Contents

INTRODUCTION

Vietnam Technological and Commercial Joint Stock Bank or Techcombank as known as Techcombank was
established in 1993 with initial capital of 200 million VND. After 27 years since established, Techcombank
continue developing and delivering the best products and services to its customers. (Techcombank, 2019)

This report will apply Porter’s Five Forces to evaluate the competitiveness in banking industry of Vietnam.
Besides, the influences of macro factors on Techcombank will be pointed out by identifying 5 factors of
PESTEL which are Political, Legal, Economic, Social and Technological. Last but not least, the impacts of
micro and macro environment on Techcombank and recommended strategies will be defined by using
SWOT.

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 PORTER’S FIVE FORCES

According to Chappelow (2020), Porter’s Five Forces is a framework which has the ability to analyze five
competitive forces. These forces play a critical role in determining weaknesses and strengths of an
industry, which helps the companies identify their corporate strategies. The understanding of competitive
level within any segment of the economy can be identified by applying Porter’s five forces. Based on the
result of this understanding, companies have the ability to increase their long-term profitability. According
to this model, the level of competition in an industry depends on five forces which are (1) threat of new
entrants, (2) bargaining power of suppliers, (3) bargaining power of buyers, (4) threat of substitute
products or service and (5) existing industry rivalry.

By using Porter’s five forces, this report is going to elaborate the competitiveness in the banking industry
of Vietnam.
1. Threat of new entrants

Based on Porter’s theory (1979), the seriousness of the threat of new entrants depends on the barriers to

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enter a given industry. The higher the entry barriers, the lower the threat to existing companies. Six main
sources of barriers to entry include economies of scale, product differentiation, capital requirements, cost
disadvantages independent of size, access to distribution channels and government policy.

According to 47/2010/QH12 (2010), there are some required factors to establish a bank in Vietnam: 3000
billion VND capital, at least 100 shareholders including 3 founding shareholders. All of them have to
satisfy requirements about qualification and at least 3-year experience in profit-making business. This
requirement for founding shareholders is 5 years. Moreover, founding shareholders must have at least
50.000 billion VND total assets and bad debt under 2%. To sum up, conditions to open a bank in Vietnam
are quite strict to Vietnamese people.

Established banks may benefit from economies of scale and reach through their ability to provide a wide
variety of low-cost goods, since they can spread their fixed costs of all its products and services per unit. In
Vietnam, customers are getting used to major banks such as Agribank (more than 2300 branches and
transaction offices), Vietinbank (151 branches and more than 1000 transaction offices) and banks with high
reputation such as Vietcombank, VP Bank, Techcombank, BIDV. All these four banks are in top 10
reputable Vietnamese commercial banks in 2019 (Vietnam Report, 2019). Consequently, new and small
banks may face the problem that they need time and resources to learn about the market’s trend and get
customers’ trust.

Opportunities for new banks may be related to new technologies (Booth, 2011). Traditional banks must be
aware of technologies from new entrants, especially wholly foreign banks, which have huge amounts of
capital from parent companies. For private commercial banks, those opportunities are limited due to the
lack of capital.

In conclusion, the threat of new entrants in the Vietnam banking industry is considerably low to the reality
that major banks have strong and trusted brands with dominant market position.
2. Bargaining power of supplier

Porter’s five forces analyze the amount of power suppliers (market of input) of a company has when they
increase the prices of products or reduce the quality of goods or services. These can lead to the decrease in
industry’s profitable potential. The power of suppliers depends on some factors including number and size
of suppliers, uniqueness of each supplier’s product and focal company’s ability to substitute (Porter, 1979)

According to Lin (2014), main suppliers of commercial banks are customers or depositors, accounting
services, legal services and financial markets. Legal services related to contracts and other issues are
provided by legal entities while the main responsibility of accounting firms is providing accounting

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services related to preparation of financial statements, tax auditing and other accounting issues.

