internship report on strategy to expand international market of kangaroo group into the czech republic

UNIVERSITY OF NICE SOPHIA ANTIPOLIS IAE School of Business Administration THANG LONG UNIVERSITY Hanoi, Vietnam INTERNSHIP REPORT ON STRATEGY TO EXPAND INTERNATIONAL MARKET OF KANGAROO G

UNIVERSITY OF NICE SOPHIA ANTIPOLIS IAE School of Business Administration

THANG LONG UNIVERSITY

Hanoi, Vietnam

INTERNSHIP REPORT ON

STRATEGY TO EXPAND INTERNATIONAL MARKET OF KANGAROO GROUP INTO THE CZECH REPUBLIC

Submitted by: Nguyen Thi To Loan

ACADEMIC SUPERVISOR

Dr TRAN DINH TOAN

Lecturer of Ecomomic and Management Faculty from Thang Long University

COMPANY SUPERVISOR Mr DO TRUNG KIEN

Export Director

Outdoor Marketing of Kangaroo Group

Hanoi, September 2018

ACKNOWLEDGEMENT

First of all, I would like to express my sincere gratitude to my mentor Professor Dr Tran Dinh Toan for the support and enthusiastic guidance during my internship process He guided me the way to develop my research work

I would like to thanks my company supervisor, Mr Do Trung Kien for guidance, his experiences sharing and valuable information about the company And I would like to send my thanks to other members in Team for their corporation and support in my internship time at the company Moreover, I would like to thank Mr Toan, general director of TAMDA FOODS Group in the Czech Republic helped me to gather the useful data and sharing experiences about doing business in Czech market and directly helps Kangaroo Group distribute products in his system in the Czech Republic in coming time

Finally, I am also indebted to collective of the professors from Thang Long University and Nice University for their precious knowledge and my colleagues, my family and friends created motivation and moral and emotional support for me in writing process

ABSTRACT

This report is a result of the 4-months internship period at Headquarter of the Kangaroo Group

The aim of this work is to develop the strategy for international market expansion of the company into Czech Republic To reach the mission, I used the theoretical knowledge which I gained from the AMI course to apply in practice I used SWOT analysis to show the external and internal factors that influence to Kangaroo for penetrating into the Czech Republic The following work, I present the way of gathering data and research method in order to achieve the set goals Based on knowledge about the Czech Republic and doing market researche about Czech market, I was able to propose and develop a suitable strategy for penetrating of Kangaroo Group into the Czech Republic

TABLE OF CONTENTS

CHAPTER I COMPANY BACKGROUND 2

1.1 General background information about Kangaroo Group 2

1.6 Basic finance figure: 8

CHAPTER II COMPANY STRUCTURE AND ORGANIZATION CHART 9

2.1 Kangaroo’s Organizational Chart 9

2.2 Explanation 9

2.2.1 Board of General Directors (BOGD) 10

2.2.2 Divisions and Departments and Affiliated Unit, Research and Application Institute, Branch, Office 10

2.2.3 Kangaroo’s Organisation and Culture 11

2.2.4 The Intern’s Position 12

CHAPTER III THE MISSION: ASSIGNED TASKS AND GOALS 12

3.1 The tasks assigned 12

3.2 The link between the subject matter and the mission 13

3.3 The desired goals 13

3.4 The Contribution to the Company 15

3.5 The theoretical knowledge to be put into Practice 15

CHAPTER IV DEVELOPMENT 17

4.1 General information on the Czech Republic 17

5.1 How to reach the goals 26

5.2 Limitations of the internship work 28

5.3 Recommendations to the company 28

INTRODUCTION

In recent years, the world has witnessed the rapid development of science and technology, and it has greatly affected the quality of life In today’s digital age, the integration of technology into people’s lives is becoming more and more popular Technologies like the Internet of Thing (IoT), the artificial intelligence are no longer in the distant future, are now present in every corner of life This has given businesses many opportunities as well as open challenges With the revolution of 4.0, businesses and companies that want to survive and develop need to invest in technology to produce high-quality products in order to meet market’s demand and can compete on the market As a pioneer as well as the leading company in the field of developing and applying technology in producing health and comfort facilities, Kangaroo has focused on the application of technology to the production of patented products of Kangaroo Kangaroo’s inventions include Hydrogen-rich water technology, antibacterial technology and IoT technology, one of the three fundamental elements of the evolution 4.0 That is the only and indispensable way for Kangaroo

