Description
I am working on a 3 phase project. Phase 1 is done and it is time for phase 2. I am attaching the overall project guidelines as well as phase 1. For this part, I need a powerpoint of at least 3 slides identifying all possible risks of owning a Lowe’s store in Thailand as well as summarizing the costs and benefits. Aside from submitting a powerpoint, I also need to submit a “paper’ that basically incorporates and explains the information used on the slides. For citing sources, please use APA format.
Unformatted Attachment Preview
BUSI455. International Business. Dr. Oh
Guideline of the Project
Global Business Plan
Homework assignments (Group Project)
• Global Business Plan (170 points):
• This project provide a student a chance to apply key concepts
and theories in IB to the foreign market entry project
• Each assignment posted on Blackboard
• Designed to develop an international business plan and an entry
strategy into a host country
• Expanding globally for a new or an existing product or service
(limited to a consumer product/service)
• Entry mode should be one of FDI forms
• Comprise of three phases and each phase has several modules
• Required to submit three reports:
• Report 1 is worth 30 points
• Report 2 is worth 30 points
• Report 3 + Final is worth 30 points
• Key Deliverables:
• Initial Presentation (GBP Proposal): 20
• Reports 1, 2, 3, and Final: 90
• Presentation: 60 (Phase 1, 2, and 3: 20 * 3)
Foreign Market
Entry Strategy
• Flow of Entry
Decision Process
• Apply to GBP project
Rationale for IB
PESTEL
Distance/Risk
globalEDGE
IB Strategy, Entry
Modes, Org. Structure
Marketing, SCM,
Production, HR,
Distribution
globalEDGE
• Started out in1995. Relaunched as globalEDGE in 2001
• Collection of diverse database related to IB
• Majority of content accessible for free (except diagnostic tools)
http://globaledge.msu.edu/
GBP Project Overview
Firm/
Country
Selection
• US MNE
• Consumer
Product
• Target
Country
• Why?
Proposal
• Rationale
for
selection
• Overview
of firm &
country
Phase 1:
Understan
ding
Business
Context
Phase 2:
Develop
IB Strategy
Phase 3:
Global
Operation
• Why?
• Economic
• Sociocultural
• Political
• Legal Env.
Distance
• Risks
• IB strategy
• Entry mode
• Strategy
diamond
• IB structure
• Marketing
• Product
• Distribution
• Promotion
• Pricing
• HR strategy
• Final Report
Final
Presentation
• PPT slides
• Online PT
• 25 minutes
• Refer to
grading
rubrics
GBP Project Proposal
• Firm/Country Selection:
• Firm/Product selection: select a firm (an American MNE), a
(consumer) product/service, not primarily online business, and
a target country that your team wants to enter
• Target (Host) country selection: preferably one of BRICS
countries (Brazil, Russia, India, China, South Africa); It should
not be one of developed countries, but one of developing or
emerging countries. And it should have a meaningful and
significant market size or critical mass of consumers (maybe, 10
BEM: Argentina, Indonesia, Poland, Nigeria, Vietnam, Chile,
Egypt, Turkey, Mexico)
• Entry mode should be one of FDI forms
• Should be approved by Professor, first-come first-served basis
GBP Project Proposal
• Proposal of Global Business Plan (GBP) Project:
• Format: PowerPoint slides
• Submit Presentation Video
• It should cover the name of an American MNE, a product/service, and a target
country. Here are exemplary items of contents in your proposal (refer to the
template posted at BB):
• Firm analysis: The company overview/history/financial performance
(last 3 to 5 years)/Business Strategy & International Business Strategy/
its prior international business operation and experience/lessons
learned from prior foreign market entry (why do you select this
company?)
• The product/service: brief explanation, key value proposition and major
adaption of the product/service for the target market, internationalization
of the product/service (for example, to what extent the firm needs to
adapt and how?), justification of selection, specify a business potential of
a proposed product/service, for example, estimated market size (provide
supporting data) of that business (why this company need international
expansion “NOW”?)