Each bank has a different type of funding composition. In terms of major banks, the main fund comes from
customers’ deposits and long-term wholesale debt while regional banks raise funds from deposits,
“offshore funding” and securitization as well. In contrast, the deposits of foreign banks are fewer and they
raise funds more through the capital market. (Deloitte, 2012)

In terms of Vietnam, the banking industry has to face a huge number of customers. According to Forbes
Vietnam (2019), up to the year 2019, 43 million Vietnamese people have at least one bank account, which
makes up 63% Vietnamese adults. Besides individual customers, the banking industry also receives funds
from business companies. Similarly, the number of companies in Vietnam is quite big: 714.755 companies
in 2018 and 138.1 thousand companies newly established in 2019. Moreover, the number of small and
medium companies only accounted for 98.1% in 2019 (General Statistics Office, 2019). As a result, there
are many suppliers of banking industry in Vietnam and the size of the majority of them is quite small.

Because of the low switching cost, customer suppliers have the ability to choose and change different
banks to satisfy their demand. Consequently, the competitive interest rate becomes a pressure of banks.
Moreover, after a global financial crisis like Covid-19 situation, the popular source of funding for banks in
Vietnam becomes deposits. However, the crisis affects all the economy, which leads to the decrease in
interest rate and in depositing demand. In fact, interest rate of banks decreased 0.3-0.5 % and the amount
of deposits of economic entities in the first year 3 year 2020 reduced 3.23% compared to that in the end of
2019. (SBV, 2020).

Furthermore, other factors that affect suppliers’ decision are the trust and ease of access to the banks.
Therefore, banks ought to focus on building branches and truth for their customers.

In addition, suppliers of banks may include companies provide facilities. Similar to the customers, these
suppliers provide physical facilities including computers, tables, chairs, etc for the branches and offices of
the banks. Banks ought to choose the suppliers carefully to maintain the quality of required facilities and
have the best price due to the big size of order. Moreover, the workforce who directly execute the bank’s
decisions can be considered as another supplier. Similar to the customers, these two kind of suppliers are
tent to change if they receive high price/salary and better compensation.

In the banking industry, suppliers are not concentrated and do not have much power. However, in times of
crisis like Covid-19, suppliers has medium threat to the profit of the industry.
3. Bargaining power of buyer

The ability of customers or the market of output’s level of power is one of the five forces. The power of the

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buyer is defined based on number of customers, size of each customer order, differences between
competitors, price sensitivity, customer’s ability to substitute, customer’s information availability and
switching costs. (Porter, 1979)

Similarly to the suppliers, banking industry has a huge number of customers including individuals and
households for retail banking and mortgage, and business for business borrowing. Moreover, each
customer has different demands and uses of banking service for different purposes. Based on that
knowledge, banks need to create and provide various specific services for each type of customer such as
housing loans, car loans, loans for business, etc with special treatments (discounts, insurance, etc).

Furthermore, due to the sensitivity of price and low switching cost, banks have to provide competitive
interest rates to keep the existing customers and attract new ones. Especially in crises like Covid-19, the
demand of loaning decreases with the demand of depositing, one of the pressures of banks is to adjust the
interest rate. For instance, to support the companies affected by Covid-19, “Big 4” banks of Vietnam
which are Vietcombank, BIDV, Vietinbank and Agribank committed to reduce their interest rate up to
2.5%/ year. In addition, other banks also provide support loans and decrease interest rates since April 2020.
(Ngọc Bích, 2020)

As a result, buyers in the banking industry do not have enough power to bargain or change the price.
However, in special situations such as Covid-19, buyer’s power still has influence on the threat to profit of
the industry.
4. Threat of substitute products

According to Porter (1979), this force is all about the danger coming from other industries, whose common
products or services that customers may switch to alternatives. To identify this threat, number of substitute
products available, buyer propensity to substitute, relative price performance of substitute, perceived level
of product differentiation and switching costs must be studied.