In addition, globalization created a lot of opportunities for cooperating, expanding the market, approaching achievement of advanced science and technology, gaining management experience, capital to develop and creating competitive advantage Entrepreneurs from all around the world tend to seek cooperation with foreign partners to expand their business market

Kangaroo Group is not only a pioneer in researching advanced technology, capturing consumer trends but Kangaroo also wants to become a pioneer in looking for a new market Kangaroo has chosen the Czech Republic as the first strategy to reach out European market where Vietnamese community officially became an ethnic minority of Czech Republic in 2014 with 75 thousand Vietnamese living and working

Therefore, during internship time with the guidance of the company’s manager, I would work on research on the topic: “Strategy to expand the international market of Kangaroo Group into the Czech Republic”

CHAPTER I COMPANY BACKGROUND

1.1 General background information about Kangaroo Group

The Kangaroo Group is Vietnam Australia Refrigeration - Electrical Appliance Joint Stock Company which was established in 2003 Over 15 years of non-stop development, Kangaroo Group has become one the leading corporation in Refrigeration - Electrical field It has expanded greatly with many branches and a large range of products Until now, Kangaroo has expanded its multidisciplinary business with four sectors, hundreds of Kangaroo’s product model which have satisfied the demand of consumers

Kangaroo used the Blue Ocean strategy as well as studying, investing in the development of green technologies, which is friendly with the environment and save the electricity Kangaroo also committed to developing products that meet the requirements of food safety, water safety, air quality and design features that help people optimize their time and enjoy life With a suitable strategy, while looking for differences and low costs, it always went ahead and focused on investment and breakthrough in technology, just after 15 years since its inception, a series of household products branded Kangaroo has rapidly taken over the domestic market, from urban to rural areas At the same time, Kangaroo helped to form a new habit among Vietnamese consumers - using clean water, a habit that ensures community health, frees women from household chores and enhances the quality of life In addition, the belief of consumers in the products manufactured by Vietnamese enterprises was also multiplied and all were marked in each product branded Kangaroo

Kangaroo attached special importance to marketing and branding of its products Apart from traditional advertising activities, Kangaroo salvaged new advertising methods by using technology gadgets and leveraging the strengths of retail outlets in order to market Kangaroo products Since retail channels play a pioneering role in market penetration, Kangaroo leveraged its power in distribution channels when launching, promoting and marketing product to increase number of products consumed and raises total revenue

Beside business activities, Kangaroo always take care of social activities in order to share and enhance the quality of life where Kangaroo is located at

Kangaroo Group’s Headquarter is at No 1 Dao Duy Anh Street, Dong Da District, Hanoi

 Contact details:

- Website: https://kangaroo.vn

- Telephone number: 024 3628 1698/024 3628 1699 - Fax number: 024 3628 3115

- Email: Feedback@kangaroo.vn

1.2 History of development

In 2003, Kangaroo Group, the origin is Vietnam Australia Refrigeration – Electrical Appliance Company Limited which was established by two young enthusiastic Vietnam entrepreneurs, and trademark Kangaroo was founded soon after that In the beginning of establishment, Kangaroo was just a small company with ten persons The main office was used as a warehouse as well The company entered market with two main products which are Reverse Osmosis filter (water filtration system) and Water Dispenser Each product costs 2 to 3 million Vietnamese Dong (VND) and it was hardly to know about it

