Luận văn Thạc sĩ Kinh tế chính trị: Những vấn đề khoa học và thực tiễn để hình thành hệ thống bảo hiểm thất nghiệp ở Việt Nam

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Based on defining difficulties of VPBank in terms of competing with not only other non-state banks but also state-owned banks, the research will significantly find out a relevant competitive strategy for VPBank in the period from 2006 to 2010 and answer Why VPBank should apply CRM as a competitive tool.

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Nội dung Text: Luận văn Thạc sĩ Kinh tế chính trị: Những vấn đề khoa học và thực tiễn để hình thành hệ thống bảo hiểm thất nghiệp ở Việt Nam

ĐẠI HỌC QUỐC GIA HÀ NỘI KHOA KINH TẾ BÙI VIỆT BẢO Những vấn đề khoa học và thực tiễn để hình thành hệ thống bảo hiểm thất nghiệp ở Việt Nam LUẬN VĂN THẠC SĨ KINH TẾ CHÍNH TRỊ HÀ NỘI, 2001
TABLE OF CONTENT Abstract………………………………………………………………………….. i Tóm tắt………………………………………………………………………….. ii Acknowledgements……………………………………………………………. iii List of table and chart…………………………………………………………. .vi INTRODUCTION ....................................................................................................... 1 1. Necessity of the thesis 2. Objectives of the thesis 3. Methodology 4. Structure of the thesis CHAPTER 1: THEORICAL FRAMEWORK ................................................................... 4 1.1 The definition of customer relationship management (CRM): ..................... 5 1.1.1 Definition of customer relationship management:............................ 5 1.1.2 Comparison between relationship and transactional marketing: ..... 7 1.2 The principle of CRM .............................................................................. 8 1.3 The element of CRM: ................................................................................... 11 1.4 The characteristics and the challenges of CRM: .................................... 15 1.4.1 The characteristics of CRM: ........................................................... 15 1.4.1 The challenges of CRM:.................................................................. 16 1.5 Ideas support CRM:................................................................................ 17 1.5.1 The statistics of Harvard-Business review in December, 1995: ..... 17 1.5.2 Pareto's Principle - The 80-20 Rule: .............................................. 17 1.6 The benefits of CRM: ............................................................................. 18 1.6.1 Long-term profitability ......................................................................... 18 1.6.2 Lower costs ............................................................................................. 18 1.6.3 Repeat customer often cost less to service ...................................... 18 1.6.4 Opportunities for cross-selling ....................................................... 18 1.6.5 Defection less likely ........................................................................ 19 1.6.6 Employee retention ......................................................................... 19 1.6.7 Family influence .............................................................................. 19 1.6.8 Word of mouth marketing ............................................................... 19 1.7 The reason why CRM fails: ................................................................... 21 CHAPTER 2: BACKGROUND ON VIETNAM BANKING MARKET AND VPBANK SITUATION ANALYSIS ............................................................................................................... 25 2.1 Overview of Vietnam Banking Market .................................................. 25 2.1.1 Background ..................................................................................... 25 2.1.2 Commercial Banks' Market............................................................. 27 2.2 Situation of VPbank ............................................................................... 30 2.2.1 Vision .............................................................................................. 30 2.2.2 VPbank’s mission, strategy and performance results in 2001-2005… 31 iv
2.2.3 SWOT analysis ................................................................................ 42 2.2.4 Value chain analyis ......................................................................... 48 CHAPTER 3: RECOMMENDATIONS TO BUILD A STRATEGIC PLAN FOR APPLYING CRM IN VPBANK...................................................................................................................... 3.1 VPBank competitive advantages and general strategy from 2006-2010…53 3.2 Application plan of CRM in VPBank: ................................................... 57 3.2.1 The first phase: Build foundation for CRM .................................... 60 3.2.2 The second phase: Deploy CRM ..................................................... 65 3.2.3 The third phase: CRM development ............................................... 77 3.2.4 Conclusion ...................................................................................... 79 v
LIST OF TABLE AND CHART Table 2.1- VPBank Financial statement analysis in 2001-2004 Table 2.2- Total mobilized funds in the market I in the period 2001-2004 Table 2.3- List of VPBank’s competitors’ software names Table 2.4- The equity growth rate of banking system and some commercial banks Table 2.5- KPI to evaluate the performance of bank Chart 2.1– Financial statement analysis Chart 2.2- Profit structure in VPBank Chart 2.3- Profit in the first six months of 2005 Chart 2.4- Mobilizing fund grow rate in 2003-2004 Chart 2.5- ROE comparison vi