Delotte (2012) highlighted that financial intermediaries like finance companies, insurance companies,
credit unions and fintech firms can be considered as substitute of commercial banks because of the similar
products and services provided.

Along with the purpose of reducing using cash too under 10%, the Fintech ecosystem in Vietnam starts
developing significantly in recent years with noticeable products which are digital banking (Timo, VRED),
payments (Moca, VNPay), Wealth Management (Finahy, Mobivi), etc. In 2017, the exchangeable value of
the Fintech market in Vietnam reached 4.4 billion USD and aimed to reach 7.8 billion USD in 2020
(Banking Review, 2019). 72% Vietnam population use smartphones and 64 million Vietnamese people use

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the internet (We are social, 2019) and they are all potential customers of Fintech companies. In addition,
according to Resolution 41/NQ-CP (2016), Fintech companies are supported in having low profit tax
(20%). Moreover, the development of Fintech in Vietnam is proofed by the representation of E-Wallet
MoMo and money management app Finhay in top 100 global Fintech firms in 2019 (Forbes Vietnam,
2019)

Therefore, this industry is on its way to develop with numerous benefits from the government and Vietnam
market. Since, the threat of substitutes to the banking industry are moderate to high that the banks ought to
pay attention to invest in technology and other services to maintain their customers.
5. Rivalry among existing competitors

The final force of Porter’s five forces model is the rivalry among existing competitors, which analyze the
intense current competition in the market. It can be considered as a form of using tactics such as price
competition, product introduction and advertising slugfests. This force is determined by the number and
size of competitors, the industry growth speed, switching cost, concentration ratio of an industry and
barriers to exit. (Porter, 1979).

Vietnam’s banking industry can be considered as a high rival industry. Despite the fact that threats from
new entrants of this industry are not really high, the bargain power of suppliers and customers are
moderate and threats of substitute products are very high. In Vietnam, there are 46 commercial banks
including 31 joint stock banks, 4 state-owned banks, 2 joint venture banks and 9 wholly foreign owned
banks and they are direct competitors of Techcombank. Up to 2019, there are 5 banks have more than
30.000 billion VND owner capital and all of them have more than 15 years experience since established
(Review of Finance, 2019). It can be said the competitors in the banking industry are very powerful and
full of experience, which may increase the competition in the industry.

Techcombank was one of the most successful commercial banks in 2019 with the profit before tax
increased 31.5% compared to that in 2018 (Techcombank Financial Report, 2019). However,
Techcombank must be aware of its competitors while they also developed in 2019. Some competitors may
include Vietcombank, Vietinbank with profit before tax rose 26% and 83% respectively in 2019. Another
noticeable competitor is VP Bank when in 2019, this bank developed significantly and reached the highest
profit before tax in 27 years since it was established. Moreover, Techcombank has to notice the
competitive advantage of this bank includes a digital bank: Timo, which does not require any fee from
customers.

Moreover, banks are hard to exit the industry due to No.17/2017/QH14 (2017), financial firms getting
bankrupt are required to be under special control by the SBV and provide specific plans to solve the

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problems. Consequently, this enhances the rivalry within the industry.

PESTEL

According to Riley (2016), PESTLE analysis is a framework used in analyzing and monitoring the
external factors, which influence an organization’s performance. In other words, this tool plays a critical
role in assessing the key features of the macro-environment of a business. PESTLE is an acronym of 6
factors: Political, Economic, Social, Technological, Legal and Environment.

