TABLE OF CONTENT INTRODUCTION Theoretical background .6 Objectives of the study Object and scope of the study .6 Methodology of the study CHAPTER: THEORETICAL BACK GROUND OF BUSINESS STRATEGY FORMULATION 1.1 OVERVIEW OF BUSINESS STRAEGY 1.1.1 Concept 1.1.2 Strategy classification 1.1.3 Affecting factors to strategies of an enterprise 1.2 PROCESS OF STRATEGY FORMULATION .11 1.2.1 Strategy formulation by SWOT analysis .11 1.2.2 Tools for strategy formulation 12 1.3.ROLE OF BUSINESS STRATEGY FORMULATION TO ENTERPRISES 16 CHAPTER II: REAL SITUATION OF CREDIT SERVICE FOR SMALL AND MEDIUM-SIZED ENTERPRISES AT AGRIBANK – NORTH HANOI BRANCH 18 2.1 INTRODUCTION OF AGRIBANK – NORTH HANOI BRANCH .18 2.1.1 Process of establishment and development 18 2.1.2 Organizational structure of the Branch 18 2.1.3 Products and services 19 2.1.4 BUSINESS RESULTS .19 2.2 REAL SITUATION OF CREDIT SERVICE FOR SMALL AND MEDIUM-SIZED ENTERPRISES AT AGRIBANK – HANOI NORTH BRANCH 22 2.2.1 Scale of credit service for small and medium-sized enterprises 22 2.2.2 Capital turnover 25 2.2.3 Non-performing loans of SMEs 25 2.2.4 Potential of banks in the region 26 2.3 ANALYSIS OF ENVIRONMENT FACTORS AFFECTING CREDIT SERVICE FOR SMES AT AGRIBANK – NORTH HANOI BRANCH 27 2.3.1 External environment analysis .27 2.3.2 External Factor Evaluation (EFE) Matrix 34 2.3.3 Competitive profile matrix .37 2.3.4 Internal factor analysis 38 Page 2.3.5 Internal Factor Evaluation (IFE) Matrix 43 2.3.6 Internal-External (IE) Matrix 44 CHATER III: STRATEGY ON EXPANDING AND DEVELOPING CREDIT SERVICE FOR SMEs AT VIETNAM BANK FOR AGRICULTURE AND RURAL DEVELOPMENT – NORTH HANOI BRANCH IN 2011 – 2015 PERIOD .45 3.1 ORIENTATION ON EXPANDING AND DEVELOPING CREDIT SERVICE FOR SMALL AND MEDIUM-SIZED ENTERPRISES OF VIETNAM BANK FOR AGRICULTURE AND RURAL DEVELOPMENT – NORTH HANOI BRANCH IN 2011 – 2015 PERIOD 45 3.1.1 Motto of AgriBank – North Hanoi Branch 45 3.1.2 Objective of business strategy by 2015 45 3.2 SELECTING STRATEGY ON EXPANDING AND DEVELOPING CREDIT SERVICE FOR SMALL AND MEDIUM-SIZED ETNERPRISES AT VIETNAM BANK FOR AGRICULTURE AND RURAL DEVELOPMENT IN 2011 – 2015 PERIOD 46 3.2.1 SWOT Matrix 46 3.2.2 SPACE Matrix 48 3.2.3 QSPM Matrix 50 3.2.4 Determination on strategy of AgriBank – North Hanoi Branch in 2011 – 2015 period 52 3.3 SOLUTIONS TO IMPLEMENT THE STRATEGY ON EXPANDING AND DEVELOPING CREDIT SERVICE FOR SMALL AND MEDIUM-SIZED ENTERPRISE OF AGRIBANK – NORTH HANOI BRANCH IN 2011 – 2015 PERIOD 53 3.3.1 Diversifying the investment portfolios 53 3.3.2 Improving appraisal 53 3.3.3 Expanding the network and attracting customers .54 3.3.4 Improving organizational model and boosting quality of human resources 54 3.3.5 Marketing solutions 55 3.4 ROAD MAP FOR IMPLEMENTING STRATEGIC SOLUTIONS 56 3.5 SOME RECOMMENDATIONS 57 3.5.1 Recommendations to the State and the Government 57 3.5.2 Recommendations to the State Bank of Vietnam (SBV) .57 3.5.3 Recommendations to Vietnam Bank for Agriculture and Rural Development 58 CONCLUSION .59 REFERENCES .60 Page Page LIST OF FIGURE Figure 1.1: Process of strategy formulation by SWOT 12 Figure 1.2: QSPM Matrix .16 Figure 1.3 -Organizational structure of the Head Office .18 Figure 2.1 Internal-External Matrix 44 Figure 3.1: Strategies on SPACE Matrix .50 LIST OF TABLE Table 1-1: Five Forces Model by Michael E Porter .10 Table 1-2: SWOT Matrix 15 Table 2.1 Results of capital mobilization at AgriBank - North Hanoi Branch in 20082010 period 20 Table 2.2 Results of credit activity at AgriBank – North Hanoi Branch in 2008 – 2010 period .21 Table 2.3 Financial results of AgriBank – North Hanoi Branch in 2008 – 2010 period .22 Table 2.4 The number of small and medium-sized enterprises having credit relation with AgriBank – Hanoi North Branch 22 Table 2.5 Results of credit service with small and medium-sized enterprises in 2008 – 2010 period 23 Table 2.6 Branch’s turnover from lending, loan collection and outstanding loans from enterprises in 2008- 2010 period 24 Table 2.7 Credit capital turnover of SMEs in 2008-2010 period 25 Table 2.8 Non-performing loans of enterprises and SMEs 25 Table 2.9 Competitive profit matrix of competitors 26 Table 2.10: External Factor Evaluation (EFE)Matrix of Agribank – North Hanoi Branch 34 Table 2.11 Competitive profile matrix 37 Table2.12: Human resources by qualification in 2008 – 2010 period 40 Table 2.13 – Internal Factor Evaluation (IFE) Matrix 43 Table 3.1 SWOT Matrix .46 Table 3.2 Strategic Position & Action Evaluation matrix (SPACE) 48 Table 3.3 QSPM Matrix 51 Table 3.4 Selected strategy and supporting strategy 53 Page LIST OF ABBREVIATIONS Agribank Vietnam Bank for Agriculture and Rural Development SMEs Small and Medium Enterprises ATM Automated teller machine CA