• A target country: overview of the country, market overview, competition
(local/global players in that host country, should provide market share
and strengths and weaknesses of the key players of major players in the
host country), preliminary analysis on political, economic, socio-cultural,
and legal environment, the reasons of your selection, a potential of
business opportunities (why this country?)
• Answer to the questions of why go international and now? And where to
go? (why do you select this country?)
GBP Project Report Guideline
• General guideline for Global Business Plan (GBP) Project:
• The semester-long project: cannot develop and complete it at
once in a short period of time. Instead, you’d better proceed it
step-by-step as the semester unfolds
• Expect the University-level quality of the business plan
• Refer to the detailed guideline posted at BB, try to do all
necessary analysis but should present relevant ones
• Should provide quantitative analyses (use globalEDGE)
• After doing key analysis, should provide managerial
implications for your foreign entry and IB
• Refer to the sample report
• Single-spaced, in MS Word format, no page limit
• Required to provide “References” at the end of Report. (Follow
APA style) Do extensive and external research
• Should cite your References in the text (place parenthetical
citation in the text)
• Filename: “Your Firm Name-Report#.docx”
Global Business Plan (GBP) Project
• Phase 1 – Seizing international business opportunity and
understanding different business context in the host country
(Part 1 and 2 in the textbook)
• Required to submit the GBP Phase 1 Report & Presentation
• PHASE 2 – Developing international business strategy to
compete in the host country and organizing a global structure
(Part 3, 4, and 5 in the textbook)
• Required to submit the GBP Phase 2 Report & Presentation
• PHASE 3 – Implementing your Global Business Plan and
international operations in the host market (Part 5 and 6 in the
textbook)
• Required to submit the GBP Final Report (Phase 1, 2, 3 + Executive
Summary + Conclusion) & Final Presentation
Global Business Plan (GBP) Project:
Phase 1. Seizing IB Opportunities & Understanding Business Context
• MODULE 1 – Identifying and Seizing Global Business Opportunities (Chapter 1 in
the textbook)
• Determine potentials of international markets for a product or service of an
American MNE (it should be a consumer product/service): estimated market size
• Analyze the firm, the product/service (adaptation of it), and the host country
• Market landscape/outlook in the host market
• Specify the business opportunities, justify the potential value of the
opportunities, and clarify the value proposition of such international business
opportunities
• Summarize the reasons why this firm needs to globalize (enter the host country)
and why now
• Managerial implications and insights
• MODULE 2 – Analyzing International Competitors and competition (Chapter 1 in the
textbook)
• Identify domestic (local) and international companies involved in similar business global
business activities (local and global players in the host country) and their market share
• Brief overview of the competitive situation and context of the local and global market
• Brief summary of strengths and weaknesses of your firm and competitors
• Managerial implications and insights
Global Business Plan (GBP) Project:
Phase 1. Seizing IB Opportunities & Understanding Business Context
• MODULE 3 – Assessing the Economic-Geographic Environment (Chapter 2 & 3 in the
textbook)
• Examine geographic and economic factors that affect the business environment of a
nation (should be relevant to your business, not list irrelevant ones)
• Exemplary contents:
• Income: GNP/GDP, Per Capita income, average family income, distribution of wealth,
employment, etc.
