organizational structure model of Bao Minh Phu Tho 41

Figure 2 10 Revenue from primary insurance premium is generated by the operation group of BMPT 2016-2019 44

Figure 2 11 Total premium revenue 2018 - 2019 56

Figure 2 12 The proportion by operation of Vietnam Non-Life Insurance market 2018 56 Figure 2 13 Market share of the non-life insurance market in Phu Tho province 2016 - 2019 63

INTRODUCTION

1 Rationale

Before 1993, the Insurance market of Vietnam had only one state-owned insurance enterprise (DN), Bao Viet There were 61 insurance companies on the market, including Bao Minh Joint Stock Corporation (Bao Minh) On November 28th, 1994, Bao Minh was the first insurance company established by Decree No 100/1993 / ND-CP dated December 18th,

1993 At the beginning of forming Insurance market of Vietnam with the functions and scope

of business: non-life insurance; Non-life reinsurance; Financial investment, and other activities as prescribed by law

After 25 years of development, and have been growing up Bao Minh has become Bao Minh Joint Stock Corporation including 62 subsidiaries, including Bao Minh Phu Tho Company with 550 Transaction Offices, spread out across the country Gradually demonstrating on the role of a shield against risks, help organizations and individuals to quickly stability production, doing business, and life, as a long-term choice and creating jobs for thousands of workers

In the first months of 2020, the COVID-19 as a disaster, it shakeups all aspects of socio-economic life In Vietnam Report gave comments on the Insurance industry - the growth situation and changes to adapt in the context of "new normal." Accordingly, the insurance market last year continued to maintain high and stable growth, contributing to the common goal of building a healthy national financial system, ensuring financial security and stability macro-economic regulation

As Like as many other economic sectors, according to a survey of the Vietnam Report assessing the impact of COVID-19 on insurance enterprises, it showed that the epidemic caused insurance companies' leaders to review and re-evaluate the model Their distribution

through three aspects: Customers, sales force, and support (such as investing in data and

digital tools), helps insurers prepare for unpredictable risks

More than half of insurance companies report that decisions related to risk management, human resource management, service management, and customer support, customer outreach, and digital transformation change step by step with the disease's outbreak

Insurance companies wish to do business successfully and create brand names in the

building is the process of defining goals, business philosophies, formulating strategies, and plans to allow businesses to change, Improving, and affirm their position in the marketplace

Bao Minh Phu Tho Company is also not an exception To ensure a sustainable development, building the business strategy must be paid more attention recently issue today From all of above problems, the author decides to choose the master's thesis topic

" Building the business strategy for Bao Minh Phu Tho Company during 2021-2025.‖

With the desire to base the current situation to give directions, strategic solutions to solve difficulties promote the construction, completion, and implementation of its business strategy more effectively

2 Aims of the Research

Building the business and develop strategy of Bao Minh Phu Tho Company to 2025 to ensure doing business efficiently and have a sustainable development Identify objectives, assessment of the factors that affecting current status of Bao Minh Phu Tho Company's in business strategies in recent years

Propose solutions for building the business strategy for Bao Minh Phu Tho Company

to 2025 Systematize the fundamental theoretical issues of position, role, functions, and strategy and business strategy development tasks to apply in practice to build Bao Minh Phu Tho's business strategy

Clarifying the status of the business strategy building of Bao Minh Phu Tho Company over the past time Constructing concepts and views on completing Bao Minh Phu Tho Company's business strategy and setting out criteria to evaluate Bao Minh Phu Tho's current status of business strategies from economic perspectives, society The thesis proposes a system of views, orientations, and solutions for building Bao Minh Phu Tho Company's business strategy to 2025

3 Survey and research methods

Introduction to the research scheme

Research diagram of the business strategy of BMPT

Based on the knowledge of Strategic Management subject, primarily through the Delta Project model, Strategy map, SWOT analysis model, and other supporting services, I conduct a survey and analyze the current economic strategy status business of Bao Minh Phu Tho proposing a development strategy to 2025

3.1 Data collection methods

Data sources for evaluation research are collected from two sources:

(i) secondary data collected from reports, research results, and official published data of agencies and organizations

(ii) primary data was collected through direct surveys using questionnaires

Collect secondary data

Secondary data were determined through annual statistical and analytical methods of BMPT These data are collected from the functional departments of BMPT, such as the Finance Department, the Prevention plan; The Organization Department includesBMPT's audited annual financial statements (source: Accounting Department)

Insurance industry growth forecast (source: Planning Department).Human resource plan BMPT (source of supply: Department of Organization and Personnel).Collecting and calculating from published data of central statistical agencies, research institutes, universities, journals, specialized newspapers and published scientific reports, domestic and international

Commenting, evaluating current strategy and proposing BMPT's strategy through Delta Project model, Strategy map and SWOT analysis model

Solutions to building BMPT's business strategy to

2025

assessment of the insurance industry's performance and issues related to Bao service development dangerous

Collect primary data

Due to the limited time, the author only focuses on collecting primary data through that method of interviewing and surveying customers:The interview will specialize in four criteria: Finance; Customer; Internal; Training, and development Interview time at the end of the meeting, interview time: 15-20 minutes.Collected directly from customers through surveys and surveys by questionnaires, periodic business performance reports of the unit