INTRODUCTION Competition in Vietnam business environment increases rapidly, especially when opening the economy. By approval of operation of economic partners, competition between industries and units of industry is significantly rising. Besides that, expanding economic integration requires firms to improve quality of products and services in order to create competitive advantages. There is high competitiveness between commercial banks in inter-bank market. Competitiveness is really carrying out between state banks and joint stock banks, two biggest bank system in Vietnam. Moreover, joint venture banks and foreign banks are emerging as potential competitors in the banking market. Foreign banks will absolutely create high pressure on Vietnamese banks. When foreign banks are free to operate in Vietnam, they will be big competitors of not only state banks but also joint stock banks. This is reason why Vietnamese banks have to apply modern technology in payment and management and diversify services in order to create competitive advantages. Vietnam joint stock commercial bank for private enterprises (VPBank) is entirely businesses under high competitiveness pressure. It is difficult for VPBank to compete against state banks because the government protects the state-owned banks. State banks have many advantages under government‟s protection and they definitely drive financial market. Furthermore, some joint stock competitors have high capital and large market as well as wide distribution channel. To become one of the top five biggest joint stock banks in Vietnam, VPBank must prepare its competitive strategy in next period in order to explore potential markets and enhance its competitive advantages. 1. Necessity of the thesis Joint Stock banks (JSBs) systems in Vietnam are significantly competing with State-owned banks (SOBs) system. Because of being result of opening the economy as well as characteristics of economy system, JSBs are controlled by Central Bank much 1
more tight than SOBs. Besides that, set up after SOBs they are really weak in infrastructure, competitive capacities and supported policies. Furthermore, when Vietnam becomes member of the World Trade Organization, Joint Stock Banks will face increasingly competitive pressure by foreign banks that have much more high power of finance and technology. Vietnam joint stock commercial bank for private enterprises (VPBank) is one of JSBs operating in Vietnam banking market. It is entirely difficult for VPBank to compete with SOBs. However, VPBank is opposing increasing competition of Joint Stock competitors in order to exist and development. Moreover, I have been working in VPBank, one of the first Joint Stock banks in Vietnam, as an officer for nearly three years. 2. Objectives of the thesis Based on defining difficulties of VPBank in terms of competing with not only other non-state banks but also state-owned banks, the research will significantly find out a relevant competitive strategy for VPBank in the period from 2006 to 2010 and answer Why VPBank should apply CRM as a competitive tool. To get the general objective the research thesis will take detail objectives: i) examining main effects of external and internal environment on VPBank‟s operation; ii) finding a relevant competitive strategy for VPBank in next five-year period and the relationship between VPBank new competitive strategy and CRM; and iii) how to apply CRM at VPBank. Questions To achieve these objectives above, the dissertation will answer three key questions follow: 1) What factors have significantly affected operations of VPBank? 2) What will be competitive strategy for VPBank in 2006 – 2010 and the relationship between the new strategy and CRM? 2
3) How to apply CRM solution? 3. Methodology To find a relevant strategy for VPBank, the thesis will analyze competitive advantages based on analyzing SWOT and value chain. Data is definitely collected from secondary data source. They are government‟s reports, Central Bank‟s annual reports, legal documents related to banking system, VPBank‟s Annual reports, VPBank‟s surveys and banking articles. Besides that, the research uses data collected from other Joint Stock Banks and State-owned Banks. The research also uses comparison and contrast methods in order to answer the research questions. 4. Structure of the thesis To regard to the research topic, the research is clearly divided into three chapters including: Chapter 1: Theorical framework Chapter 2: Background on Vietnam banking market and VPBank situation analysis Chapter 3: Recommendation on competitive Strategy of VPBank in 2006-2010, and how to apply CRM solution as a competitive tool. 3