• Natural resources
• Industry compositions (major industry)
• Population: latest count, growth rates, number of households, working population, age
distribution, density of population
• Size of middle class, household consumption, Market Potential Index (MPI)
• Infrastructure: transportation and communication systems – Modes/types, availability,
usage rates
• Inflation rates, interest rates
• International trade statistics: exports/imports/balance-of-payments/exchange rates
• Trade restriction: embargoes, quotas, import taxes, tariffs, licensing, custom duties
• Foreign ownership restrictions
• Managerial implications and insights
Global Business Plan (GBP) Project:
Phase 1. Seizing IB Opportunities & Understanding Business Context
• MODULE 4 – Assessing the Social-Cultural Environment (Chapter 4 in
the textbook)
• Research social institutions, customs, traditions, business practices, and
beliefs influencing business (should be relevant to your business, not list irrelevant ones)
• Exemplary contents:
• Language Spoken/Written
• Religion and religious influences in business and life
• Customs/traditions/manners/habits: food, drinks, clothing, hygiene, myths and
superstitions
• Core values, norms, and attitudes relating to foreign and domestic products
• High-and low-context culture; rankings on Hofstede’s cultural dimensions
• Aesthetics, colors, music, symbolism, etc.
• Social institutions: family life, educational institutions, class systems, etc.
• Business customs and practices: protocols, greetings, keeping time, space, gift
giving, negotiation style, hospitality, etc.
• Demographics, characteristics of demographics and its change over time
• Managerial implications and insights
Global Business Plan (GBP) Project:
Phase 1. Seizing IB Opportunities & Understanding Business Context
• MODULE 4 – Assessing the Social-Cultural Environment (Chapter 4 in
the textbook)
Global Business Plan (GBP) Project:
Phase 1. Seizing IB Opportunities & Understanding Business Context
• MODULE 4 – Assessing the Social-Cultural Environment (Chapter 4 in
the textbook)
• Should be relevant to your business (industry)
The case of Home Depot or Lowe’s
Global Business Plan (GBP) Project:
Phase 1. Seizing IB Opportunities & Understanding Business Context
• MODULE 5 – Assessing the Political-Legal Environment (Chapter 2 &
3 in the textbook)
• Research political institutions, geopolitical factors, legal context of business
in the host country
• Research the influence of government and regulations on business activities
• Should be relevant to your business, not list irrelevant ones
• Exemplary contents:
• Political ideology
• Roles of politics, political stability and risks, political freedom
• Relationship between politics and business
• Type of government and recent political developments
• Legislation, regulations, or special rules affecting marketing your product
or doing your business in the local market
• Tariffs, quotas, and other restrictions on imports and exports
• Information on subsidies
• The rule of law, legal tradition
• Intellectual property rights: laws, regulations, legal enforcement systems
• Managerial implications and insights
Global Business Plan (GBP) Project:
Phase 1. Seizing IB Opportunities & Understanding Business Context
• MODULE 5 – Assessing the Political-Legal Environment (Chapter 2 &
3 in the textbook)
Global Business Plan (GBP) Project:
Phase 2. Strategizing/Organizing for GB Activities
• MODULE 6 – Managing International Economic (Financial) and
Business Risks (Chapter 5, 6, 7, 8, 9, 10, and 11 in the textbook)
• Identify all possible risks in doing business in the host country
such as political, economic, socio-cultural, legal, environmental,
and institutional environments.
• Summarize Costs and Benefits of your foreign market entry
• Specify the differences in doing business between the home and
the host country (Distance Analysis) and provide risk-mitigating
strategies/measures
• Exemplary analysis: CAGE framework*
• Identify methods/alternatives/solutions for reducing such global
business risks (risk management strategies)
• Managerial implications and insights
*Ghemawat, P. (2001) Distance still Matters. Harvard Business Review, 79, (8) pp. 137-147.
