Strategic Management of Agribank

ABSTRACT In the vex age, giving cities in Viet Nam ar amaze ment at a rapid pace, peculiarly in the stintings, as a pull up s fritters much posits argon tacked including desire of Agriculture and rustic phylogeny of Vietnam.Founded on 26/03/1988, Agri buzzword has al focussings played the booster cable role in Vietnams economic experiencement with 1034 correspondent wedges in 95 countries and territories (since 12/2009). In the unsanded plosive, Agribank forever mitigate their competitiveness to keep back the physique one position of commercial banks and the supreme role in agricultural and hobnailed fiscal commercialize place, serving farmers, gardening and pastoral atomic fig 18as. To become the member of Group pay and tinting in the rustic, Agribanks st wandergy is associated with the sustainable development of customers, banking, partners and communities.Based on the data obtained from a sm ein legality last(predicate)-scale interview carried ou t deep down Agribanks employees and reviewed literature, our spews squad analyze Agribanks st tellgicalal bear offment. opposite key point of this report is providing testimonys to improve its effectiveness and efficiency. It is hoped that this empirical report washbasin bring the readers with a to a greater extent precise look at the Agribanks strategic Management. TABLE OF CONTENT Abstract1 I. Executive depth psychology 3 II. founding of the lodge 3 III. Managerial assist.. 4 IV.Literature review.. 5 V. strategic management.. 6 1. Step 1 identifying the banks goal. 7 2. External Analysis7 3. internecine Analysis9 VI. decision and recomm prohibitation. 12 References. 14 I. Executive summary This report was com delegacyed to analyze, evaluate and in appendage to give recommendation about the strategic management of vernacular of Agricultural and Rural Development of Vietnam. The seek draws draw inion to Agri relys current missions and goals focusing on renovati ng and increment banking applied science in a sassyfangledisation manner.Further investigations give a SWOT compend about Agri imprecate and conclusions about their status atomic play 18 made Intern wholey, Agribank has quite a agglomerate of strengths such(prenominal) as commodious bout of gross capital, senior spunky school-pitched prestige, modern facilities, as intimately as some impuissancees homogeneous bad financial fashioning and put-go operation effectiveness. Besides, outsidely, Agribank as well has umpteen a(prenominal) opportunities quiet political status, economy rec overy, the bangle of the house servant market, and has to deal with lots of threats from competitors, loss of salubrious- strung-out employees, or governmental policies. later on(prenominal) cautiously evaluated, Recommendations argon given AgriBank should pe engagementrate the market strategies to take out spiriteder performance by focusing its sources of human and facilitie s on primary(prenominal) market. AgriBank should overly plump the market outline, which is to transmit receipts of its available products and swear out to read a new market in sanctify to expand market treat, blend more output and approach new potential dropity customers. II. Introduction of the company Agribank is the largest bank in terms of gillyf starter imagerys, itemise of employees, assets, operation nedeucerk and customer bases with theme non only in local anaesthetic anesthetic market but in any case external market.Agribank has always foc utilise on the cognitionableness and application of banking technology in favour of traffic administration and the development of an groundbreaking banking service interlocking. As the report of Agribank. com. vn As of November 2011, Agribank had the total asset of VND 5240,000 billion, total right of VND 22,176 billion, total outstanding loans of VND 414,464 billion, total inventory resource of VND 478,000 billion, total supply of 35,000 people, 2,300 branches and effect offices.Agribank is one of the leading bank in Viet Nam in terms of receipt and executing of unusual projects, especi totallyy from World Bank, Asia Development Bank, European Investment Bank and French Development Agency. At present, Agribank is serving 10 million household and 30,000 enterprises. With the position of a leading commercial bank in Viet Nam, Agribank has shown its gigantic efforts and contribution greatly to the peoples industrialization and modernization as well as economic development. imputable to its location and market share, Agribanks print market is Vietnam, especially in awkward areas. astir(predicate) crisscross customer, in the startle occlusive, its fundament was people who did the agricultural work. However, nowadays, Agribank has no tar realize customer as it welcome everyone who offer up capital and invest in many fields different than factory farm. III. Managerial guide In the context of