This report will elaborate each factor and its impacts on Techcombank.
1. Political and Legal

First of all, Vietnam is a Socialist Republic country which follows a single party called the Communist
Party of Vietnam. It is independent, reunified and owned by the Vietnamese people. As a result, Vietnam
can be considered as a stabilized country. The most powerful institution in Vietnam is the National
Assembly (NA), which has the responsibility to establish and amend the constitution of Vietnam. Besides,
the government’s duty is to control the operation of business in terms of laws and policies (Circular
No.21/2013/TT-NHNN, 2013). In Vietnam, all the commercial banks and other financial firms are under

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control of the State Bank of Vietnam (SBV) due to its functions and responsibilities in formulating,
implementing, and monitoring the monetary policy or maintaining currency reserves (SBV, n.d).
Organizations like Techcombank need to consider political factors when operating their business and these
factors and decisions of the government may have both sides impacts on the firms.

According to Samuel (1994), corruption is one of the worst factors that affect to the business and the
industries within a country but it still exists in the majority of developing countries. Vietnam is a country
which has high rate of corruption with the point 37/100 and rank 96/180 in 2019 (Transparency
International, 2019). Aware of the alarming situation, Vietnamese government published 59/2019/ND-CP
(2019) to control the corruption. Moreover, commercial banks can be inspected by SBV to ensure the
customers’ benefits. Consequently, Techcombank has positive impacts when the government tightens
internal control among commercial banks, which are avoiding bad competitions. Besides, Techcombank
needs to pay close attention to its operation and internal audit to stay away from illegal activities.

Since 2020, the minimum wage in Vietnam increased from 1.490.000 VND to 1.600.000 VND (Review of
Finance, 2019), which may lead to the increase in demands related to saving deposits and loans for
different purposes. This can be considered as an opportunity for Techcombank and requires Techcombank
to have specific plan to seize this chance.

Another decision of the government that Techcombank must be noted is the circular 18/2019/TT-NHNN
(2019) about some changes in consumer loans. Some noticeable points of this circular are financial firms
are not allowed to call the debtors before 7AM and after 9PM and the maximum time to call the debtors is
5 times per day. Techcombank should notice these new changes to deal with its debtors or when selling the
debts for other companies.

The banking sector is heavily affected by two distinct forces: firstly, the perception by customers of an
organization's level of compliance and compliance with laws and regulations is a necessity for the socio-
political legitimation of banks, and secondly, how non-compliance is addressed (Nienaber, Hofeditz and
Searle, 2014). In some cases, political and legal factors can become a threat for Techcombank’s operation.
For example, due to the effects of Covid-19 to the global and Vietnam’s economy, SBV decided to reduce
the interest rate of every commercial bank including Techcombank (2020). Consequently, the capital of
Techcombank can be decreased, which is a bad news.
2. Economic

The globalization rate of Vietnam is the highest rate in the world (200%), consequently, the changes in
the world economy have huge impacts on Vietnam’s economy (Review of Finance Vietnam, 2020).
According to TTXVN (2020), the world economy is in the deepest recession due to the Covid-19. The

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GDP of America decreased significantly 4.8% in Q1/2020 and in May 2020, there were 3.2 million
American applied for unemployment benefits. In the same period, the economy of Eurozone reduced
3.8%, manufacturing in German and French fell 9.2% and 16.3% respectively. The economy of foreign
countries, especially powerful countries in a depression situation leads to the reduction in foreign direct
investment (FDI) of Vietnam. Iqba, Ahmad, Haide and Anwar (2013) pointed out that FDI has the ability
to help the country receive the investment beyond its capacity to improve GDP and economic growth. In
terms of Vietnam, in the first 4 months of 2020, FDI of Vietnam was only equal to 84.5% of that in the
same period of 2019, which was 12.33 billion VND. As a consequence, GDP of Vietnam in Q1/2020 was
3.8% while that in 2019 was 6.5% (The World Bank, 2020). Moreover, the economic growth of Vietnam
in this year can be decreased 3-4% compared to its prediction of 6.5%.