Example of Data for Distance Analysis: Heritage Foundation
Global Business Plan (GBP) Project:
Phase 2. Strategizing/Organizing for GB Activities
Impact of Distance
Gravity Theory: trade flows have a positive relationship between economic size and
trade, a negative relationship between distance and trade
Global Business Plan (GBP) Project:
Phase 2. Strategizing/Organizing for GB Activities
Global Business Plan (GBP) Project:
Phase 2. Strategizing/Organizing for GB Activities
CAGE Framework
United States
Ireland
Risk Level
Cultural
Language
Religion
Values and Social Norms
English
Protestant 46.5%
Roman Catholic 20.8%
Mormon 1.6%
Unaffiliated 22.8%
Highly individualistic;
entrepreneurial
Tradition
Focus on hobbies outside of work
Ethnicities
White 72.4%
Black 12.6%
Asian 4.8%
Other 10.2%
English
Roman Catholic 84.7%
Church of Ireland 2.7%
Other Christian 2.7%
Other/Unspecified 9.9%
Individualistic; open
communication at work
Pub Culture; interpersonal
relationships when not working
Irish 84.5%
Other White 9.8%
Asian 1.9%
Black 1.4%
Other 2.4%
Low
Low
Low
Low
Low
Administrative
Currency
Legal System
Governmental Intervention
Corruption
U.S. Dollar
Federal Repubilc
Minimal
Minimal
Euro
Parliamentary Republic
Minimal
Minimal
Moderate
Low
Low
Low
Located across the Atlantic Ocean
68,883 sq km
Temperate Maritime
Island nation
Airports, railways, highways; some
improvement needed
Telephone, internet, and cellular
infrastructure
Moderate
Low
Low
Moderate
Geographic
Physical Distance
Size (Land Area)
Climate
Landlockedness
9,147,593 sq km
Mostly Temperate
Large multi-state nation
Transportation
Airports, railways, highways
Communication
Telephone, internet, and cellular
infrastructure
Low
Low
Economic
Per Capita Income
Cost of Labor (Index Points)
Economic Size (GDP)
Tax Competitiveness
Inflation
Population
$62,641
$83,203
80.80
111.98
$20,494,100,000,000
$403,828,175,286
21% Corporate Tax Rate
12.5% Corporate Tax Rate
2.443%
0.488%
327,167,434
4,853,506
Low
Low
Low
Low
Low
Low
Global Business Plan (GBP) Project:
Phase 2. Strategizing/Organizing for GB Activities
Purpose of Analysis: Evaluate Country Attractiveness
à then, Develop a Foreign Market Entry Strategy
Benefits
• Size
• Wealth (purchasing power)
• Economic growth
• Factor conditions
Costs
• Political payoffs(corruption)
• Lack of Infrastructure
• Legal costs
Overall
Attractiveness
Risks
• Political: conflict, violence, policy changes, property seizure, regulation
• Economic: economic mismanagement (level of debt, inflation rate ….)
• Legal: contract violation, property expropriation
• Socio-cultural risks
IB Strategy: Balance long-term risks with short-term benefits
of doing business in a foreign country.
Global Business Plan (GBP) Project:
Phase 2. Strategizing/Organizing for GB Activities
• MODULE 7 – Developing International Business Strategy
(Chapter 12 & 13 in the textbook)
• Develop IB strategy to compete in the host market and the
global market
• Identify your overall IB strategy (refer to the taxonomy of IB
strategies in the next slide and the textbook) and its rationale
• Specify the details of IB strategy such as location selection,
entry modes/strategies, primary business strategies (how to
compete and to differentiate your product/service in the host
market), primary business model (economic logic/how to
make profit), and staging strategies (timing, speed, sequence,
scale, partnering)
• Present Diagram of Strategy Diamond and detailed
explanation for each element
• Managerial implications and insights
Types of IB Strategy
Strategy Diamond (5 elements of strategy)
25
IKEAʼs Strategy Diamond
Arenas
Arenas
Staging
• Inexpensive contemporary furniture
• Young, white-collar customers
• Worldwide
• Rapid international
Vehicles
expansion, by region
• Early footholds in each
country; fill in later
Staging
Economic logic
• Economies of scale (global,
regional, and individual-store
scale)
• Efficiencies from replication
Economic
logic
Differentiators
Vehicles
• Organic expansion
• Wholly owned stores
Differentiators
• Very reliable quality
• Low price
• Fun, nonthreatening shopping
experience
• Instant fulfillment
Global Business Plan (GBP) Project:
Phase 3. Implementing IB Activities
• MODULE 8 – Product and Target Market Planning for Foreign Markets (Chapter 12,
13, & 16 in the textbook)
• Identify specific attributes and customer benefits for a proposed international
product or service
• Identify unmet needs à clarify value proposition
• Elaborate product concept, its product life cycle, and adoption potentials
• Specify product cores (no need to adapt) and some product attributes that
need to be adapted in a host market
• Product development and adaptation: which attributes need to be adapted?
