Tài liệu Building the business strategy phase 2011 2015 and orientation to 2020 of song da financial joint stock company

Thesis topic BUILDING THE BUSINESS STRATEGY PHASE 2011 - 2015 AND ORIENTATION TO 2020 OF SONG DA FINANCIAL JOINT STOCK COMPANY 1 TABLE OF CONTENT No. Content INTRODUCTION Page 7 1 Reason for selecting the topic 7 2 Objective of the study 7 3 Scope of the study 7 4 Method of the study 7 5 Structure of the capstone project 7 CHAPTER 1: THEORY FRAMEWORK 1.1 Theory on business strategy of enterprise 9 1.1.1 Some concepts of strategy 9 1.1.2 Essence of business strategy 9 1.1.3 Characteristics of business strategy 10 1.2 Process of building strategy 12 1.3 Model of external environment analysis 13 1.3.1 Model – Macro analysis 13 1.3.2 Five Forces Model of Michael - Industrial analysis 16 1.4 Model of internal analysis 18 1.4.1 Value chain 18 1.4.2 Sustainable competitive advantages of enterprise 20 1.5 General analysis model (SWOT) 21 1.6 General competitive strategies 22 1.6.1 Cost-leadership strategy 22 1.6.2 Product differentiation strategy 23 1.6.3 Concentrated growth strategy 24 1.7 Analysis model selecting strategy of weighting method 25 CHAPTER 2: ANALYZING THE REAL SITUATION OF SONGDA FINANCE JOINT STOCK COMPANY 2.1 Overview on SongDa Finance Joint Stock Company 2.1.1 Process of establishment and development 27 27 2 2.1.2 Business lines of the Company 27 2.1.3 Organizational structure of the Company 28 2.1.4 Achievements in 2008-2010 period 29 2.1.5 Some notes about the development history of SDFC 30 2.1.6 Business situation 30 2.2 Analyzing external environment of SongDa Finance Joint Stock Company 35 2.2.1 Analyzing macro environment of SDFC 35 2.2.2 Analyzing micro environment of SDFC – Industrial environment 40 2.3 48 Analyzing internal environment of SDFC 2.3.1 Value chain model 48 2.3.2 Sustainable competitive advantages 55 2.4 SWOT analysis of SDFC 58 2.5 Vision, Mission and Strategic Objective of SDFC to 2020 63 2.5.1 Vision 63 2.5.2 Mission 63 2.5.3 Strategic Goals by 2015 and 2020 63 2.6 Selecting business strategy for SDFC according to weighting method 66 CHAPTER 3: SOLUTIONS, RECOMMENDATIONS AND CONCLUSION 3.1 Some solutions to successfully implement the selected strategy 71 Boosting the establishment and development of human resource with 3.1.1 advanced management and high-qualified and professional human resource 3.1.2 71 Optimizing management process to reduce the cost of goods sold of financial services, raise quality and pre-eminence of products. 3.1.3 Investing in information technology and modern infrastructure 72 72 Ensuring the diversification of channels for mobilizing capital, 3.1.4 mobilize enough capital and optimally balance capital structure and time-limit for business 73 3 3.1.5 Concentrating resources to establish subsidiaries and joint-venture companies in the strong fields of the company 73 Some recommendations, shortcomings and following orientation 3.2 of the study 74 3.2.1 Some recommendations 74 3.2.2 Shortcomings of the study 75 3.2.3 Orientation of study in the future 75 3.3 Conclusions 75 DEFINITIONS Within the scope of this report, the following abbreviated terms are construed as follows: ACB ASEAN ATM BIDV BIM EVNFC Eximbank : Asia Commercial Bank : Association of Southeast Asian Nations : Machine and withdraw cash payment automatically : Bank for Investment and Development of Vietnam : Bao Minh Insurance : Electricity Viet Nam Financial Company : Export and Import Bank GDP : Gross domestic product M& A : Mergers & Acquisitions MB : Maritime Bank MIC : Military Insurance Company PVFC : Petro Viet Nam Financial Company PVI : Petro Vietnam Insurance Sacombank : Sai Gon Commercial Bank SBU : Sub Business Unit SDFC : Song Da Financial Joint Stock Company Vietcombank : Joint Stock Commercial Bank for Foreign Trade of Vietnam 4 WTO : World Trade Organization List of Table and Figure Page Figure 1-1 : Model of strategic management process 12 Figure 1-2 : External environments 13 Figure: 1-3 : Diagram of industrial competition 16 Figure: 1-4 : Value chain diagram 19 Table 1- 1 : Selecting strategy option according to weight method 26 Figure 2-1 : Management model of the Company 29 Table 2-1 : Capital mobilization by year 31 Table 2-2 : Balance of debit by year 31 Table 2-3 : Classification of lending forms 32 Table 2-4 : Data on the security rate and risks management 32 Table 2-5 : Business result in last 3 years 34 Table 2-6 : Criteria of efficiency 34 Figure 2-2 : Value chain 53 Table 2-7 : Labor structure as of December 31, 2009 54 Figure 2-3 : SWOT matrix of SDFC 61 Table 2-8 : Select an appropriate strategy by using the weighting method 68 5 PREFACE 1. Reason for choosing the subject: Becoming the 150th member of the World Trade Organization (TWO) on January 11, 2007 affirms that Vietnam’s economy in general and Vietnamese enterprises in particular have integrated into the world economy deeply and widely. Vietnamese enterprises have been renewing their thought of business and reaped certain success. To develop and integrate into the world economy successfully, Vietnamese enterprises need to ceaselessly renovate and raise the adaptability to the market and clearly define the destination that the enterprises need to reach. How to reach it and by which mean? Therefore, they need to have business strategy. Sound and reasonable business strategies will insure the sustainable development of enterprises on the basis of effectively implement enterprises’ goals. 