Potential Opportunities For Chick-fil-A In The South African Market: A Business Report

PESTLE Analysis of Thailand

The analysis in this report will be based on the PESTLE analysis of Thailand to decide whether the “Pollution-eating bikes” that are being developed in Beijing can enter the Thai market. The bikes are being manufactured in such a way so that they can emit clean air by absorbing pollution. This product is being designed by Daan Roosegrade who is an artist and designer of the Dutch origin and he has partnered with a Chinese start-up company producing bikes (Arwatchanakarn 2017). The increasing levels of pollution in the various countries of the world have been the major reason behind the manufacture of these bikes. However, the analysis of the business environment of Thailand is the main focus of this analysis.

PESTLE Analysis is mainly a tool or framework which is used by the marketing executives of an organization to monitor and analyse the factors related to the external environment of the company.

• Political factors– The political factors of PESTLE model are mainly related to the opportunities and the pressures that are imposed by the political institutions in the country. The policies of the government of that particular country impact the business organization to a great extent (John et al. 2017).
• Economic factors– The factors related to the economic structures, economic policies and the degree up to which the economy of the country that impacts a business are a part of economic factors. The international trade of the country is also examined in the economic analysis of a particular country (Li 2017).
• Social factors– The social environment of the country also impacts the operations of an organization to a large extent. The ethical issues, the influences, major events, the trends, the buying access have an impact on the companies (Moffitt and Tormey 2014).
• Technological factors– The technological factors that influence the operation of an organization in a particular country are mainly related to emerging technologies. The legislations related to technology, the improvement of technology, innovation and research, communications and information, technology development of competitors, property issues (Papong et al. 2015).
• Legal factors – The legal factors of a particular country are mainly related to the determinants of law and the regulatory factors that affect the positive or negative results of the operations of an organization. These factors must be analysed by the international organizations before they enter a new market area (Nakhata 2018).
• Environmental factors – The environmental factors that affect the organizational operations are related to the ecological aspects of the country that affect the demand of the products of the organization. The major factors in this case are the ecological regulations, the environmental regulations, the issues related to sustainability (Saha 2018).

Thailand has been chosen by the Chinese organization for the expansion of their business operations and to launch the new product which is the “pollution eating bikes”. The analysis of business environment in Thailand will be conducted on the basis of three major factors which are, political, economic and environmental. The development of a successful business in a new area involves many challenges for the organization. The challenges that can be faced by the Chinese organization in the business environment of Thailand will be discussed in detail (Junge, Diez and Schätzl 2015).

Political condition in Thailand – The political factors are mainly related to the policies that are formulated by the government and the ways by which the economy is affected by these policies. The trading policies of the government, the initiatives, grants and funding provided are all part of the political factors. The pressure of the groups and lobbying in the government are also related to these factors. The work related ethics of the country, the technological image, the company, the brand is a part of the social factors that influence the organization. The opinions, attitudes, buying patterns of the consumers of that country will impact the profitability of the organization. The political trends, the elections, the internal political issues, the relationships with the other countries are political factors related to PESTLE framework. The government of Thailand was a constitutional monarchy until the year 2014, where the Prime Minister was considered as the head of the government and the monarch was the head of the state. The judiciary of Thailand is however independent of the legislative and the executive branches. The constitution of Thailand was however revoked in the year 2014 and the country came under military rule in the same year.

Business Environment Analysis in Thailand

This situation depicts that the political situation in Thailand was unstable and it was an area of fighting for the new and the old bureaucrats, elites and the generals (Harris 2015). The head of the government in Thailand in the present situation is the Prime Minister of the country. However, the history of corruption in the government system is quite prevalent in this country. The foreign relations of Thailand are however quite good. The country has been participating actively in the regional and international organizations. Thailand also has a long relationship with the US related to security policies and this makes it a strong country. Therefore, it can be said that the Chinese organization can introduce their product in the market of Thailand as they have strong relationships in the international arena (Sukholthaman, Chanvarasuth and Sharp 2017). The strong relationship of Thailand with the foreign countries and other trade relations can therefore help the Chinese organization in establishing their business.

