Building business strategy for Prosperity Joint Stock Commercial Bank - 5

Savings in banks is being competed by insurance companies… Besides banking activities, the black market also has a number of activities similar to banks such as accepting deposits, lending with capital. simple procedure that attracts a large portion of the bank’s customers.

2.2.3 Analysis of the internal environment

– Financial resource

With the new entry into Ha Tinh market for 6 years, although VPBank Ha Tinh bank operates effectively, the capital source has always increased over the years. However, the size of the bank is still small, so the financial resources of VPBank are compared to other banks in Ha Tinh province, especially the banks that have been operating for a long time and are leading in the world. The area is still a long way off. This is a weakness of VPBank Ha Tinh in competing with other banks.

– Quality of operation

Operational quality of VPBank Ha Tinh is relatively good, although it has just entered the Ha Tinh market when VPBank’s brand name is not known by many customers in Ha Tinh, but after 5 years of operation, the indicators of capital mobilization, credit balance, and profit have all increased over the years.

– Technological factors

Currently, VPBank owns a modern information technology system on a wide area network, allowing all online transactions to be carried out in the whole system. As a result, information access and payment between branches and customers are processed quickly, safely, and quite securely.

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– Net

Up to this point, VPBank Ha Tinh bank has only one head office located in Ha Tinh city and four transaction offices, including 02 transaction offices in the city, 01 transaction office in Ky Anh district and 01 transaction office. transactions in Hong Linh Town, this is a weakness of VPBank Ha Tinh compared to other banks in the area. Therefore, in the coming time, VPBank Ha Tinh needs to open more transaction offices in district and town centers throughout the province.

– Human Resources

With VPBank, people are always the most valuable asset. Therefore, the Bank believes and creates conditions for each individual to promote their abilities and capacities, thereby contributing and giving the best. VPBank has paid special attention to building and implementing advanced human resource management systems, which serve as a solid foundation to create a competitive advantage in terms of people and sustainable development.

Accordingly, the bank applied a new organizational model and built governance processes including a Performance Management and Evaluation System (KPI/Balance Score Card), a salary and bonus system associated with efficiency. work individually, internally and externally, to be fair and competitive, providing a solid basis for meeting business and strategic goals. VPBank is also one of the pioneering joint stock commercial banks in building a methodical training and learning system, a clear career path to each key position in the organization. The core competency framework project and professional competencies for business units have been approved by the leadership and are being implemented throughout the system. Not only that, VPBank’s Board of Directors also has a very clear strategy for building VPBank into the second home of each employee.The Bank determines that a competitive welfare regime, an ideal, professional working environment, and a clear career orientation will create the attractiveness and difference of VPBank compared to other competitors. “Finding the right people, giving the right jobs with the right capabilities to retain talent is always a challenge for every organization. Human resource surveys show that single compensation is only a very short-term tool to attract, but a friendly working environment, where employees are respected, are involved in decision-making within the scope of the job, being trained, having the opportunity to challenge, experience to succeed… is a decisive factor in increasing the employee’s commitment to the organization,” talent feet”.Having a clear career orientation will make VPBank attractive and different from other competitors. “Finding the right people, giving the right jobs with the right capabilities to retain talent is always a challenge for every organization. Human resource surveys show that single compensation is only a very short-term tool to attract, but a friendly working environment, where employees are respected, are involved in decision-making within the scope of the job, being trained, having the opportunity to challenge, experience to succeed… is a decisive factor in increasing the employee’s commitment to the organization,” talent feet”.Having a clear career orientation will make VPBank attractive and different from other competitors. “Finding the right people, giving the right jobs with the right capabilities to retain talent is always a challenge for every organization. Human resource surveys show that single compensation is only a very short-term tool to attract, but a friendly working environment, where employees are respected, are involved in decision-making within the scope of the job, being trained, having the opportunity to challenge, experience to succeed… is a decisive factor in increasing the employee’s commitment to the organization,” talent feet”.Human resource surveys show that single compensation is only a very short-term tool to attract, but a friendly working environment, where employees are respected, are involved in decision-making within the scope of the job, being trained, having the opportunity to challenge, experience to succeed… is a decisive factor in increasing the employee’s commitment to the organization,” talent feet”.Human resource surveys show that single compensation is only a very short-term tool to attract, but a friendly working environment, where employees are respected, are involved in decision-making within the scope of the job, being trained, having the opportunity to challenge, experience to succeed… is a decisive factor in increasing the employee’s commitment to the organization,” talent feet”.