2. Objective of the study. - Studying and systemizing theories, selecting effective model of analysis to building and implementing business strategy. - Applying the system of theoretical bases and models to analyze internal and external environments and building business strategy of the Company. - Suggesting solutions and recommendations to the Company in implementing business strategy to complete the selected business strategy; 3. Scope of the study: Studying and analyzing business lines of SongDa Finance Joint Stock Company. 4. Method of the study The report mainly used quantitative analysis method. Methods of collecting data such as using questionnaires, interviewing experts were used. Using national 6 statistical data, information and specific data; using secondary data about strategy and previous reports of the Company. 5. Structure of the Capstone Report Chapter 1: Theory framework Chapter 2: Analyzing real situation of SongDa Finance Joint Stock Company. Give an overview of SongDa Finance Joint Stock Company. Business strategy to 2015 and vision to 2020. Apply models of analyzing external environment affecting the enterprise – Five forces model. Apply the model of value chain and sustainable competitive advantage to analyze the internal of the Company. Apply SWOT analysis to have an overall evaluation to find out the strengths, weaknesses, opportunities, and threats. Analyzing and selecting business strategy for the Company according to weighting method. Chapter 3: Recommendations and conclusion Some solutions to successfully implement the selected business strategy, some shortcomings and recommendations to solve these shortcomings and orientation for further studies in the future. The End is references. 7 CHAPTER 1: THEORY FRAMEWORK 1.1. Theories on Business Strategy of Enterprise 1.1.1. Concept of Strategy and Strategic Management  Concept of strategy - Strategy is model of goals, objectives and plans to achieve those goals (Kenneth, 1965); - Strategy and formation of a unique and valuable position include the differentiation, a bartering selection to mostly concentrate resources to generate advantages for an enterprise... (Michael Porter) - According to group 7, “Strategy is a system of coherent and long-term measures and methods that an enterprise tries to implement to gain the clearer and more outstanding differentiation compared to its rivals to achieve a set goal”.  Concept of strategic management - According to Alfred Chandler, strategic management is the process of identifying basic and long-term goals of an enterprise, selecting mode or orientation of action and distribution of vital resources to implement those goals. - According to John Pearce and Richard B.Robinson, strategic management is a system of decisions and actions to form and implement plans to attain goals of an enterprise. - According to group 7, “Strategic management is a systematic process from building strategy, developing strategy, controlling and evaluating strategy to achieve the targets set by an enterprise. 1.1.2 Essence of Business Strategy Business strategy is a business model of enterprise, in terms of business strategy, is the platform of business activity; method of using resources; basis for handling all matters of the business. 8 Business strategy is the creation in management, which means that business, based on certain objectives to form a new effective and competitive management system. Therefore, business strategy is preceded from the actual situation of the enterprise. Two businesses in the same area, same product, same size, but the business strategy can not completely be the same because of their different subjective condition. At the same time the creative management must combine closely with organizational creativity, technical innovation can promote the work of business strategy. Business strategy is to show the competitive position of enterprises, while building their business strategy, enterprises need an objective analysis of their situation, explore opportunities and challenges that affect the objective circumstances to business. Study of subjective conditions of the business to know the strengths and weaknesses and base on these actual situations to achieve the objective of the enterprise 1.1.3. Characteristics of Business Strategy  Conformity The conformity of business strategy is reflected on three aspects: It needs to be consistent with the dominant trend of development and the motto directing the activities of the enterprise and needs to be in line with the development trend of the country in economic, technical and social aspects in a certain period of time; and needs to be conformable with the trend of world economic integration.  Predictiveness In the past, due to having no strategy planning, doing activities spontaneously and following movement, many enterprises worked hard but ineffectively. One of the causes of that situation is the lack of understanding about the development trend of the enterprises. Therefore, to build business strategy, there must be good forecast on the economic and technical development trend of the society. 