a scholarly and comprehensive integration, to shuffling a oddment in how well Agribank performs as well as to cope with this ambivalent situation, Bank of Agriculture and Rural Development of Viet Nam posit strategic management.Hoang Thu Hien one of the staffs of Agribank pointed out that adept of Agribanks strategies is making great efforts in fund mobilization from both local and irrelevant sources and maintain the extension growth at a reasonable take. Another way is giving antecedency in investment in agriculture, farmers especially to farm households with agricultural, forestry, fishery and salt production. She in addition reveals that those strategies is built in the period 2000 2010 by a group of financial experts hired by Agribank. They are remedy used today and other details of the strategic management are kept as secret database of the bank.The superior oecumenic strategy of Agribank this period is it testament put forth a number of sol utions which are fol firsting the insurance policy of the governing body and the State Bank of Viet Nam on mo light upary policy in 2011 and for culmination geezerhood (n. d. ). First of all is locomote up the fund mobilization from contrasting sources for serving agriculture, farmers and rural areas then circumstance up the progress on implementing the Circulation 13, 19 of SBV on safe index for acknowledgment inductions or fol small-scaleing the SBVs governor and relative agencies for adding fund in 2011 and ontogenesis strategy on international cooperation and foreign fund projects for 2010-2015.Secondly, Agribank has completely changed into Ltd Company with ascorbic acid% capital of State and pushing up the modern banking technology based on IPCAS II which is used to develop the new products and services with juicy type to let out serve the customers. Thirdly, Agribank is trying to train the staff about the core cultural determine including honesty, discipline, c reativity, character and efficiency. Finally, Agribank plans to carry out the project on business development strategy for 2011-2015 towards 2020 to prove the prestige of the largest commercial bank-financial institution in Viet Nam.IV. Literature review Regarding strategic management, many scholars consume look fored about it so as to find out the scoop way to establish strategy and manage it. Stephen P. Robbins and Mary Coulter with Management ten percent edition go drawn the well-nigh detailed and comprehensive read of strategic Management. According to their theory, strategy is plans for how an face leave do what its in business to do, how it will compete success to the complete, and how it will attract and satisfy its customers in order to secure its goals (Stephen amp Mary 2009, p. 163). And then strategic management is delimit as what managers do to develop an disposals strategies. on that point are three reasons why strategic management is classical which ar e say that it makes a difference in how well an organization performs, it is necessary to cope with uncertain situation and to provide organizational goals for severally part of the organization to work toward. After clarifying the importance of strategic management, those two authors draw a big picture of the strategic management dish.There are all 6 move in the process which the first 3 are close to important. The first step is to identify the organizations current mission, goals and strategies. Mission is defined as a statement of the purport of an organization and goals are on a lower floorstood as measurable performance targets. Identifying those concepts will assistant the organization draw a general path to follow. The side by side(p) two steps kitty be combined as SWOT psychoanalysis which analyze 4 main factors strengths, flunkes, opportunities and threats.It kindle also be defined as doing external analysis environment around the organization and its effect- a nd immanent analysis the organizations particular(prenominal) resources and capabilities. The next step that is to say Formulating strategies is through with(p) after all the analysis and is to establish a detailed path for the organization to follow. The last 2 steps are about implementing and evaluating the strategies that have been built up in the last step. Agreeing with those two authors theory, we have conducted interview and done some research and analysis about Agribank Vietnam. V. Strategic ManagementTo research about the companys strategic management, we are required to conduct the first three steps of Agribanks strategic management process. Our project team will identify the Agribanks missions and goals and do the inborn (SW) along with the external (OT) analysis. Furthermore, the recommendations will be set up to uphold the strengths, outmatch impuissancees, maximize opportunities and eliminate any threats or turn them into opportunities. 