Competitive Advantage ES Enviroment Stability EFE External Factor Evaluation Matrix FS Financials Strengths GDP Gross domestic product IS Internals Strenghts IFE Internal Factor Evaluation Matrix IE Internal External Matrix QSPM Quantitative Strategic Planning Matrix SWOT Strengths, Weaknesses, Opportunities,Threats SO Strengths , Opportunities ST Strengths, Threats SPACE Strategic Position & ACtion Evaluation matrix WO Weaknesses, Opportunities WT Weaknesses, Threats Page ACKNOWLEDGEMENT With the assigned task of formulating business strategy for a unit in the scope of capstone project report, besides our great efforts in studying, this capstone project report would not have been possible without the guidance and the help of several individuals who in one way or another contributed and extended their valuable assistance in the preparation and completion of this study … Because of some mistakes caused by the time limit, we would like to receive the teachers’ invaluable helps and opinions to perfect our research as well as develop further research which serves business efficiency in the recent integration situation We all commit that this paper is the result of our group’s efforts in studying; also, all data and information used in this capstone project report are authentic and clearly cited AUTHORS Page INTRODUCTION Theoretical background Under the situation of an increasingly competitive business environment due to the globally economic integration, Vietnamese companies operating in all industries have to face fierce competition of international rivals with high financial capacity and long history The pressures are much higher as in the banking sector; Agibank- North Hanoi Branch has not got acquainted with the competition from other commercial banks in the market Although Agribank is one of the leading banks in implementing the State’s monetary policies, constraining and reducing inflation, stabilizing monetary market and enhancing economic development, it is required that the bank, under the pressure of competition and capitalization, should obtain the right opportunities to develop sources of competitive advantages In order to develop a competitive advantage, as well as increase competitiveness in the banking system, Agribank – North Hanoi Branch should well create formulate Objectives of the study - Organizing and reviewing literature and theories of strategic management; - Analyzing and evaluating business performance of Agribank – North Hanoi Branch; - Proposing strategic solutions for Agribank – North Hanoi Branch in 2010- 2015 period Object and scope of the study - Scope: within the Vietnamese market during the period of 2010- 2015 - Objects: Strategies for expanding and developing credit service for small and medium –sized enterprises in Agribank – North Hanoi Branch Methodology of the study + Data collection method - Data offered by Agribank – North Hanoi Branch including annual reports, performance reports, equity and liability reports and other related data; - Data collected from financial reports, internet, newspapers and magazines, etc relating to the banking markets and other commercial banks Page + Data analysis method - Research methods of secondary data reviewing the market’s scale, structure and trends; - Comparative method: a popular method This method provides an explanation about the extent of relationship between different variables including absolute or relative ones in term of times (one period over another period) or place (one bank over another bank), etc - Individual evaluation method: analysis of each issue, indicator, and phenomenon; and a comprehensive analysis assessing all the Bank’s activities Structure of the capstone project report TOPIC “Strategy on expanding and developing credit service for small and medium - sized enterprises at Vietnam Bank for Agriculture and Rural Development – North Hanoi Branch in 2011 - 2015 period” Chapter 1: Theoretical background of business strategy formulation Chapter 2: Real situation of credit service for small and medium-sized enterprises at Agribank – North Hanoi Branch Chapter 3: Strategy on expanding and developing credit service for small and mediumsized enterprises at Vietnam Bank for Agriculture and Rural Development – North Hanoi Branch in 2011 - 2015 period Page CHAPTER I THEORETICAL BACKGROUND OF BUSINESS STRATEGY FORMULATION 1.1 OVERVIEW OF BUSINESS STRAEGY 1.1.1 Concept 1.1.1.1 Concept of business strategy According to Michael Porter, business strategy is the creation of unique and valuable position including differentiation, selection with exchange characteristics to focus all resources to create advantage for the enterprise In doing business, enterprises must have strategies, deploy strategy, make