9  Competitiveness If there is not competition, it is not necessary to have business strategy; thus, when building business strategy, we need to know how to get businesses a competitive edge over rivals and therefore win the competition.  Risks Business strategy is the planning the enterprise’s development in the future. The longer-term the strategy is, the riskier the strategy is, requiring entrepreneurs to have a prudent and objective vision and observation to have a sound strategy. Business strategy should not be too long-term and needs to insure the flexibility and practicality.  Professionalism and Creativeness Enterprises can base on their internal power to select a suitable field of operation and avoid the industry in which big enterprise has dominant position. However, the technological advancement and competition in the market is unlimited; therefore, enterprises need to ceaselessly specialize and invent suitable technology and important measures to insure their existence and development.  Relative Stability Business strategy of enterprises needs to have a relative stability in a certain period Otherwise, it will not have any steering implication to the real operation of the enterprise. Business strategy also needs to be adjustable to suit the objective situation 10 1.2. Process of Building Strategy. Figure 1-1: Model of strategic management process Mission & Objective External analysis (Oppotunities and Threats) Selecting and building strategies Internal analysis (seeking resources, capacities...). Functional strategy SBU strategy Global strategy Corporate strategy Structure Adjust strategy, structure and supervise Supervise Change strategy (Source: Strategy Management – Statistical Publishing House 2009)  Vision A correct vision will help enterprises analyze and approach the overall business environment and find out the real advantages and disadvantages influencing the production and business activities of the enterprise. 11 Mandate of the enterprise  Determining current missions, goals and strategies of the enterprise is the starting point of strategic management. When having developed in a business environment that contains full of fluctuations, managers need to redefine the initial goals. Goals and mission of the enterprise  Insuring the agreement on the internal goals of the Company, establishing a common voice or corporate environment; facilitating the introduction of goals and work structure relate to the allocations of missions 1.3. Model of External Environment Analysis: 1.3.1. Macro Analysis Figure 1-2: External environments Economi c Demographi c Industrial environment Cultural - Social Threats of new entrants Bargaining power of suppliers Bargaining power of buyers Threats of substitute products Competitive intensity Environment Global Political/Legal Technological (Source: Lecture on strategic management – Gamba) 12  Analyzing Economic Environment Status of the macroeconomic environment determine the health, economic prosperity, it always affects businesses and industries. Therefore, enterprises must study the economic environment to identify changes, trends, implications of its strategy. There are four important factors in the macroeconomic environment that is growth of the economy, interest rates, exchange rates and inflation rates.  Economic Growth: leading to the explosion of spending by customers, so it may tend to bring more relaxed about competition in the industry and tends to reverse when the economy declined.  Interest rates: It may affect the demand for products and services of the business. Interest rates are important factors when consumers to borrow to finance their purchase operations for goods and services.  Exchange rate: Determining the value of national currencies with one another. Movement of exchange rates has a direct impact on the competitiveness of enterprises on the global market.  Inflation: Can reduce the stability of the economy, making the economy grow more slowly, higher interest rates, exchange rate shifts are not stable. If inflation increases, investment planning becomes risky. Bad investments held out of business, in case of inflation, will reduce the economic activity, eventually pushing the economy to stagnate place. Thus, high inflation is a threat to the company.  Analyzing Demographic Environment  Population scale: Observing the demographic changes in terms of population to highlight the importance of this segment. The projection on population shows the global challenges related to population of the 21st century and opportunities for businessmen. 13  Age structure: showing the opportunities of services, but it also contains new threats related to human resource for enterprises.  Geographical distribution: This may create advantages for technology. With computers, people can stay at home and exchange with other people via the telecommunication network.  Analyzing Political and Legal Environment  Political Environment: consists of political factors and contexts whose operation has influence on the business of the enterprise. These factors include political regime, political party, political union, policies of the Party and State, political atmosphere of the society.  