Although the scale of VPBank’s current Ha Tinh branch with 01 head office and 04 transaction offices is small, the network of transaction offices is still small, mainly located in Ha Tinh city. The number of employees is small with relatively young age and profession. However, the human resources of VPBank Ha Tinh are still young, but the vast majority of employees have high professional qualifications, especially enthusiastic, dynamic and quite creative, flexible in working and attentive service attitude. considerate. This significantly affects the style and quality of customer service, especially in consulting and assisting customers to make decisions related to services provided.

– Marketing factor

Marketing activities over the years of VPBank Ha Tinh Branch have been interested by the management of VPBank Ha Tinh Branch and have achieved certain achievements. However, if compared with other banks in the area, the marketing activities of VPBank Ha Tinh branch are still quite poor and not invested much. Therefore, the effectiveness of marketing has not been achieved as expected and is far behind the main competitors in the market. With the pressure of banking business on profit, VPBank Ha Tinh Branch needs a clearer marketing strategy. Because marketing activities are extremely important in business activities, it contributes to creating the bank’s brand reputation in the eyes of customers, creating trust and value of the bank for customers who come to transact.

2.2.4 Analysis and selection of business strategy

2.2.4.1 SWOT matrix analysis

We use the SWOT model to form the business strategy of VPBank Ha Tinh Branch. In the SWOT model, it will clearly show the strengths and opportunities that VPBank Ha Tinh Branch has as well as the weaknesses and threats that VPBank Ha Tinh Branch is facing.

Table 2.2: SWOT matrix analysis

S-Strength: Strengths W-Weakness: Weaknesses
S1. Rich products and services
S2. Professional service style
, fast.
S3. Young,
dynamic and qualified human resources.
S4. Good operating quality
is maintained over the years.
S5. Possessing a modern
technology platform .
W1. Brand is not strong
W2. Financial resources are low,
much lower than other banks in
W3 province .
Limited scale and network of distribution channels
W4. Small business market share,
unsustainable customer base
W5. The quality of banking products and services is
not high and the application scope of
new products is still limited
O-Opportunities: Opportunities T-Challenge: Threats
O1. Economic growth of the area
, business scale and efficiency
of economic organizations and residents
O2.
State and local investment attraction policies
increase the ability to attract
new domestic and foreign investors
O3. The increase in demand for
domestic and foreign payments,
foreign currency trading
O4. Changes in capital requirements
investment capital, mobilized capital, services and
new products of
O5 bank . The fluctuation of
population ‘s income affects the
retail market of banks
T1. Impact of international
economic integration process on
current and potential customers.
T2. Competitive pressure in business
from current and potential competitors
in the area.
T3. Infrastructure conditions affecting
the deployment
of
T4 banking technology and products . Risk of macro imbalance,
high interest rates, exchange rate fluctuations, inflation
T5. The national legal environment
affects the production and business of all
economic sectors

(Source: 2013 Business Performance Assessment Report of VPBank Ha Tinh Branch).

Coordination between “Strengths – Opportunities”: In order to take advantage of the development of society, the recovery of the economy, favorable conditions from legal policies to expand more transaction points, revenue attracted a lot of attention from individuals and businesses in the province. Thereby affirming the position of VPBank Ha Tinh Branch in comparison with other banks in the province. However, along with those developments, VPBank Ha Tinh Branch also needs to research more new products and services to meet the new needs of society. Improve the old products better, improve the bank’s reputation.

Coordination between “Weaknesses – Opportunities”: VPBank Ha Tinh’s understanding of its weaknesses and opportunities, both now and in the future, will help the management to take reasonable remedial measures to achieve success. can increase the brand value of not only VPBank Ha Tinh Branch but also VPBank. With reasonable development strategies, the distribution channel system of VPBank Ha Tinh Branch will be expanded, the financial situation will be improved and can fully serve all the needs of customers in the locality. Province table.

Coordination between “Strengths – Challenges”: With the development of society, the law is becoming stricter, customers are becoming more and more “smart” and customer change is easier and easier. . However, this is the time when VPBank in general and Ha Tinh branch in particular need to promote the strengths of their products and services such as quality and diversity to affirm their position in the banking market. row.

Coordination between “Weaknesses – Challenges”: To affirm that the changes in management methods as well as internal governance of VPBank Ha Tinh Branch are suitable for the general development of society. Through its own difficulties, VPBank Ha Tinh Branch will stand firm in the market and the future will open a whole new chapter with strong development in both depth and breadth.