reasonable decisions, control their activities, taking advantages of opportunities and weaknesses, overcome threats and enhance competitive strength 1.1.1.2 Basic characteristics of business strategy - Business strategy is to clearly define basic objectives and business orientations of an enterprise in each period - The orientativeness of strategy aims at ensuring continuous and stable development in the volatile business environment - Business strategy helps ensure maximum mobilization and optimal combination of resource use of enterprises at present and in the future, promote strengths and grasp opportunities to gain competitive advantage - Business strategy is reflected in a continuous process - Business strategy always has aggressive spirit and gaining victory in the business market - Business strategy is often built in a long period (3,5,10 years) 1.1.2 Strategy classification Many types of strategies are used in an organization; however, there are three levels of strategies used: - Corporate level strategy: sets out objectives and business activities of a company, making policies and basic plans to realize these objectives Page - Business level strategy: determines business environment of the Company, market segment and products for each type of market - Functional level strategy: Determines solutions and plans for each business fields 1.1.3 Affecting factors to strategies of an enterprise 1.1.3.1 External environment A Macro-environment (1) Macro-economic environment: Macro-economic environment always has influence on enterprises and the industry, and strong influence on banking sector Macro-economic environment concentrates on some influential variables such as GDP, inflation rate, base interest rate, the availability of credit system, income and consumption capacity (2) Technological environment: Technological environment has a strong influence on business activities of banking system because technology can support bank by quickly, favorably and accurately supplying services (3) Socio-cultural environment: includes socio-cultural factors having influence on the life and behavior of the people, via that affecting the structure of demand, consumer behaviors and consumption trend of customers (4) Demographic environment: Population, gender, age, geographical distribution, community of ethnic groups and income distribution (5) Political – legal environment: includes a system of viewports, policies of the state, legal system, especially the laws related to business, political movement within the country and in the world (6) Global environment: includes important international political events, characteristics of institutions and basic culture in the global markets, related global markets, current changing markets, regionalization trend, economic relation among countries, regions are factors having direct influence on strategic management B Micro-environment/industry environment: Applying five forces model by Michael E Porter: Michael E Porter is a theorist and practician of strategy at Harvard Business School, he set out a framework to help managers to recognize opportunities and threats facing enterprises in an industry Page 10 3.2 SELECTING STRATEGY ON EXPANDING AND DEVELOPING CREDIT SERVICE FOR SMALL AND MEDIUM-SIZED ETNERPRISES AT VIETNAM BANK FOR AGRICULTURE AND RURAL DEVELOPMENT IN 2011 – 2015 PERIOD 3.2.1 SWOT Matrix From evaluation on Strengths – Weaknesses of AgriBank – North Hanoi Branch, the group sets up SWOT Matrix as follows: Table 3.1 SWOT Matrix External factors Opportunities Threats Stable political and legal Incomplete legal environment environment Increased entry of foreign 2.Open economic environment banks in Vietnam after WTO High and stable GDP growth accession Supporting policies for Increase in number, scale and SMEs quality of joint-stock Increased in number of commercial banks newly-established enterprises Substitute products like Opportunities of accessing securities, gold, etc and transferring modern 5.Exodus of talented people to technologies joint-stock commercial banks Populated population of and foreign banks Hanoi, high demand for Shortcomings in management Strengths banking products and services SO strategies capacity of SMEs WO strategies High fund sources, + Raising quality of fund + Grasping and forecasting proactiveness in sources, reducing capital changes in legal and macro- mobilization and expense by strongly management environment to interest rate developing enterprise change business strategy Good credit supply to customers with the focus on suitably customers SMEs + Taking opportunities to learn Ensured liquidity + Developing credit service for experience on risk management Internal factors Page 48 AgriBank brand