Sample investigation

The survey was conducted in Phu Tho province, including 200 samples:Business customers:

50 samples Individual customers as employees, students, business people: 150 samples.The selected samples are large enough, ensuring the representativeness for customers, for each region, and both representative and broad for the whole province of Phu Tho Because the number of individual customers coming to banking transactions is greater than that of corporate customers, the sample of individual customers will account for more (150 samples) than the sample of business customers (50 samples )

3.2 Objectives of the survey

The survey aims to evaluate the development of modern insurance services of BMPT in the insurance market of Phu Tho province, and at the same time assess the satisfaction level and the factors that influence and dominate current insurance services BMPT Since then, research and find solutions to develop modern insurance services of BMPT

Methods of implementation

Sample selection: Apply random sampling, select regions according to the following table:

Total 200 50 150 100

TP Viet Tri 80 20 60 40

TX Phu-Tho 70 20 50 35

Lam Thao district 50 10 40 25

The number of samples surveyed at research sitesViet Tri City, Phu Tho Town, Lam Thao District is the 3 locations selected for investigation because they are 3 locations with BMPT

transaction space, densely populated areas living in the city The town has large universities, industrial parks, and factories contiguous and guaranteed to represent other Phu Tho provinces

+ Individual customers: Individuals are selected for the survey by stratified random sampling according to the following criteria:

(i) Gender;

(ii) Age;

(iii) Educational attainment The quantity and structure ratio are as follows:(Investigation

of 150 individual samples)

Content Sex Age Education level

Male Female < 22 22-30 30-55 > 55 PT TC Graduate After

graduate Samples 75 75 15 25 78 32 17 67 51 15 Ratio (%) 50 50 10 17 52 21 11 45 34 10 The number of individual samples surveyed according to the criteria+ Corporate customers: Enterprises are selected for investigation according to (i) Type of activity: Private enterprise (private enterprise, joint-stock company (JSC), state-owned enterprise (SOE); (ii) The quantity and structure ratio are as follows:

(Survey of 50 enterprise samples)

Content Type of enterprise Operation time

Private JSC SOE <3 year 3-5 year 5-10 year >10 year Sample

number

27 18 5 13 15 9 13 Ratio (%) 54 36 10 26 30 18 26

Number of enterprises surveyed according to the criteria

- Contents of the questionnaire:

The questionnaire contains primary information such as (i) General information with the contents of Gender, age, education (for individuals) and business sector, type of business, time of operation (for business); (ii) A survey with questions to identify Insurance services in

information is represented by specific questions for the person to understand and answer correctly and completely

3.3 Data synthesis method

We will analyze and select the necessary factors to synthesize into valid data with a scientific basis from the collected data Include:

Statistical classification method to systematize and synthesize documents according to criteria suitable for research purposes

Processing and calculating data, research indicators were conducted on computers using Excel software and related application software

Graphical method: Using modeling information from numbers to graphs Using graphs from data tables provides users with information to access and analyze information on the topic more easily

Descriptive statistics method

A method of studying socio-economic phenomena describes the volatility and the development trend of socio-economic phenomena through collected data This method is used

to calculate and evaluate the research results from the questionnaires

SWOT analysis method

SWOT is an abbreviation set of the first letters of the English words: Strengths, Weaknesses, Opportunities and Threats - a famous model in the classification of area.SWOT analysis is the analysis of strengths, weaknesses, opportunities, challenges for an organization or an individual It is a tool in strategy building, comparing and evaluating options, for organizations or individuals

Using SWOT analysis model to assess SME development's current situation, analyze strengths, weaknesses, opportunities, and challenges, thereby proposing solutions to Improving and develop services at BMPT

Theory of SWOT model:

Strengths: BMPT's advantageous factors can enhance insurance services.Weaknesses: BMPT's weaknesses in management capacity, capital, technology, network, human resources affect the Insurance service that BMPT can overcome

Opportunities: Advantages brought by the external environment for BMPT

Challenges: Constraints for BMPT's service development

Comparative method

Adopt the mean, the frequency, the maximum, and the minimum Comparative statistical methods include comparing absolute numbers and comparing relative numbers to evaluate phenomena' developmental dynamics, things over time and space After calculating the data,

we compare the customers' assessment of current insurance services among the insurance companies in the area, thereby assessing the current state of quality modern insurance services

of BMPT

Methods of experts, monographs

Use relevant documents, consult experts in the evaluation analysis process to find out scientific and accurate conclusions

Support tools

The author will rely on many models for analysis, such as:

PEST model is used to analyze the macro environment;

Michael Porter's five-force competitive model to analyze the insurance industry's environment;

Analyze the internal and external environment of BMPT using SWOT analysis model to exploit strengths, seize opportunities to overcome challenges, and overcome weaknesses to Improving competitiveness, from which to propose the options to building the strategy

Research indicator system

Proposing a system of specific indicators to analyze and evaluate the strategy and the status of the strategy implementation, thereby specifying the strategic issues that need to be built for BMPT: The system of criteria to evaluate the results and scale of production and business activities, market share of service provision over the years

- Market share of local name service providers: this indicator shows the market share of local services over the years (%)

System of agents, branches of the unit in the area over the years.Economic growth rate, the socio-cultural situation of the locality.Per capita income

Competitors in the area; this indicator is to analyze and evaluate direct and indirect competitors in the area