According to Sarel (1995), low inflation rate does not cause negative impacts on the growth of the
economy while the adverse can. It is recommended that the inflation rate should be maintained under the
structural break (8%) to avoid pernicious influences. Vietnam is in inflation: In the first quarter of 2020,
CPI increased by 5.5% compared to the same period of 2019, which is the highest rise between 2016 and
2020 (GSO, 2020). Moreover, the GSO (2020) also reported that the inflation rate of Vietnam was 5.6%
in this period due to the dramatic rise of pork price: the maximum price was 90.000 VND/kg. At present,
the Government has had some solutions and decisions to reduce this price to manage the CPI. However,
GSO (2020) claimed that in the next two quarters of 2020, Vietnam still needs more than 30.000 tons of
pork to satisfy customer demand, which leads to the shortage. Besides, pork is a necessary commodity,
which means its demand is inelastic and may have a negative impact on the customers. As a result,
Techcombank can face the problem of losing its customers in deposits and loans. Despite the fact that the
Government is trying their best to manage the CPI, inflation rate in 2020 is still predicted to be
unpredictable that Techcombank should be aware and prepare for different situations.

In recent years, Vietnam enhanced the globalization: In November 2016, Vietnam took part in the World
Trade Organization (WTO). Furthermore, Vietnam signed two noticeable trade agreements which are
CPTPP, EVFTA. Globalization brings various opportunities for Vietnamese firms. The Prime Minister of
Vietnam at that time pointed out that Vietnamese companies had had the ability to approach goods,
services from foreign countries with the support tax. Nevertheless, these companies must face the
challenge in the increase in the number of competitors with lots of competitive advantages in
technologies, HR, capital, etc. (MOFA, 2016). The application of Basel II in banking industry was a
requirement for commercial banks since 2020 due to its benefits in managing capitals, decrease risks
(SBV, 2019) Techcombank was one of the first commercial banks in Vietnam allowed to apply this
system and until 1/2020, there were 16 out of 35 commercial banks in Vietnam applied Basel II (Review
of Finance, 2020), which makes Techcombank have more competitive benefits. Moreover, according to

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 Mr. Thắng (2020), Techcombank has been preparing for this application for 2-3 years by training its
employees to bring the best services to customers, which is another competitive advantage of this bank.

Besides, Techcombank has to compete with others banks in terms of product. Take loaning activities as
an example. Loaning is an activity belongs to oligopolistic competition market. There are some
enterprises provide this service in Vietnam market but there are few banks receive high profit through
this activity and numerous customers. In the first 9 months of 2019, Techcombank’s outstanding balance
enhanced 28.5%, which was the highest rate among commercial banks. Behind Techcombank was VIB
bank with 28% increase, OCB bank and TPBank with more than 20% increase. In the context of
competition in banking industry getting harder, Techcombank needs to find a way to create its values.
3. Social

Stentoft and Mikkelsen (2016) emphases that traditions and norms are the roots of different cultures, which
makes them play vital roles in doing a business. Moreover, norms of the culture are not fixed by any laws,
therefore, it is hard to work with social culture. In terms of Vietnam, the culture of this country is created
based on a great heritage of historical nature. Different periods leave their marks on Vietnam’s cultural
heritage in both positive and negative ways, which impacts on further generations.

Along with the influence of Buddhist influence, the main belief in Vietnam can be considered as Buddhist
and the traditional religions related to their ancestors. Besides, Stentoft and Mikkelsen (2016) highlighted
that in this country, the religion and the philosophy merges. Confucianism has significant impacts and
connection with Buddhist and Vietnam’s traditional religion, which leads to a little feudal view on the
culture of this country.

In addition, from Confucianism, people know that they have to understand the importance of justice and
morality (Confucian Analects, XIV). Furthermore, the Vietnamese are loyal to their families and put this
category above everything including their business. Consequently, Vietnam can be considered as feminine
society based on Hofstede’s scale.