Need to introduce a new product?
• Clarify a target market, segments, their profile, size, and characteristics
(segmentation à targeting à positioning)
• Overview of marketing mix
• Exemplary contents:
• Describe your product in detail including special features, value propositions,
reasons to buy, unmet needs
• Attitudes toward foreign products in the host country
• Any strategic adaptation needed: extension, adaptation, or invention
• Sales volume expected
• Managerial implications and insights
Global Business Plan (GBP) Project:
Phase 3. Implementing IB Activities
• MODULE 9 – Designing a Global Distribution Strategy (Chapter 15 in the textbook)
• Analyze distribution channels and intermediaries for global business operations
• Analyze unique features of distribution systems in a host country
• Figure out distribution landscape in a target market segment
• Distribution channels: Where is the product typically bought by customers in the
host market segments?
• Wholesale distribution: What is the role of wholesalers for the host market
segments targeted?
• Retail distribution: What is the availability of different types of retail stores in the
host markets for the customer segments targeted?
• Specify distribution system, distribution channels, channel objectives and
restraints
• Identify intermediaries, suppliers, and supply chains in a host market
• Analyze channel concentration, length, exclusivity and quality
• Develop and specify your distribution strategy in a global and a host market
• Managerial implications and insights
Global Business Plan (GBP) Project:
Phase 3. Implementing IB Activities
• MODULE 10 – Planning a Global Promotion Strategy (Chapter 16 in the textbook)
• Suggest advertising messages, media and other promotional activities for an
international enterprise in a global and a host market
• Specify communication mix: social media, mass media, direct marketing, sales
promotion, advertising, word of mouth
• Identify communication barriers in a host country
• Specify target audience, promotional goals/objectives, and media plan (types
of media, target audience, frequency, reasons of selection)
• Proposed promotion budget/expenditures
• Managerial implications and insights
(An example of Communication Plan)
Target Audience
Messages
Media Plan
Frequency
Global Business Plan (GBP) Project:
Phase 3. Implementing IB Activities
• MODULE 10 – Planning a Global Promotion Strategy (Chapter 16 in the textbook)
(An example of Communication Plan)
Target Audience
Messages
Media Plan
Frequency
(Communication Plan Template)
Who (Audience) What (Messages)
How (Media Plan)
When (Frequency)
Owner/Sources
Budget
Global Business Plan (GBP) Project:
Phase 3. Implementing IB Activities
• MODULE 11 – Selecting an International Pricing Strategy (Chapter 12 & 16 in the
textbook)
• Recommend a global pricing strategy based on costs, market demand,
competition, and economic environment
• Price acceptance by local consumers
• Potential demands analysis, any differences in the host markets?
• Pricing objectives and strategies: major pricing strategy when you enter a host
country (skimming, predatory, multipoint pricing, or else)
• Analyze factors (environmental and others) affecting your pricing
• Pricing structure
• Cost of goods sold: price level and why?