CHAPTER 1: THEORICAL FRAMEWORK The evolution of marketing The word marketing is derived originally from Latin “mercatus”, which means marketplace. It comes from the word “mercari”, which means, “to trade”. The word can also be somewhat confusing. If you ask people what marketing is, many will respond with a variety of words such as selling, advertising, promotion, targeting, or marketing research. The fact is that marketing encompasses all of these and yet many other activities and it is concerned with the identification of marketing opportunities. The traditional view on marketing with the concept of 4ps: Price, Product, Place, and Promotion, was originally constructed by Niel Hopper in 1964. This approaches that has then over the years been further developed by a number of authors. These four elements are regarded as the traditional marketing mix and the marketing mix approach constitutes a production-oriented definition of marketing where transactions are put in the focus. From the early 1980s an alternative approach to marketing theory and practice was gaining power, namely relationship marketing. The term itself can be traced back to the service marketing literature, through arguably it can be said to have originated in industrial marketing. In the scope of industrial marketing this shift from traditional marketing towards relationship marketing are occurring and several scholars are claiming that this is a paradigm shift in marketing defines relationship marketing in the following way: “Marketing is to establish, maintain, and enhance relationship with customers and other partners, at a profit, so that the objectives of the parties involved are met. This is achieved by mutual exchange and fulfillment of promises.” In its earliest forms, relationship marketing focused simply on the development and cultivation of long-term, profitable, and mutually beneficial relationships between an organization and a defined customer group. However, the concept quickly broadened to 4
encompass internal marketing in acknowledgement that the successful management of external relationships was largely dependent on the alignment of supporting internal relationships. 1.1. The definition of customer relationship management (CRM): 1.1.1. Definition of customer relationship management: As already stated, the change of the business environment and the evolution of marketing to adapt to these changes have led to that the way companies organize themselves has switched from product-based to customer-based structures. A key driver of the change is the advent of customer relationship management-CRM, which underpinned by information systems convergence and the development of support software, promises to significantly improve the implementation of relationship marketing principles. From another perspective, CRM is a strategic view of how to handle customer relations from a company perspective. The strategy deals with how to establish develop and increase customer relations from a profitability perspective. Based upon knowledge about the individual customer‟s need and potential, the company develops customized strategies describing how different customers should be treated to become long-term profitable customers. The basic philosophy underlying CRM is that the basic of all marketing and management activities should be the establishment of mutually beneficial partnership with customers and other partners in order to become successful and profitable. In order to more efficiently manage customer relationships, CRM focused on effectively turning information into intelligent business knowledge. This information can come from anywhere inside or outside the firm and this requires successful integration of multiple databases and technologies such as the Internet, call center, sale forces automation, and data warehouse. There is no universal explanation of what CRM is, since the area is fairly new and still is developing. It is therefore important to 5
remember that several attempts of defining CRM exist and that many companies adapt the definition to their own business and their unique needs. The following quotations are three examples of how CRM is defined: “CRM is a new customer-centric business model that reorients firm operations around customer needs (as opposed to products, resources, or processes) in order to improve customer satisfaction, loyalty and retention” “CRM is the integration of customer focus in marketing, sale, production, logistics and accounting, i.e. in all parts of the company’s operations and structure” “The activities a business performs to identify, qualify, acquire, develop and retain increasingly loyal and profitable customer by delivering the right product or service, to the right customer, through the right channel, at the right time and the right cost. CRM integrates sales, marketing, service, and enterprise resource planning and supply-chain management functions through business process automation, technology solutions, and information resources to maximize each customer contract. CRM facilitates relationships among enterprises, their customers, business partners, suppliers, and employees” As can be seen above, the three definitions have the following in common: - They all include activities in all parts of the company - The reason for CRM is to create a customer relationship focused company. In essence, CRM provides management with the opportunity to implement relationship marketing on a company-wide basis. However, for CRM to be successful, all activities in a company need to be managed in a combination to reach success. 6
1.1.2 Comparison between relationship and transactional marketing: Relationship marketing Objectives Transactional marketing Relationship marketing Transactional marketing Customer base analysis Market and competitive and Need perceptions analysis segmentation Customer management Marketing strategies strategies Mix offer development Customer management policies Implementation Results Review We can make it more clearly through this table: Transactional marketing Relationship marketing - Only focus on sale - Focus on the retention and the - Promote the characteristics of loyalty from customers. product - Focus on some characteristics - Short-term goal of product that are - Don‟t care much for the customer meaningful to customers. retention - Long-term goal, short-term - Less interaction with customer cost but more effective and 7
