INTERNSHIP REPORTJanuary – April (2016)

Nguyen Duc TuanIRN: 1132300374

Abstract

Currently, I took an opportunity to intern at Thai Binh Shoe Company in logistic

department. In fact, Thai Binh Shoe Company business comprises 6 sectors: footwear

manufacturing industry, manufacturing industry bags, investing - business - real estate

management and industrial infrastructure, ports and logistics, trading & services. Thus, this place

is an excellent chance I encountered to enrich my knowledge and experience about supply chain

management, especially import-and-export-related understanding. After following 4-months

internships in TBS, I could apply what I study in class to the reality in reasonable way in order to

serve my future career. Besides, the purpose of the program is to fulfill the core equipment for

the award of a Bachelor Degree in Business Administration.

In this internship report, I would like to describe my experiences during my internship

period. It would contain a brief overview of the TBS company and its activities, tasks and

projects that I have worked on during my internship. Writing this report, I also will describe and

reflect my learning objects and personal goals that I have set during my internship period.

Contents

I. Introduction .................................................................................................................. 1

1. Internship objectives ............................................................................................. 1

2. Expectations .......................................................................................................... 2

II. Organization.............................................................................................................. 3

1. Internship organization.......................................................................................... 3

TBS Group Corporation.............................................................................................. 3

2. Culture, identity and image ................................................................................... 4

3. Vietnam’s footwear industry overview ................................................................. 6

4. TBS group corporation’s export condition............................................................ 7

5. The SWOT analysis in exporting products to the U.S market. ............................. 9

III. Literature review..................................................................................................... 12

1. Export concepts ................................................................................................... 12

2. Marketing concepts ............................................................................................. 13

IV. Solution for TBS group in entraining its products to the U.S market..................... 14

V. Tasks, projects and activities .................................................................................. 16

VI. Conclusion .............................................................................................................. 18

VII. References ........................................................................................................... 19

1

I. Introduction

1. Internship objectives

Like I said, it is believed that multi-sectors developed and executed in TBS company give

me a great chance to approach and exposure an extensive experience as well as to enhance my

skills and competencies in operational environment. During my internship I worked as a

purchasing official as I help to draft the purchase order, prepare payment documents (LBC,

remittance). In addition, I have to perform the necessary work on transport (contact, and

Forwarder, ...). This is a major competency that I have to conduct and focus on during my

internship. And finally I have to set up personal targets to develop and improve my skills.

Following this, I formulated it by using SMART to reflect my target:

Major Role: Purchasing official

During my 4 month of internship, I want to actively contribute to the company’s

objectives by applying the knowledge I obtained during my education such as developing, and

execute purchasing strategies, seeking and partnering with reliable vendors and supplier, and

negotiating to get the best quality needed goods and services for company at the lowest price and

expense.

Major competency

Strategist:

As a Strategist, I want to come up with plans; new ideas and strategies on how to improve

the purchasing strategies.

Negotiator:

As a Negotiator, I want to set up network to facilitate the acquisition of company with

reliable vendors or suppliers who provide the quality goods at reasonable prices

Along with professional competencies like above, I also improve my personal skill as I

have studied what is the best behavioral manner in group. By understanding how to work in

professional environment, I am supposed that I will harmonize better in my future working job.

2. Expectations

I wanted to learn and specialize in how to coordinate and control the order cycle by using

information technology. Also it is important for me to learn how to improve and develop

business performance within the constraints of legislation, fuel costs and rising environmental

pressures. One more thing I hope to have relates to liaise and negotiate with customers and

suppliers. In reality, building up the network requires thousands skills to conquer the customer

and convince the supplier that could be not taught in class.

That is why I choose this internship company. It is suitable and I knew could achieve my

learning goals.

II. Organization

1. Internship organization

Since the great improvement of Viet Nam of national construction and economy,

currently Vietnam participates in the WTO, AFTA and even TPP. In a sense, this offers plenty of

opportunities for Vietnamese companies in joining the world trade market to gain more market

and more profit without any geographical and legislative boundaries.