Economic condition of Thailand – The local economy, inflation, taxation, interest rates, seasonality issues, trends in economy, industry growth, ratios of import and export are related to economic factors of PESTLE. The different processes, regulatory bodies, the laws related to employment, the protection laws of the consumers are also part of the economy of the country. The regulations related to safety, health, tax, money laundering are important legal factors for the organizations (Soliman et al. 2016).

Thailand is country which has been industrialized recently and the economy of the country is highly dependent on the exports. The export of Thailand accounts for greater two-thirds of the GDP of the country. The economy of the country has risen by around 6.5% in the year 2016. The high economic growth can be useful for the growth of the Chinese pollution eating bikes in Thailand. The expected growth of the Thai economy in the coming years is between 3.8% to 4.3%. The service sectors and the industrial sectors of Thailand are major parts of the economy of Thailand. The agricultural sector of the country contributes around 8.4% of the total GDP. The other sectors like mining and construction sectors forms around 4.3% of the GDP of Thailand. The major emerging sectors of the country are the trade sector and telecommunications sector. Thailand is considered to be the second-largest country with respect to its economy in entire Southeast Asia. Thailand has also been recognised by World Bank as “one of the great development success stories” with respect to the development and social indicators. The huge size of Thailand economy will be a welcoming factor for the Chinese organization and help them in establishing the business.

Political Condition in Thailand

The rate of unemployment is low in Thailand and this has been a major factor in the development of Thailand economy (Soliman et al. 2016). The economy of Thailand has seen huge development from the year 2012 and the business organizations have also seen a lot of profits. The low rate of unemployment and the good economic condition can be useful for the organization to establish the business in Thailand. Considering the development of the Thailand economy in the recent years, it will be profitable for the Chinese organization to expand its operations and launch the pollution eating bikes in Thailand. The emerging market of Thailand can be a huge market for the pollution eating bikes of the Chinese organization (Yukongdi and Rowley 2016).

Environmental condition of Thailand – The huge economic growth of Thailand has led to many issues related to the environment. The major environmental problems that are faced by the country are mainly related to water and air pollution. These issues have led to the decline in the wildlife populations, soil erosion, deforestation, waste issues and water scarcity. The major initiatives that have taken by the country are mainly related to the various environment safety programs like, “Seventh Economic and Social Development”. This plan had declared the top priority of Thailand government will be the protection of environment and to ensure stability and sustainable growth. The high levels of heat in the countries of Southeast Asia has also reduced the working hours in Thailand and is has been expected to be doubled within 2050 (Challcharoenwattana and Pharino 2015). The pollution eating bikes can be useful in absorbing the air pollution and thereby increasing the working hours in the country. The increase of heat and decrease in working hours can affect the economy of the country in an adverse manner. The environmental pollution can therefore affect the economy of the country and this effect can increase in the next few years in a rapid way. The emission levels of Carbon dioxide in the country has been gradually increasing in the past few years. The government has introduced Climate Change Master Plan 2012-2050 so that the pollution levels can be curbed easily. This plan will also help the government in developing its social, economic and political environment easily. The rising levels of sea is also a major environmental that is being faced by Thailand in the recent years. The increasing rates of deforestation is also a major environmental problem in Thailand as the forest cover is decreasing quite fast (Ho 2014).

Economic Condition of Thailand

Deforestation is being caused by the conversion of forest lands to land that are used for other purposes. The decline of forests in Thailand by 43% has led to a huge increase in pollution. The government has however taken many initiatives related to this problem and tried to prevent excessive pollution in the country.  Air pollution has caused huge number of deaths in Thailand from the year 2013 and this has been created by the industrial growth. The effect of deforestation can also be reduced with the help of the use of pollution eating bikes in Thailand as they have the ability to absorb air pollution. The vulnerability of Thailand towards the increasing levels of pollution is the major cause behind the extreme pollution in the country. The increase in the levels of hazardous wastes has increased pollution levels in the air. The vehicles and industries are the major contributors in the problems that are caused by pollution. The pollution eating bikes can be a major success in the country as it has the ability to reduce air pollution. The environmental situation of Thailand will be a major factor of advantage for the Chinese organization in the country (Yukongdi and Rowley 2016).

