Analysis
Analysis
| Strengths | Weaknesses |
A Growing Domestic Market with IT Potential
Thailand does have some advantages. With 60 million people, its domestic market is much larger than Singapore's, with 3 million, or Malaysia's, with 20 million.1
The Thai people are known to be flexible and able to adapt to new ways of doing things more easily than some other, more conservative cultures and societies of the region. Also, the freedom of information enjoyed in Thailand is matched in Southeast Asia only in the Philippines. Singapore and Malaysia have international reputations for government censorship and control of information.
If the government can follow through with its plans to improve the information technology resources in the primary, secondary and University level educational institutions, and continue to invest capital into local research and development in IT, then the potential for the people in Thailand to support an internationally competitive IT market is very possible.
Economic Recovery is on the Horizon
Since the devaluation of the baht, Thailand's economy has had problems attracting foreign investment because of questions that arise about the country's institutional capabilities and competitiveness. However, soon after the Asian Financial Crisis occurred, Thailand started to take aggressive actions towards reforming its economy. By working with the International Monetary Fund and implementing this institutions strict, free-market based economic policies, and actively engaging in international lobbying efforts, Thailand is slowly beginning to regain the confidence of local and international investors.
Thailand was once considered to be one of the more appealing "emerging markets", but now, with the Financial Crisis tainting its past, and with the entry of many new emerging markets throughout the world, investors are beginning to look elsewhere. Many international investors are still uncertain about the general business environment in Thailand and for that matter, most of the Southeast Asian region is heavily shadowed by their past financial misfortunes. So, in order to bring money into the country, certain steps will have to be taken and these should include the easing of cash shortages, a reduction in interest rates, higher demands in consumer products and a population that is more educated in the sectors that are seeking an international presence. Information Technology is a perfect example of this type of sector!
ASEAN - Great Idea in Theory, but Tough to Make it Work
It is hoped that by working together in different joint endeavors, the countries of ASEAN will be able to capitalize on the strengths of their neighbors in different sectors of development. Unfortunately, this is not always the case for these international communities because of the unequal balance of resources and capital that are found within each member country. For example, Singapore is a very wealthy country and Cambodia is very poor. How much is Singapore willing to invest into Cambodia when they not only risk increasing the competitive advantage of Cambodia, but any capital that they put towards the ASEAN initiative will be capital that is not put towards their own development. Countries are like businesses, they can work together, as long as they don't threaten each other's market share and reputation. So even though the community has been proposing some great initiatives that are supposed to woo foreign investment to the region, it is questionable if all of the member countries within ASEAN are equally influential in regards to where that money should actually go.
The Black Market Looks Good to the Consumer...
As seen in the Legal Environment page, the black market is a well-established institution in Thailand. From software, to designer watches, to women, it is possible to find just about anything on the streets of Bangkok for a highly discounted price. Although this presence threatens local business, it remains a highly protected industry and one that will be difficult to compete against, especially as an outsider.
Kogod School of Business American University Other Country Reports
Sources:
1 Thailand Board of Investment, http://www.boi.go.th/english/business/g31.html
2 Country Commercial Guide Thailand, Fiscal Year 1999, Prepared by The Embassy of the U.S.A., Bangkok, Thailand