- Only the manufacturers take care cost savings later. for quality. - Emphasis upon higher levels - Less commitment of service that are possibly tailored to individual customer - Care for the interaction with customers to gain information to build the relationship - Always keep and develop customer relationship - High commitment - The entire organization shares a commitment to quality Source: Transaction v relationship marketing (adapted from Christopher et al 1994) Christopher M, Payne A & Ballantyne D 1993, relationship marketing, ButterworthHeinemann. The two comparison tables show that the transactional marketing focuses on the capability of taking over new customers, attracting the potential customers from competitors while relationship marketing focuses on the capability of protecting the market share in the market, keeping close relationship with the current customers, cross-selling and up-selling. 1.2 The principle of CRM The principle of CRM is that all customers are not the right customers, so in CRM each customer group will be treated in the different ways. Given the many benefits of long-term customer relationships, it would appear foolish for a company to refuse or terminate a relationship with a customer. This section considers the view that not all customer relationships are beneficial. 8
A key step towards successful customer relationship management is to distinguish the transaction buyer from the relationship buyer. The transaction buyer tends to be interested in price and will easily shift to a competitor who offers a reduced price, even when the service may be inferior. The relationship buyer is looking for a supplier they can trust. Even when they are aware of cheaper products, they will prefer to stay with the original supplier for the peace of mind. Transaction buyers are rarely profitable as they only discounted items. Very often, relationship buyers subsidize the sales of transaction buyers. Database marketing software enables suppliers to separate transaction buyers from relationship buyers. For those whose customer files cannot be queried by profit per customer, some system for flagging lower profit transactions is required. In some businesses there are time periods when all transactions are discounted. Customers who purchase only in these times are easy to identify as transaction buyers. The remaining customers represent potential relationship buyers. They can be divided into three district segments: - Those who are significantly the most profitable; - Those who are delivering good profit and suggest the capability of becoming top profit customers; - Those who are only marginally profitable. This leads to one of the most basic database marketing tools: the monetary decide analysis. These segment customers into tenths, showing the total profit each decile contributed in the time period specified and the % in the total market that segment represents. This analysis is consistent with Pareto‟s law which shows that 80% of a business‟s revenue derives from 20% of customers. In most businesses, in fact, 60% of the customer base accounts for at least 90% of sales and an even greater %of profit. The next step is to conduct the purchase deciles analysis. This involves separating the total sales and profits into tenths to show how many customers account for each 9
10% of company profit. The results of this analysis frequently show that a little more than 1% of customer account for 10% of company sales with an even smaller segment contributing to 10% of total profit. Therefore, for a company with 150,000 potential relationship customers, fewer than 1,500 represent 10% of company profit. This analysis can be used to identify the three distinct segments of profitable relationship buyers as follows: - The first group of buyers: Those customers who represent 10% of the company‟s business and are the most profitable should be the first to be targeted for CRM. The purpose of the CRM efforts will be retention. Even although it may be difficult to make these customers more profitable, CRM should help assure that none of them are lost to the competition. - The middle group of buyers: The balance of the customers in top 40% or 50% as ranked by sales and profit. It will be just as important to target this middle group of buyers who are delivering good profit but may be capable of moving up to the top of profit level. Customers in this group are probably giving some of their business to your competitors. CRM activities for these customers should be aimed directly at increasing your company‟s share of their business. CRM marketing strategy developed for this middle group of buyer more than paid for the company‟s significant investment in database software within a year. - The final, less profitable, group of customers: The third group of customers represents those who, while profitable, are only marginally so. While it is possible that some in this group would move up the sales ladder as a result of increased communications, it will probably not be worth the effort. Typically, this group will represent almost half of the customer file. Hence this simple analysis has greatly reduced the size of the challenge of implementing CRM. 10