TBS Group Corporation

The renew policy released by the government in 1986 has opened a new era of Vietnam

economy. A number of companies

have been allowed to operate and

one of them is TBS Group. This

firm was founded in 1992 by a

group of Vietnamese shareholders

as one of the very first footwear

company in Vietnam (Thai Binh

Shoe Group , n.d.). At the begin, it

produced lady fashion shoes and

canvas vulcanized shoes, but then

specialized in sport, casual, hiking

shoes and sport sandals (Shop, n.d.). Apart from this, it has been expanding over many sectors:

manufacturing industry bags, investing - business - real estate management and industrial

infrastructure, ports and logistics, trading & services (Thai Binh Shoe Group, n.d.). With a

gradual increase in economics of scale, TBS continuously enlarge the production capacity by

building up new factories in both South and North Vietnam to reach the output target 25-30

million pairs annually (Thai Binh Shoe Group, n.d.). As a result, the export turnover increased

sharply from a mere 1.5 million US Dollars in 1992 to 61 million US Dollars in 2006 (Shop,

n.d.). And since 1992, Thai Binh Shoe has been listed in top 10 Vietnam footwear producers.

The company takes a pride on satisfying customer and market needs with sophisticated products,

competitive prices and on-time delivery. In addition, as OEM firm, the group becomes the

trustworthy footwear producer for brands and stores as Reebok, Decathlon, Stilman,

Dcshoescousa, Quik-Silver… in the US, EU, Japan...markets (Thai Binh Shoe Group, n.d.).

Besides, it also offers integrated supportive manufacturing resources starting from the footwear

design to the molds, lasts, outsoles, to name a few. Throughout, the comparative advantages with

great capacity, efficient productivity, flexibility and advance management, TBS offers customers

our real sense of commitment to long-term business.

2. Culture, identity and image

Culture:

TBS is a place where Vietnamese traditional culture accordingly meets modern

technology models.

Vision:

By the aspiration and the determination of both competent employee and talent leaders,

TBS will emerge as a strong diversified-investment company in Vietnam and outside well. It

promises to achieve the global standard, so that it affirms itself as a delegate of Vietnam

intellectual stature and pride over the world.

Mission:

By relentless investing and innovating, TBS is proud of providing a high-quality products

and services that contribute to the Vietnam economy.

Additionally, it guarantees to always being creative and innovative. Its development

accompanies the high benefits, responsibilities associated with community businesses, social.

This means that it always brings confidence, peace of mind for customers, partners and

employees.

Core company values:

Human Resources

Focus on developing humanresources. Employees are themost valuable assets whichcontribute as a strategic weapon

for success and developmentof the business.

Accompaniment

Accompanying with customers,partners and employees to buildTBS development, success andmutual benefit-sharing

Responsibility

Being responsible for benefit ofcountry, community, society andemployees. Trying to contributeto life, for a better society.

Innovation and CreativityConstantly innovation as a

foundation for growth

3. Vietnam’s footwear industry overview

Vietnam has a huge amount of labor force. This is singificant for the success of

developing labor intensive industries in Vietnam. Footwear industries requires a lots skilled

workers for producing. According to Lefaso ( Vietnam Leather, Footwear and Handbag

Association), there are about 812 active leather and footwear companies. Those companies are

mostly located in Ho Chi Minh city, Dong Nai, Binh Duong and Ha Noi. The footwear industry

has created thousands of job supporting around 624,000 workers. Around 80% of Vietnamese

producers are subcontractors of foreign (Nguyen, 2014)

Vietnam’s leather & footwear export structure by market in first 6 months of 2013

Source: General Department of Vietnam Customs

4. TBS group corporation’s export condition

TBS group’s export turnover into different markets

TBS group’s export turnover into the U.S market

Year Total export turnover Export turnover into the U.Sõ Proportion (%) Growth (%)

2008 54,941,460 3,331,802 6 -

2009 69,737,869.07 9,471,155.98 13.58 184

2010 95,753,551,98 34,497,340.1 36.06 264

It is clear to see that TBS group has diversified many markets where EU and the U.S are

the main two main market accounted around 85% of total exported products. The export

turnovers have increased gradually for all markets. Although Vietnamese footwear industry is

accused by EU the act of anti-dumping in 2006, TBS group’s growth ratio is still high. There is a