• Cost structure: variable and fixed cost, any factors causing
different/increased cost in a host market
• Set the retail price: are there trade tariffs, nontariff barriers, and/or other
regulatory influences on price that will influence the pricing equation used to
determine the retail price to customers, considering your COGS/cost structure
• Total revenue expectations
• Managerial implications and insights
Global Business Plan (GBP) Project:
Phase 3. Implementing GBP
• MODULE 12 – Identifying Human Resources for Global Business
Activities (Chapter 17 in the textbook)
• Gather information on needed personnel for operating your business in a host
country
• Develop an HRM strategy in a host country
• Identify a specific staffing policy, T & D, performance appraisal, and
compensation in details (for an example for “compensation”, you’re required to
provide the compensation approach, details of compensation packages for Expats and
local employees in compensation)
• Managerial implications and insights
Final Report: GBP Phase 1 + Phase 2 + Phase 3 Reports, and
should include an Executive Summary + Conclusion
•
•
•
•
•
•
•
Cover page
Table of Contents
Executive Summary
Phase Report 1, 2, and 3 with your own titles and subtitles (Don’t use the word of Module 1, 2, 3, …)
Conclusions
References
Appendix (data, tables, graphics, and others)
Global Business Plan (GBP) Project:
Detailed Instruction & Guideline
• Please refer to the files posted on Blackboard
• Guideline for GBP Reports
• Instruction/ Guideline
• Learning Goals
• Key purpose of each module
• Key elements
• Key contents
• Resources
• Conduct Research: how to collect data and information
• Managerial implications
• E-Commerce Application
• References
Lowes Report 1
Lowes
• Originally founded by Lucius Smith Lowe in 1921.
• The first store was originally called “North Wilksboro Hardware” and
was located in Wilksboro, North Carolina.
• Went public 1979. (Shane, 2016).
• Currently operates over 1,700 Home Improvement stores in the U.S.
and Canada.
• Uses customer centric approach and ensures employees have skills
and knowledge to fulfill customer needs. (Lowe’s Corporate, 2023)
Prior international
expansion
To date, the only country Lowe’s operates in
outside of the U.S. is Canada.
Previously Lowes had operated in Mexico,
but in 2018 it closed all of its Mexican based
stores.
This came as a result of a drop in quarterly
earnings of $872 million to $629 million.
(Howland, 2018).
Target market and IB strategy
• Our Target market is Thailand’s middle class.
• As of 2015, this group made up 35% of the country’s population.
(Wangkait, 2017).
• Typically, a country’s middle class can be found in urban areas, so it
would be best to start our business in the nation’s capitol of Bangkok.
Target market and IB strategy cont….
• It will be in our best interest to learn as much about the people and
culture before we begin any major activities like opening a store or
distribution center.
• It would be best for our business to hire locally as it would allow for
more seamless customer interactions.
• When we open, it would be best to do so in a lighter capacity, with
only one or two stores to start with.
• It is possible to implement Lowe’s online store, though we may be
restricted to a “Last-mile” only delivery system due to uncertainty in
infrastructure.
Host market
• This chart shows our firm, Lowes,
compared to the top 3 Home
improvement stores already operating
in Thailand by their market value.
(Disfold Data, 2023).
Socio/Cultural Environment of Thailand
Religion
4.30% 1%
0.10%
Languages: Thai
English
Mandarin
Religion: Theravada Buddhism
94.60%
“The predominant Buddhist religion is very tolerant and has
amicable relations with religious minorities” (World, 2010, pg. 14).
Buddhist
Muslim
Christian
Other
(Data gathered from globalEDGE database.) (globalEDGE Introduction, 2023)
Customs/Traditions
•
Constitutional Monarchy
•
Buddhism
•
Traditional Family
•
Holistic Practices
•
Collectivist Culture
•
Treatment of Women
“The traditional Thai adage, “Women are the elephant’s hind legs,” illustrates women’s important role but secondary status in Thai society. Whether they are considered the
front legs or the back legs, there is no doubt that Thai women actively participate in the country’s increasingly industrialized and diversified work force” (World, 2010, pg. 24).