2.2.4.2. Analysis of the evaluation matrix of external factors EFE

From the opportunities and threats that VPBank Ha Tinh Branch may face in the competitive banking environment in the area (shown in the SWOT Matrix), we have a matrix to assess the impact of external factors. as follows:

Table 2.3: EFE . Matrix Analysis  

Number the external factors Critical level Weight Score
first Economic growth of the area,
business size and efficiency
of economic organizations and residents
0.15 3 0.45
2 Risk of macro imbalance,
high interest rates, volatile exchange rates
0.10 2 0.20
3 International legal environment 0.05 2 0.10
4
State and local investment attraction policies
0.10 3 0.30
5 Demand for
domestic and foreign payment , foreign currency trading
0.10 4 0.40
6 Changes in demand for investment
capital, mobilized capital, products and services
new of the bank
0.15 3 0.45
7 Variation of population’s income 0.10 3 0.30
8 International economic integration 0.10 3 0.30
9 The infrastructure 0.05 3 0.15
ten Current and potential competitors 0.10 3 0.30
. . total 1.00 2.95

(Source: 2013 Business Performance Assessment Report of VPBank Ha Tinh Branch).

Through the evaluation of factors outside EFE in the table above, we see that the total score achieved by VPBank Ha Tinh is 2.95, corresponding to the 10 biggest influencing factors. extreme with changes coming from external factors. There have been major changes to better match domestic changes and changes from foreign factors. However, the above are just a few of the many external factors affecting the operation of the banking industry in general and VPBank in particular, so the evaluation results are only approximate.

2.2.4.3 Analysis of the internal factors evaluation matrix IFE

Table 2.4: Analysis of the assessment matrix of internal factors IFE

Number Internal factors Weight classification
type
Score
first Human Resources 0.12 3 0.36
2 Technology system 0.10 4 0.40
3 Service style 0.10 4 0.40
4 Operational quality 0.08 3 0.24
5 Rich products and services 0.10 3 0.30
6 Financial resource 0.10 2 0.20
7 Brand reputation 0.15 first 0.15
8 Size, distribution channel network 0.10 2 0.20
9 Business market share 0.08 2 0.16
ten Quality of products and services 0.07 2 0.14
. . total 1.00 2.55

(Source: 2013 Business Performance Assessment Report of VPBank Ha Tinh Branch).

The internal factors of VPBank in general and VPBank Ha Tinh in particular are the strengths and weaknesses of VPBank. However, when assessing IFE’s internal factors, the author personally only relies on 10 factors that the author believes have the greatest influence on VPBank’s value.

The total score of VPBank’s internal factors assessment is 2.55 which is the average score of a bank in terms of the current resources it has available.

Through the matrix of internal factors, we can see that VPBank’s biggest weakness is its reputation and brand name in the banking market, which is classified by 1 and weighted as 0.15; Next are weaknesses related to financial resources, scale, distribution channel network, market share and quality of products and services of the bank, which are classified as 2. This is also proven by the financial statements. “Vietnam Banking Industry Survey 2013” ​​is conducted by KPMG (KPMG is a global network of professional member firms, providing Auditing, Taxation and Consulting services. ). Currently, VPBank is in the middle of the 17 banks surveyed by KPMG.

With the above weaknesses, but VPBank also has strengths that are highly appreciated such as a properly invested technology system, closely following the increasing requirements of customers. With a team of young, dynamic and well-trained staff, VPBank is also highly appreciated for its professional, fast and accurate service style, plus attentive service attitude.

2.2.4.4 QSPM . matrix analysis

The problem up to this stage is to choose which strategic group will achieve the best results on the way to achieving business goals. From there, solutions will be given on the basis of the selected strategic groups. To answer the above question, the author uses the QSPM matrix to analyze and choose a strategy as follows:

Table 2.5: Analysis of the QSPM Matrix – S/O . Group

Key factors Alternative strategy Attractive score base
Classification Market penetration Market development
SA I WILL SA TAS
Internal factors            
Human Resources 3 4 twelfth 3 9  
Technology system 4 3 twelfth 3 twelfth  
Service style 4 4 16 4 16  
Operational quality 3 3 9 3 9  
Wide range of products and services 3 4 twelfth 3 9  
Financial resource 2 2 4 3 6  
Brand reputation first 3 3 2 2  
Scale, distribution channel network 2 3 6 3 6  
Business market share 2 3 6 2 4  
Quality of products and services 2 3 6 2 4  
the external factors            
Economic growth of the area, business size and efficiency of economic organizations and residents 3 4 twelfth 4 twelfth  
Risk of macro imbalance, high interest rates, fluctuating exchange rates 2 3 6 3 6  
International legal environment 2 3 6 3 6  
State and local investment attraction policies 3 4 twelfth 3 9  
Demand for domestic and foreign payment, foreign currency trading 4 3 twelfth 3 9  
Changes in demand for investment capital, mobilized capital, new products and services of the bank 3 3 9 4 twelfth  
Variation of population’s income 3 4 twelfth 3 9  
International economic integration 3 3 9 2 6  
The infrastructure 2 3 6 3 6  
Current and potential competitors 3 2 6 3 9  
Total points of attraction     176   161

(Source: 2013 Business Performance Assessment Report of VPBank Ha Tinh Branch).

From the table above, it can be seen that the market penetration strategy has a total attractive score of: 176, while the market development strategy is 161. From that result, in my opinion, in the period from now to 2020, VPBank Ha Tinh branch should prioritize focusing on promoting long-term market penetration strategy.

After that, VPBank Ha Tinh Branch will prioritize the market development strategy. This is completely consistent with the development trend of the banking industry in the future.

Table 2.6: QSPM Matrix – S/T . Group

Key factors Alternative strategy Attractive score base
Classify Product development Product differentiation
SA TAS SA TAS
Internal factors            
Human Resources 3 3 9 3 9  
Technology system 4 3 twelfth 3 twelfth  
Service style 4 4 16 4 16  
Operational quality 3 3 9 4 twelfth  
Wide range of products and services 3 4 twelfth 4 twelfth  
Financial resource 2 3 6 3 6  
Brand reputation first 3 3 2 2  
Scale, distribution channel network 2 3 6 2 4  
Business market share 2 3 6 2 4  
Quality of products and services 2 3 6 2 4  
the external factors            
Economic growth of the area, business size and efficiency of economic organizations and residents 3 4 twelfth 4 twelfth  
Risk of imbalance in macro, profit 2 3 6 3 6  
High interest rate, variable exchange rate            
National legal environment 2 3 6 3 6  
State and local investment attraction policies 3 4 twelfth 4 twelfth  
Demand for domestic and foreign payment, foreign currency trading 4 3 twelfth 3 9  
Changes in demand for investment capital, mobilized capital, new products and services of the bank 3 3 9 3 9  
Variation of population’s income 3 2 6 2 6  
International economic integration 3 2 6 2 6  
The infrastructure 2 2 4 2 4  
Current and potential competitors 3 3 9 2 6  
Total points of attraction     167   157  

(Source: 2013 Business Performance Assessment Report of VPBank Ha Tinh Branch).

Through the analysis in the table above, we see that the product differentiation strategy has a total attractiveness score of 157, the new product development strategy has an attractiveness of 167, so both these two strategies are quite important to the market. with VPBank Ha Tinh, in the immediate future, VPBank Ha Tinh Branch should focus on promoting new product development strategies to consolidate and increase market share in the current market.

In summary, the analysis results of QSPM matrix of SO group show that VPBank Ha Tinh branch should first focus on market penetration strategy, then market expansion strategy. Although VPBank Ha Tinh Branch’s goal is to become the leading retail bank in the market, in the coming period VPBank Ha Tinh Branch should use its inherent strengths to penetrate the market and keep maintain and develop market share in the field of credit, business banking services.

Because Ha Tinh is one of the small provinces and the economy is still poor compared to the average of other provinces in the country. In recent years, the banking industry has only begun to appear many joint stock commercial banks in the area.

In the future, with the competition in the market, there will be more banks present in Ha Tinh market, so entering the market early and keeping and developing the bank’s market share is extremely important. important.

In addition, the ST group QSPM shows that the market penetration process should be supported by a product differentiation strategy by stronger development of utility products and services for customers and deployment of new products. just make a difference.

2.2.4.5 Choosing a strategy

Through analyzing the external and internal environments and using matrices for analysis, the process of identifying the development potential of the banking industry and the competitive position of VPBank Ha Tinh Branch in comparison with other commercial banks. other customers, combined with subjective intuition, we choose a strategy to differentiate the quality of products and services for VPBank. This strategy is more feasible than the other strategies and it is also suitable for the current situation where the Bank’s products and services are being copied a lot, so the important thing is not “what” but “what”. “how” means how VPBank will apply and provide products and services to customers.

Basis for choosing this strategy:

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