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
COMPANY BACKGROUND
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
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 the beginning At that time, revenue of company increased slowly
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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.
Mission, Vision, Core value and Achievement
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
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?”
“Developing together” is value which associated with customers, partners and investors
Kangaroo honored Top brand award, Vietnam golden star award, Awards by young entrepreneurs association continuously in several years
In 2017, Kangaroo Group was honored to be ranked in the Top 100 sustainable development enterprises in Vietnam for the second year, and in the Top 500 largest private enterprises in Vietnam, and recognized as the most trusted product in Vietnam
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
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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
Page 7 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.
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
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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
COMPANY STRUCTURE AND ORGANIZATION CHART
Kangaroo’s Organizational Chart
The Company’s organizational structure is illustrated in the following chart:
High tech assembly company Factory
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Note: : Executive relationship is directly from top to bottom
: Ordinate relationship according to vertical system about direction
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,
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:
Name Function and task Quantity of staff
1 st Team Internal PA - Provide information about business operation
- Promotion Program and design corporation identify program for new product
- 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
- - 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
Table 1 Kangaroo’s Cooperation Marketing Department
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, affirming their own domains and values Although, Kangaroo is a large and thriving group its
Thư viện ĐH Thăng Long 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
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.
THE MISSION: ASSIGNED TASKS AND GOALS
The tasks assigned
As mentioned in the previous chapter, I have taken my internship as a member of 3 rd 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.
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.
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:
Task Goal How to achieve Deadline
- Find the in-depth information about the company: its main business activities, financial situation, company structure, culture, its products, customers
- Read the company documents And its website
- Discuss to peers at different department to have a clear overview of company
Thư viện ĐH Thăng Long and competitors - Study on its competitors to know more about the company strengths and weaknesses
Study the 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
- 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
- Analyze the data collected to see the attractiveness of the market, the feasibility of the strategy, identify the opportunities and risks
- Collect and analyze the data collected by using SWOT analysis
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
15 market penetration in team meeting
- The strategies will be reviewed by team leader who gives final approval before submitting to BOGD
The Contribution to the Company
During my internship period, I gathered a lot of information about Czech market to do market research I used both primary and second research approach to collect data I have a good knowledge with the Czech Republic, about Vietnamese community where I had a long time studying and living with a lot of relation which is useful for conducting surveys in the Czech Republic So, I can conduct surveys with target customers, Vietnamese enterprises in the Czech Republic I could support my team to translate documents related to Czech market by both English and Czech language That’s reason that Team leader appointed me to support him to developing market expansion strategy into the Czech Republic
Generally, I contribute to day to day work of Outdoor marketing Team and I believe that my efforts would help company to broaden its international market successfully.
The theoretical knowledge to be put into Practice
With the precious knowledge I have achieved during the AMI Master program, I began the internship at Kangaroo Group with great enthusiasm I had a lot of opportunities to apply what I had studied into practice There are some subjects that I have learnt during the AMI program that gave me a vital theoretical knowledge for me to apply into practice during the internship time:
- Helps to select and build up the suitable strategies for international expansion
- Provides different methods and tools to analyze market by using models such as PESTEL, Porter’s five forces and SWOT analysis
- Supply the background of the globalization process and tendency
- Present both potential opportunities that the company may have to expand the business oversea and challenges during its performance
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- Provides useful knowledge for the penetrating market
- Supply me with a lot of factors for taking into consideration while doing international transaction
- Helps to understand how to manage business internationally
- Provides general overview of business and management
- Provides an overview about different distribution channels
- Helps to choose suitable channel to distribute and promote company’s product
- Helps us know how to protect Industrial property rights include such as patents, utility models, trademarks and trade names
- To avoid unfair business practices from the competitors
- Provides useful knowledge such as cultural dimensions, geographical features, internationalization process with country selection and entry mode, international marketing mix and cross-cultural communication
- Helps for analyzing the market and creating proper strategies for market penetration including notices on how to communicate and do business in a different country
- Equipped us with the knowledge about cultures and the influence of cultures in doing international business
- Helps to analyze different culture through various methods, such as Hofstede’s Model and Hall’s Model and figure out the most effective ways to do business in this country, is an essential part of my internship work
- Provides information about potential market and teaches us experiences which can apply in practice for market expansion, business management via playing business game online
I have come to a realization that all subjects in Ami Master Course have influence significantly on my work at Kangaroo However, I have just listed several subjects whose knowledge is clearly related to my tasks.