Based on the characteristics of Vietnam’s culture, Techcombank ought to have a strategy in managing its
human resources. For example, understanding the collectivists among employees, it will be a good choice
for Techcombank to manage employees in a group and focus on enhancing HR relations. In fact, according
to Ms. Minh Dan, the HR Manager of Techcombank (2017), Techcombank focuses on training and
developing its employees with the philosophy that the company only successes when the employees
succeed. In 2019, Techcombank was in top 2 “Best workplace in Vietnam banking industry” and in top 10
“Best workplace in Vietnam” by Intage Vietnam & Anphabe in 2019 (Techcombank, 2019)

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On the other hand, culture is also a challenging factor for the business. As identified above, Vietnamese
people tend to pay attention to their family before their work. It means that Techcombank needs to do well
in not only satisfy its workers, but also have special and support care for their family if they have
problems. In addition, the PDI score (power distance of Vietnam is high with 70 points (Stentoft &
Mikkelsen, 2016), which means that the Vietnamese accept a hierarchical order and politicians and the rich
in Vietnam have a high status. In contrast, Western countries such as the USA or the UK have low scores
(40 and 26 respectively) (Hofstede Insights, n.d). The clear contrast between Vietnam and these big
countries can be a barrier for Techcombank when Vietnam is on its way of globalization, signing various
trade agreements and joining WTO. Techcombank needs to identify and have a specific plan to deal with
this cultural difference before cooperating with any foreign firms.

Another social factor that has impacts on Techcombank is Vietnam’s population. According to UNFPA
(2011), Vietnam has had golden population structure at the moment, however, it seems to be older in recent
years. Moreover, aware of this reality, by the Decision 588/QD-TTg (2020), the Government encourages
Vietnamese people to get married before the age 30 and provide incentives in tax, house buying, education,
etc for which family has 2 children since this year. As a result, the demand of buying a house insurance can
be increased after the Covid-19 crisis, which is an opportunity for Techcombank.
4. Technological

Technology is one of the most important factors to Techcombank, which is shown directly through the
name of the company: Vietnam Technological and Commercial Joint Stock Bank. Techcombank is one of
the first commercial banks focused on developing technological applications in the banking industry. In
2001, Techcombank was the first joint stock commercial bank paid a huge amount of money (accounted
for 20% its authorized capital) in developing technology, which was Core Banking of Temenos (Swiss)
(Hoàng Nam, 2012). It is undeniable that technological factors play an important role in the operation of
Techcombank since it was established.

In the explosion of Industrial Revolution 4.0, the bank industry all over the world has made some changes
and applications. Some of them may include using Chatbots for customer service, fraud detection and anti-
money laundering software and investment software. The banks (including Techcombank) may receive
numerous benefits from these applications including having better decisions, reducing operating cost and
credit risks, improving customer service and enhancing internal control. In fact, besides banks in foreign
countries, there are some wholly foreign owned banks in Vietnam and Vietnam commercial banks applied
AI such as HSBC, Shinhan, Citibank, VietABank, TPBank also applied Chatbots in customer service (Anh
Quyên and Nguyên Sa, 2020). Due to the reality that these banks are direct competitors of Techcombank,
the technology somewhat increases the competitiveness among bank industry, which can be a threat for

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Techcombank if it cannot adapt the trend.

Despite the fact that technology has the ability to promote the development of Techcombank due to its
advantages, Techcombank still has to face the problems of high purchasing cost on the equipment.
However, the Executive Board of Techcombank recognized this issue and planned to pay 300 million USD
in investing the technology (Vương Vĩnh Thắng, 2020). In addition, technologies are required to be
upgraded regularly to maximize its productivity while these upgrades may annoy customers because they
cannot use the service. In terms of Techcombank, the latest updated system had some problems which led
to the dissatisfaction of customers and received a huge number of complaints (Techcombank, 2020).

Besides, the more AI applied in business, the easier employees lose their jobs because of the replacement
and outstanding productivity of AI. According to MOF (2018), 86% workforce of Vietnam textile and
footwear industry facing the threat of unemployment in 4.0 Industry. As a consequence, the number of
suppliers and customers of Techcombank may decrease, which affects its profit negatively.