SMEs, giving priority to a and administration from foreign Quality of the staff number of manufacturing and banks System of high processing enterprises, creating + Training and improving technology employment for the society leadership capacity for Favorable and + Exploiting new technology managers convenient and utilizing the capacity of + Diversifying list of products infrastructure introducing many new and streamlining the cost for products, services and utilities inputs and outputs to meet to better meet customers’ customers’ demand demand ST strategies WT strategy Weaknesses Dependence on + Suggesting AgriBank to AgriBank + Analyzing potential flexibly empower branches and Unprofessional competitors and grasping new transaction office by promotion products to timely cope with management qualification and Having no right in new entrants business performance recruitment + Innovating and creating + Applying modern banking Having not differentiated products technologies to enhance internal established performance + Establishing compensation risk management and appraisal system mechanism for management transparency management in Limited network staffs transactions Incomplete + Building a customer + Building and completing information technology information management transaction offices both in terms system system to limit risks of infrastructure and staffs + Improving organizing and training for the staff to meet requirements of integration process 3.2.2 SPACE Matrix Table 3.2 Strategic Position & Action Evaluation matrix (SPACE) Page 49 Criteria Score Financial strength (FS) Average score Note 4.66 AgriBank – North Hanoi Branch has Financial strength financial strength: High fund sources and profit This criterion is rated with scores AgriBank – North Hanoi Branch Liquidity ensures to sufficiently meet payment demand of customer This criterion is rated with scores Capital adequacy ratios are sustained at Capital adequacy ratios reasonable level and rated with scores Competitive advantage (CA) -2.66 AgriBank – North Hanoi Branch has Distribution network transaction offices which are limited -3 and have not met actual demand This criterion is rated with scores Products and services have not been Products, services diverse, and remained lack of -4 competitiveness, thus, rated with scores AgriBank – North Hanoi Branch is a Brand prestige -1 Bank with a strong branch, rated -1 score Environmental stability (ES) -2.25 The economy in the recovery and Economic and political environment -1 development stage along with political stability create favorable conditions for enterprises, rated with - score Page 50 Legal system of banking sector is still Legal system asynchronous and unsuitable with -3 International standards and common rules, rated with -3 scores Inflation rate, exchange rate and Inflation, exchange rate, interest rate interest rate have complication -4 movements; however, the Government has made effort to stabilize exchange ratepresent, and interest ratedare with - 4high, At entryrate, barriers very Entry barriers -1 constraining new entrants, rated with -1 score Industry strength (IS) Industry growth rate Important role with the economy Capital scale of the sector 5.33 Banking sector always has high growth rate, rated with scores Banking is one of the entities leading 6 the economy to develop effectively, rated scores Banking sector has a large scale of capita, rated with scores We have: FS + ES = 4.66 + (- 2.25) = 2.41; IS + CA = 5.33+ (- 2.66) = 2.67 Representing on SPACE Matrix, strategy of AgriBank – North Hanoi Branch at aggressive position: Page 51 Figure 3.1: Strategies on SPACE Matrix FS CA-6 -5 -4 -3 -2 -1 -1 IS -2 -3 -4 -5 -6 ES AGRIBANK – North Hanoi Branch is strong in the aspect of finance and has competitive advantage In the current stage, AGRIBANK – North Hanoi Branch is recommended to select aggressive strategy to take advantage of external opportunities to overcome internal weaknesses and avoid external threats Specifically, AGRIBANK – North Hanoi Branch is suggested to have strategy on expanding and developing credit service for SMEs in 2011 – 2015 Matrix 3.2.3 QSPM Matrix In the scope of this project, the group has selected two key strategies related to the project, namely: Strategy 1: Expanding and developing credit service for SMEs Strategy 2: Expanding and developing loans for consumers, individuals and production households Page 52 Table 3.3 QSPM Matrix Alternative strategy Expanding and developing Key factors Weight Expanding and developing credit service for credit service for SMEs consumers, individuals & Base for total attractiveness score production households Attractiveness score Total attractiveness score Attractiveness score Total attractiveness