DEVELOPMENT
General information on the Czech Republic
The Czech Republic has approximately 10.6 million citizens with area is 78865 km2 The Czech Republic is a landlocked country in Central Europe, is bordered Germany in the west, Austria to the south, Slovakia to the east and Poland to the north Prague capital is largest city with 1.3 million inhabitants The Czech Republic is a parliamentary democracy, with separate legislative, executive and judicial powers The Czech Republic is also a member of the OECD, EU, WTO, NATO, IMF, Schengen area Its official language is Czech and uses CZK such as official currency Average monthly salary of Czech people is about 1170 EUR or 1355 USD
(The Source: Czech Statistical Office 2017 and 2018, Czech Ministry of Finance)
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GDP per capita PPP (USD) 32605.91 33100 34100 34100 34100 3480
The source: the Czech Republic - Economic Forecasts - 2018-2020 Outlook
The Czech Republic is one of the most stable and prosperous markets in central Europe The private sector accounts for about 80% of Gross Domestic Product (GDP) Purchasing power parity (PPP) based per capita GDP is currently around USD 32.605 – one of the highest in Central and Eastern Europe (CEE) The Czech Republic is a member of the European Union (EU) with living standards in the Czech Republic are at 90.5% of the EU average measured by GDP per capita based on the purchasing power parity In 2018, GDP is expected to increase by 2.9%, GDP per capita should move up to 91.5% of the EU level (The source: Czech Economic
Outlook for 2018: Controlled Slowdown - Deloitte’s estimate for 2017)
That is good chance for Vietnamese firms to promote export into this market
Sanitary ware of Kangaroo made from antibacterial materials, is one advanced technology with impressive designs which is designed meticulously by experts and reach to EU standard quality Kangaroo chose sanitary equipment to penetrate the Czech market due to several reasons Firstly, the sanitary ware suppliers in Czech focus mainly on the middle and high segments with relatively high prices So, the company has targeted medium and lower segments for low-income earners Kangaroo wishes to provide consumers with good quality products and more affordable price range Secondly, with the fast growing pace of Czech economy, the need to renovate and build new houses is increasing not only in the Czech Republic but also in Europe, it is a huge potential market Thirdly, in terms of Vietnam’s investments in the Czech Republic, currently, there are four projects registered with the Czech Republic with the total capital of USD 5.3 million, focusing on real estate and construction materials Moreover, Vietnamese people in the
Czech Republic have started investing in real estate besides the traditional retail sector There are some Vietnamese private construction companies in the Czech Republic From 2016 onward, there is a trend among Vietnamese people to invest heavily in real estate through the purchase of real estate, investment in building hotels and restaurants
There are many factors affect to Kangaroo for penetrating into the Czech Republic in many different ways which are divided into two kinds: internal and external factor I used SWOT analysis, which is a useful tool created by Albert Humphrey to analyze Kangaroo’s strengths, weaknesses and external factors that create opportunities and threats which Kangaroo has to face when enters in the Czech market with sanitary ware sector and presented in the table below:
- Global trade mark and well-known brands in
- Kangaroo is a brand trusted by Vietnamese people Almost every Vietnamese family possesses at least one product of Kangaroo
- Wide distribution product network in 7 countries in southeast Asia, 3000 points of sale, products branded Kangaroo are exhibited and sold at almost every supermarket throughout sixty provinces of Vietnam
- EU-standard production technology with a 700 model products (with diverse sanitary ware products, antibiotic sanitary porcelain: toilet, wall-hung Urinal, pedestal basin, under counter basin, above counter basin, antibiotic shower,
Kitchen Sinks, Antibiotic washbasin faucet, etc)
- Strong research with professional team of doctor of science, engineers, experts: easy to change production to meet requirements about
- The brand name is not recognized in the Czech republic and EU
- Strongly competed by the other famous sanitary ware brands in the medium and high segment
- Has not distribution system in the Czech Republic yet
- Managers have not got the experience about doing business in the Czech Republic and in Europe
- Applying for visas to the Czech Republic is difficult and the fact that Vietnam has not yet been included in the list of countries receiving green card status in the Czech Republic and do not issue tourist visa, affects to conducting surveys of Kangaroo in the Czech Republic