Legal Environment: This is the legal system related to the enterprise, including normative law, legal sense of the judicial agencies, executive agencies and the enterprise. Influence of political and legal environment to the enterprise is very deep and even has dominant implication.  Analyzing Scientific and Technology Environment Many new techniques invented and applied quickly has been knowledged and revolutionized the entire economies of developed countries. That will change the scientific, technical and technological environment of the society, promoting technological innovation, technology of the society as well as boosting the current technology transfer and industry restructure. Enterprises should identify changes, implement and apply technical advancement and upgrading the technology.  Socio-Cultural Environment  Social environment: It includes the formation, changes of social classes, population structure, migration, etc. All the status and variation of the factors can have influence on the operation of enterprises. 14  Cultural environment: include factors related to philosophy, religion, language, literature and art. These factors have indirect influence on the operation of enterprises and should not be underestimated  Global environment Global environment includes related international market, current markets that are changing, important international events and basic institutional and cultural characteristic on global market. Macro-environment analysis allows the evaluation of macro-economic factors that have influence on business activities of enterprises and changes in competitive environment. 1.3.2. Five Forces Model – Industrial Analysis Five forces model by Michel Porter is summarized in following 1- 3 figure: Figure 1-3 Diagram of industrial competition Threats of new entrants Bargaining power of suppliers Competitive rivalry within an industry Bargaining power of buyers Threats of substitute products (Source: Strategy Management – Statistical Publishing House 2009)  Threats of new entrants New entrants may be newly-established enterprises joining the market or enterprises that previously traded other types of products, now trade many types of products. These enterprises bring about new production capacity to the industry, but also require a certain market share. Whether this competitive pressure is great or insignificant depends on the expenses of an enterprise when participating in the 15 market and the level of reaction of other enterprises when that enterprise participates in the market and depends on the industry entry barriers.  Threats of substitute products Substitute product is a product of similar use. If the profitability of the substitute product is high, the competitive pressure will be great and make the enterprise passive. If the manufacturer of the substitute product rapidly develops production, the industry will be under a strong threat. If consumers accept the substitute product smoothly both in terms of economics or psychology, that threat will be greater.  Bargaining power of buyers Enterprises’ customers can request that the prices of goods or services to be cheaper along with higher satisfaction on service quality. The problem is who are the main customers having the power to negotiate and need the attention of the enterprise. Those users give criteria of price, quality, technology, date of completion, etc. It requires enterprises to have capacity to be willing to meet requirements during the competition process.  Competitive rivalry within the industry The competition among enterprises in the same industry is expressed via the patterns, characteristics of competition, relating to the following factors: - The business may base on the assignment of the industry, position and role of the industry in the process of social production, resources used by the industry, the prospect of the economy, consumers’ habits, etc. Via those analyses to understand the characteristics of the industry and have appropriate policies. - Structure and scale of enterprises in an industry usually come in two forms. Firstly, the structure and scale of big enterprises will be very big and those of small enterprises will be very small. In this case, the competition is not very tough because big enterprises have gained absolute dominant positions. Secondly, big enterprises are not too big; the small enterprises are not too 16 small. In this case, the competition will be fierce because the internal powers of enterprises in the industry do not vary much. - In general, the structure of number of enterprises in the industry is large, it will prove that the market size is significant and the market entry barriers are relatively small. - Market structure in the industry, the supply and demand in the market, oversupply, supply and demand is balance or over-demand. If demand exceeds supply, there must be investigation of form of market entry with certain advantages. If the supply-demand is balance, enterprises should reinforce their strengths. If supply is greater than demand, enterprises should consider the creation of competitive advantage or withdrawal from the industry.  