Assignment Sample on SG7001 Managing Strategy, Operations And Partnerships
Activity 2: An evaluation of megatrends
| Megatrend | Key issue and impact on Atelier Chiang Mai | Impact and implication |
| Sustainable fashion | The Government of Thailand has provided major concern on the development of sustainability which has passed the Factory Act 1992. Additionally, Environment and climate change law has been renewed and enforced in 2021 (Mattei et al. 2021). All these factors have imposed major pressure on the production on Atelier. | Atelier has developed a sustainable policy to manage its production unit, as per the sustainability regulation of the government. It has been mentioned that the production unit is currently exploiting the concepts like recycle, reduce and reuse. In the official report of the company, it has been mentioned that 5% of the fabric loss in the manufacturing process has been minimised with reuse (ATELIER, 2021). Additionally, heavy machine made production has been replaced with handmade production which has minimised negative environmental impact and the industrial risk for the workers. As per the idea of Singh et al. (2018), the theory of circular economy always promotes the concept of renewal and reuse in the industrial level. Atelier has developed their optimised recycling techniques to minimise environmental burden. |
| Online sell and e-commerce | The trend of online selling and ecommerce is highly predominant in the current fashion and apparel market of Thailand. As per the official report, Thailand is at the leading position in the Asian market of e-commerce along with online sale and it has been identified that 58% enhancement of online sale happened in 2020 for Thailand market (THE NATION, 2021). This factor is creating a major issue in the traditional physical sale of the Atelier. | Atelier is moving on with the concept of physical store, in the market of Thailand and this has helped the organisation to earn high brand image and fame. Multiple physical stores and a network of supply have been developed by the company in Thailand and other parts of southeast Asia (ATELIER, 2021). However, no-practice of online shopping has been identified for Atelier. This factor is negatively impacting the connectivity of the brand to the larger sphere of the customers. This should be rectified with the formulation of an effective e-commerce strategy. |
| Social media marketing | In the community of Thailand and other Asian markets, the use of social media has deeply integrated with the community. Hallikainen et al. (2019) have mentioned that social media platforms are one of the major on-stage touchpoints between the brand and the customer. It has officially been reported that there are 55 million social media users in the Thailand market. This megatrend of the market has also influenced the marketing approach of Atelier (Kemp, 2021). | Atelier has focused over social media marketing by utilising Facebook. However, high agility in social media is not been noticed. |
Table 1: Megatrend analysis
(Source: Developed by researcher)
Activity 3: Recommendation and evaluation
| Recommendation | Online sales and e-commerce should be introduced in the business of Atelier with the use of an effective e-commerce platform. Additionally, social media marketing should be specifically focused by using the platforms like Instagram, Youtube or twitter just like the other apparel production houses. |
| Justification | In the recent time, social distance and lockdown has been implemented to manage the crises of COVID-19 pandemic. This factor has enhanced the scope of e-commerce and online business. As per the idea of Bhatti et al. (2020), both B2B and B2C level e-commerce has enhanced in the time of pandemic. Atelier is associated with both of the mentioned practices. Additionally it has been identified that 58% of online sales in Thailand have enhanced after 2020 (THE NATION, 2021). For all these factors e-commerce should be introduced by using a strong platform like Amazon, Alibaba or eBay.