- Have to overcome strict requirements regard to trade, finance and employment of EU market, because the Czech Republic is a
Thư viện ĐH Thăng Long quality, design, model and technology
- Managers have good vision, enthusiasm, dedication, rich experiences in international environment, strong team leaders
- Professional human resource & administration management system
- The company has large and stable financial resources
- The logistics system has a lot of experience
- Have good relationships with Vietnamese enterprises in the Czech Republic member of the European Union, is bound by the laws of the EU
- Vietnam and the Czech Republic have had trade relations for quite a long time
- Utilizing advantage comes from about 75 thousand Vietnamese living and working in the
- With Vietnamese community of earning per capita income at USD 16.090, monthly average income at about 1.340,5 USD is lower monthly average income of Czech people, so they tend to consume So they tend to consume the products are cheaper than most of the Czech’s products
- Czech strategy is to develop diverse relationships with other countries in the world including Vietnam, with considering Vietnam as one of the 12 important partners for economic development in the period of 2012 – 2020
- Vietnam’s Investments to the Czech Republic:
Currently, there are four registered projects with
- The market has strong competition of famous brands such as Lauren, Roca, Jika of Czech, accounting for 50% market share (data from report of Association of the Glass and Ceramic Industry of the Czech Republic in 2016) and other famous brands like OBi, Horbach from Germany, with different prices to meet most of the market segments
- There are other competitors in this market
- There might be other competitors from Vietnam will expand their business in the Czech Republic
- Customers like the other brands
21 the Czech Republic with the total capital of USD
5.3 million, focusing on real estate and construction materials
- The Czech Republic and Vietnam signed the
Protocol on Legitimacy of Agreements made between Vietnam and Czechoslovakia and a number of Agreements have established a legal framework for cooperation in the new period:
Agreement on avoidance of double taxation
(2004); Agreement on the Promotion and
Agreement on return of citizens of the two countries (2007), are member of WTO and in particular, in 2018, if free trade agreement between Vietnam and the EU becomes true, it will be a good opportunity for Vietnamese product to enter the Czech market easier and become effective, facilitating the export of Vietnamese goods to this market
- is located in the Centre of Europe, gateway to both eastern and western markets, less than two hours by air from most European destinations, the
Czech Republic is a potential and large market because it is not only a consume market but also a bridge for Vietnamese goods into neighboring countries like Poland, Hungary, Bulgaria and
- The Czech Republic is emerging market area, so, the capacity is very large
- In particular, the Czech Republic has the best
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Eastern European roads and bonded warehouses and Bonded warehouse is rent with low price, will be a great opportunity for businesses to enter the
- The most pleasant way of working in Eastern
- The Czech government is aware of the positive impacts of vibrant research and development of new innovations, spending for R&D increased about 2% of GDP from 2003 to 2014
- A party to the Multilateral Investment Guarantee
Agency (MIGA) and a signatory to the General
Copyright Treaty, the Czech Republic is obliged to protect the copyright, patents and trademarks of businesses and individuals
- A small open economy, stable macroeconomic situation and the relatively low government debt have been reflected in positive ratings, helps maintain the Czech Republic as a market offering growth, stability
- The Czech Republic has the highest level of human development in Central and Eastern
Europe, ranking among the top 30 nations in the world, as the 9th most peaceful country in Europe
- The trend of increased interest in healthy living, green products, etc
Base on the strengths and weaknesses of Kangaroo Group, I drafted the strategy that helps maximize the opportunities which the company can achieve and minimize the threats that the company has to face when enters into the Czech market and presented in the table below:
- Identify strategic partner in Czech market to reach target customer effectively
- - Build suitable price strategy for target customer
- Build marketing strategy effective to increase brand awareness and brand image, make Kangaroo more popular in Vietnamese community in Czech Republic