score External factors Stable political and legal environment Open economic environment Supporting policies from the Government Populated population, potential market Demand for banking services Industry rivalry Scale and quality development of banks Fierce competition in attracting talented people Increased risks in integration process 10 Customers’ requirements for quality 12 12 3 4 12 3 3 9 6 2 Having the same response Having the same response The first strategy better responses to The first strategy this criterion better responses to The first strategy this criterion better responses to this criterion Having the same response The first strategy better responses to Having the same this criterion response The first strategy worse responses to The first strategy this criterion 3 of banking products and better meets this criterion services Internal factors Technological and communication system 2 4 Having the same response Page 53 Good financial situation and credit supply Ensured quality of the It is more effective to 12 3 Brand prestige 12 Wide network 6 Interest gained 6 Operating cost 12 Poor image promotion 6 10 Business risks 2 4 staff Dependence on AgriBank Sum total attractiveness score 165 focus on the first strategy The first strategy will be more appropriate The first strategy will be more appropriate Having the same response The first strategy brings more interests Having the same response The first strategy saves more cost Having the same response Having the same response 122 3.2.4 Determination on strategy of AgriBank – North Hanoi Branch in 2011 – 2015 period Via SWOT and QSPM matrices, after evaluating the strategy on expanding and developing credit service for SMEs has higher attractiveness score, the group has detailed strategy for business activity of AgriBank – North Hanoi Branch in 2011 – 2015 as follows: Page 54 Table 3.4 Selected strategy and supporting strategy Strategy Content Strategy on expanding and Taking advantages of brand and supporting developing credit service for SMEs policies of the Government for SMEs Using new technology and making use of Strategy on optimizing credit risk analysis capacity of information system to Strategy of diversifying investment portfolios manage credit risks Based on the number of current customers, analyzing groups of customers and groups of credit products and forecast risks in the future 3.3 SOLUTIONS TO IMPLEMENT THE STRATEGY ON EXPANDING AND DEVELOPING CREDIT SERVICE FOR SMALL AND MEDIUM-SIZED ENTERPRISE OF AGRIBANK – NORTH HANOI BRANCH IN 2011 – 2015 PERIOD 3.3.1 Diversifying the investment portfolios - Reviewing and evaluating each credit products, which are being established in terms of size and quality, as well as predicting its risks - Adjusting and regularly replace credits of the high-risk products with the low-risk ones, or those which never been implemented at AgriBank- North Hanoi Branch - Establishing and developing effective credit products which were successful launched by other credit institutes while AgriBank – North Hanoi Branch has not implemented or even established with little attention and uniformity 3.3.2 Improving appraisal - Regular training and retraining in credit operation and enhancing knowledge of business finance, law for credit officers to improve the quality of this team Good analysis of business finance is a very important stage in appraisal to provide accurate proposals for credit facilities and reduce risks in the future - Dividing management according customer groups, especially selected good ones who have deep understandings of corporate finance to work in business credit groups Page 55 - Decentralizing access and management with various types of businesses: SMEs are assigned to the Transaction Management Lending Department, the head office will manage SMEs lending more - Enhancing the role of management and credit control Regular disseminating ethics for officials and avoid the area, misleading, and false loan application client to influence the lending decision is incorrect - Establishing independent evaluation of credit staffs, with a regular task to capture, analyze and process customer information for assessment tasks, branch-level credit 3.3.3 Expanding the network and attracting customers - Reviewing and analyzing the effectiveness of each transaction office in the network To maintain and develop additional transaction with high priority in the new urban areas in the near future, also called "going in advance" - Improving service quality to attract customers in order to adequately satisfy the needs of customers To improve service quality, AGRIBANK - North Hanoi Branch need to: + Building a team with a professional qualification, have a sense of responsibility, serious