66694894-OLD-TOWN

7/29/2019 66694894-OLD-TOWN

1/21

INTRODUCING OLD TOWNWHITE COFFEE TO THAILAND

GROUP MEMBERSAbdulrahman Ringim

Idsarin Tongsang

Hastantu OsamanCui Shan

HELLO!!!THAILAND

7/29/2019 66694894-OLD-TOWN

2/21

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.

7/29/2019 66694894-OLD-TOWN

3/21

WHY THAILAND??

Thailand has a free enterprise economy and welcomesforeign investment.

Thailands population reached 60 million (up from 38million in 1970), with very little racial diversity.

Thailand is located at the heart of Asia and one of theworlds largest growing economic regions

Thailands economy is in the top three in terms of size andvolume of international trade.

High education.

Low cost of labor. Bangkok and other city are convenient hub for tourist and

investors

7/29/2019 66694894-OLD-TOWN

4/21

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 legitimatefashion, typically foruse in trade.

7/29/2019 66694894-OLD-TOWN

5/21

WHY THAILAND??

0.9

Coffee

consumptions(2011)

7/29/2019 66694894-OLD-TOWN

6/21

WHY THAILAND??

Location Product Opportunities ExperienceEasy to transport

Similar Culture

Low Cost oftransport

Many branch in

Asian country like

Malaysia,

Singapore, Hong

Kong

Productdifferentiation(white coffee)Similarly in

type of food

Low cost ofproductOffer mainFood

New product and

service can be

retail in caf or outlet.

High Market of

Thai demand.

Introduce the

product as newbrand.

Long term

experience in

global marketQuality in

customer service

Human resource

Successful in

Malaysia

7/29/2019 66694894-OLD-TOWN

7/21

WHY THAILAND??

Mostly driven by instant standard coffee which dominated with90% share of total off-trade value sales of coffee in the countryin 2010.

Industry performed active advertisements, marketing activities,and new product innovations which helped to stimulate overallgrowth of the category.

Nestl (Thailand) Ltd is strongest one in coffee industry ofThailand.

7/29/2019 66694894-OLD-TOWN

8/21

PESTEL

External EnvironmentPolitical 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 provincesare

high.

Economic The Thai consumer goods market will record steady growth inthe forecast period.

Economy recovered strongly in 2010.

Real GDP is forecast to expand by an average of only 4.4% in2011-15.

Social Thailand has a population 67 mil with a labor force of 39.50mil. (2010 est.)

High education in number of workforce.

highly-skilled service oriented employees.

7/29/2019 66694894-OLD-TOWN

9/21

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 corruptionremains a problem.

Legal The legal system is slow and inefficient, but it is considered tobe relatively impartial.There is no evidence to suggest that domestic rather than

foreign interest are favored.

Although political powerful or wealthy investors may receivepreferential treatment

7/29/2019 66694894-OLD-TOWN

10/21

SWOT

Internal EnvironmentStrengths 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 coffeeshops 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 usingcoffee.

Weaknesses Coffee consumption in Thailand is still very low with less thanhalf a kilo per person per year.Coffee drinking is growing in the age between 25-50 year old.

7/29/2019 66694894-OLD-TOWN

11/21

Internal environment

Opportunities Increasing in number of caf shop and products withfunctional 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.

SWOT Cont.

7/29/2019 66694894-OLD-TOWN

12/21

PORTERS FIVE

IndustryRivalry

Starbucks

Nestle

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.

Threat of Substitute

Soft drink in

supermarkets and

hypermarkets.

Convenient products

substitute.

Power of SupplierThailand is the third largest

coffee producer in south east

Asia

Government impose a strict

balance of trade on the

commodity

Power of Buyer

Many varieties of coffee

related products

Coffee houses has been

mushrooming all over

Thailand

Increasing demand for

coffee amongst locals.

HIGHHIGH

HIGH

MEDIUMMEDIUM

7/29/2019 66694894-OLD-TOWN

13/21

ENTRY MODE : JOINT

VENTURE

Joint Venture Entry ModeDefinition Firm that is jointly owned by two or more otherwise

independent firms.Advantage Local partner is familiar with local conditions, culture,

language, political systems and business systems. Reduce the operation riskShare the cost and risk of new business

Disadvantage Lack of control over technologyInability to engage in global strategy coordination

7/29/2019 66694894-OLD-TOWN

14/21

Franchising entry modeDefinition 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 toabide by strict rules as to how it does business.

Advantage Low development cost and riskDisadvantage Lack of control over quality

Inability to engage in global strategy coordination

ENTRY MODE : FRANCHISING

7/29/2019 66694894-OLD-TOWN

15/21

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.

Vs

WHICH ENTRY MODE IS BEST

FOR OLD TOWN COFFEE?

7/29/2019 66694894-OLD-TOWN

16/21

Environmentanalysis

-Research

-Information ofthe country

Operationmission &

vision

Human resourcemanagement

-HRdevelopment

-HR Training

Process Total QualityManagement

OPERATIONS STRATEGYACTITITIES

7/29/2019 66694894-OLD-TOWN

17/21

OLD TOWN COFFEBUSINESS 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.

7/29/2019 66694894-OLD-TOWN

18/21


Plan 2: Location

Open Old town coffee shops at areas with hightraffic, offices ,University, airport, petrol station

etc. Make old town white coffee available at local

retail shops

7/29/2019 66694894-OLD-TOWN

19/21


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 themenu which match with Thai culture and style.

And provide good internet capability in the stores.

7/29/2019 66694894-OLD-TOWN

20/21


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

7/29/2019 66694894-OLD-TOWN

21/21

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

Documents

66694894-OLD-TOWN