1. STEP 1 IDENTIFYING THE brass sectionS CURRENT MISSION AND GOALS To maintain the leading bank, provide the modern and high quality products nd services, meet the necessity of customers and growing the non-credit income, Agribank is focusing on renovating and developing banking technology in a modernization manner. That is its mission in 2011 and for the coming years The Agribank An Phu pointed out that Agribank expects to reach the goals for 2012 as follows the fund resource increases by 15-17% compared with 2011, outstanding loans rises by 11-12%, the rate of loans to agricultural and rural areas is 70%, NPLs below 3%, non-credit income goes up by 10%, CAR complies with international standard.In general, Agribanks goal is bringing prosperity to the customer. 2. orthogonal ANALYSIS After deciding the mission and goals of Agribank, the important thing is to conduct an external analysis, which includes the two components the general and the circumstantial environment. severally factors in the componen ts maybe an prob exponent or a threat to Agribank, basing on how they send packing affect Agribanks market. A. Opportunities As to abduce about the general environment, it is reported that the existences and Vietnams economy are recovering from the crisis and are predicted to be increment in the near future.A recent hold from the famous BBC (9 October 2012) has reported What is happening is a re-balancing of our economy. We have created a million net new jobs and we are now a net exporter of cars, but it is a disinclined process. With the economy flourishing, Agribank has an opportunity to expand the market size and provide more services to the customers. In addition to the countrys economy recovery, Agribank also eudaemonias from the fact that Vietnam has officially entered the WTO. By joining the worlds economic flow, Agribank has more chances to meet big partners and to develop itself.For example, the bank can strike from the foreigners about the new technology and in vestigate their way of working and technical skills. And, as to mention the political conditions, Vietnam is a undisturbed country with no terrorists or genteel wars which encourages the development of law and economy, and Agribank can make use of this to complete their working system. The opportunity for Agribank does not only come from the general environment but also the proper(postnominal) environment, especially from the customers.According to the Standard Charter Banks CEO, saying to baomoi online intelligence servicepaper (Phuong 2009), Vietnam has a young and fresh banking market, which is not fully exploited. He also points out that in the recent years, the number of banking service users rises piecemeal and it will continue to rise in the next 5 years. Furthermore, according to the vietnamplus. vn (Son 2009), Vietnams average age flows to become higher, consequently, many people will begin to carry saving for their pension plan.Agribank can take advantage of this op portunity to reach more to the customers need. B. Threats Besides the opportunities, there are also threats that Agribank has to deal with. The fact that Vietnam has entered the WTO also brings along the trouble of the market share beingness downsized because Vietnam banks and companies are now freely get investments from foreign companies. It will also increase the competition between Vietnam and other WTO countries, creating great tension to Agribank. In addition to this, the Government policies are also putting Agribank under pressure.The current ceiling interest rate is kept truly low at 9% started from 11th June, but its also predicted to be lower, according to Dr. Vu Dinh Anhs analysis (Thanh 2012). This policy makes it hard for Agribank and other banks to mobilize capital from people, and so on earn less(prenominal) profit on lending other companies money. In addition to the general environments influences, the specific environment, too, holds some menaces. The number of c ompetitors growing quickly in todays sentence of high-technology, following with the decrease in number of high-quality employees is current problems that Agribank have to face.Nowadays, joint-stock company banks such as Vietcombank, Vietinbank or ACB bank are playing their leading roles in banking effort in Vietnam, alluring a large number of users comparing to AgriBank. Not as tidy as JSC Banks, but the banks with foreign investments like the Standard Charter Bank being equipped with higher quality and credit funds and non-bank credit organizations are acting as the harbingers to Agribank. According to Vietnam quotation Information and Rating Companys report (Thanh 2012), 32 banks are rated to be highly competitive.Unfortunately, Agribank is not listed. Adding to the threats from competitors, the upcoming custody in banking being estimated to be really large but cannot be so sure about the quality is also a trouble for Agribank. The best workers tend to chase for high positi on with high salary in foreign countries or other bank rather than Agribank mend the rests are not really well-trained. In general, the threats to Agribank are surpassing the opportunities that the bank can get, but its whole banking business is predicted to be growing. 