Assignment task:
Instructions: Your team will act as a consulting group, responsible for presenting to the Board of Directors of your chosen company. The goal is to evaluate and provide advice on the feasibility of the company either entering or not entering the selected country. Before reaching a decision, the team must conduct thorough background research and analysis.
What to do: We are doing PESTLE analysis Economic, Socio-Cultural and technologies are already done Similarly do Political, environmental, and legal company and country are mentioned make sure to cite it.
Chosen Company: PCL Construction
Chosen Country: Thailand
New Market Analysis (Team's Chosen Country):
Economic Factors to Consider:
Current economic state: As of the available information, Thailand's economy is on an upward trajectory. Projections indicate that the country's economic growth is expected to increase, with a forecasted increase from 2.5% in 2023 to 3.2% in 2024 (Bank T. W., 2023). This growth is notably attributed to the support from the tourism sector.
The anticipation of a rise in tourist arrivals further reinforces the positive outlook for the economy. Projections suggest an increase to 35.8 billion tourist arrivals (Bank W. , 2023)
Given these projections, it can be assumed that the current economic situation in Thailand is leaning towards growth, supported by the positive outlook for the tourism industry.
Exchange rate impact: The provided information suggests a limited timeframe for assessing the stability of key exchange rates, specifically from February 5 to February 9, 2024 (System, 2024). A brief snapshot may not provide a comprehensive understanding of the overall stability of exchange rates. Exchange rates can vary for each currency pair, and factors affecting one currency may differ from those impacting another.
Tourism Impact: Malaysia, China, Singapore, and India were significant sources of tourism for Thailand in 2023, with millions of arrivals from these countries (Hodgson, 2023). This indicates a considerable level of international travel and suggests that customers from these nations have the financial capacity for tourism expenditures.
Disposable Income Growth: The forecast for per-household disposable income growth in 2024 indicates a deceleration to 0.5%, down from the forecasted 0.9% in 2023 (Hodgson, 2023). This suggests a potential slowing down in disposable income growth on a household level.
Consumer Spending Trends: Consumer spending in Asia Pacific is expected to rise, outpacing the expected global average. However, the specific mention of consumers seeking affordability and value in their spending to reduce unnecessary expenses suggests a cautious approach to expenditures (Hodgson, 2023).
Unemployment Rate: In July 2023, Thailand's unemployment rate was reported at 0.99%, and there is a forecasted increase to 1.70% in 2024, followed by a slight decrease to 1.60% in 2025 (economics, 2023). While there is a forecasted uptick, the unemployment rate remains relatively low, suggesting a stable labor market.
Skilled Workforce Availability: Thailand's labor market is described as diverse, with experienced professionals available in various industries, including manufacturing and tourism. The presence of a well-educated workforce, with a high percentage of English-speaking individuals, is highlighted as a facilitator for international businesses to find workers easily (Camille, 2023).
Labor Costs and Competitiveness: Thailand's Salaries are generally lower than Western countries but remain competitive within the Southeast Asian region. This information implies that hiring skilled labor in Thailand may be cost-effective compared to other global locations (Camille, 2023).
Social Security System: Thailand's employers must contribute to the social security system, which covers employees' healthcare. This adds a layer of social protection and could be viewed as a positive aspect for employers and employees (Camille, 2023).
Impact on globalization: Globalization significantly impacts Thailand's economic environment, particularly evident in the government's ambitious target of welcoming 3.5 million tourists in 2024. Tourism stands out as a significant contributor to Thailand's income, and its continuous growth is a testament to the interconnectedness fostered by globalization. The number of tourists in Thailand witnessed a remarkable 20% increase from 2022 to 2023, highlighting the country's commitment to positioning itself as an attractive destination for international visitors (Nation, 2023).
Other factors to consider:
Tourist spending habits: analyzing the spending behavior of tourists, both domestic and international. Understanding what visitors spend their money on can tailor the offerings and pricing.
Government policies and incentives: understanding and being aware of government policies related to tourism and tax incentives can impact the overall costs and feasibility of building and operating the attraction.
Socio-Cultural Factors to Consider:
Demographic landscape: In 2024, Thailand's population stands at 71,885,799, representing a modest 0.12% increase from the previous year (Macrotrends, 2024). While this indicates continued but relatively small growth, United Nations predictions suggest a future trend of decreasing population growth rates in the coming years.
Accompanying this population dynamic is the median age of Thailand, which has risen from 40.22 in 2023 to 40.70 in 2024. This upward trend in median age is expected to continue, with projections indicating a further increase to 45 by the year 2034 (Database, 2024).
Health indicators: Thailand's societal well-being, particularly in terms of health, is marked by a noteworthy higher life expectancy of approximately 78 years, surpassing other Southeast Asian nations. While this signifies progress, the landscape is intricate, as infectious diseases persist despite advancements in healthcare. The most prevalent nutrition-related health issue in Thailand is diabetes (Department, Health in Thailand - statistics & facts, 2023).
