The Analysis of TOWS Matrix for Promoting Thai Kitchens into ASEAN Markets of Lao People s Democratic Republic and Socialist Kingdom of Cambodia

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1 Universal Journal of Industrial and Business Management (7): 8-87, 0 DOI: 0.89/ujibm The Analysis of TOWS Matrix for Promoting Thai Kitchens into ASEAN Markets of Lao People s Democratic Republic and Socialist Kingdom of Cambodia Sirote Pholpuntin, Sirivan Serirat,*,.Jirawat Anuwichanont, Panisa Mechinda Suan Dusit Rajabhat University, Thailand Rajamangala University of Technology, Thailand *Corresponding Author: sirivanonline@gmail.com Copyright 0 Horizon Research Publishing All rights reserved. Abstract To date, the ASEAN community has been regarded as the fastest economic-growing countries with enormous purchasing powers of billions of consumers. Moreover, ASEAN Economic Community (AEC) comprising 0 member countries was formed to develop this economic community as a highly competitive economic region in the global markets. As Thai foods are rated and recognized as the most favorite choice, therefore, Thai food businesses have won successes in expanding the business in many foreign countries. Thanks to the Thai government s policy of promoting Thai Kitchen to the World, both governmental and private sectors gave more emphasis on conducting researches with an aim to expand Thai food business into the neighboring countries and global markets. Thus, this study was aimed to investigate the market situation of Lao People s Democratic Republic and Kingdom of Cambodia and developed the marketing strategies accordingly for promoting Thai kitchens into these ASEAN markets. Both quantitative and qualitative researches were incorporated to assess the market environments of these two markets. 60 Thai restaurant entrepreneurs in these two countries were recruited for data collection and depth interview by employing the purposive sampling. The SWOT analysis was implemented to assess both internal and external environmental factors of market situation. Subsequently, the TOWS matrix analysis was conducted to match the business s internal strength/weakness with the external opportunity/threat towards Thai food business. The research findings revealed that Thai food business in these two countries was found to be in the position of SO (strength/opportunity), indicating that Thai food business possessed both favorable strength and opportunity in running future business. According to the SO strategy, companies or business units are recommended to utilize their strengths to take advantage of opportunities. Thus, the appropriate strategy relevant to this position is growth strategy. According to the qualitative findings, the appropriate investment of Thai food business was recommended to be either wholly owned or joint venture which will allow the Thai restaurant entrepreneurs to manage and sustain their own food quality and business images. The marketing implications of the results are discussed. Keywords SO Strategy. Introduction SWOT Analysis, TOWS Matrix Analysis, To date, the ASEAN community has been regarded as the fastest economic-growing countries with enormous purchasing powers of billions of consumers. With an aim to sustain their potentials and conserve their resources, many Asian countries in this region agreed to form ASEAN Economic Community (AEC) which comprises 0 member countries including Indonesia, Malaysia, Philippines, Singapore, Thailand, Brunei, Vietnam, Laos, Burma and Cambodia. Their agreements were formed to develop this economic community as a highly competitive economic region in the global markets under the Asian Free Trade Agreement (AFTA). Moreover, the ASEAN integration also aims to attract foreign investment and build negotiating power by promoting Asian countries as one business market and production base. This agreement will facilitate the exchange of investment, products, services and personnel as well as lessen the economic gaps among member countries. Consequently, the unity of ASEAN countries will help sustain their competitiveness and establish their competitive position in the global markets through harmonizing rules and regulations [7]. As Thai foods are rated and recognized as the most