SWOT

One of biggest goals of Techcombank is becoming the leading iconic in the Vietnam banking industry.
Techcombank is on its way to reach this goal and in 2019, this bank planned to increase its profit before
tax and total assets as well. In order to achieve these objectives, Techcombank has to pay attention to its
opportunities and threats from micro and macro environment.

The influences of micro and macro environment on Techcombank will be identified through the SWOT
analysis.

Strengths

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Focus on superior technological capabilities

Focus on training and developing human resources

Marketing & Sales and Service activities perform effectively

High non-interest income

Close relationship with big corporation

Opportunities

Demand for online transaction increases due to Covid-19.

Globalization brings opportunity in new technology, workforce.

Increase in bancassurance due to the exclusive agreement with Manulife.

Due to the effects of Covid-19, the economy of Vietnam has had negative impacts and caused the
downward trend in credit demand and credit growth (Financial & Monetary Review Market, 2020).
Moreover, the number of customers visit in some branches of Techcombank reduced by 9% (Vương Vĩnh
Thắng, 2020). Due to this decrease, the objectives in increase compounded annual growth, profit before
tax and total assets is becoming difficult than ever. Nevertheless, during the quarantine, people are forced
to stay at home, which results in the rise of online transaction demand. Since the online transaction fee of
Techcombank is 0 VND due to its Zero-Fee program, this can be considered as an opportunity of
Techcombank in the world crisis Covid-19.

In addition, Vietnam is improving in integration (with globalization rate of 200%) (Review of Finance,
2020), which leads to the opportunities in receiving new and modern technologies in big foreign countries.
One specific example is the Basel II agreement in managing risks, which play a critical role in the
operation of Techcombank while there were only 16 out of 35 bank applied this system. In contrast,

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coming with the opportunities is the threat of facing new customers from foreign countries as known as
wholly foreign-owned banks. In the Board meeting 2019, the chairman - Mr. Ho Hung Anh claimed that
existed competitors in Vietnam is not as alarming as foreign banks. If domestic commercials banks do not
pay close attention at corporation and investing technologies, foreign banks will be the most biggest threat.
(Vương Vĩnh Thắng, 2020).

Awaring of the opportunities and threats may come, Techcombank ought to have specific strategies in
current situation to utilize its strengths and solve the weakness. Strengths and weakness of Techcombank
will be identified by analyzing the value chain model and SWOT and strategies will be recommended for
Techcombank.

Value chain is a model introduced by Michael Porter in 1985, which has the ability to analyzing the values
of a certain company. Porter grouped activities of a company into two groups which are primary and
support categories. The primary activities can create values by themselves and include inbound logistics,
operations, outbound logistics, marketing & sales and services. Besides, support categories (procurement,
human resources management, technology development and infrastructure), as their name, they has the
duty to support for primary to run smoothly. (Zucchi, 2018). This report will only focus on Marketing &
Sales and Service in the primary activities and Human Resources Management (HRM) and Technology
Development in secondary activities because they are all the strengths of Techcombank.

Marketing and Sales department plays a vital role in the operation of Techcomank, especially researching
their needs. With the philosophy of centering on the customers, providing the best service for customers is
one of the biggest values of Techcombank. Understanding customer insight was the benefits from online
banking (cost savings, better control over service delivery, reduced wait times, high level of customization
and convenience) (Montezami, 2014), Techcombank started the campaign Zero Fee with 0 VND online
transaction fee since 2016. The success of this program brought to Techcombank huge number of
customers: the number of new customers in 2019 and the first 4 months of 2020 equals to that in the last
24 years (Vương Vĩnh Thắng, 2020). It means that privilege customers of Techcombank with receive other
service of Techcombank’s partners including insurance, real estate, airplane ticket, etc with 0 VND
transaction fee. It can be said that Techcombank succeed in understanding what customers want and
satisfied them to achieve what the company wants.