working style, honesty and openness with customers + AGRIBANK - North Hanoi Branch should improve its procedures towards convenience and friendliness with customers, making customers feel comfortable when dealing with the bank - Each transaction office must have a staff in charge of providing guidance and answering questions for clients in the most professional way to ensure the interests of both customers and the AGRIBANK bank- North Hanoi Branch 3.3.4 Improving organizational model and boosting quality of human resources - To improve the organizational model, AGRIBANK - North Hanoi Branch needs to consolidate the organizational structure to match the scale and model of the company currently and in the future The organizational structure must meet the requirement: compact and effective to ensure the smooth and secured operation - Improving the quality of human resource: Rapidly and effectively implementing and Page 56 deploying the training and retraining of staff, consolidate staff in the whole of AGRIBANK system - North Hanoi Branch - Adopting strategies to attract talents: Building special treatment policy for professional staff, the staff with high experience in management - Building a work system and an effective, specific and clear division of labor in order to evaluate accurately the work performance of employees 3.3.5 Marketing solutions - Principle of operation of AgriBank – North Hanoi Branch: putting the satisfaction of the customer's needs first, forward to customer with professional style and modern, regulating directly interview, taking a survey of customer satisfaction to find the limit to overcome weaknesses - Building brand name AgriBank - North Branch Hanoi through media channels, television, local radio, leaflets, porters, billboards, directed at the office, and through the annual customer conference to contact, catch the proposal and needs which the bank does not timely supply effectively - Improving website quality of AgriBank- North Hanoi Branch to provide fully information about products and services of the bank Page 57 3.4 ROADMAP FOR IMPLEMENTING STRATEGIC SOLUTIONS SOLUTION ROADMAP FOR COMPLETION 2011 2012 2013 2014 2015 Diversifying credit investment Risk analysis and forecast Reducing credit to the group of high-risk products Converting credit to other products with low risk Improving appraisal quality Establishing an independent appraisal team Setting up management team Training in-depth in corporate finance Raising the role of management and work ethics Expanding network and attracting customers Checking and analyzing efficiency of each point-of-sale Establishing customer service division at each transaction office Enhancing quality of customer services Completing and improving qualify of human resources Completing organizational structure Improving quality of human resources Marketing solution Developing brand Raising quality of website 3.5 SOME RECOMMENDATIONS Lending for SMEs plays a very important role It not only brings about profit to the Bank, but also boosts the development of these enterprises, making contribution to boost economic development Therefore, to develop lending for SMEs, there must be both effort of banks as well as SMEs and the smooth and synchronous coordination of Page 58 relevant agencies and branches such as the Government, the State Bank of Vietnam, Vietnam Bank for Agriculture and Rural Development, etc 3.5.1 Recommendations to the State and the Government - Continuing to sustain a stable politic and socio-economic environment The State is recommended to establish a stable, reasonable and long-term macro-economic environment for the stabilizing the macro-economy to create a stable business environment for the entire economy - Promptly completing standard legal system in accordance with International common rules to integrate in the International economy, create conditions, encourage enterprises, including SMEs to development and effectively operate under the law Creating conditions for stable and equal development for all enterprises of all economic sectors and fields - Having close regulations in establishing enterprises, supervising the situation that enterprises are established massively without capital for operating or operating ineffectively - Completing dispute settlement mechanism related to loan insurance and treating mortgages Promulgating legal document to accelerate compulsory sale of mortgages at banks 3.5.2 Recommendations to the State Bank of Vietnam (SBV) - Flexibly regulating monetary and fiscal policies to raise the efficiency of monetary policies via regulating the open market operation, rediscounting, refunding Closely combining monetary policies with fiscal policies to control all cash