- - Position prestige brand name with high quality, advanced technology, low cost, trust, friendly and professional service
- Minimize weaknesses to utilize opportunities with brand enhancement strategy
- Minimize weaknesses by increasing competitive advantage with marketing strategy by advertising, sales promotion program, after - sale service, training sale staff and its product
Table 4: SWOT matrix for strategy
Penetration strategy
In order to get a closer look into Czech market, initially use exporting as the mode of entry in this market After researching both the Czech and Vietnamese partners, our team selected TAMDA FOODS Group such as strategic distributor of the Kangaroo brand in the Czech Republic TAMDA FOODS Group is a Vietnamese company established in 2008, after the construction, it
Thư viện ĐH Thăng Long was officially opened its wholesale warehouse in March 2011 at the Sapa-Prague Trade Center, the largest Vietnamese wholesale center in the Czech Republic This is a remarkable event in the new business direction, selling a Vietnamese synthetic general food item named “Potraviny - Nápoje – Drogerie” in Sapa shopping Center as well as throughout the Czech Republic while it is a hard time for Vietnamese fabric industry here, a large part of businessmen has shifted to this food business Since its founding, TAMDA FOODS has been very successful in its business direction It has become famous not only in the Vietnam community in the Czech Republic but also the Vietnamese community in neighboring countries In order to take advantage of the available distribution channels and reputation of TAMDA FOODS in the Vietnamese community and in line with TAMDA FOODS’s development strategy, which is expanding the business field and diversifying the product lines The company selected TAMDA FOODS as a strategic distributor to reach out target customer TAMDA FOODS Group is famous and prestigious Vietnamese enterprise in Vietnamese and Czech communities There aretwo wholesale and retail supermarkets in the largest shopping malls of Vietnamese community, consists SAPA Shopping Center in Prague and Vinamo Trade Center in Brno, located in two biggest cities in the Czech Republic, supplying products for Vietnam community through store system throughout the Czech Republic With 5000m2 store area, more than 30.000 available products to meet the needs of the majority customers with 15.000 registered members It has strong financial resources and professional HR management system It has professional shopping online service with 15 trucks for service in express, only 24 hours in Prague and 72 hours with customer in wholly territory Its staff is professional, strong willed, cooperative and dedicated Kangaroo can utilize reputation of TAMDA FOODS Group to promote its brand name and image and can approach to target customers effectively due to a large number of existing customers Moreover, TAMDA FOODS’s website in Vietnamese language is convenient for Vietnamese customer to understand about its product However, that is a new product lines, and TAMDA FOODS has no experience with this product lines, so, Kangaroo needs to support it to build the organization, distribution system, marketing strategy, competition strategy, price strategy to reach target customers effectively Besides, Kangaroo also helps building a team of well-qualified staff by training sale staffs and its product
Company’s marketing strategy needs to be focus on customer first It’s about understanding the target customer such as their wants, demand and buyer behavior and then back focusing on building up its brand image promote the product with all of its strengths, build up an image of high quality, advanced technology, low price, and trust, friendly and professional service
The company needs to increase brand awareness and attract customer by supporting the distributors to make Television Commercial (TVC) for advertising for product and develop website from utilizing existing website of TAMDA FOODS Group When TAMDA FOODS Group launch this business sector, need to organize events to introduce this product line at SAPA Shopping Center in Prague and Vinamo Trade Center in Brno where located two wholesale and retail supermarkets in the largest shopping malls of Vietnamese community and advertise product via TAMDA FOODS’s website and media publication such as banner, poster, leaflets and Vietnamese newspaper in Czech Republic Besides, the company needs to build sales promotion program to support distributor to attract customers while introducing and building its brand The company also needs to protect the brand name by registering the industrial property office for protection IP which consists such as trademarks, designs, patents and copyright and register with the Czech standards, metrology and testing authority for standards and technical regulations such as requirement about labels, label of product should be all in Czech and the extent on labeling comply with Czech domestic legislation on advertising and health and safety