In 2005, Kangaroo developed home application sector In 2008, Kitchen application sector was launched

In period from 2005-2009, Kangaroo only focused on developing two main product lines as

In 2011, company changed to Vietnam Australia Refrigeration – Electrical Appliance Joint Stock Company and in the same year, corporation identify program was launched and Kangaroo’s manufacturer officially came into operation in Industrial zone in Hung

Yen province with area 600.000 square meters Several branches were opened in central

area, southern area and oversea In this year, Kangaroo launched more product lines such as square safes, energy, telecommunication equipment and door systems

In 2012, Company opened branch in Myanmar and customer service center in Hanoi was established At this time, Kangaroo launched a series of luxury product and began to export

Within three years, from 2010 - 2012, Kangaroo successfully launched plenty of new product lines with price range from 200.000 VND to 50 million VND and strengthened the distribution network with nearly 2500 points of sales in the whole system

In 2014, research and application Institute was established to research and apply advance technology science for production, uses with professional team of doctor of science, engineers, and experts from both inside and outside country’s well-known research institute along with the world’s most advanced technologies In this year, company launched sanitary ware sector

In 2015, Company stopped to manufacture telecommunication equipment

In 2016, Company was established three subsidiaries which include high tech assembly company, construction material company, and Energy Company and risk management department

In 2017, Kangaroo has created many research works and 30 industrial designs are protected by copyright The same year, the second Kangaroo’s manufacturer became into operation in Binh Duong Province, Vietnam with area 30.000 square meters

In 2018, Kangaroo will apply research works which is invented to produce and launch it to the market

At present, after 15 years, Kangaroo made a breakthrough with more than 2.000 employees nationalwide, 3.000 points of sale spread throughout sixty provinces of Vietnam, 3 subsidiaries, 7 branches include: Ho Chi Minh branch, Da Nang branch in Vietnam and Myanmar branch, Indonesia branch, Laos branch, Cambodia branch, Philippine branch, Representative Office in Australia and 2 factories, one in Hung Yen Province and other in Binh Duong Province of

Vietnam, 1 customer service center and 1 research and application Institute, providing four sectors with more than 700 product models

1.3 Mission, Vision, Core value and Achievement 1.3.1 Mission

Kangaroo’s mission is to take care of community health with healthy products and only business products regard to community health, expand business in both domestic and foreign markets in order to affirm a multinational Vietnamese brand representing a strong-growing Vietnam

1.3.2 Vision

The vision is to become a well-known brand in Vietnam as well as in the region and affirm its position in the region and internationally Kangaroo’s ambition is to become the number one Southeast Asian Group by 2020 in the field of manufacturing and trading and further will be Asia

and the world as Kangaroo Group General Director shared: “The US has Apple, Japan has Honda, Korea has Samsung, will Vietnam have Kangaroo?”

At the 15th anniversary of the corporation founding, Kangaroo was honored with the Prime Minister’s merit for its achievements in the business and contribution to the cause of building the socialism and defend the Fatherland of Vietnam

At present, there are more than 300 enterprises on the total of 561.000 enterprises in the whole country having been certified as science and technology enterprises Particularly, Kangaroo is the 45th enterprise in Hanoi to be granted this certificate

1.4 Product

Capturing the trend and realizing the advantage of distribution channel, Kangaroo has expanded its multidisciplinary business Until now, it has four business sectors namely: home appliances, kitchen appliances, sanitary ware and water pump, electro refrigeration to meet majority of consumer’s demand with more than 700 product models

Kangaroo considers water purifier as “core product” to penetrate into the market and to develop business in Vietnam and ASEAN countries Kangaroo has become the leading enterprise in market when occupies 60% market share with water purifier product This product affirms Kangaroo’s position as a high-quality brand The company attached exaggerated importance to researching and developing this product The inventions includes Hydrogen-rich water technology which can remove virus amoeba and arsenic, add nutrients to the water, antibacterial technology and IoT technology, is one of the three fundamental elements of the evolution 4.0 which tested by NFS, FDA of the US and WHO