The implementation of the strategy of social media promotion is effectively needed. As per the official report, 12,266,000 individuals in Thailand are actively using Instagram and this population has been estimated as 17.6% of the entire Thai community (NAPOLEONCAT, 2020). Hence, the use of Instagram in the marketing activity for Atelier should be most effective. |
| Potential implication | Active support of the stakeholders is highly needed in case of implication of the recommended strategy. As per the idea of Albasu and Nyameh (2017), in stakeholder’s theory the entire stakeholder group has been differentiated between two major subcategories like external stakeholder and internal stakeholder. The active support of both the groups is essential. For Atelier, in the context of social media marketing, a digital marketing team should be developed with inclusion of technically skilled marketing employees. This is the inclusion of the internal stakeholder. The customers and suppliers, the major external stakeholders should be addressed and communicated in the social media platform. The support of e-commerce initiation stage will also be developed with the help of partnership with any major e-commerce platform. Hence, that e-commerce organization should be the major external stakeholder in the implementation of that strategy. |
Table 2: Recommendation evaluation
(Source: Developed by researcher)
Activity 4: Industry environment analysis
| Environment factors | Issues pinned with industry | Implication |
| Political | Political stability is quite poor for Thailand. Political stability index has been at a negative value for the last five years. As per the official report, the political stability index has been -1.22 in 2012 which is at -0.54 in 2019 (THE GLOBAL ECONOMY, 2020). This factor has a negative impact on the apparel and fashion industry of Thailand. The scope of cross border free trade has got restricted ads with political instability poor reform of business has taken place. | The creation of a more free trade aspect and minimisation of duty is needed. The raw material for the appeal and fabric industry comes from Europe which demands a high duty payment. As per the official report, Thailand’s average tariff for non-agricultural goods is about 24% which is often considered as quite high (INTERNATIONAL TRADE ADMINISTRATION, 2021). This needs to be minimised with power business law reform and with political stability. In the case of the fabric industry, local sourcing of raw natural resources should be prioritised. This should help in the minimisation of cost burden. |
| Economic | It has been identified that the economy of Thailand is quite strong compared to the other countries of southeast Asia. As per the official report, 501.89 billion dollars has been estimated as the GDP of Thailand (STATISTA, 2021). This factor has implemented positive impact on the fashion and apparel industry of Thailand. | With effective promotion, the purchasing power of the customer base should be utilised. |
| Social | People have little interest in purchasing high priced luxury brands. This factor has influenced the fashion and appraisal industry | The fashion and apparel industry should imply medium low pricing strategy for acquiring greater segment of market. |
| Technological | It has officially been documented that the internet users have increased from 47.54 million to 54.98 millions in Thailand (STATISTA, 2019).This signifies the availability of technology. | With the use of this technology, ecommerce Omni-channel marketing and social media marketing can be conducted in the apparel industry. |
Table 3: PEST analysis
(Source: Developed by researcher)
| Porter’s force | Strength | Justification |
| Buyer’s power | High | It has been estimated that about more than 6.96 crore people are associated with Thailand which is the main customer of the country. Additionally, the customers are associated at a cross border level. Hence, the power of the purchaser is high for the fashion and fabric industry of Thailand as there are ample alternatives in front of them. |
| Supplier’s power | low | Good and integrated with the suppliers have been developed at the national and international level for the fabric and fashion industry of Thailand. An export of 7.52 billions of fabric from Thailand is done with the active support of suppliers (BIZVIBE, 2020). |
| Threat of substitution | Medium | The threat of substitution is there in the fabric industry of Thailand as the majority is dealing with the same type of materials like silk and other natural fibres. |
| Industrial rivalry | High | Varakith Textile, Royal Fabric, Grandeur Fiber, Thai Acrylic are the major companies tagged with the fabric industry of Thailand. All these companies have international trade. |
