INTRODUCING OLD TOWN WHITE COFFEE TO THAILAND

HELLO!!! THAILAND

GROUP MEMBERS Abdulrahman Ringim Idsarin Tongsang Hastantu Osaman Cui Shan

INTRODUCTION
This presentation attempts to identify an Old town coffee industry in Malaysia as product which can be successful in Thailand We will also provide entry mode and operation strategy and analyze basic factors for a good business plan.

WHY THAILAND??
Thailand has a free enterprise economy and welcomes foreign investment. Thailands population reached 60 million (up from 38 million in 1970), with very little racial diversity. Thailand is located at the heart of Asia and one of the worlds largest growing economic regions Thailands economy is in the top three in terms of size and volume of international trade. High education. Low cost of labor. Bangkok and other city are convenient hub for tourist and investors

WHY THAILAND??
Import goods or services are provided to domestic consumers by foreign producers.
An import in the receiving country is an export to the sending country.

Thailand import is any goods or service brought into one country from another country in a legitimate fashion, typically for use in trade.

WHY THAILAND??

0.9

Coffee consumptions (2011)

WHY THAILAND??
Location
Easy to transport Similar Culture Low Cost of transport Many branch in Asian country like Malaysia, Singapore, Hong Kong

Product
Product differentiation (white coffee) Similarly in type of food Low cost of product Offer main Food

Opportunities Experience
New product and service can be retail in caf or out let. High Market of Thai demand. Introduce the product as new brand. Long term experience in global market Quality in customer service Human resource Successful in Malaysia

WHY THAILAND??
Mostly driven by instant standard coffee which dominated with 90% share of total off-trade value sales of coffee in the country in 2010. Industry performed active advertisements, marketing activities, and new product innovations which helped to stimulate overall growth of the category. Nestl (Thailand) Ltd is strongest one in coffee industry of Thailand.

PESTEL
External Environment Political It is only a matter of time before enmity develops between the
new government and the royalist establishment. Security risks in the Muslim-majority southern provinces are high.

Economic The Thai consumer goods market will record steady growth in
the forecast period. Economy recovered strongly in 2010. Real GDP is forecast to expand by an average of only 4.4% in 2011-15.

Social Thailand has a population 67 mil with a labor force of 39.50

mil. (2010 est.) High education in number of workforce. highly-skilled service oriented employees.

External Environment
Technology As one of the major coffee producers in the world.
Thailand has the necessary technology to supply coffee related products and equipments.

Environment Foreign investment is encouraged.

The trading environment is generally open but corruption remains a problem.

Legal The legal system is slow and inefficient, but it is considered to

be relatively impartial. There is no evidence to suggest that domestic rather than foreign interest are favored. Although political powerful or wealthy investors may receive preferential treatment

SWOT
Internal Environment Strengths
Thailand coffee consumption is worth more than 6,000 million baht (US$200 million) in 2009, with growth rate of 20 - 25%. Coffee continued to dominate hot drink in terms of value and volume sales and registered the healthiest growth. Boasting the largest expatriate community and the most coffee shops of any city in any Southeast Asia, Bangkok is a microcosm for the development of the Southeast Asian coffee industry. Old town has experience in operation in Asian country from different parts of the world and has established a culture of using coffee. Coffee consumption in Thailand is still very low with less than half a kilo per person per year. Coffee drinking is growing in the age between 25-50 year old.

Weaknesses

SWOT Cont.
Internal environment

Opportunities Increasing in number of caf shop and products with

functional ingredients. Ingredients to enhance the digestive system or reduce cholesterol levels.

Threats

Many of new coffee shops, both chains and non-chains, are open every year, reflecting a continued increase in demand for freshly brewed coffee.

PORTERS FIVE
Threat of Substitute

Power of Supplier
Thailand is the third largest coffee producer in south east Asia Government impose a strict balance of trade on the commodity

MEDIUM

Soft drink in supermarkets and hypermarkets.

MEDIUM

Convenient products substitute.

Threat of New Entry A cafe is relatively easy to set up and requires low capital compared to other types of businesses. Many of new brand was came in to Thailand market.

Power of Buyer
Many varieties of coffee related products

Industry Rivalry Starbucks Nestle

HIGH

Coffee houses has been mushrooming all over Thailand Increasing demand for coffee amongst locals.

HIGH

HIGH

ENTRY MODE : JOINT VENTURE

Joint Venture Entry Mode Definition Firm that is jointly owned by two or more otherwise independent firms. Local partner is familiar with local conditions, culture, language, political systems and business systems. Reduce the operation risk Share the cost and risk of new business

Advantage

Disadvantage Lack of control over technology Inability to engage in global strategy coordination

ENTRY MODE : FRANCHISING

Franchising entry mode Definition Franchising is a specialized form of licensing in which the franchisor not only sells intangible property to the franchisee, but also insists that the franchisee agree to abide by strict rules as to how it does business. Low development cost and risk

Advantage

Disadvantage Lack of control over quality Inability to engage in global strategy coordination

WHICH ENTRY MODE IS BEST FOR OLD TOWN COFFEE?

Vs

High local partner knowledge. Sharing in cost and risk is important to do business in Thailand. In term of coffee business its not focus more on technology. Easy to deal with political term which Thailand have high risky in politic.

OPERATIONS STRATEGY ACTITITIES

Process Human resource management Operation -HR mission & development vision -HR Training

Total Quality Management

Environment analysis -Research -Information of the country

OLD TOWN COFFE BUSINESS PLAN

Plan 1: Product Gain competitive advantage by selling Old Town white coffee product. Product differentiation by offering Malaysian traditional food on the menu in thailand.

OLD TOWN COFFE BUSINESS PLAN

Plan 2: Location

Open Old town coffee shops at areas with high traffic, offices ,University, airport, petrol station etc. Make old town white coffee available at local retail shops

OLD TOWN COFFE BUSINESS PLAN

Plan 3: Customer Expectation Old town will add thai desired products to the Menus and also provide products with low calories. Add different flavors to coffee, more food on the menu which match with Thai culture and style. And provide good internet capability in the stores.

OLD TOWN COFFE BUSINESS PLAN

Plan 4: Shop Will make the outlets with modern interior architecture. Create the shop as Relaxing area or meeting place Physical evidence like nice wall paintings, good air atmosphere etc

CONCLUSION

In Thailand it is very to establish a new business The best entry mode for any business in Thailand is the joint venture which we already identified as the best entry mode for the old town coffee business. At 2006 to 2011 the coffee consumption increased from 0.6kg per person head to 0.9kg per person head. There is also low cost of labor and operations which will increase the profit of the business