1.3 The element of CRM: CRM consist of three elements: People, Process and Technology, that help companies to understand their customers. To gain the success in CRM project, the company must coordinate all aspects. People and Culture The culture of an organization must be thoroughly understood before moving forward with an implementation. Organizations must concentrate on overcoming resistance. It is a strong reason why CRM projects often experience failure. Know your corporate culture and where the challenges will be prior to the start of the implementation so the appropriate changes can be made. Create long lasting awareness that a CRM solution is needed in the organization and exactly why. “Customer management behaviors … are often not embedded in the culture of an organization. Hence, people change roles and their thinking is either lost or moves with them” (Starkey, 2002). Explain the long-term goals and what the future culture will be so employees can change their perspectives. Help them understand that it is a cultural shift that must remain constant even through turnover or promotions. In addition, an organization must consider culture and social norms are not globally consistent. For example, the CRM approach in North America is very different from the Nordic School, which focuses “much more on aligning the organizations resources in such a way that ongoing (personal) relationships are formed and maintained” (Schultz, 2002). The description further details that the North American version of CRM is technology driven, and the Scandanavian version is built on personal relationships. This means one program may not be able to be rolled out uniformly in Japan, Europe, North America, and India. This is an interesting topic for global businesses trying to integrate processes throughout their organizations. Organizations must be keenly aware of the differences and how that affects a CRM program. There must be flexibility to change the process according to the cultural differences. 11
Employees may be resistant, because they feel overwhelmed with more work or drastically changing responsibilities. In addition, there may be blame in areas having significant customer failures. In a CRM environment the culture must shift to solutions rather than punishment for errors. In order to determine the root cause of problems, the culture must exhibit the freedom to communicate at all levels without fear of recourse for mistakes. In addition, the culture must shift from silos to one integrated operation. For example, sales people have traditionally guarded their turf, refusing to share information on customers they have cultivated. Teams must begin to work efficiently with other departments and other divisions around the world (Arthur, 2002). This means overcoming organizational and global cultural differences. Clear communication, resources, awareness, and training must be integrated into the culture or the transformation cannot occur. “Have a vision and passionately communicate it” (Brendler, 2001). This means communication is key; it will reduce resistance of employees. Employees want to know how they are expected to support the business. The more educated employees are on their new role, the smoother the transformation. In addition, providing a forum for employees to give input and give feedback can ease the implementation. Implementation should have complete involvement of those that know the business best. In order to have success, a complete view of the organization and „buy in‟ should be ingrained into the culture. Process The current process requires evaluation to determine what changes in the process must occur. "This is not just about investing in software; it is investing in a new approach to relationships," says Ronald S. Swift, vice president of strategic customer relationships with NCR Corp (Groves, 2002). Change the process before making technology infrastructure changes. Technology is the enabler not the focus. 12
The process of implementation has fundamental steps of development, implementation, and maintenance. There are also four key factors as the project advances from development to maintenance. These project factors include teamwork, resource commitment, consensus, and clear communications (Menon et. al., 1999). Teamwork is pinnacle at the early stages in the implementation. Resource commitment may seem obvious, but it still is an issue for organizations to resource adequately when undertaking a large project. Consensus represents the strategic alignment of managers and employees in the organization. Clear communication is important for the same reasons mentioned in the discussion on culture. A project cannot be successful if it fails to be methodical from development through maintenance while at the same time incorporating the success factors. During the developmental stage it is important to first define the outcome that is to be achieved from the project. “Ready, fire, aim” doesn‟t work. Resist the temptation to make it up as you go along. CRM is complex (Thompson, 2001). A well thought out strategy is a requirement for success (Menon et al, 1999). This will minimize scope creep and ensure the ultimate goal is clear. At this vital stage it is key to determine the members of the team. The team members of the project should be a cross functional group representing the different areas of the organization. For example, a manufacturing company should include quality assurance, supply chain, operations, accounting, research, and sales departments. This is most effective in problem solving and understanding a range of complex issues or opportunities. During the implementation phase of the process it is critical to have strong commitment from participants, leadership, and the entire organization. This commitment can be best achieved by laying out the project steps of implementation. The project must be broken down into achievable steps that are manageable. “We tend to implement in small phases,” says Boise CEO Milliken. Focusing on objectives with 13