Hofstede’s Cultural Dimensions
(Data gathered from: Country comparison tool (hofstede-insights.com))(Hofstede Insights, 2023)
Hofstede’s Cultural Dimensions Explained
Power Distance: High power distance = Greater class separation. “The ancient Thai worship of hierarchy will be
hard to alter, and not all Thais see it as a bad trait since it promotes harmony and simplifies decision-making” (World,
2010, pg. 19).
Individualism: Thailand is a collectivist society. “The society fosters strong relationships where everyone takes
responsibility for fellow members of their group” (Hofstede, 2023).
Masculinity: Low level compared to United States. “This lower level is indicative of a society with less assertiveness
and competitiveness, as compared to one where these values are considered more important and significant
(Hofstede, 2023).
Uncertainty Avoidance: Since Thailand has a high level of uncertainty avoidance, change must be seen for the
greater good.
Long-Term Orientation: Thailand is normative oriented and prefers to maintain traditional values.
Indulgence: Thailand falls right in the middle of the spectrum on indulgence and restraint. This makes it somewhat
difficult to determine whether they lean more to one side or the other.
Business
Customs
• Punctuality
• “Yes” can mean “No”
• Body language cues
• Women in management
• Business hours
Demographics
Ethic Groups
1.30%1.10% 0.10%
Population: 71,697,030 (2022)
69.27% of the population is between ages
15 and 64
Rapid urbanization: 52% of Thailand is
Urban
97.50%
Thai
Burmese
Other
Unspecified
(Data gathered from globalEDGE database.) (globalEDGE Introduction, 2023)
Managerial Implications
•
In order for Lowe’s to be successful in globalizing Thailand, we must account for cross-cultural differences. We must also
be tolerant of Thai customs and religion. Some of the ways that Lowe’s can accommodate this is to honor Buddhist
holidays, showing respect for the monarchy by hanging a picture of the King at all of our locations, learning the local
language and understanding Thai body language.
•
Thailand is a country with a high uncertainty avoidance level. Lowe’s would need to show the Thai people that our
company is about community and the greater good. By doing projects that benefit the community, like building homes for
the impoverished, we can help generate good public relations with Thailand. We can also do this by get behind
government programs like Baan Mankong.
•
Following basic business practices will also be vital for the success of Lowe’s. Opening our businesses on-time and
operating on a regular Thai workday will be beneficial for us. Not following these basic business principles will be seen as
a sign of disrespect to the people of Thailand.
Competition and Competitors
• Lowe’s main competitors in Thailand are
– Siam Global Home
– DoHome
– Home Product Center(HomePro)
•
Image is based off 1 year stock performance
Competition
and
Competitors
Home Product Center
Market
Capital
(USD)
4.5B
Siam Global
DoHome
2.3B
921.3M
Competitors Strengths
HomePro although they are #181 for country rank
They come in at #1 in category rank, meaning they are the top dogs of the home
improvement stores in Thailand
Siam Global ( often called Globalhouse) are ranked 5th in the category rank for home
improvement. Although that may seem average, they are bringing in $500M- $1B annual
revenue
DoHomes, although one of the smaller companies, they saw a 21.4% jump in 2022, mainly
caused by bad weather causing people to need home improvement equipment to repair the
damages. DoHomes is trending upward as they opened 5 large format branches in 2022
Sample Footer Text
Competitor Weakness
•
•
Although DoHome is one of the larger
home improvement they have some
serious weaknesses
•
DoHome’s net profit margin growth rate
in 5 yrs is -13.19
•
They also struggle with their Revenue
Growth quarterly
•
Ideally you want your growth rate
quarterly around 20%……..DoHome’s last
quarter’s revenue growth was 1.39%
•
HomePro’s weaknesses are slow new
store expansions as well as declining
consumer confidence
10/22/23
Global House saw their fair share of issues when it
comes to a flexible infrastructure. Their back offices
were all housed-on premises and when they expanded
across the country the branches had to connect to the
servers at headquarters. This required space, servers,
and monitoring causing operating costs to go up
Consumer confidence Index in Thailand
17
• With families increasingly
choosing to live independently
and with incomes rising,
particularly upcountry,
Thailand’s home improvement
segment has emerged as a
dynamic and particularly
competitive one. In greater
Bangkok alone, an estimated
80, 000-100,000 new houses
and some 30,000-40,000 new
condos are registered every
year.
