Chapter 4: Case Study
4.1 The case company: ABC Money Transfer Company
4.1.1 The remittance business in ABC Money Transfer Company (ABCMTC)
The case company is a major Vietnamese Money Transfer Company. For confidential reasons, the company is called ABC in this thesis. Founded in 1992, ABC Commercial Bank, former Eastern Asia Commercial Bank, one of the leading joint stock commercial banks in Vietnam immediately launched the remittance services thanks to the good experiences and assistance from Phu Nhuan Jewelry JSC (PNJ), the 2nd biggest shareholders.
In order to specialize and enhance remittance services, ABC Money Transfer Company was established in November 2001, originally from the Money Transfer Department of ABC Commercial Bank.
ABC Money Transfer Company is recognized as the leader in money transfer services in Vietnam. In 2006, almost 16 percent of the total USD 4.8 billion overseas remittance volume into Vietnam went through ABC Money Transfer Company's system.
Beneficiaries can receive money at ABC Money Transfer Company‟s 103 transaction offices and local agent network spreading out in the whole country.
ABC Money Transfer Company especially manages a strong and experienced home-delivery team that is able to provide door-to-door home-delivery to beneficiaries in almost 60 provinces amongst the total 64 provinces of Vietnam .
ABC Money Transfer Company is the leading company in Vietnam's remittance market.
They offer a wide range of money transfer services to clients in various regions of Vietnam.
ABC Money Transfer Company also was the pioneer of home delivery service in Vietnam.
- ABC Money Transfer Company has the employees who are high experience and profession.
- ABC Bank‟s Account: immediately with full amount, no charges or fees.
- To other banks‟ Account in Vietnam: from 1 – 3 days, depending on the destinating bank‟s network and infrastructure. The fund amount will vary according to that bank‟s charges and fees
- No charges and fees for customers use counter pick up and home delivery services also.
- ABC bank possesses the second largest customers‟ base in Vietnam with over 2.8 million individual bank accounts
- ABC Bank is also considered as the leading bank in technology with nearly 400,000 subscribers for E-banking services
- ABC Bank is among the leading joint-stock commercial banks in Vietnam Resources
Distinctive Competencies
Capabilities
Cost Advantage or
Differentiation Advantage
Value Creation
- ABC Money Transfer Company has expanded its network recently to over 164 branches and offices across provinces in Vietnam
Source: Directory of the statistics in Vietnam
Figure 5: ABC Money Transfer Company’s market share in Vietnam in 2008
As the statistics, ABC Money Transfer Company was the second biggest market share in money transfer from other countries to Vietnam up to at the end of 2008. They accounted around 20% of remittance market in Vietnam with over 650 million USD of inward remittance.
Money Transfer Market
Agribank, 12.29%
ACB, 11.43%
Sacomrex, 12%
Incombank, 13.14%
ABCMTC, 18.03%
VCB, 20.86%
others, 12.26%
Source: ABCMTC
Figure 6: Revenues of ABCMTC from 2003 to 2008
With more opened policies on foreign currencies, encouraging remittance to Vietnam by the State and the increasing of investment demand in Vietnam, the amount of money which transfer through ABC Money Transfer Company grew very strongly in the recent years.
511
Sales of 7 months of 2009 against 2008 in ABCMTC
0
Source: ABCMTC
Figure 7: Sales of 7 months of 2009 against 2008
Generally for 7 months of early 2009, sales just reached more than 578 million USD which was less than the sales of the same previous quarter. Due to crisis, the amount has been downward in 2009.