Year 2008 2009 2010

Markets Export turnoverProportion(%) Export turnover

Proportion(%) Export turnover

Proportion(%)

EU 42,104,859.29 76.6 49,914,157.24 71,57 48,546,702.54 50.7

U.S 3,331,802 6 9,471,155.98 13,58 34,497,340.1 36,06

America 4,325,784 7.87 2,718,538.46 3,9 6,629,486.52 6.9

Asian 4,162,905 7.57 7,580,401.08 10,87 5,913,903.58 6.17

Others 873,443 1.96 5,715.84 0.08 166,119.24 0.17

Total 54,941,460 100 69,737,869.07 100 95,753,551.98 100

significant increase of export turnover for the U.S market, coming from 6% in 2008 to 36% in

2010. This change step by step show off market restructure of TBS group in the future, focusing

more on the U.S market.

By dividing exported products into different markets, the company could reduce risks and

pressure if there are any issue, and make sure steady profit for the company. Although the

company has diversified its exported market, TBS group has strategies for key markets like E.U

and the U.S in order to promote export performance and earn profit.

The U.S market is potential for export footwear products and the company step by step

try to reach the plan in which: 40% of products are exported in E.U, 40% in the U.S and 20% for

the rest.

Structure of exporting footwear products of TBSgroup to the U.S market.

2008 2009 2010

Products Pairs of shoes Proportion (%) Pairs of shoes Proportion (%) Pairs of shoes Tyû troïng (%)

Sport shoes 329,593 98 893,188 93,5 3,435,772 98.7

Others 2 6,5 1.3

Total 100 100 100

Most of products exported into the U.S market are sport shoes accounted around 98% of

total exporting products. Focusing only on sport shoes could bring both benefits and risks. The

company could focus on one kind of products, and invest machine as well as increase quality of

the product in order to meet foreign requirement. However, that is risky as the company is

dependent on one kind of product. If there are any problems in regard of sport-shoes products,

the company would suffer huge negative impacts.

5. The SWOT analysis in exporting products to the U.S market.

Strengths:

TBS group has a young labor force and they are active.

Most of machine at TBS are modern and they are imported from Italy

TBS has achieved ISO 9000

TBS groups has achieved trusts from many famous shoe brand and received many

subcontract contracts from foreign partners, like Skechers, Decathon.

The company has a department for research and develop product designs.

The company has a great capacity with many factories located in Thuan An and

Di An district.

There is good facilities and safety working condition for staffs and employees,

like restrooms and modern cafeterias.

Weaknesses:

TBS is 100 % domestic owned firm, so fund for operation is still low in

comparison with famous brands like Nike, Puma, Adidas. Besides, TBS groups has already

operated around 20 years, so the company lacks of experience for developing a owned brand.

There is not a department for research and development of foreign information

market. This department is actually important if the company want to expand its brand to

international market.

TBS group is a subcontractor, so the company is dependent much on foreign

partners. The company usually wait until the contract to begin the production line and this could

lead to waiting cost or overproduction.

TBS groups only focus on subcontract products from foreign partner’s design, the

company lacks of foreign market information. Besides that, shoes designs at TBS still limited.

There are still many defects in productions that may increase cost.

Opportunities:

Vietnam is one of the largest footwear producers and exporters in the world.

Recently, Vietnam has joined WTO and AFTA as well as TPP.

Vietnam has the stable reputation and safe environment for production.

The scandal of an-dumping in 2006 makes Vietnam achieve more attention from

many other countries. If Vietnam could exploit that, this would be positively potential.

Plentiful work force and low labor cost.

TBS (Thai Binh Shoe) is a famous fashion brand in Vietnam.

The company locates in the key economic zone, near to Tan San Nhat airport and

Cat Lat port.

Threats:

TBS groups lack of market information, so there is not forecast for the market and

production plan

Materials are important from China and Taiwan, and the company has to wait for

orders from foreign partners before producing. This increases carrying cost and warehousing

cost. Besides that, the company has to import materials from different resources, so product

quality is not the same and standardization.

TBS groups has to compete Chinese products in which products from China are

usually low price. The average price of product of TBS is 10-12 USD per one whereby 8 USD

per one for product from China.