HRM and Technology Development involve to support the primary activities. According to Vương Vĩnh
Thắng (2020), Techcombank aims to invest 300 million USD in technology in 2016-2020 period. In the
exploration of the 4.0 industry and the increase of Fintech companies, digital bank, technology is
becoming one of the most important part in the operation of every bank, including Techcombank. The

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awareness of this importance since beginning helps Techcombank catch the trend easily. In fact,
Techcombank receive around 700 billion VND lost because of Zero Fee campaign. However, due to the
reduce in labor and service cost resulted by the application of technology (Curran & Meuter, 2005),
Techcombank still has the ability to keep this campaign in 3 years and got its success. Furthermore, Mr.
Thắng (2020) claimed that the technologies can be repeated or copied among the banks, however, quality
of human resources of Techcombank cannot and this is what Techcombank aims to be. This is the reason
why Techcombank always focus on its workforce and believe that the bank only success when its
employees success. Techcombank’s General Annual Meeting (2019) pointed out that Techcombank
carried out 1.348 courses and examination including 655 centralized courses, 597 e-learning courses and
86 decentralized courses. Moreover, Techcombank also provided employees engagement survey (EES) to
assess employee satisfaction every 2 years. In 2019, 4 aspects had the best results are clear orientation and
job prospects, focusing on quality and customers, trust in leadership and jobs, structure and processes.

Another strength of Techcombank was pointed out in the SWOT model is having close relationship with
big corporation such as VinGroup or Masan Group. This helps Techcombank approach customers of these
groups and meet the demand of both privilege and normal customers. In 2017, 87% housing loans came
from this ecosystem which led to the rise in CAGR retail deposits of Techcombank by 15% in 2015-2018
period. (VN Direct, 2019) Moreover, corporate with big partner make Techcombank’s bonds safer than
other banks which corporate with small companies (Vương Vĩnh Thắng, 2020). Along with having big and
reliable partners, Techcombank’s non-interest income increased in recent years due to the approach of big
customers. Between 2015-2018, Techcombank climbed dramatically by 50.2% and had the highest TOI in
the banking industry in 2018 with 30.6% (after excluding windfall gain and bad debt recovery income)
(VN Direct, 2019).

Regards to customers’ choice, bank reputation, customer relationship and even distance to banks may play
an important role (Montazemi, 2014).On the other hand, Techcombank is a private company while main
big competitors of Techcombank is Big4 (Vietcombank, BIDV, Agribank and Vietinbank), which have
high reputation and trust of customers because they are controlled by the Government. As a consequence,
these commercial banks have benefit in financial resources and more competitive advantages in investing.
Meanwhile, the number of branches and transaction points of Techcombank still limited compared to its
competitors. Therefore, Techcombank needs to focus on this weakness and trying to build branches and
truth for their customers all over the world to dominate the market.

To be sum up, Techcombank is trying its best to bring special value to its customers, which is customer
centricity. Techcombank aims to satisfy customers by understanding their needs and providing suitable
service with the support of technology and HRM. Firstly, Coronavirus has created the movement towards

15
digital banking (Melamedov, 2020). Therefore, Techcombank ought to put technological objectives above
others to provide better system for customers and enhance its values. Besides, the threats come from
Fintech products are higher and higher that the bank has to have modern technologies to compete with
them. Another goa that Techcombank should consider is expending in its network that potential customers
from rural areas can approach the bank. Moreover, Techcombank can corporate debt structure and provide
credit support for its customers in Covid-19 to improve social responsibility of the bank. After the crisis,
Techcombank can open more service such as giving advices for the vulnerable to expand its customers.

CONCLUSION

In conclusion, the competitiveness in Vietnam’s banking industry, influences of macro and micro
environment on Techcombank and its objectives are pointed out by applying Porter’s Five Forces,
PESTEL and SWOT. Based on those information, some strategies were suggested to Techcombank in
current business.

16
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