Competitive situation
• The traditional leader in all
segments of the market, Home
Product Centre, is facing stronger
competition from smaller networks
in specific segments. The
established groups in this segment
– HomePro, Siam Global House,
Central Group’s Power Retail,
Index Living Mall – are all
aggressively expanding their reach
and are banking on sustained
growth in the provincial centers.
Thailand’s Economic/Geographic
Environment
• Current GDP is at around 505 Billion and is
expected to be at around 509 by the end of
year.
• Relies mostly on Agriculture, Fishing,
Mining, and Forestry for their
Natural Resources.
• The biggest industries in Thailand include
the Agriculture sector, Manufacturing
sector and Services sector.
• Inflation Rate currently at 0.88% and Interest
rate is at 2.50% to support long term growth.
Population
• As of 2023, the current population in Thailand is 71,801,279 with a .15% yearly growth rate
with a little bit over 18 million households
• The number of employed people in Thailand reach almost 40 thousand with the exact number
being 39,677.45 and about 35% are middle class
• The population density is 364 people per every square mile
• In Thailand, there are about 51.5% females and 48.8% males
• 13,998,001 of the population are 0 to 14 years old
• 50,007,566 of the population are 15 to 64 years old
Infrastructure
• Thailand offers a number of transportation including:
• Taxi/ Motorcycle Taxi- 80,000 use taxi’s and 185,303 use motorcycle taxi’s with over 51,000 available
• Train/ BTS Sky Train- 1.25 million use the train with 5 major lines available
• Ferry- 12.9 million use the ferry with 63 ferry ports available
• Bus- 73.75 million use the bus with 1.6 thousand available
• (Tuk Tuk) Auto Rickshaw and Songthaew- 3.5 million use Tuk Tuk’s with 30,000 available
BTS Skytrain
Ferry
Taxi
Bus
Auto Rickshaw
Songthaew
Motorcycle Taxi
Train
Trade Statistics
• Over 65% of the economies’ GDP is accounted by the country’s exports
• While exports has increased between the months of July and August, imports has decreased
and been at a steady decrease since May.
• Thailand’s top export partners are the United States (1st), China and Japan.
• Thailand’s top import partners include China, Japan, Malaysia with United States as 4th
highest profitable partner.
• The current exchange rate between US and Thailand is One USD = 36.54 THB
• As of May 2023, The economy’s Balance of Payments is at a deficit of approximately 2.8
billion in USD
Trade/Foreign Ownership Restrictions
• The custom duty rate vary between different consumer goods which is typically between 0% and
35%
• The Import tax for Thailand is 7%, it can include additional taxes for products like
alcohol/cigarettes.
• Due to high tariffs for different sectors, It makes it difficult for US products to get access to the
country’s market.
• Import licenses are required to import certain products/ May include additional fees for products
that doesn’t require a license.
• In order to gain 100% ownership of a company in Thailand, you must have a Foreign Business
License or register through Treaty of Amity. Generally, foreigners are not allowed to own more
than 49% of a company in Thailand.
Government
Structure
• Adopted their constitution in 2007 and it was drafted by a
committee established by the military junta
• Included: rights and freedom of the people, structure of the
government, duties of the Thai people, and direct political
participation of the public
• Government type: Constitutional Monarchy (monarch shares
power with a constitutionally organized government)
• Head of Government:
• King- Maha Vajiralongkorn Phra Vajiraklaochaoyuha
• Prime Minister- Srettha Thavisin
• Foreign Minister- Parnpree Bahidda-Nukara
• Trade Minister- Phumtham We