a documented plan creates structure to the CRM implementation that ensures resource allocation and commitment to tasks. Resources include financial, people, training, and support. Clear commitment and resource allocation go hand in hand to achieving success. A company cannot have success without both factors. There also must be a focus on post implementation involvement to keep the project alive, create continuity and momentum as part of the process. The project doesn‟t end after the initial implementation. The implementation of CRM is a process and cultural change that must continue to offer results over time. In addition, poor follow-up could stifle customer relationships if attention doesn‟t continue. Think of customer relationship management as a never-ending journey with satisfied customers as guideposts along the way. No matter how successful you‟ve been, you‟re never really done with CRM. As customer expectations continue to rise, what was exceptional service yesterday becomes the status quo today—and will be going out of business strategy tomorrow (Thompson, 2001, p.64). Technology The success of CRM is not based on technology, but is described as the enabler of the process integration. The technology must be strategic, cost effective, and accessible. Strategic technology means there is flexibility and growth for the long-term corporate strategy. The information technology manager must select a healthy company that has a firm foundation in cutting edge software offerings. If the goal is to have Internet access for customers to place and track orders, the software must be able to provide or integrate with such systems. The system must also meet the needs defined by the business for security. Failure to take the proper security precautions can be a deadly experience for a business if intellectual property is lost or customer trust is publicly destroyed. The system should be cost effective. The technology should aim for configuration, not customization. This allows companies to “break the habit of writing custom code to 14
accommodate unique business processes; it will be well worth the effort when it is time to upgrade” (Bednarz, 2001). The more customization the harder it is to upgrade to the next version of the software. In addition, from personal experience the more code manipulations the less standardized the programming, and harder to proof out in productive systems. Managing the content of this information means ensuring customer information is properly collected, analyzed, and documented so that each department within the company has the customer data it needs to implement CRM functions (Groves, 2002). Otherwise information can create a wealth of data without a positive means of applying it properly in decision-making. The financial community, the board, and senior management are mostly focused on outcome indicators, especially those pertaining to the value created for investors. In addition to conventional financial and share measures the CRM system affords a more finegrained look at marketing effectiveness with respect to customer acquisition and defection rates, customer tenure, customer value and work, percent inactive customers and cross-selling (Crosby and Johnson, 2001, p.2) People Process Technology 1.4 The characteristics and the challenges of CRM: 1.4.1 The characteristics of CRM:  Customer database centrally: Give to the company a overall view of relationship of each customer. 15
 Profitability of customer analysis: CRM helps to create the balance sheet of individual customer, and helps the company to invest more effectively on each customer, the profitability is the most important thing to evaluate and classify customers. Normally, each company has three classes of customers: - The first class: Take about 10% of total customers, this class makes the highest profit and has long-term transactions with the company. - The middle class: Take about 40%-50% of total customers, this class makes profit and is very potential. - The last class: Also take about 40%-50% of total customers, the profit of this class is not high and mainly is the current customers who have few transactions or only come to the company in some special occasions like sale-off, discount...  Customer segmentation: CRM classifies customers into different segmentations and measures the effectiveness of each segmentation.  Marketing campaigns base on customer database: Use the database and information of each segmentation to plan and implement marketing campaigns  Analysis of customer‟s needs: Help to give personalized product or service to each customer and find more new and potential needs from customers to compete with competitors. 1.4.2 The challenges of CRM:  Have to change the policies and process in the whole  Need full support from the board of management and all staffs, for example: the way they import the customer information to CRM system and dig this database...  Need large initial cost to invest on software, machine, equipment and human resource... 16