Price is the one element of marketing mix, it affects directly to revenue Price decision also must be consistent with brand positioning and the company’s marketing strategy and its target customers The company should use low price strategies, I suggested that in the beginning of entering in Czech market, company need a clear pricing strategy to help entering market successful The company and distributor should set the price lower than the average price the same product range in Czech market With the target market is Vietnamese community in Czech Republic, the company and distributor needs to develop its own valuation strategy The distributor needs to build three price levels: high, medium and low for specific market segments to help boost revenue and accurately reflect customer value Besides, distributor needs to build price policy for wholesale and retail to apply for different market segment in this target market
Thư viện ĐH Thăng Long
- Build the optimal distribution system, besides utilizing the available distribution channels of TAMDA FOODS Group
- Open other selling points at shopping malls of Vietnamese community in Ostrava and Prague
- Set up a back-up system to guarantee after sale service
CONCLUSION
How to reach the goals
Despite the limited time only with 4 months and I do not have much experience but I contributed to the company significantly By doing SWOT analysis, I analyzed Kangaroo’s strengths, weaknesses and external factors that create opportunities and threats, are important factors impacts on the process of carrying out the strategy
The SWOT analysis helps the company to be clearly aware of its strengths, weaknesses, the opportunities and the threats that it might occur when company want to penetrate in this targeted market I propose for selecting TAMDA FOODS Group such as strategic distributor in Czech market
To reach my goal, firstly, I had to study the company’s product carefully, target customers and competitors, financial condition, company structure, culture and its business I also spent a lot of time to study the market expansion strategy of company to some countries in southeast Asia such as Cambodia, Laos, etc to understand the approach to build a strategy, the way to identify potential of new market and product strategy to enter each particular market in order to apply for developing strategy to expand market of Kangaroo into the Czech Republic In order to do market research in the Czech Republic, I referred information from various sources: business journals, books about doing business in the Czech Republic, business news, reports about Czech market, Czech economics and Vietnamese community newspaper in the Czech Republic, website related to Vietnamese community and their businesses in the Czech Republic, make surveys with target customers, Vietnamese businesses I also spent time to study advertising law, investment law, business law in the Czech Republic
In order to collecting data about Czech market, I carried out in both primary and secondary research approaches I used primary research method with target customers and distributors such as conducting personal interviews I used telephone and email as an alternative In term of objects of the interviews, I divided them into 2 groups: target customer and distributor I talked with the Chairman of the Association of Vietnamese in the Czech Republic and some Vietnamese businesses in the Czech Republic by telephone to take more information about Vietnamese community and their trend of enterprising
I asked target customers about their demands, the survey to find out what they really want and need from our product and service I also asked the customers about their opinions with the similar products of other existing brands, what they like, what else they want this sort of products to offer I asked some distributors in Czech about feasibility of enterprising on sanitary equipment in the Czech Republic and when I studied Vietnamese community, I found out that at present, there has no any Vietnamese enterprise to enter this business sector in Czech market That is opportunity for Kangaroo to enter in Czech market, will not be compete among Vietnamese businesses
Thư viện ĐH Thăng Long
The results of the market research have been discussed in regular meetings and then Team leader will give commendations and evaluation about feasibility of strategy, result of research
Basing on this result, I can build up suitable and feasible strategy for international market’s expansion into the Czech Republic.