System of indicators to evaluate the efficiency of human resource useNumber of officers and employees over the years

Labor productivity

The efficiency of labor use according to revenue/profit

Effective use of labor according to salary and income fund

Labor efficiency by salary/output and revenue fund

Investment in science, technology, recruitment, staff training .Financial indicators, assets, business results for the years 2016-2019Indicators of assets, capital sources, revenues, costs, revenue and expenditure differences: Financial and asset indicators: this indicator shows data

on assets, capital sources in the units over the years; the Unit of calculation is million dongs Business performance results: this indicator shows the unit's unit results over the years (annual income and expenditure difference)

The formula and calculation unit are as follows:

Business results (million VND) '= Total revenue - Total cost2.5 Limitations and difficulties

in implementing research methods

Analysis and evaluation of the business development strategy of BMPT are mainly based on secondary documents Also, because of the short time of the study, it was not possible to investigate, collect documents and information from all research subjects; Therefore, it is difficult to analyze the current development quality of BMPT comprehensively

4 Object and scope of research

4.1 Object of research:

-Systematize the strategy management issues

-Conduct macro, micro and local environment analysis to recognize the opportunities and challenges as well as strength and weakness, directly affecting Bao Minh Phu Tho’s development and competitiveness

- Setup the strategic objectives for Bao Minh Phu Tho Company from now to 2021 with vision to 2025 and propose the solutions to fulfill such objectives

4.2 Scope of the research:

- About the research content: The thesis focuses on research: analyzing the factors affecting the current status of Bao Minh Phu Tho Company's business strategy

- About the research object: the process of building business strategy of Bao Minh Phu Tho Company

- Regarding the research period: Data is used for the analysis of the situation 2016-2019

4.3 Research methodology

The research is based on the dialectical materialistic methodology to research the production and business process of the Company Besides, the methods: statistics, analysis, modeling, forecasting are also used to analyze and evaluate and make strategic development directions in the Company

Clarify the requirements of the topic, the author focuses on solving problems to answer three big questions:

How Bao Minh Phu Tho's business strategies built? What are the bases for building business strategies of Bao Minh Phu Tho?

Bao Minh Phu Tho's business strategies are optimal and appropriate in the context of the current period to 2025?

What solutions does BMPT need to build its business strategies?

5 Thesis structure

In addition to the opening chapter, conclusion, references, structural thesis into three chapters:

Chapter I: Basic theory of building strategy

Chapter II: Analysing and selecting business strategies for Bao Minh Phu Tho Company in

Chapter III: Building business strategies for Bao Minh Phu Tho Company

CHAPTER I: BASIC THEORY OF BUILDING STRATEGY

1.1 Business strategy

1.1.1 The concept of business strategy

The term strategy is derived from military art There are also many concepts in the military about strategy "Strategy is an art of fighting only in a dominant position," said Clausewitz "Strategy is the art of commanding means to victory" in an old publication of Larousse's dictionary In the military field, the term strategy has been seen as an art of commanding to win a war Napoleon said, "The art of war is a simple art, but all must be obeyed." That shows that in the military is extremely necessary, an indispensable condition for victory

Nowadays, the term strategy is used quite popularly in socio-economic life, both on the macro and micro scale There are quite a few different approaches to this concept

"Business strategy is the art of creating a competitive advantage," said Michael Porter, a Harvard University professor Thus, business strategy is one way to compete among businesses; it is a measure for businesses to achieve their set goals by building competitive advantages or building construction—strengths, opportunities, risks, challenges, and appropriate solutions to win business

According to the advisory group of consulting firm Boston Consulting Group (BCG) stated: ―Business strategy is the allocation of available resources to change the balance of enterprises' available resources and change competitive position on my side.‖ That is the enterprise from analyzing its resources, analyzing the business divisions, and then allocating the most optimal resources, from which goals, measures to achieve the goals with efficiency highest strength to compete

Alain Charles Martinet, the author of the book "Strategy," who received the grand prize of Harvard Expansion in 1983, thought: "Strategy is the art that businesses use to fight competitors and win." So the strategy is to outline steady and long-term trajectories of progress around that trajectory that could be about to reach the business's correct decisions and actions

Thus, through the above concept of strategy, we can consider: "Strategy is the business direction to achieve the business's set goals." Business strategy is seen as a principle,

a principle in business Therefore, if businesses want to be successful in business, the

1.1.2 Characteristics of business strategy:

Although there are many different conceptions and approaches to the strategic category, its essential characteristics are relatively unified The basic features are:

+ Business strategy is oriented for a long time; it sets out business goals and directions for each specific product industry and clearly defines the necessary tasks, solutions, and steps to achieve the set goals

+ Business strategy is very flexible and diversity Because the business strategy is built base

on forecasting the future market, the market is always volatile For the right strategy to help businesses achieve their set goals, the strategy must be flexible in the term of market changes + Business strategy is built for a long time (5 or 10 years), so the business strategy is the roadmap, for a long-term strategy, it will often be concretized by those shorter-term strategies—also known as a plan

+ Business strategy is a continuous process from construction to implementation, inspection, and supervision

+ Business strategy always brings the idea of moving forward to win the competitors Business strategies are formulated and implemented based on discovering and taking advantage of business opportunities and corporate comparative advantages to achieve high business efficiency