3. INTERNAL ANALYSISBeside external analysis, it is also very important to explore and assess the inherent factors of Agribank which are its strengths and weaknesses. Understanding about those upcountry elements will give us the knowledge of Agribanks ability to take well-being from the opportunities and to face the threats. A. Strengths The first and the roughly powerful strength of Agribank is that it has the largest total capital, the biggest operation network and the hugest source of labors and customers in Vietnam. According to the member 3 ngan hang thuong m? i nha nu? c co v? n di? u l? tren 1 t? USD on gafin. n (23 March 2012), a familiar website for investors, Agribank is the commercial bank that has t he sterling(prenominal) amount of total capital in Vietnam which is over 29. 606 billion VND. It is an advantage for Agribank as it can invest in a lot of fields and activities with its huge capital. About its operation network and source of labors and customers, Agribank has over 2. 300 branches and office and 37. 500 staffs all over the country. Moreover, according to the official website of Agribank (n. d. ), it also signs contract with other foreign banks from Laos, Cambodia and china to expand its market.Another strength is that it is the unique and main bank that focuses on the field of agriculture and rural areas. In Vietnam, only Agribank is the commercial bank that is nurtured and controlled by the government to develop agriculture and congest agricultural workers. Vietnam is the country that has the main focus on agriculture and producing food so that this market share would be a big benefit for Agribank. Moreover, Agribank is considered as having the lowest rank of in security due to its support from the government and it also has the prestige of a governmental bank with tradition and experience.This advantage can shape up the customers trust that not all other rivals can do. Last but not least, one more strength of Agribank is that its high technology applying in its infrastructure. To approve this point, the phrase Viettel va Agribank ky k? t th? a thu? n h? p tac toan di? n on danviet. vn (D? c 2011) states that from November 20th, 2011, Viettel would coordinate with Agribank alone with its telecommunication infrastruction. The combination of those two giants will be an extreme advantage for Agribank to enkindle its system and bring better products to its customers. B. WeaknessesIt is essential that Agribank is one of the strongest banks in Vietnam at this age however, it still has its own weaknesses that need alter to get the highest performance. The first alarming weakness is its bad financial capability. Although its system is modern and successful in Vietnam, Agribanks financial control is still weak compared to the worldwide standard. Stockbiz. vn reported that Fitch Ratings has affirmed Vietnam Bank for Agriculture and Rural Developments (Agribank) Long-Term Foreign-Currency Issuer Default Rating (IDR) at B (12 July 2012). The Outlook is Stable.At the same time, the result has affirmed Agribanks Viability Rating (VR) at ccc and Support Rating news report at B. A full rating breakdown is provided at the end of this release. Also according to this rating agency, Agribank has low rank of risk thanks to the support from the government, not from its own ability. The banks reported non-performing loans (NPLs) are the highest among domestic peers. Its low level of reserves, together with a high level of special mentioned loans (SMLs) and a sulky economic backdrop, is promising to keep credit costs elevated in the near- to medium-term.As a result, Fitch expects the banks lucrativeness to remain low, given also potential margin squeeze from a restrictive cap on lending rank on the agriculture sector. Therefore this weakness may not affect Agribank now in the domestic market, but if it wants to expand to the oversea market, it has to improve its financial capability a lot. Another clear weakness of Agribank is that its operation effectiveness is not high enough. Although the bank was established in 1988, it still hasnt made huge doctor on Vietnams agriculture.Farmers still do the farming work with traditional regularitys and do not use much technology in working. The rate of poor households in rural areas is still high after years. This weakness could be very breakneck as it would lose the customers and governments trust, which can reduce its total capital. one(a) last weakness of Agribank is that its human resource is huge but not qualified enough. There is a sad truth in Vietnam that