Although TBS group’s products could compare to Chinese products, Chinese

products are diversified in regard of designs, color and price.

In order to attract foreign contracts, the company has to offer new shoe designs

every month and that would increase cost.

TBS is a subcontractor for foreign partners, and the products are sold with the

brand of foreign partners. So, not many foreign users know about TBS brand. In order to expand

the market, TBS need to create a new brand for itself.

Although participation in world trade organizations reduce tariff and tax, this

increase pressure for local organizations to compete foreign brand with foreign direct investment

for foreign companies.

III. Literature review

1. Export concepts

Export is a function of international trade whereby organizations earn profit by buying

products and services to foreign markets, not local market (Investopedia, n.d).

The role of export: Export plays an important role in generating national funds for

importing, promoting the process of industrialization. This process contributes to economic

restructure, increasing production, development of technology and upgrading new equipment.

Focusing on export would bring a huge amount of foreign currencies to the country as well as

create jobs for workers. Besides, export is also considered as a way to exchange cultures and

strengthen relationships with other countries.

Significance of export: Export is a key in reaching international exchanges of the country

by exploiting competitive advantages like resources, natural conditions, and labor force to get

profits and foreign currencies. This creates funds for national constructions and step by step

improve citizen’s standard of living.

By export, domestic products would be put in the international market to compete with

foreign products in terms of price and quality. In order to get success and compete with foreign

organization, Vietnamese organizations need to restructure the production process as well as

apply new methods to satisfy international requirement and standards.

2. Marketing concepts

Marketing definition: According to American Marketing Association, marketing is the

activity, set of institutions, and process of creating, communicating, delivering and exchanging

offering as well. That brings value for customers or users. (AMA, 2013)

Another simple definition comes from Meldrum and Mike in the book named Marketing

in a nutshell: key concepts for non-specialists / Mike Meldrum and Malcolm McDonald.

Marketing is the link, creating relationship between the customers and suppliers, and the link

between production and consumption (Meldrum & McDonald, 2007).

International marketing: it is the application of marketing principles in which products

and services are marketed oversee and across national borders. Although there are not much

difference in definition between domestic market and international market, there are significant

difference in marketing management between those two strategies ( domestic marketing and

international marketing). International marketing is more complicated than domestic marketing

as marketers face with difficulties in currency, finance, culture and law between countries.

(International marketing, n.d.)

The American Marketing Association (AMA) defines international marketing is

the multinational process of planning and executing pricing, promotion as well as distribution of

goods and services. In this case, marketing activities are undertaking in many countries.

IV. Solution for TBS group in entraining its products to the U.S

market.

Improving competitiveness

Improving quality of initial material for production: TBS group could establish a

purchasing department. The role of the department is to find, research and deal with the

procurement of materials, make sure the quality of the inputs. Besides, the organization should

build up the relationship with suppliers to make sure that materials will be delivered on time.

TBS group could link with local footwear producers, such as Thuong Dinh or Biti’s, in order to

exchange information. Moreover, it is necessary to find a new kind of material instead of only

relying on materials imported from China and Taiwan.

Improving labor skill and knowledge: apply gross-training to labor force to raise worker

skill. Sometime, the company should send some employees to foreign countries, such as Korea

and Italy to study experiences as well as quality management methods. In addition, TBS group

should apply new methods like 5S or Lean in its production process. By doing so, the company

could save costs and raise productivity.

Diversification of methods for export to the US market

Diversifying product designs to reach more customer segments: the role of research and

development of design department is important in reaching customer’s need.

Building up Thai Binh brand: instead of only focusing on subcontract, TBS group should

create some owned product designs and bring them to customers. By doing so, TBS group brand

could be strengthened and expanded in the world.

Promote marketing strategies in the US market.

Market expo is an effective way for TBS group’s products to reach American users. The

company need to identify which kind of product they want to show off and who target customers

are. Besides, providing catalogs to customers as well as admissions counselor if there is any

questions from customers at the market expo show. In addition, the company could use the

Internet as a marketing channel.

Diversification of methods for export TBS’s products to the US market: instead of being

subcontractor of foreign footwear companies, TBS group could build up the relationship with

retailers at the U.S like Walmart to bring TBS group’s products to American users.