+ All strategic decisions in building, implementing, evaluating, and adjusting the strategy are focused on the group of senior administrators to ensure the accuracy of long-term decisions and information confidentiality in competitors Thus, from the above concepts and features,

we can simply understand: ―Business strategy is a process of defining overall business development goals and using a combination of factors, technical factors, economic and business organization to win the competitors and achieve set goals.‖

1.1.3 The role of business strategy

- Business strategy helps businesses identify their purpose and direction in each period, is a guideline for all business activities It helps business be more proactive instead of passive in the future

- The business strategy is given out to make every member of the business understand what to

do and commit to it That can create support and promote employees' available capacities in the business, clarifying each individual's responsibilities

- Business strategy helps businesses exploit their competitive advantages in the marketplace

to create a competitive advantage, thereby helping business members positively change from the environment outside

- Business strategy to help businesses effectively use tangible and intangible assets For example, in a business strategy set out for a business, there must be corporate uniforms, logos, cultural activities, arts, sports that will create the strength of the Company and that it is the intangible properties of the business

- Business strategy is the basis for choosing a business plan, investment plan, technology innovation, and market expansion Thus, if enterprises want to survive in the market, they must have an appropriate business strategy to adapt frequent changes in the market if they want to win in the fierce competitors

It once again affirms: Business strategy is the driving wheel for businesses to successfully sail, the wind blowing the kites to fly high forever Business strategy in the right direction is

an indispensable factor for enterprises' existence in the market mechanism

1.2 The role and objectives of the strategy management:

1.2.1 The role of business strategy management

In today violation business environment, which often creates unexpected opportunities and risks The strategic management process helps us identify future opportunities and risks; clearly define the direction, overcome the marketplace's challenges, and reach the future with our efforts Recognizing the desired results and future goals helps the manager and employees understand what needs to be done to achieve success It will encourage both groups to achieve short-term achievements to better Improving the business's long-term welfare

The strategic management process helps businesses connect the proposed plan and the external environment The greater the fluctuation, the more proactive the enterprise must try Businesses must build their strategic management system adaptive and change with market fluctuations to survive and develop Therefore, strategic management moves towards the future, not accepting the market, but changing the business environment

Thanks to applying the strategic management process that has brought the company more success, businesses will associate their decisions with relevant environmental conditions

by predicting the market's movement trend The achievements are the figures of sales, profits,

ability to prevent organizationally, minimize risks In short, strategic management is a product

of modern management science based on a practical basis, summarizing many companies' experiences However, each business's success depends on the capacity of implementation, implementation, and control of the internal system and is seen as the art of business administration

1.2.2 The system of strategic objectives

+ Strategic goal: To indicate a specific goal that the enterprise wants to achieve, which is inferred directly from the mission function but more precisely and clearly, quantified into numbers: growth, profitability, sales, market share… There are usually two types of goals: short term and long term

+ Long-term goal: is the complete desired result that the enterprise wants to achieve in a period longer than a year, with specific contents: profitability, productivity, competitive position, job development, community relations, Technology position, social responsibility + Short-term goal: is the specific results expected by the enterprise in a cycle, quantified into

a number

1.2.3 Principles when defining goals

Be clear in each stage of business development; There are interconnections and mutual support; one goal does not obstruct another; Priority targets must be identified, showing the hierarchy of objectives and tasks set for the business in each stage

1.3 Classification of business strategy

Business strategies can be divided into two categories: general strategy and division strategy General strategies are execution strategies at the enterprise level, aiming to build an enterprise's competitive advantage based on satisfying its top leader Segment strategy is a strategy implemented at the enterprise's functional departments to achieve the general strategy's objectives

1.3.1 General business strategies

1.3.1.1 Centralized growth strategy

a Market penetration strategy

Is seeking growth in the current market with products currently in production can be done in the following directions: Product Purchasing Power Increase: denotes the relationship

between the frequency of purchases and the volume of purchases purchased per turn To increase purchasing power can convince customers to use the product more often or use each time with more quantity Entice competitors' customers: by marketing strategy with policies

on products, prices, places of consumption and promotions, after-sales services

Acquisitions, mergers of competitors: If other opportunities to increase market share are not attractive, the firm may consider buying out or seeking to merge with one of its direct competitors Increase the overall market size by making those who have not previously been consuming the products they operate (the relative non-consumer market) to seek those products with marketing measures., stimulus measures

b Market development strategy

Finding new markets to consume the products that the company is producing is very important in order to expand the ability to consume goods and products: Finding markets in new markets, including finding new distributors, expanding sales force or opening new sales networks, or peer integration with a firm that needs another target market Finding new target markets: searching for entirely new target groups of customers within the existing market Also, developing new consumption channels or using new advertising means Find new uses for the product: the product has many uses that the firm can exploit Each new use of the product could create a whole new market, in which case the market strategy induces the product's new life cycle

c Product development strategy

Product development strategies include developing new types of products for consumption in existing markets or to existing customers This strategy can be aimed at individual products or entire business items Separate product development:

+ Improving product features by improving, adding or rearranging features, the content of old products

+ Improving quality to increases product reliability, speed, durability, taste or other features + Improving designs, designs, sizes: Improving aesthetic appearance by changing colors, packaging design, product texture

Development of commodity structure:

The main option is to add new items or Improving existing products that are currently in

+ Stretching upwards: To add products to serve the upper part of the market, offering more sophisticated products

+ Two-way stretch: when the business occupies the middle position of the market, it is possible to stretch in two directions by offering new products that serve both the upper and lower parts of the market

+ Filling the commodity structure: increasing the number of product categories in the current structure

+ Modernizing the structure of items: when the length of the item structure is still acceptable,

it is necessary to have adjustments to renovate the design or introduce new technology applications

+ Stretching upwards: To add products to serve the upper part of the market, offering more sophisticated products

1.3.1.2 Integration growth strategy

The integrated growth strategy is consistent with the goals and long-term strategies that businesses are implementing, allowing them to consolidate and fully promote enterprises' production and business capabilities To implement Its strategy, businesses can associate, enter into joint ventures with input factor suppliers, or undertake their products and services to create an active position for production and business activities The joint venture or association will create strength and create a new business direction for products and services The integrated growth strategy includes:

a Reverse vertical integration

Reverse vertical integration is that businesses seek growth by taking power or enhancing control over inputs (materials, equipment, capital, human resources) to be fully active in quantity, quality and time for production and business

b Forward integration link

It is the strategy of holding power or increasing control over its products' output through the distribution system When consumers pressure businesses, consumption is slow To solve this problem, businesses must link up to ensure the particular consumption of their product

When implementing this strategic plan, businesses can set up stores to introduce and sell products; or associate with consumer establishments

c Horizontal integration link

It is a strategy to seek ownership and control over competitors in the production and supply of products and services Naturally, each product can have many enterprises producing and supplying on the same market, leading to competitors among enterprises in product consumption, difficulties in production, and products' consumption Products To overcome this situation, businesses must implement a horizontal integration strategy by acquiring weak competitors; link, compromise with several strong competitors to dominate the market control, dominate the remaining competitors

1.3.1.3 Diversification Strategy

It is a strategy to produce and trade many types of products and services in different markets

to increase revenue, increase profits, and increase production and business activities to ensure its competitive position

a Concentric Diversification

This strategy aims to produce new products related to existing products, create new products, save materials and equipment, taking advantage of labor resources, create new markets, and Improving production and business efficiency The key to concentric diversification is to take advantage of enterprises' advantages, such as equipment, human resources, and product marketing experience

b Horizontal diversification

This plan will put into production and provide new technology products and services that are not related to the products and services currently being produced This strategy's formation is when the company's products and services reach the point of saturation, reducing revenue and profit, forcing businesses to launch new products and services to create a new market segment and increase the current market size

c Diversify the mixture type

This plan is put into production to provide new products and services that are not related to each other It means to focus on new markets for new products and services that are technologically unrelated to the products and services that the enterprise is currently producing

When implementing the mixed diversification strategy, enterprises must have sufficient

diversification strategy requires a large investment, reducing immediate profits, so it is necessary to have an accurate forecast or be passive in production and business

1.3.1.4 Joint venture and affiliate strategy

This strategy is joint venture enterprises, linked to exploiting a unique production and business opportunity

The cause of the joint venture strategy is derived from the division of labor and specialization Therefore, an enterprise cannot produce a complete and qualified service product but must depend on each other

In addition, the development of the market economy makes the rules of operation more and more powerful and the competition is more, so businesses have to link together to solve some problems out in business The association also facilitates the international division of labor, solving problems posed on world, national and regional markets That is also consistent with the law of accumulation and concentration of capital to expand production and business

1.3.1.5 Decline strategy

When the industry no longer has a chance for long-term growth, when the economy is unstable, or businesses find other opportunities more attractive than current production and business, it is necessary to have a suitable decline strategy

a Cost-cutting strategy

It is a temporary measure aimed at reducing ineffective costs Usually reducing costs on operations and increasing labor productivity Specific measures depending on the actual situation often include reducing hiring, leaving employees

b Return on investment strategy

It occurs when the business sells or closes one of its facilities to fundamentally change its operations' content This strategy is applied to unprofitable institutions that match the firm's supply strategy The return on investment leads to the reallocation of resources to focus on potential parts or create new business opportunities

c Dissolution strategy

It is the last strategy to minimize losses when businesses are no longer able to compete in the marketplace; this strategy is done when applying all the other decline strategies that do not save the business

1.3.1.6 Mixed Strategy

Many strategies are mixed with increasing production and business activities The formation

of this strategy is due to production and business activities in the market economy Businesses often cannot have stable and long-term strategies Each strategy has advantages and disadvantages, precisely because it forces businesses to implement a mixed strategy Businesses that implement a mixed strategy will be more dynamic, better business opportunities, and less risky

1.3.2 Segment (functional) business strategies

1.3.2.1 Product manufacturing strategy

a Product service strategy

The product service strategy offers products to satisfy the market's needs and customers' tastes

in each period The product service strategy is the backbone of the business strategy The higher the level of production and business, the more market competitors becomes, the more critical the role of product strategy becomes Without a product strategy, there is no pricing strategy, distribution strategy, communication and expansion strategy If the product strategy

is wrong, it will lead to the failure of a bunch of other marketing activities

The product strategy ensures the production to provide the right products, closely linked between the extended reproduction process stages to achieve the overall goals Types

of product service strategies are as follows:

+ Strategy to set up categories: To continue Ensuring to keep a dominant position in the market by protecting the reputation that the business has achieved About technical and customer trust

+ Type restriction strategy: simplifies the category structure, focusing on developing a few selected promising products

+ Type change strategy: This strategy is to continue changing the mode to satisfy requirements to increase customers' numbers The change can be done by changing the shape, size, color… of the product to increase the attractiveness to customers

+ Product Improving strategy: is the strategy of improving the quality parameters of products and services Products and services are built according to the customer's wishes and accepted

Defining the wrong market means identifying the wrong people to serve all production; consumption organizations will become meaningless because such goods and services cannot

be sold It also means that the business will not be able to grow and develop

A market strategy aims to study and determine the market's requirements on mechanical, physical and chemical characteristics, utility, brand, and quantity of products and services, researching the most convenient distribution method to exploit its maximum capacity

c Price strategy

The pricing strategy is to set prices for each product or service for each market and period to consume many products most efficiently It is an essential factor affecting the consumption of products or services because the price is one of the crucial criteria that customers consider before deciding to use a product or service Price is an essential competitive factor in the market mechanism The price strategy has a direct effect on the revenue and profit of the business Establish the right pricing strategy to help businesses maintain, expand the market, compete successfully, and ensure production and business efficiency The pricing strategy includes the following:

+ Price stabilization strategy is the strategy to maintain the current price, applied in the condition that the selling price has met the goal of maximizing profit, maximizing revenue + Price increase strategy: is the strategy to bring prices higher than the current prices, applied when the company's products and services are popular, customers have admired the quality and design products and services being provided When applying this strategy, pay attention

to customers and competitors; otherwise, it will fail

+ Discount strategy: is a strategy to lower the current prices This strategy applies when there are signs of demand reduction or there appear to be risks from competitors; it is also possible

to apply This strategy in the decline period in the cycle

+ Differential price strategy: uses different selling prices for different customers, based on the volume of purchase, the time of purchase, to serve specific needs The purpose of the differentiated price strategy is to fully exploit the elasticity of demand over prices to increase consumption volume, increase market share, and increase business profits

1.3.2.2 Financial and human resource strategy and organizational structure

Including the orientations on the scale and the source of capital formation for investment, on mobilizing and efficiently using existing capital sources to implement the set objectives The financial strategy includes the following contents: Select capital mobilization channel, choose capital mobilization method, revenue target, profit target

To determine the size, structure and quality requirements of labor corresponding to the identified production and business strategy The quality of human resources has a significant influence on the production and business activities of enterprises If the human resource is weak, untrained, it is limited to transferring new technologies and techniques and limiting productivity, quality and production efficiency

Human resources' organization plays a vital role; it depends on the senior leadership team's awareness and management level, deciding how to implement business strategies The joint is the most effective way Managers need to be fostered, improving their knowledge of business management in the market mechanism, improving business management capacity to ensure sustainable development

1.3.2.3 Marketing Strategy

The Marketing function of an organization plays an essential role in the pursuit of a sustainable competitive advantage Marketing is defined as a process of assessing and responding to the needs and wants of individuals or groups of people by creating, delivering and exchanging products of value The two most important factors in marketing are the customer and the competitor The Marketing strategy of an organization is aimed at effectively managing these two groups Key Marketing strategies include segmented or target markets, differentiation, positioning, and coordinated marketing strategy decisions

1.4 Main tools for building a business strategy

1.4.1 External Factor Matrix (EFE)

External Factor Matrix (EFE) refers to a matrix to evaluate the external factors affecting the Company’s operation How to develop matrix: Tabulate all external factors which may affect the company, evaluate the influence or significance of each factor by marking the weights, provided that total weight of all factors is equal to 1

Evaluate the Company’s responsiveness against the factors by classifying the factors from (1) to (4), in which (4) is the best response of the Company and (1) is the lowest response Next is to score the significance of each factor by multiplying with the corresponding classification marks, and then sum it to find out total significance mark of the Company Total highest critical score is (4) and the lowest one is (1), the mean is 2.4 score

In the event that total critical score is (4), it unveiled that the Company successfully grasps the opportunities and controls the external threats In case the total score is (1), it shown that the Company fails to grasp the opportunities and control the external threats

External factors (list) Significance Classification Critical score

Table 1 1 External factor matrix

1.4.2 Internal Factor Matrix (IFE)

IFE aims to evaluate the internal factors, affecting the Company activities, including its strengths and weakness How to develop matrix: Tabulate all external factors which may affect the company, evaluate the influence or significance of each factor by marking the weights Evaluate the Company’s responsiveness against the factors by classifying the factors from 1 to 4, in which 4 is the best response of the Company and 1 is the lowest response Next

is to score the significance of each factor by multiplying with the corresponding classification

marks, and then sum it to find out total significance mark of the Company Total highest critical score is 4 and the lowest one is 1, the mean is 2.4 score.