Kangaroo has become a most well-known brand in Vietnam in home appliance sector, currently is No.1 home application company in Vietnam It changed the habit of favoring foreign goods, which has ingrained in many people’s thinking

In Kitchen Appliances with a large range of smart and versatile cooking appliances, you can save a lot of time for yourself and your family

With Electronics Refrgeration, Kangaroo provides three main product series: freezers, coolers and ice-cream dispensers It uses antimicrobial and nanoparticles silver to deodorize, and maintain vitamins and minerals It also helps to energy saving, prolongs the storage time of food and optimum cooling, storing food in a perfect environment

The sanitary ware of Kangaroo made from antibacterial materials, is very luxury, reach to EU standard quality with impressive designs, which were designed meticulously by experts to create uniqueness It uses antibacterial nanoparticles technology, anti-stain that overcomes the disadvantages of other products on the market and it is very safe to use

Kangaroo’s products are mordern to create differences Many products have not yet introduced in Vietnam, were introduced for the first time in Vietnam For example, the sanitary ware which made from antibacterial materials, antibacterial freezer, and antibacterial water heater and applying IOT technology in water heater In addition, the strength of antibiotic technology

continues to be developed in some products such as antibiotic sanitary porcelain, antibiotic shower, antibiotic freezers

With regards to water pump, Kangaroo provides a wide range of models that suite customer's needs Each model is equipped with powerful engine to ensure stable water pressure, outstanding performance, together with maximizing energy-saving Kangaroo’s water pumps are made from durable material, equipped with thermal overload protection devices

Kangaroo is a pioneer not only in the open market, but also in researching technology to create creative products, capturing consumer trends, and bringing more value to society Before reaching the consumers, all products have to go through the process of research, testing, inspecting, producing and assessing the safety Products that meet the strictest quality requirements will be sold

Currently, the Group owns two main technology groups: Water Purifier Hydrogen and Antimicrobial Technology Owning key technologies helps Kangaroo not only maintain its position in the domestic market, but also getting popular in the international market

Besides diversifying products, the company also focuses on customer service There is a customer service center and more than 80 authorized service stations throughout the country with well-trained technicians and consultants Kangaroo warranty service is highly appreciated

1.5 Customer

With 3000 selling points, products branded Kangaroo are exhibited and sold at almost every supermarket throughout sixty provinces of Vietnam At the moment, Kangaroo products are exported to oversea market as Laos, Cambodia, Philippines, Myanmar, Indonesia, and Cuba Kangaroo is expanding its market to other countries in Southeast Asia By 2020, Kangaroo sets a target of 200% per annum growth in sales in Southeast Asia with 20 million units sold, meeting the needs of nearly 700 million Southeast Asians and becomes Southeast Asia’s No 1 home appliances company

Kangaroo always thinks that “consumers will not know what they want until you show them”, because, the creativity and possibility to apply creativity of an enterprise is limitless

In its development strategy, Kangaroo aspires to enter into Asia and Europe market to affirm its position in the region as well as in the world

1.6 Basic finance figure:

The basic finance figure is illustrated in terms of sale revenue and net profit in the chart below:

Figure 1 Kangaroo’s Basic Financial Data from 2015 to 2017

Over the past three years from 2015 to 2017, Kangaroo’s sales have increased significantly, sale revenue is 1,360 billion VND, 1,750 billion VND and 2,500 billion VND respectively Net profit rose dramatically from 137 billion VND to 260 billion VND

This result is contributed by many factors Because Kangaroo group expanded business sectors and diversity of product, scale of economic and broaden market both domestic and oversea Besides, Kangaroo group also focus on product research, make propers action on product design improvement, product performance and salvaged new advertising methods by using technology gadgets Kangaroo focus on strengthen of the distribution channel, leveraging the strengths of retail outlets in order to market Kangaroo products Therefore, the brand named Kangaroo has become popular and the company has a firm position in the market