Limitations of the internship work
After a 4 month internship period, besides the benefits that I have brought to the project, I also realized that there are many the shortcomings in my work that need to be improved
Followings are details of those shortcomings:
- My method is mainly to study documents It is because I cannot afford to go to the Czech Republic to do the research
- The name list of particular target customers has not been made
- The name list of distributor which I conducted telephone survey
- With short time, I have not many information about competitors in Czech market such as their marketing strategy, how to promote and market product.
Recommendations to the company
- The company should conduct Czech market survey by themselves before implementing to develop strategy
- Discuss with distributor for about selling Test some of Kangaroo’s product on TAMDA FOODS’s website in real condition sale to test reaction of customer about demand, product, design and price
- Company should discuss with distributor to open other selling points in shopping mall of Vietnamese community in the Czech Republic to approach easiler to target customer
- It is necessary to collaborate with the distributor to study the model, design, diversifying products to attract new customers, and make the designs which suit the Europeans
- After penetrating the Czech market with sanitary products, the company should continue to research other export sectors to exploit more effectively this potential market, reduce advertising costs and take advantage of the available distribution channels
- As the level of brand awareness and the Kangaroo products grows as well as be better known in the Czech market, the company can set up a representative office or a branch in the Czech Republic to expand its network of distributors
- With personal sale, distributor can combine by using express delivery of TAMDA FOODS Group via shopping online service
- Study more about the competitors and how to promote and their marketing strategy to can apply when we wants to expand target customer and market in the future
- The company should also study carefully Czech law on advertisement, law on investment, Czech law on enterprises.
Conclusion
Turning back to topic of this internship report “Strategy to expand international market of Kangaroo Group into the Czech Republic”, this conclusion is drawn basing on the result of market research in the Czech Republic, is target market which company would to penetrate
I set up the strategy to expand international market of Kangaroo Group into the Czech Republic
In the first step, when Kangaroo would like to step into, they should cooperate with TAMDA FOODS Group to distribute its product to Vietnamese community in the Czech Republic and develop its brand in this market Because, both Kangaroo and TAMDA FOODS Group has common target customer, that are Vietnamese community in the Czech Republic So, Kangaroo can take advantage of the distribution channels of TAMDA FOODS Group to reduce investment costs, advertising costs and easily reach out target customers It is a good chance for the brand of Kangaroo Group to become more popular in Czech market
I suggested that in the beginning of entering in Czech market, the company need a clear pricing strategy to help entering market successfully Kangaroo also needs to focus on building up its brand image and marketing strategy effectively to attract new customers
I am delighted that my strategy successfully helped connect the company and distributors in the Czech Republic It is contributing to the development of the company I am also willing to help the company in the next steps of the strategy I hope that with the vision of the management, the strength of financial resources, and enterprising staff, the company will occupy Czech market in particular, European market in general This penetration strategy not only helps Kangaroo Group to increase sales and profit but also affirm Kangaroo brand in the region and the world
Thư viện ĐH Thăng Long
1 Doyle, P and Stern, P., 2006 Marketing management and strategy, 4 th ed., Prentice-Hall
2 Kotler, P., and Kevin, K., 2009 Marketing Management, 13 th ed., Prentice-Hall
3 Ministry of the Interior of the Czech Republic, 2011 Information Publication for
Foreigners Czech Republic, 1 st ed., Olomouc, STUDIO TRINITY, s.r.o
1 http:// www.vietrade.gov.vn
1 Association of the Glass and Ceramic Industry of the Czech Republic., 2017 Annual report: Glass and Ceramic Industry of the Czech Republic in 2016
2 Acimac, MECS., 2016 Statistic - World sanitary ware production and exports
3 OECD Economic Surveys Czech Republic 2016
Table 1 Kangaroo’s Cooperation Marketing Department
Table 4: SWOT matrix for strategy
Thư viện ĐH Thăng Long
Figure 1 Kangaroo’s Basic Financial Data from 2015 to 2017 Figure 2: Kangaroo’s Organizational Chart