Internal factors (list) Significance Classification Critical score

Table 1 3 SWOT Matrix Table

S-O strategy: Seize the most feasible opportunities with the Company’s strengths,

market-based business orientations (Attack)

W-O strategy: Overcome weaknesses to seize opportunities (Competitors)

S-T strategy: Specify how the company may make use of its advantages to minimize adverse

impacts of external challenges (Caution)

W-T strategy: Setup a defensive plan to prevent the Company’s weaknesses out of the

challenges from external environment (Defense)

1.5 Building and Selecting Business Strategies

-Cost governing strategy: Refers total actions to provide the specific products or services

with the lowest cost in the industry accepted by customers This means that the company knows how to make use of all possibilities to provide products or services with lower costs than that of the competitors Since then, the remarkable advantages are obtained against its competitors That tool attracts the customer to domain a higher market share This strategy makes the company take advantages as lower price but with the same profit, event higher and the company shall have more reliable position in the cut-throat competitors of the competitors, including potential competitors without significant impact of negotiation capacity of supplier, customer capacity as well as substitutes This is caused by the company’s possession of high technology, preferences in receiving the input materials, good production capacity, suitable policies, etc

-Differentiation strategy: It refers to the Company’s looking for opportunities to become the

only unique product or service supplier in the industry under the perspective of the buyer in any aspects This strategy selects one or some product attributes that are evaluated to be important, then self-positions to be only supplier to satisfy such demand

-Centralization strategy: It is designed by selecting the industry’s narrow competitors scope

By optimizing the strategy towards the target segments, the units with concentrated strategy focus on looking for and obtain the competitive advantages even in the target segments Generally, no advantages are held by them

1.5.1 Quantitative Strategic Planning Matrix (QSPM)

Strategy may be selected by using Quantitative Strategic Planning Matrix (QSPM) This matrix is a high-level strategic management approach for evaluating possible strategies in accordance with the pre-determined internal and external critical success factors

Table QSPM Matrix

(AS- Attractive score, TAS- Total attractive score)

QSPM Matrix is setup by 6 steps, concretely:

Step 1: List the external opportunities are listed and threats and internal strengths in the left column Such information is derived from EFE and IFE matrix

Step 2: Classify each internal and external critical success factor Such classification is similar

in EFE and IFE matrix

Step 3: Study the matrices and identify the replaceable strategies that could be considered to launch Record such strategies in the first row of QSPM Matrix Collect such strategies into separate groups if nay

Step 4: Identify the attractive score that is figure value, demonstrating the relative

attractiveness of each strategy in the group of replaceable strategies

Step 5: Sum attractive scores by multiplying classification score (step 2) with attractive score (step 4) in each row The higher total attractive score is, the more attractive the strategy shall

be (only considering the critical success factors next to it)

Step 6: Sum attractive scores in the strategy column of QSPM Matrix Sum total attractive scores to demonstrate which strategy is the most attractive in each possible strategy group Then, refer to the matrix to select the strategy with the highest attractive scores

1.5.2 Organization and implementation

When the business strategy is designed, strategy organization and implementation are initiated

by reviewing the strategic objectives and basis of the strategy, setting up annual objectives, developing the implementation plan and policy, figuring out the proper programs, budgets and procedures, allocating human resources (HR, finance and physical and technical facilities), selecting and perfecting the organizational structure in accordance with the strategy, establishing the Steering Committee and management rules, undertaking to launch the strategy, gradually launching each strategy steps and finally checking, controlling, coordinating and working during its strategy performance

1.5.3 Evaluate the setup strategy performance

-Check conformity of the business strategy before official launch As mentioned above, the company’s success is decided by the business strategy

-Evaluate the company’s operating performance in each phase of business strategy to find out the defects and errors of the strategy, then timely modify and supplement

-Procedure on checking and evaluating the strategy efficiency includes: determine the checking and evaluation contents, set out the benchmarks and criteria for testing and evaluation, quantify the implementation results, compare and evaluate the strategy results, find out the root causes to release the corrective measures

CHAPTER II: ANALYSING AND SELECTING BUSINESS STRATEGIES FOR BAO

MINH PHU THO COMPANY IN THE PERIOD 2021-2025

2.1 Overview of the Vietnam Insurance market

2.1.1 Overview of economic development in Phu Tho province

In the coming time, the society and economy of Phu Tho province is forecasted to develop rapidly and sustainably base on: On the basis of continuing economic restructuring, developing modern industrial-urban zones with high-tech industries and clean technologies; to increase investment in commodity agricultural production areas with high economic value, agricultural mechanization, and new rural construction; to develop synchronous and modern infrastructure construction; improving quality, efficiency, competitiveness and proactive international integration; comprehensively develop the fields of health, education, healthcare, culture and society; improving the quality of human resources, basically solving environmental pollution; well implement social security policies, Improving people's lives; maintain political security, social order and safety; consolidate defense, local military; implementing virtually administrative reform and judicial reform; Improving the operational capacity and efficiency of state agencies

On December 14th, 2019, the People's Council of Phu Tho province approved the 2020 economic development plan with the following primary contents: Economic development target The economic growth rate reaches 7.5% or more Industrial growth reached 11.6%; service rose 8.05%; agriculture rose 3.0% or more Total products in the area per capita reached VND 47.32 million The export value reached USD 2.2 billion Total social investment capital reached VND 30.8 trillion The province's total budget revenue has been completed more than the Central Committee (VND 6,193 billion)

socio- Socio-cultural development target

 The rate of solidified rural roads will reach 70%

 Ten more communes are meeting new rural standards

 The rate of communes, wards and townships meeting national standards on health will reach 100%