CHAPTER II COMPANY STRUCTURE AND ORGANIZATION CHART 2.1 Kangaroo’s Organizational Chart

The Company’s organizational structure is illustrated in the following chart:

Board of General Directors

Support Unit Research and

Application Institute

Risk management Department

Business Operation Unit

Domestic Branch/affiliated

Oversea Branch/office

Distribution Channel

MarketingDepartment

Curstomer service

center

Warehouse Transportation

-Department

Import Export Department

-Modern Trading

Project

Administration - Personnel

Accounting - Finance Department

IT Department

Law

Quality Management

Department

Purchase Department

High tech assembly company

Factory

HO CHI MINH Branch

DA NANG Branch

Material Construction

Company

Energy Company

International quality control

office

Indonesia Branch

Myanmar Branch

Laos Branch

Cambodia Branch

Philippine Branch Bussiness

sectors Professional

Division

Representative office in Australia

Note: : Executive relationship is directly from top to bottom

: Ordinate relationship according to vertical system about direction

2.2 Explanation

2.2.1 Board of General Directors (BOGD)

With the most important role in the company, the Board of General Directors (BOGD) is responsible for making decisions at macro level and Kangaroo’s performance as deciding investment project and market expansion of the company as opening the representative office, branches, factories or strategy to expand to ASEAN countries, Asia, Europe and other countries over the world

BOGD not only directly supervises the institute for research and applications, risk management department but also supervises daily activities of business operation unit, support unit, and all offices, branches and subsidiaries of the company The BOGD consists of three members: The chairman, the vice chairman and a member The chairman is the general manager and he directly supervises the activities of research and applications Institute

The deputy general director will operate the business and solve all issues related to administration and personnel, IT, law, quality management, purchasing department of the whole system Member of the BOGD oversees the accounting & finance department and risk management department The effective management of BOGD led to the sustainable development of Kangaroo in 15 years of operation

2.2.2 Divisions and Departments and Affiliated Unit, Research and Application Institute, Branch, Office

Figure 1 shows the company’s operation which is divided into research and application Institute, risk management department and Business operation Unit, support Unit, Production Unit, affiliated Units and domestic Branch, oversea Branch and Office The function and mission of them are represented by name of them I will only present more detail about division and department that I interned

Business operation unit comprises of three divisions: professional division, business sectors and distribution channel It is supervised by vice chairman In professional division consists Cooperate marketing department, customer service center, warehouse and transportation department, import and export department

 In cooperate marketing department staff in the headquarters is split into three teams:

2nd Team Digital Marketing

- Support for Sales in domestic, online shopping, post advertising on website, push by view in order to increase views for online advertising

- Making Television Commercial (TVC) advertising for product

1 Leader and 7 member

3rd Team Outdoor Marketing

- - Seeking new market, market research, and suggesting and developing strategies for market expansion

- - Support subsidiaries, branches for making advertisements program outdoor both in domestic and oversea to increase sales

- - Make procedures for running promotion program

- - Build the image and the value of the brand, introduce corporation identify program for new product

1 Leader and 3 member

Table 1 Kangaroo’s Cooperation Marketing Department

2.2.3 Kangaroo’s Organisation and Culture

In Kangaroo, human resources are considered the secret weapon of the company The combination of the pioneering spirit “Do not criticize, do not explain, give solutions” and open environment helps every individual is free to give idea and maximizing the creative capacity,

organization is not too complicated It simplifies management tasks by ensuring that employees at all levels are clear about their functions and duties It also provides an opportunity for superiors to listen to their staff’s opinions and ideas