Bargaining power of suppliers Suppliers in the banking sector is quite diverse, they can be the bank's shareholders, or partners, enterprises having ample financial resources and often supply capital to banks or customers have the ability to negotiate on prices. Credit institutions are interested in the bargaining power to suppliers to address the requirements of quality, product prices and the capacity of capital advancement and turnover. 1.4. Analysis Model of the Internal Of the Enterprise: 1.4.1. Value chain The value generated of an enterprise is measured by the amount that buyers who are willing to pay for products or services. The division of activities in the value chain creates favorable conditions for investing costs and result of each activity, finding the way to improve each activity, combining them according to the strategy to generate value of each specific product as well as of the enterprise. Activities supporting for key activities are specified as follows:  Developing technology: developing products and manufacturing technology. Developing technology can lower production cost, creating more attractive products and sell at higher prices. 17  Human Resource Management: Human resource is the most precious asset of the enterprise. High-quality human resource and an effective apparatus are important factor for the success of the enterprise.  Company Infrastructure: Infrastructure includes organizational structure, executive systems and culture of the enterprise. Via the management power, senior managers can actively shape the infrastructure of the enterprise and through which all activities to create other value is done. Figure 1 – 4 Value chain diagram In In te re st t es r te Services Marketing & Sales Logistics outside Production Logistics inside Pur cha sin g Tec hn olo gy dev elo pm ent Hu ma n res ou rce ma na ge me nt In fr as tr uc tu re Basic activities (Source: Lecture on strategic management – Gamba) 18 S u p p or ti n g ac ti vi ti es 1.4.2. Sustainable Competitive Advantages of the Enterprise  Competitive advantages of the enterprise is constituted from 4 factors: The first is the knowledge and technological capacity of the staff including knowledge and skills of each employee; and qualities and knowledge structure of the whole staff. The second is the technical system of the enterprise or the crucial system of techniques to implement the business strategy of the enterprise. The third is the management system of the enterprise, the enterprise’s strengths formed through regimes, regulations, organizational structure, organization plan, and leadership, encouragement of the enterprise and the leader’s art of leading. The fourth is the concept of value and the enterprise’s culture system, the important constituent of the enterprise.  The analysis of competitive advantages of the enterprise - needs to solve 3 problems: - What are the competitive advantages of the enterprise? How is their status? To solve this problem, we need to analyze in-depth resources, technical system, management and corporate culture of the enterprise. - What is the effect of competitive advantage on the competitive strengths of the enterprise? Generally, the unique the competitive advantage of the enterprise is, the longer the time for maintaining the strength is and the firmer the competitive strength is. - How to develop and foster the enterprise’s competitive advantage? The development and fostering the enterprise’s competitive advantage often include the investment and revive the human resource of the enterprise, ceaselessly raise the technical quality of the staff, timely renovate 19 management structure to be able to make it operate smoothly and harmoniously with the objective environment. 1.5. SWOT Analysis SWOT analysis is used to analyze strengths, weaknesses, opportunities and threats of an enterprise to determine a suitable business strategy, promote strengths of the enterprise and overcome weaknesses in making full use of business strategy as well as challenges from the external environment. SWOT analysis is the key to develop strategy and clarify the internal power of the enterprise; strengths, weakness, opportunities and threats from the outside.  Strengths What are the strengths of the enterprise? What is the best task done by the enterprise? What are the advantages that people see from the enterprise? The issues must be considered by the enterprise and other people. Strengths are formed when comparing with competitors.  Weaknesses Which weaknesses can be improved? Which tasks are best done? What needs to be avoided? The above issue needs to be considered both internally and externally. Other people can see weaknesses that the enterprise does not recognize. Why do competitors can do better? This matter should be viewed practically.  Opportunities Where the good opportunities are? What is the existing trend that should be paid attention? Opportunities may come from the changes of technologies, policies of the State, social pattern, population structure, etc. The most effective method to find is to check the enterprise’s strengths and pose the question “whether those strengths can lead to any new opportunities? The enterprise can do reversely – check its weaknesses and pose the question “whether there is any opportunity to remove them?”  Threats 20