Table 2: Analyzing Sales in ABCMTC in July, 2009 according to market Source: ABCMTC
No. Market July,2009 Percentage
of market
Jul, 2009 compare
with Jun,2009
I EUR 4,017,100 100% 40.7%
1 THIEN PHU 2,079,274 51.76% 77.4%
2 HOA LE 1,024,128 25.49% 32.1%
3 KIM NGUYEN 424,697 10.57% 8.5%
4 MIVICO 220,276 5.48% -35.5%
6 CHEQUEPOINT(SEC) 196,524 4.89% 72.9%
8 EVINS 72,201 1.80% 20.1%
II USA 56,827,382 100% 4.8%
1 HOA PHAT 22,207,840 39.08% 5.3%
2 OMNEX 15,278,333 26.89% 3.4%
3 THIEN PHU 11,912,610 20.96% 7.7%
4 VN USA ENTER 4,246,150 7.47% 0.0%
5 MINH HAI 1,112,825 1.96% 28.8%
No. Market July,2009 Percentage of market
Jul, 2009 compare
with Jun,2009
6 SG FINANCIAL 472,300 0.83% -8.8%
7 CONTINENTAL 564,593 0.99% 0.5%
8 ĐONG PHUONG 279,905 0.49% -2.9%
9 SAIGON USA 378,310 0.67% 3.4%
10 IMP GROUP 244,576 0.43% -22.5%
11 THAI BINH DUONG 100,100 0.18% 14.7%
12 U.S MONEY 27,540 0.05% -6.1%
13 MINH HAI ĐANG 0
14 EAST WEST BANK 2,300 0 -8.0%
III CANADA 9,669,586 100% 4.7%
1 HAI VAN 4,690,742 48.51% 6.7%
2 OMNEX 2,396,236 24.78% 17.6%
3 TRANSAIGON 962,086 9.95% -16.6%
4 THIEN PHU 384,704 3.98% 36.5%
6 A & VY MONEY 470,190 4.86% 12.0%
7 VIETSTRAVEL 120,888 1.25% -15.3%
8 THE LE A.T.M. 4,584 0.05% 13.0%
9 VN KING 171,386 1.77% -44.7%
10 BEN THANH GIFT 468,769 4.85% 10.4%
11 VINAFAST 0 -100.0%
12 LE VA KHANG 0 0
No. Market July,2009 Percentage of market
Jul, 2009 compare
with Jun,2009
IV Australia 2,735,526 100% 24.3%
1 ĐONG KHANH IMPORT 757,671 27.70% 76.9%
2 QUICK MONEY 471,737 17.24% -0.5%
3 THIEN PHU 373,497 13.65% 56.6%
4 KIM SON 381,778 13.96% 78.1%
5 ROS.HONGHOA 254,812 9.31% 57.2%
6 CHUCO 166,483 6.09% -31.1%
7 TOAN CAU 73,288 2.68% -42.8%
8 PHI LONG 234,943 8.59% -17.6%
9 HAI LAM 21,316 0.78% -27.8%
V Asian 6,984,850 100% 10.9%
1 BKK FOREX 4,923,745 70.49% 8.7%
2 BKK FOREX-DAB 1,790,019 25.63% 19.5%
3 MERCHANTRADE 253,190 3.62% -1.4%
4 PIB 9,535 0.14% 234.6%
5 PAY2HOME 8,362 0.12% -20.9%
VI Middle East 2,744 100% -38.0%
1 INSTANT CASH 2,744 43.43% -38.0%
VII Global 2,770,030 100% -15.9%
1 MONEY GRAM 2,575,925 92.99% -16.5%
2 COINSTAR 63,092 2.28% -1.3%
3 XPRESS MONEY 131,013 4.73% -9.9%
No. Market July,2009 Percentage of market
Jul, 2009 compare
with Jun,2009
Total 83,007,218 6.3%
The biggest market of ABCMTC is USA, and this is the main remittance market for Vietnam as well. ABCMTC has fourteen partners in USA, eight in EUR, twelve in Canada, nine in Australia, five in Asia, one in Middle East, and three for global services.
Partners have the amount of money which is deposited in ABCMTC for enough so that ABCMTC disburses to customers. There are four ways of disbursement to customers such at counter pickup, home delivery, account transfer, ABC‟s card. At the end of a month, partners make payment for ABCMTC. Partners transfer money to ABC‟s account. There are three kinds of payment as the following basing that partners use to count commission for ABCMTC:
- On the transfer times (fix fee) - On the amount of money - On charges on customers
4.1.2 ABCMTC’s strategy in remittance business
A. Clear strategies for future structure and good implementation in service expansion Firstly, the management needs to have a clear vision and objectives for the year. Then it has to translate sufficiently to subordinates and understand how they understand and apply in the real work. They should have policy direction and explanation through good process in implementation to guide everyone systematically. It will avoid the waste of time for each person or department find the way from beginning. The researcher finds that ABCMTC
should focus on process in term of supporting for employees and management. Along with each strategy and new policy or work, it is essential to have clear process or description to guide the achievements.