2.2.4 The Intern’s Position

During the internship, I worked as a member of the 3rd Team: Marketing Cooperation Department This Team includes 4 members and I am directly guided by the supervisor, Mr Do Trung Kien, who is intelligent, dynamic, professional but discipline at work He has 5 years working experience in the 3rd team All members of the Team are very dynamic, cooperative and creative The open working environment allows the best participation and cooperation among its member

During my internship, I completely understand that outdoor marketing is the key factor in expanding the market With 75 thousand Vietnamese living and working in the Czech Republic Vietnamese community officially became an ethnic minority of Czech Republic in 2014 Basing on the valuable knowledge that I gained in the MBA course, the guidance of the manager as well as my personal experience, knowledge of the Czech Republic, I hope that I can outline the best strategy for the company

CHAPTER III THE MISSION: ASSIGNED TASKS AND GOALS 3.1 The tasks assigned

As mentioned in the previous chapter, I have taken my internship as a member of 3rd Team of Corporate Marketing Department When I started to work at Kangaroo, company was planning to set up a strategy to broaden the market to EU and initiation in particular is Czech market Kangaroo want to penetrate into the Czech Republic and targeted customer is Vietnamese community here In initial intention, company will use exporting via distributor as the mode of entry in this target market The core product line that company chooses to enter Czech Republic market in short term plan is sanitary ware In middle term, company will continue to research other export sectors and expand distribution scale over the whole territory of Czech Republic and several neighbor EU countries where there are a lot of Vietnamese people with per capita income level is lower than the average income per capita in EU countries Following are main tasks that I have done to support Mr Kien, team leader:

 Collecting data: We are required to study market demand for sanitary equipment products, Vietnamese community in the Czech Republic, the suppliers, distributors and the competition level of this product line

 Analyzing data: Based on the data and information collected from the target market, we have to make a sensible analysis of opportunities, risks and challenges

 Developing strategies: Based on findings from market analysis, I drafted the best strategies for Czech market penetration

I was guided by Mr Kien, team leader for collecting data and analyzing data I am responsible for collecting data, translating documents, analyzing data and drafting regular reports and finally, before finishing internship time, I have to submit to team leader strategy for international market’s expansion of Kangaroo into Czech Republic

3.2 The link between the subject matter and the mission

Under instruction of company’s supervisor, my mission is linked directly with the subject matter Firstly, I had studied about company, its rules and operation structure in order to have a comprehensive understanding of the company and its business operation According to Mr Kien’s guidance and his sharing about experiences, its market expansion to Cambodia, Philippines and Laos, I started to collect information of EU market, in particular Czech market and refined data Finally, after having all needed information, I analyzed those information by using SWOT analysis to make decision for developing strategy to penetrate Czech market in coming time

3.3 The desired goals

During this period, my general goal is to study Czech market to developing the strategy to expand market into the Czech Republic

Following is my individual action plan to complete the subject matter and goals during the internship time:

company

- Find the in-depth information about the company: its main business activities, financial situation, company structure,

- Read the company documents And its website

- Discuss to peers at different department to have a clear overview

29th June

and competitors - Study on its competitors to know more about the company strengths and weaknesses

market expansion strategy of company

- Understand the approach to develop strategy, the way to identify potential of new market and product strategy to enter each particular market

- Read documents related to the market expansion strategy of company

- Join the discussions with colleagues

- Attend the company’s meetings to understand more about approachs and the way to propose target market to broaden

1st August

Collecting data

- Collect related information about the targeted market: politics, economy, social –culture, legislation, technology, nature environment factors which affects Kangaroo to enter this market and I collected data about market demand, target customers, the suppliers, distributors and competitors

- By using both primary and secondary method

15thAugust

Analyzing data

- Analyze the data collected to see the attractiveness of the market, the feasibility of the

opportunities and risks

- Collect and analyze the data collected by using SWOT analysis

24thAugust

Developing up strategies for market

expansion

- Based on result of market search to draft developing the strategy

- Give commendations for develop strategy due to market analysis - Discuss with other members to Select the best way for Czech

24thSeptember