Employment landscape: Thai work culture emphasizes respect and hierarchy, with a notable emphasis on valuing seniority. This cultural aspect influences how individuals navigate professional relationships and interactions, contributing to a sense of order and respect within the workplace. Conflicts are typically addressed indirectly in the Thai work culture, reflecting a commitment to preserving harmony. This approach aligns with society's collective values, emphasizing the importance of maintaining positive relationships within the workplace. Central to Thai work culture are the values of collectivism and teamwork. Collaboration and cooperation are highly prized, fostering a collaborative spirit where individuals contribute to shared goals and success is viewed as a collective achievement. Personal relationships and building rapport are deemed essential for successful work outcomes. The emphasis on interpersonal connections goes beyond professional interactions, contributing to a work environment where trust and mutual understanding play pivotal roles. Communication in the Thai work culture tends to be polite and indirect. Body language and facial expressions are critical channels for understanding underlying messages. This nuanced communication style contributes to a subtle and respectful exchange of ideas. Communication in the Thai work culture tends to be polite and indirect. Body language and facial expressions are important as key channels for understanding underlying messages. This nuanced communication style contributes to a subtle and respectful exchange of ideas. Long working hours are a common feature of the job market in Thailand. Despite this, there is a strong emphasis on family and social connections. This dual emphasis reflects a balance between professional commitments and the significance placed on personal relationships (NNRoad, 2023).
Social Taboos: Thai people value composure and politeness, considering it inappropriate to display anger, temper, or impatience in front of others. This cultural norm underscores the significance of maintaining a calm demeanor in business interactions. Thai people exhibit a remarkable openness toward tourists, aligning with the country's reputation as the 'land of smiles.' This cultural expression is a standard greeting and provides comfort, particularly in challenging circumstances. Recognizing and reciprocating this warmth is integral to successful business interactions. The pervasive 'land of smiles' culture reflects the Thai approach to hospitality and relationships. While deeply ingrained in traditional values, this cultural trait shapes contemporary business dynamics. Recent socio-cultural changes may further enhance the importance of genuine and positive interactions in business settings (Soontayatron, 2012).
Religious impacts: With a staggering 94% of the population identifying as Buddhists, the influence of Buddhism permeates deeply into the daily lives of Thai people. Buddhism is not just a faith but a profound aspect of Thai culture, requiring individuals to don the saffron robe and devote a period of their lives to the religion. This practice is considered a fundamental rite of passage, underscoring the pivotal role Buddhism plays in shaping the spiritual and cultural identity of the Thai populace.
Buddhism in Thailand is characterized by openness and tolerance, contributing to the nation's reputation for embracing diverse beliefs. Monks hold a revered status, commanding respect across societal strata. Their role extends beyond spiritual guidance to embodying principles of humility and wisdom, reinforcing the profound impact of religious beliefs on Thai society's moral and ethical framework (Debrincat, 2015).
Other factors to consider:
Culinary experiences: incorporating authentic culinary experiences into the attraction can enhance authenticity and foster positive relationships with locals.
Celebration of festivals and traditions: aligning the attractions, events, and activities with Thai festivals and traditions can attract both domestic and international visitors.
Technological Factors to Consider:
New technologies: Virtual reality emerges as a promising tool to enrich cultural experiences for travelers. The implementation of VR allows sites to offer interactive tours, providing guests with immersive encounters. Notably, this technology extends its reach to individuals unable to leave their homes, offering a virtual visitation to the destination. Moreover, VR proves valuable for prospective travelers, enabling them to explore hotels and destinations before finalizing their trip plans (iTechOLabs, n.d.). The integration of contactless payments is a seamless and efficient solution across the attraction. This method streamlines transactions, enhances convenience, and expedites the payment process. The simplicity of tapping cards or mobile phones fosters reduced physical contact and heightened hygiene-a particularly relevant feature in contemporary times. The popularity of "Buy now, Pay later" methods gains traction, offering travelers a financial alternative that avoids high credit card interest. The increasing prevalence of contactless payments among travelers is attributed to their enhanced security features, underscoring their appeal in the evolving technological landscape (Techspian, 2023).
Government research: Government priorities are strategically directed towards key economic sectors in Thailand, encompassing agriculture, manufacturing, tourism, services, and natural resources (Asia, 2019). This targeted focus opens avenues for our venture, particularly in the context of establishing a tourist attraction in the mountains. Incorporating their research findings enhances the development and sustainability of our mountain-based tourist attraction, capitalizing on the extensive information cultivated by the Thai government. Furthermore, the government's commitment to improving transport links presents an additional opportunity for our project (Asia, 2019). By aligning with this focus, we can contribute to and benefit from initiatives that enhance accessibility and connectivity to the mountain attraction. The Thai government serves as another strategic avenue for our venture. Establishing a dedicated platform to introduce the Thai tourism industry to digitalization and technological advancements showcases their commitment to progress. This forum not only aids tour companies and government tourism boards in improving their product and service offerings but also provides users access to cutting-edge technologies, including blockchain and big data. The overarching goals of the platform include enhancing tourism through digital technology and assisting the Thai government in developing more efficient rules and promotion standards (Santhika, 2023).
Other factors to consider:
Multilingual support: offering multilingual support through technology can help cater to a diverse international audience and enhance communication.
Data analytics: implementing data analytics tools to gather insights into visitor behaviors, preferences, and feedback to ensure continuous improvement.