people who have friendly relationship with some big men inside the company are likely to get the j ob. And Agribank is not an exception.Due to this terrible truth, many people who are not meliorate well enough still have good job and decide the great deal of the bank. Therefore, its human resource can not satisfy the requirement of the global standard, which would be a disadvantage for it when expanding to the bigger world. VI. Conclusion and Recommendations In conclusion, like other corporations and organizations, Agribank has its all strengths such as large number of gross capital, high prestige, modern facilities, and weaknesses namely bad financial capability and low operation effectiveness.Beside these midland factors, Agribank also faces up with opportunities peaceful political status, economy recovery, the freshness of the domestic market, and threats from competitors, loss of well-qualified employees, or governmental policies. Therefore, based on the analysis of SWOT and the wholesome interview of fix employee, we have drawn up the strategies for Agribank to strive m ore success in the next five years. 1. Penetrating market strategies In this strategy, we would focus our resources of human and facilities on main market to get higher performance.To get the strategy accomplished effectively, some methods essential be applied such as Improving the mobilization capital by allowing wide range of maturities, or periods, interests rate or accumulated interests. Furthermore, the bank can also try to attain sponsored -agricultural projects or projects of supporting small and average-scale business. Another method is improving the quality of credit service by using up the qualification of the staff to do research on reducing some steps of surgical operations so that the deed duration will be minimized which makes it faster and more favorable to deposit.Another effective solution is diversifying and developing the quality of the services because at the moment close of Agribank products are traditional ones, so it is less competitive. Therefore, the bank should introduce new locomote and convenient services and products to ensure the ability of serving customer efficiently. This method also heightens the administrative status of the management. 2. Expanding market strategy This is the strategy in which Agibank would take advantage of its available products and services to enter a new market in order to expand market share, get more output and approach new potential customers.There are some methods that can be applied, the first one could be intensify the process of constructing material facilities or, in detail, purchase necessary assets especially IT equipments, strongboxes, electric generators. Secondly, it could develop the network by establishing more transaction posts which help popularize brand name. Thirdly, Agribank can enhance the quality of the staff by focusing on recruiting, introducing new reserving support policies, retraining the current staff to get higher qualification and ability.Furthermore, in the period of expanding to new market, Agibank may appoint the most important and experienced cadres (skillful employees) to new brands in order to make sure that new brands can operate effectively. Beside those, Agribank should speed up marketing operations/ activities because marketing plays an important role in popularizing and giving products to the public. both(prenominal) methods for developing marketing performance are for products, improving traditional products and services, shortening procedure of transaction, and bringing new benefits to customer.For location, it can accept the most convenient location so that customers can slowly make transactions. For advertisement, it is wise to use radio, television, newspaper and the internet as the important way to advertise the bank. Furthermore, it is the way we serve that is one of the most government agency of advertisement to customers. Last but not least, we recommend to reinforce the control of internal activities which means tha t does not merely prevail the account or the asset of the bank but verify the quality of credit, the efficiency, refuge so that administrator can easily find out and re-correct defects and mistakes.References Agribank An Phu official website n. d. , D? nh hu? ng phat tri? n c? a Agribank Vi? t nam, viewed 17 November 2012, http//agribankanphu. com. vn/vn/company/details/dinh-huong-phat-trien-cua-agribank-viet-nam6. html Agribank Vietnam official website n. d. , Agribank phat tri? n b? n v? ng vi s? th? nh vu? ng c? a c? ng d? ng, viewed 17 November 2012, http//www. agribank. com. vn/hundred and one/786/gioi-thieu/dinh-huong-phat-trien. aspx Agribank Vietnam official website n. d. , M? ng lu? i ho? t d? ng Agribank hon 2300 Chi nhanh, Phong giao d? ch tr? dai cung hinh ch? 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