V. Tasks, projects and activities

In the internship period from 11/2015 to 2/2016, I has learnt useful lessons as well as

practical experiences as the role of a document staff. Firstly, I would like to thank the manager of

import and export department as well as staffs. They create a favorable working conditions for

me to study and work at TBS group Corp in the internship time.

Although I am majoring supply chain management, the job I deal with at the company is

about international logistics, specifically customs documentation. This makes me confused and

worried in the early days at the company. Most of key tasks likes, planning for exporting

products and importing materials, purchasing job and finance are undertaken by experienced

staffs who has many years working at the company. In contrast, young staffs, like me,are

assigned the job which requires traveling a lot, such as working at ports, meeting carriers and

forwarders in Ho Chi Minh city. They have to work with the Ministry of Industry and Trade to

get CO (certificate of origin), take bills from carriers and forwarders (mostly located in Ho Chi

Minh city), or meet customs officials at the ports if there is any problems related to exporting

products.

By working at Export and Import department in the internship time, I understand more

the working process of the export and import office. The department is divided into two small

departments. One is responsible for footwear product’s customs declaration and the other is

responsible for handbag products. At TBS group, I am assistant for Mr. Quan, who is responsible

for getting certificates of origin, taking bills and pay money for forwarders. Some days in week, I

follow Mr Quan to come to the footwear factory located in Thuan An district. We talk with

supervisors to the problems about shoes and receive packing lists of product. Every shoe at TBS

is designed followed several steps before checking and parking for oversee shipments. I also

helps people in typing documents, solving technical problems related to computer softwares. I

am impressive to the automatic customs clearance software (e-declaration), Thai Son software.

In addition, Vietnam is developing a new customs clearance named VNACCS/VCIS system, this

is promised to reduce costs and time for customs declaration.

Exporting products at TBSg roup could be used by vessels or planes. As each carrier and

forwarder specialized in certain routes, and TBS group Corp diversified its exporting products in

different forwarders. This may increase documentation jobs, but it reduces transportation cost by

exploiting competitive advantages of each carrier. We travel to the forwarder’s office in Ho Chi

Minh city in order to receive bills and pay transportation cost. TBS group Corp’s carriers are

DHL, Expeditors, Vinatrans, etc. we also deal with banks for transfer money. By meeting

carriers, forwarders and banking staffs, I could build up the relationship and understand more

about logistics process in Vietnam

VI. Conclusion

It is potential for TBS groups to expand its exporting product to the US market. There is

huge demand in the U.S and American are also willing to pay money for fashion. However, there

are challenges for the company in expanding in this market. In order to do that, TBS group need

to complete two work: improve competitiveness and promoting marketing strategies. There is an

issue remaining in all of Vietnam footwear companies is that. We mostly focus on subcontract

orders from foreign partners, there is not any owned brand for Vietnamese footwear firm,

although Vietnam is one of the largest footwear producers. Developing an owned brand is an

important task for footwear industry in order to expand the footwear industry’s impact on the

world and get profit.

VII. References

Shop. (n.d.). Retrieved from Exporters: http://exporters.com.vn/shop/THAI-BINH-HOLDING--SHOES-MANUFACTURING-CO-/35471/about.html

Thai Binh Shoe Group . (n.d.). Lich su phat trien. Retrieved from TBS Group:http://tbsgroup.vn/ve-tap-doan-tbs/lich-su-phat-trien/

Thai Binh Shoe Group. (n.d.). Linh Vuc Hoat Dong. Retrieved from TBS group:http://tbsgroup.vn/linh-vuc-hoat-dong/

Investopedia (n.d.), Export. Retrieved fromhttp://www.investopedia.com/terms/e/export.asp#

AMA (2013). Definition of export. Retrieved fromhttps://www.ama.org/AboutAMA/Pages/Definition-of-Marketing.aspx

Meldrum, M & McDonald, M. (2007). Marketing in a nutshell: key concepts for non-specialists, 294: pp43

International marketing (n.d). Retrieved from http://www.marketing-schools.org/types-of-marketing/international-marketing.html#link1

Nguyen, P. M. (2014, July 16). New Boost Needed. Retrieved fromhttp://vccinews.com/news_detail.asp?news_id=30750