 The rate of the population participating in health insurance reaches 93%

 The poverty rate decreased by 1.17% or more

 The rate of trained and vocational workers reaches 70%

 The number of schools meeting national standards reached 748 schools

On April 9th, 2020, Deputy Prime Minister Trinh Dinh Dung has just signed Decision No

490 / QD-TTg approving the task of planning Phu Tho province for 2021 2030, with a vision

to 2050 The planning scope is Phu Tho province's territory, with a total natural area of 3,534.6 km2 Principles of planning Phu Tho province for 2021 - 2030 with a vision to 2050 must be consistent, unified, and synchronous with the goals and orientations of the 10-year Socio-Economic Development Strategy 2021 – 2030

The national 5-year 2021 - 2025 socio-economic development plan; national strategy for green growth and sustainable development; international treaties to which Vietnam is a member country; ensure the People, compliance, continuity, inheritance, stability, and hierarchy in the national planning system; ensure feasibility, science, objectivity, publicity and transparency; applying modern technology, connecting, economically and effectively The planning objectives are concretized the national master plan; regional planning at the provincial level; on the space of socio-economic activities, national defense, security, urban system and rural population distribution; infrastructure, land allocation, resource use and environmental protection based on connecting national planning, regional planning, urban planning, rural planning; spatial arrangement and distribution of socio-economic activities, national defense and security in association with infrastructure development, resource use and environmental protection in the locality; to use resources for a balanced, harmonious, effective and sustainable development in the planning period

At the same time, this is a tool for comprehensive and unified leadership, direction and management in Phu Tho province; as a basis for making policies and creating a driving force for development; it is the basis for management and investment attraction accelerate strategic breakthroughs in infrastructure development

The goal of eliminating overlapping plans prevents development investment in the area; reforming administrative procedures, ensuring publicity, transparency, fairness in mobilizing, accessing and maximizing resources in investment activities and socio-economic development

- environment

Requirements for planning content: need development orientation, spatial arrangement and allocation of resources for socio-economic activities; must be in sync with national and regional planning; is decided by competent state agencies, aiming at sustainable development

international integration, commitments in multilateral and bilateral international treaties to which Vietnam is a member

Ensuring the linkage, synchronization, exploitation and efficient use of the existing infrastructure system between branches and inter-district regions and localities in the province; identify specific areas used for military, defense and security purposes at the provincial and inter-district levels and the orientation to be located in the district level Constructing and concretizing guiding views on socio-economic development, ensuring social security; attach importance to developing areas with complicated and challenging conditions inhabited by ethnic minorities and mountainous areas and ensuring sustainable livelihoods, improving the material and spiritual life of the people ; rationally and effectively allocating, exploiting and using natural resources associated with the conservation of historical-cultural values and natural heritage for present and future generations

The above indicators show that Phu Tho province's socio-economic situation develops at high speed, and the prospects are excellent in the coming time With such a situation, it will create many development opportunities for Bao Minh Phu Tho Company With a higher economic growth trend, the higher the people's income, the greater the insurance participation rate With the above growth rate, other insurance companies will surely make their business strategies Moreover, the entry of many new insurance companies will be more and more competitive However, growth opportunities are still more viable than challenges will face

2.1.2 Development trend of Vietnam Insurance market and Phu Tho province

2.1.2.1 Development trend of the Vietnam Insurance market in the coming time

The insurance business in Vietnam has a history of birth and development late compared to the world From reunification in 1975 to 1993, there was only one insurance company in the country It is Vietnam Insurance Corporation, directly under the Ministry of Finance The Vietnam insurance market kicked off after December 18th, 1993, when the Government issued Decree 100/CP on insurance business Accordingly, the Government encourages the establishment of several insurance companies from many different economic sectors A monopoly in the insurance business was abolished From here on, the Vietnamese insurance business began to have competitors among companies

As a new service industry, Vietnam Insurance has a high growth and growth rate, making a significant contribution to reducing risks in production, business and social life; Improving the investment environment; reducing the burden on the state budget, contributing to socio-

economic growth and development The annual growth rate of the Insurance Industry during the past years is always at a high level In recent years, the Insurance market of Vietnam is gradually forming vibrant and stable development The structure of insurance companies' components is increasingly diversified, with the State, joint-stock, joint venture, 100% foreign capital

On February 28th, 2019, the Prime Minister issued Decision No 242/QD-TTg approving the project "Restructuring the stock market and insurance market to 2020 and orientations to 2025" The actual content is as follows:

General goal: To comprehensively develop a safe, sustainable and effective insurance market, meet the diverse insurance needs of organizations and individuals to ensure social security; Insurance enterprises have a strong financial capacity, governance capacity meeting international standards and domestic and regional competitiveness

2019, the Vietnam economy had another prosperous year with high growth and a stable macro economy in general In that context, the insurance market continued to maintain its growth momentum, and the insurance sector's mechanisms and policies continued to be Improving

As of December 31st, 2019, the Insurance market of Vietnam had 66 insurance businesses (including 30 non-life insurers, 18 life insurers, two reinsurance businesses and 16 SMEs) and

01 branches of non-life insurers alien life

- Total assets in 2019 were estimated at VND 454,379 billion (an increase of 15.03% compared to 2018), of which non-life insurers were estimated at VND 89,447 billion, life