The company should guide clearly who is responsible for each activities and the way they are linked together to work effectively. The middle and department managers have importance roles to support for controlling with applying changes and improvements in the process
There are many other factors to formulate and implement good strategies, which the company should concern such as leadership development and cultures. The most challenge for ABCMTC needs to pay attention is how to apply new strategic implementation in the obsolete system and push it change to adapt to new market.
B. Development of training to enhance employees‟ values and corporate well
To improve customer service and avoid risk of conflict organization, ABC Money Transfer Company can organize more regularly training activities to improve its service staff‟s competence as well as their ethical practice. In fact, due to the old system, the company did not motivate enough employees and not provide them enough training course to improve their professional skills in jobs. As a result, in reality, the company can rely on the service-profit chain framework. The company should “have at the command to get them achieve extraordinary results”. It creates good environment, which can encourage response to customer satisfaction from service staffs. “Good environment with affective satisfying employees through good rewards and fair punishment, the company can make them stay longer, large commitment to the community. Then they will try to devote their talents to improve the company‟s services and satisfy back to clients”, Ms. A said.
Further, the company should empower staff‟s actively make decisions and solve problems. It is also the way to reduce the customers‟ waiting time. Therefore, they can be more confident to face the problems and improvise flexibly the situations as well as encouraged to contribute to the business. Additionally, it can help them to understand and cooperate effectively. Good communication will be improved and thus, working well among departments will provide necessary supports for effective restructure and implementation.
Management, then, can develop the full potential ability in employees.
C. Enhancing control system and strong support for customer service system
Before launching a service, ABC Money Transfer Company should test the performance under different market conditions to define the class of clients, and then test with internal organization that approach customer and work on the services to let them understand clearly new services, so that they can know when and whom they can recommend the service.
They should fully understand the complexity of service. Staffs, especially counter and home delivery staffs can understand their kinds of services as well as their clients‟ need well, which helps them provide suitable service, and then increases chance of success.
Base on resource-based view, ABCMTC should have promotion for their brand. They should enter the blue ocean markets which are less competitive and create their own market instead of red ocean markets.
4.2 SWOT analysis Strengths
- ABC Money Transfer Company, a subsidiary of ABC Bank, established in 2001 and is the leading player in Vietnamese remittance market
Weaknesses
- Service network haven‟t spread all provinces in Vietnam.
- The process of transfer money is sometime slow.
- ABC Money Transfer Company provides all services for remittance market including:
home delivery, counter pickup, bank account transfer,…at excellent quality covering the nation wide with competitive price.
- Strong reputation, financial power, and infrastructure from ABC Bank
- Meet the demand of foreign currency adequately.
- Strong relationship with state.
- Strong home delivery
-Valued and motivated employees, good work environment.
- Advanced techniques will reduce the time to pay for customers
- Types of payment are more various which will improve the quality of services.
- The number of people who live oversea is more and more increase in demand.
- Government policies have supported free their relative in Vietnam is decreased by their age and difference generation
- Vietnamese workers who were out of job have to go back due to financial crisis
- Informal channel service is cheaper
Source: This research
Figure 8: Exchange rate VND/USD from 2001-2008
As we know that exchange rate VND/USD increases year by year, so this is an opportunity for ABC Money Transfer Company because customers who receive money can have much more VND than before, and it encourages people to receive money from foreign countries. The remittances market will have more opportunities.
From SWOT analyzing, we can see that ABC Money Transfer Company has a lot of strengths thanks to ABC Bank, so ABC Money Transfer Company should take this advantage to improve their services in order to expand their market. However, there are many opportunities for ABCMTC in the market. By this I mean that they can be easy to pass over threats which ABCMTC has to face so that they can increase their market share in near future.