SG7001 Activity 4 Assignment Sample
A critical analysis of the industry environment
| Environmental factors | Issues pertinent to the industry | Implications for the industry |
| Political | Thailand is having an unstable political condition and a democratic government (GTU, 2020). The tax rate within the country can be an issue for the clothing industry that reveals corporate tax to be 20% (Trending Economic, 2020). However, the battle between political parties or shirts commonly known as thered-shirts and the yellow-shirts can also create an issue (Refer to Appendix 1). | A high tax rate can impact the clothing industry negatively further decreasing their profit margin. In this respect, the industry should maintain its sales rate based on the tax rate to earn a desirable amount of profit. |
| Economic | A low rate of unemployment is observed within the domain depicting 0.8% further depicting high chances of deriving talented labour within the market (Plecher, 2020). The rate of inflation as of 2020 depicts -0.43% further reflecting low demands of goods and services within the domain (Neill, 2021). This can impact the industry of clothing negatively (Refer to Appendix 2). | A low rate of employment can impact the clothing industry within Thailand positively alongside negatively. It is because a high employment rate increases the demand for labour. On the other hand, it can impact positively by providing talented labour within the domain. Apart from that, the low inflation rate depicts that the clothing industry can face low demand that can reduce the sales rate within the domain. Hence, the clothing industry should take effective measures to satisfy the employees further implementing innovative aspects that can increase the demand for the clothes among the customers. |
| Social | Thailand seems to be attracting most people due to its beauty. This depicts high populations within the domain that further creates the high opportunity for sales for the clothing industry. | Based on the stated facts it can be implied that the clothing industry should follow the trends of the population within the domain (Pavel and Supinit, 2017). It will help the clothing industry to accomplish the targeted goals as it will help in meeting the demands of the customers and increase the level of satisfaction within them. |
| Technological | Innovative technology has been used by the clothing industry. However, low investment in terms of technological development seems to be creating an issue for the clothing industry to develop their products. | Based on this issue it can be stated that the clothing industry within Thailand should invest in technological development to develop its products and services (Noranarttakun and Pharino, 2021). High technological investment alongside hiring proper technical expert will help in bringing competitive edge to the products and services. It can also help in the reduction of time for production and maintain its supply and demand instances within the domain. |
| Porter’s force | Strength | Justification |
| Industry rivalry | High | A high number of competitors are available in the market including H&M, ZARA and others further revealing high industry rivalry within the clothing sector. |
| New entrants’ threat | Moderate | It is because the capital that is required for entering the market of Thailand is comparatively lower than other nations further having proper governmental policies to operate within the market (Pavel and Supinit, 2017). |
| Authority of buyers bargaining | Low | There are fragmented buyers with no specific effect on the sales within the market. The clothing industry cannot be impacted by the power of the buyers. |
| Authority of suppliers bargaining | High | The clothing industry in Thailand is highly based on the suppliers of the clothing sector and the low cooperation of the suppliers can impact the industry negatively (Pavel and Supinit, 2017) |
| Threats of substitute | High | The clothing industry is having no such direct substitute but the availability of different brands within the market creates a high threat for substitutes. |
| Identification of the industry | Clothing industry |
| Stage of the industry | The clothing industry of Thailand is at the stage of growth representing 17% of the total GDP within the nation (Embassy, 2020). |
| Implications | The clothing industry within Thailand should comply with the demand of the population alongside the rate of inflation and employability to maintain its growth stage within the market. |
| Issue | Survival factors | Success factors |
| Lack of domestic demand | Implementing innovation in clothing and decreasing the cost and helping the clothing industry survive within the market. | Increasing productivity and high demand for clothing can reflect success factors for the clothing industry in Thailand. |
| Scarcity of raw materials | Implementing sustainability within the supply and management chain of the clothing industry can help the industry to survive within Thailand (Noranarttakun and Pharino, 2021). | Proper maintenance of the demand of the customers alongside the supply of the products can reflect the success factor of the clothing industry in Thailand. In addition to this, maintain proper relationship with the suppliers can also be effective in creating positive influence in the raw material supply further preventing the scarcity of raw materials. |
Reference list
Embassy, D., 2020. Sector overview: The fashion industry in Thailand, Fibre2Fashion. Available at: https://www.fibre2fashion.com/industry-article/3224/sector-overview-the-fashion-industry-in-thailand#:~:text=The%20fashion%20industry%20is%20a,17%20percent%20of%20total%20GDP.&text=The%20former%20governments%20focus%20on,penetration%20on%20the%20international%20market [Accessed on 25 March 2021]
GTU, 2020. GLOBAL COUNTRY STUDY REPORT, GTU. Available at: https://www.gtu.ac.in/ABP/GCSR%20PDF%202013/799%20Thailand%20-%2011-.pdf [Accessed on 25 March 2021]
Neill, O. A., 2021. Inflation rate in Thailand 2025, Statista. Available at: https://www.statista.com/statistics/332274/inflation-rate-in-thailand/ [Accessed on 25 March 2021]
Noranarttakun, P., and Pharino, C. 2021. Strategic Implementation to Enhance Green Industry Practices in SMEs: Lesson Learned from Thailand. EnvironmentAsia, 14(1). Available at: https://www.thaiscience.info/Journals/Article/ENVA/10992252.pdf [Accessed on 25 March 2021]
Pavel, S. and Supinit, V., 2017. Bangladesh Invented Bioplastic Jute Poly Bag and International Market Potentials. Open Journal of Business and Management, DOI, 10. 2414-2427. Available at: https://www.scirp.org/html/5-1530503_78731.htm?pagespeed=noscript [Accessed on 25 March 2021]
Plecher, H., 2020. Unemployment rate in Thailand 2020, Statista. Available at: https://www.statista.com/statistics/332222/unemployment-rate-in-thailand/ [Accessed on 25 March 2021]
Trending Economic, 2020. Thailand Sales Tax Rate – VAT2006-2020 Data, Trading economics. Available at: https://tradingeconomics.com/thailand/sales-tax-rate [Accessed on 25 March 2021]
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