| New entrant’s threat | Low | The new entrants are majorly SMEs which have little capability to provide threat to the companies with high competitive advantage in the Fabric market of Thailand. |
Table 4: Porter’s five force analysis
(Source: Developed by researcher)
| Industry inquisition-identification (100) | The fabric and fashion industry of Thailand is quite strong as 4500 fabric and textile companies are currently operating in the market and provide a high contribution to the national GDP (BIZVIBE, 2020). More than 1 million people are employed in the industry. |
| Stage of the industry in life cycle | The industry is at the maturity stage of the industry life cycle. |
| Implication | New trends like Omni channel marketing, sustainable production and e-commerce should be implemented to prevent the decline of the industry. |
Table 5: Industry life cycle
(Source: Developed by researcher)
| Issue | Survival factor | Success factor (200) |
| Poor e-commerce practice | The lack of e-commerce practice is hindering the profitability of the industry in the competitive international and national market. | Partnership with e-commerce platforms like Amazon, eBay or Flipkart should help to reduce this issue. |
| Lack of social media marketing | Fashion and fabric industries of the other competitive market are using social media marketing and this factor helps in the enhancement of the integrity with the customer base. This is hindering the competitive advantage of Thailand’s fabric industry in the international level. | Awareness Should be developed with the interpretation of beneficial outcomes of social media marketing. |
| Lack of sustainability in raw material usage | The survival factor is getting endangered with the issue of cotton usage in the industrial level. As per the official report, 500, 000 tonnes of cotton is used by the industry but only 2% of the same is produced by the country (BIZVIBE, 2020). This is creating sustainability crises. | Either cotton cultivation should be checked or the dependency on cotton should be minimised. |
Table 6: Industrial issue analysis
(Source: Developed by researcher)
References
ATELIER, (2021). Environment Protection. Available at: https://chiang-mai-clothing.com/guarantee/environment/ [Accessed on 29 June 2021]
ATELIER, (2021). Professional Apparel Manufacturer in Asia. Available at: https://chiang-mai-clothing.com/ [Accessed on 29 June 2021]
Bhatti, A., Akram, H., Basit, H.M., Khan, A.U., Raza, S.M. and Naqvi, M.B., (2020). E-commerce trends during COVID-19 Pandemic. International Journal of Future Generation Communication and Networking, 13(2), pp.1449-1452.
BIZVIBE, (2020). Thailand’s Textile and Apparel Industry Overview. Available at: https://blog.bizvibe.com/blog/textiles-and-garments/thailands-textile-apparel-industry-overview [Accessed on 29 June 2021]
Hallikainen, H., Alamäki, A. and Laukkanen, T., (2019). Individual preferences of digital touchpoints: A latent class analysis. Journal of Retailing and Consumer Services, 50, pp.386-393.
INTERNATIONAL TRADE ADMINISTRATION, (2021). Import Tariffs. Available at: https://www.trade.gov/knowledge-product/thailand-import-tariffs#:~:text=Thailand’s%20average%20bound%20tariff%20for,of%20plastic%20and%20restaurant%20equipment. [Accessed on 29 June 2021]
Kemp, S., (2021). Digital 2021: Thailand. Available at: https://datareportal.com/reports/digital-2021-thailand [Accessed on 29 June 2021]
Mattei, F., Sinhaseni, N., and Homklinchan, C., (2021). Thailand: Environment & Climate Change Laws and Regulations 2021. Available at: https://iclg.com/practice-areas/environment-and-climate-change-laws-and-regulations/thailand [Accessed on 29 June 2021]
NAPOLEONCAT, (2020). Instagram users in Thailand. Available at: https://napoleoncat.com/stats/instagram-users-in-thailand/2020/01 [Accessed on 29 June 2021]
Singh, M.P., Chakraborty, A. and Roy, M., (2018). Developing an extended theory of planned behavior model to explore circular economy readiness in manufacturing MSMEs, India. Resources, Conservation and Recycling, 135, pp.313-322.
STATISTA, (2019). Thailand: number of internet users 2017-2025. Available at: https://www.statista.com/statistics/553730/number-of-internet-users-thailand/ [Accessed on 29 June 2021]
STATISTA, (2021). Thailand – Gross domestic product (GDP) 2026. Available at: https://www.statista.com/statistics/332234/gross-domestic-product-gdp-in-thailand/#:~:text=GDP%20is%20an%20important%20indicator,around%20501.89%20billion%20U.S.%20dollars. [Accessed on 29 June 2021]
THE GLOBAL ECONOMY, (2020). Thailand: Political stability. Available at: https://www.theglobaleconomy.com/Thailand/wb_political_stability/ [Accessed on 29 June 2021]
THE NATION, (2021). Thailand leading Asia’s shift to e-commerce with 58% rise. Available at: https://www.nationthailand.com/business/30403806 [Accessed on 29 June 2021]
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