inflows of the economy, especially from the State Budget and non-banking financial institutions - Completing the system of the State Bank of Vietnam in the direction of converting SBV into a real central bank Enhancing the relative independence of SBV and the Government to raise efficiency of monetary policy, establish the role and self-reliance of SBV in establishing and managing monetary policies - Promoting the role of inspecting and supervising of the State Bank of Vietnam to business activities of credit institutions, ensuring secured and effective operation and avoiding unhealthy competition among credit institutions Page 59 - Expanding credit information system and preventing risks by upgrading, expanding customer information system and ensuring the accurate and timely information supply to banks Credit information system will contribute to limit the lack of customer information of commercial banks Besides, SBV is recommended to promulgate regulation on exchanging credit information among banks 3.5.3 Recommendations to Vietnam Bank for Agriculture and Rural Development - Improving proactiveness to branches and transaction office in business activities on the basis of potentials and internal forces of each branch - Having encouragement policy for branches with effective operation, bringing high profit for the Bank - Supporting software technology to help branches formulate a multi-dimensional information system Investigating and applying appropriate risk management system with current regulation pursuant to the operating characteristics of AgriBank and International common rules - Regularly opening training and knowledge fostering classes to enhance professional qualification for the staff to catch up with the current development trend of financebanking sector - Quarterly marking credit rating of branches to have orientations for the branches in each stage of development CONCLUSION Vietnam economy in general and financial market in particular has integrated in to International economy Although the Vietnam enterprises have strongly grown both in Page 60 quantity and quality and there are many opportunities, they have also encountered difficulties, challenges and potential risks In period 2011-2015, Vietnam economy will witness quality changes in competitive environment: it is transferring from domestic competitive to international competitive Vietnam commercial bank system will accompany with enterprises under the pressure of international economic integration which force the commercial banks including AgriBank – North Hanoi Branch to make preparation to integrate and develop Therefore, AgriBank- North Hanoi Branch is required to have some timely changes to stand firm on difficulties and suitably develop Hence, it is needed to be built real strength, right orientation to participate common environment On the ground of opportunity analysis- potential risk, strengths and weaknesses of AgriBank- North Hanoi branch, the survey has given business strategy for it in period of 2011-2015 To implement strategies, AgriBank - North Hanoi Branch needs to concentrate on solution groups: solution of diversifying credit investment, improving quality of appraisal, broadening network and drawing attention of customers, bettering organizing model and improving qualification of staff, of Marketing solutions However, AgriBank - North Hanoi Branch has to regularly test and evaluate the result of the solutions to have suitable change … Page 61 REFERENCES Theory on Strategic Management of Fredr David, Statistical Publishing House Encyclopedia – Ass Prof PhD Pham Hung Viet (http://dictionary.bachkhoatoanthu.gov.vn/default.aspx? param=1377aWQ9NzkwNSZncm91cGlkPTgma2luZD0ma2V5d29yZD0=&page=17) http://tamnhin.net/tieu-diem/5678/Tang-truong-kinh-te-Viet-Nam-nam-2011-cao-thuba-toan-Chau-A.html http://dvt.vn/20110106105532876p0c69/tang-truong-gdp-nam-2010-cua-ha-noi-dat- 11.htm Annual report of AgriBank – North Hanoi Branch; and data supplied by MBA program’s students working at competing banks Socio-economic report in June and the first six months of 2011 – Hanoi General Statistics Office Page 62 ... strategy formulation Chapter 2: Real situation of credit service for small and medium- sized enterprises at Agribank – North Hanoi Branch Chapter 3: Strategy on expanding and developing credit service. .. SITUATION OF CREDIT SERVICE FOR SMALL AND MEDIUM- SIZED ENTERPRISES AT AGRIBANK – HANOI NORTH BRANCH 2.2.1 Scale of credit service for small and medium- sized enterprises Table 2.4 The number of small. .. STRATEGY ON EXPANDING AND DEVELOPING CREDIT SERVICE FOR SMEs AT VIETNAM BANK FOR AGRICULTURE AND RURAL DEVELOPMENT – NORTH HANOI BRANCH IN 2011 – 2015 PERIOD 3.1 ORIENTATION ON EXPANDING AND DEVELOPING