• The organization needs to market the “pollution eating bikes” in Thailand in such a way so that it highlights the solution that it can provide to the air pollution related problems.
• The ability of the bikes to reduce air pollution can be a part of the initiatives that have taken by the Thailand government related to pollution.
• The low rates of unemployment and fast growing economy is a major advantage for the Chinese organization.
• Thailand has positive industrial relations with other countries and this will make the product to get huge success in the global industrial area.
• The Chinese organization needs to undertake a thorough research on the political environment of the country before they enter the market.
• Thailand has a huge emerging market and this will be an advantage for the Chinese organization.
• The economy of Thailand is quite strong and this will help in the growth of the organization and increasing their profitability.

References

Arwatchanakarn, P., 2017. Structural Vector Autoregressive Analysis of Monetary Policy in Thailand. Sociology, 7(3), pp.133-145.

Challcharoenwattana, A. and Pharino, C., 2015. Co-benefits of household waste recycling for local community’s sustainable waste management in Thailand. Sustainability, 7(6), pp.7417-7437.

Harris, J., 2015. Who Governs? Autonomous Political Networks as a Challenge to Power in Thailand. Journal of Contemporary Asia, 45(1), pp.3-25.

Ho, J.K.K., 2014. Formulation of a systemic PEST analysis for strategic analysis. European academic research, 2(5), pp.6478-6492.

John, V.K., Duangekanog, D., Wichayachakorn, A. and Vikitset, N., 2017. The Global Competitiveness of Thailand: An Empirical Analysis of the ASEAN Community.

Junge, V., Diez, J.R. and Schätzl, L., 2015. Determinants and consequences of internal return migration in Thailand and Vietnam. World Development, 71, pp.94-106.

Li, Y., 2017. The Evolution of Policy Analysis and Use of Knowledge: A Comparative Perspective on Thailand and China. Journal of Comparative Policy Analysis: Research and Practice, 19(2), pp.187-189.

Moffitt, B. and Tormey, S., 2014. Rethinking populism: Politics, mediatisation and political style. Political Studies, 62(2), pp.381-397.

Nakhata, C., 2018. The relationships between human capital, entrepreneurial competencies and career success of SME entrepreneurs in Thailand. AU Journal of Management, 4(2), pp.17-26.

Papong, S., Itsubo, N., Malakul, P. and Shukuya, M., 2015. Development of the social inventory database in Thailand using input–output analysis. Sustainability, 7(6), pp.7684-7713.

Saha, G.C., 2018. FINANCIAL STRUCTURE OF THE MANUFACTURING CORPORATE SECTOR OF THAILAND AROUND THE ECONOMIC CRISIS: A DECOMPOSITION MEASURE BASED APPROACH. AU Journal of Management, 1(1), pp.23-34.

Sarooghi, H., Libaers, D. and Burkemper, A., 2015. Examining the relationship between creativity and innovation: A meta-analysis of organizational, cultural, and environmental factors. Journal of business venturing, 30(5), pp.714-731.

Schaeffer, C. and Smits, M., 2015. From matters of fact to places of concern? Energy, environmental movements and place-making in Chile and Thailand. Geoforum, 65, pp.146-157.

Soliman, T., MacLeod, A., Mumford, J.D., Nghiem, T.P.L., Tan, H.T.W., Papworth, S.K., Corlett, R.T. and Carrasco, L.R., 2016. A Regional Decision Support Scheme for Pest Risk Analysis in Southeast Asia. Risk Analysis, 36(5), pp.904-913.

Sukholthaman, P., Chanvarasuth, P. and Sharp, A., 2017. Analysis of waste generation variables and people’s attitudes towards waste management system: a case of Bangkok, Thailand. Journal of Material Cycles and Waste Management, 19(2), pp.645-656.

Yukongdi, V. and Rowley, C., 2016. Business Networks and Varieties of Capitalism in Thailand: Adding the Context of History, Political Structures, and Social and Cultural Values. In Business Networks in East Asian Capitalisms (pp. 235-268).

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