2 Universal Journal of Industrial and Business Management (7): 8-87, 0 8 favorite choice among travelers, therefore, Thai food businesses have won successes in many foreign countries. Thanks to the varieties and popularities of Thai foods, Thai government strives to promote and encourage the export of Thai foods and related products with an aim to boost the exporting revenues. Thus, the government policy of promoting Thai Kitchen to the World has stimulated all concerned sectors and entrepreneurs to expand food business into the neighboring ASEAN countries and the global markets. In addition, this policy helps boost the potential and competitiveness of Thai foods in the ASEAN markets. According to the above-mentioned importance, this study was aimed to investigate the market situations of Thai food businesses in ASEAN markets including Lao People s Democratic Republic and Kingdom of Cambodia. This study was organized into three parts including () the analysis of TOWS matrix () the content analysis of qualitative findings and () marketing implications The objectives of this study are listed as follows:. To explore the internal and external environmental factors of Thai food businesses in Lao People s Democratic Republic and Kingdom of Cambodia.. To evaluate the market situations of Thai food businesses in Lao People s Democratic Republic and Kingdom of Cambodia through the TOWS matrix.. To develop the marketing strategies in running Thai food businesses in Lao People s Democratic Republic and Kingdom of Cambodia.. Research Methodology This study incorporated the findings of both quantitative and qualitative researches to form the marketing strategies for promoting Thai food businesses in Lao People s Democratic Republic and Kingdom of Cambodia. The quantitative research was conducted by using the self-administered questionnaire as the tool of data collection with 0 Thai restaurant entrepreneurs in Lao People s Democratic Republic and 0 Thai restaurant entrepreneurs in Kingdom of Cambodia. Then, the SWOT analysis and TOWS matrix were employed to analyze the data to evaluate the market situation of Thai food business in these abovementioned countries []. In addition, the quantitative results were then incorporated with in-depth interviews of 0 Thai restaurant entrepreneurs in Lao People s Democratic Republic and 0 Thai restaurant entrepreneurs in Kingdom of Cambodia with an aim to form the strategic plan for promoting Thai kitchens into ASEAN markets. The internal environmental analysis of market situation of Thai food businesses in terms of strength and weakness [] was conducted in terms of quality, nutritional benefits, freshness, hygienic and safety, uniqueness, varieties, cooking competency of Thai foods, etc. The multi-item scales of market strength and weakness were measured on a five-point numeric bipolar scale anchored by high weakness () and high strength (). In addition, the external environmental analysis of market opportunities and threats influencing Thai food businesses was assessed in terms of economic situation, political stability, market competition, tourism growth of these two countries. Consistently, market opportunity and threat were measured on a five-point numeric bipolar scale anchored by high threat () and high opportunity (). Moreover, respondents were asked to assess the importance of each item of market strength /weakness and market opportunity /threat on a five-point numeric bipolar scale anchored by low importance () and high importance (). Then, the importance weight of each item was calculated and all importance weights were summed to.0. The importance weight indicated the relative importance of each item. Finally, the importance weight and the mean score of each item were multiplied to form the weighted score. The average of all weighted scores of weakness/strength and opportunity/threat as shown in Table and were utilized to determine the position in the TOWS matrix as shown in Figure and.. Results.. Market Analysis: The Internal and External Environmental Analysis The SWOT analysis revealed that Thai food business especially Thai seasoning in Laos has high market potential because of the political stability and the governmental support of foreign investment. Moreover, the local infrastructure in Laos is sufficiently suitable for both local and foreign investments of food businesses. In similar, the Cambodian government also supports the foreign investment of Thai food business but the import of Thai chefs is still required to assure the business success. But the political conflict and instability between Thai and Cambodia hinder the business operations. In addition, the spiciness and taste of Thai seasoning needs to be adjusted to be milder in order to attract more local and international customers. The internal and external environmental analysis was conducted to form TOWS matrix of the business situation of Thai food businesses in Laos and Cambodia. According to the internal environmental analysis in Table, the weighted score of.9 indicated that market situation of Thai food business in Lao People s Democratic Republic was in the strength position. Similarly, the weighted score of.97 indicated that market situation of Thai food business in Kingdom of Cambodia was also in the strength position. Regarding the external environmental analysis, the weighted score of.89 and.09 revealed that Thai food business had the market opportunity in Lao People s Democratic Republic and Kingdom of Cambodia, respectively as shown in Table. Consequently, the weighted scores of both internal and external environmental analysis were utilized to form TOWS matrix which revealed that Thai food businesses in Lao

3 8 The Analysis of TOWS Matrix for Promoting Thai Kitchens into ASEAN Markets of Lao People s Democratic Republic and Socialist Kingdom of Cambodia People s Democratic Republic and Kingdom of Cambodia were in the position of SO (Strength and Opportunity) as shown in Figure and, respectively. The SO position indicated that Thai food businesses had both favorable strength and opportunity in running business in Laos and Cambodia. Thus, the growth strategy is appropriate for maximizing the strengths and marketing opportunities through building brand equity, human resource development by focusing on management know-how, computer technology, point-of-sale advertising and internet and sales promotion [6]. Table. Internal environmental analysis of Lao People s Democratic Republic and Kingdom of Cambodia Internal environmental analysis Strength/weakness Importance Importance weight Weighted score Laos Cambodia Laos Cambodia Laos Cambodia Laos Cambodia Food taste Nutritional benefits Quality and tasty Low calorie and fat Unique recipe Food decoration Variety of menus Uniqueness of menu Freshness of materials Hygiene and safety Food taste compared with others Image and reputation Value for money Competitive competency Location Advertising Sales promotion Personnel management Personnel competency Service procedure Quality control Service environment Food product line Strategic partner Total

4 Universal Journal of Industrial and Business Management (7): 8-87, 0 8 Table. External environmental analysis of Lao People s Democratic Republic and Kingdom of Cambodia External environmental analysis Opportunity/threat Importance Importance weight Weighted score Laos Cambodia Laos Cambodia Laos Cambodia Laos Cambodia Economic situation Political stability Market competition Tourism growth Currency stability Consumer income Free trade growth Total Market Analysis: TOWS Matrix of Laos Opportunities/Threats SO SO x ST ST Strengths/W eaknesses High strength Strength W eakness High weakness High strength Strength W eakness High weakness Laos (S =.9, O =.89) WO WO WT WT High opportunity High opportunity Opportunity Opportunity Threat Threat High threat High threat Figure. TOWS matrix of Laos... Market Analysis: TOWS Matrix of Cambodia

5 86 The Analysis of TOWS Matrix for Promoting Thai Kitchens into ASEAN Markets of Lao People s Democratic Republic and Socialist Kingdom of Cambodia Opportunities/Threats SO xso ST ST Strengths/W eaknesses High strength Strength W eakness High weakness High strength Strength W eakness High weakness Cambodia (S =.97, O =.09) WO WO WT WT High opportunity High opportunity Opportunity Opportunity Threat Threat High threat High threat Figure. TOWS matrix of Cambodia.. The Content Analysis of Qualitative Findings... Current Situations of Thai Food Businesses The investment of Thai food business in Laos can be wholly owned by Thai entrepreneurs up to 0-90% and in the form of small-sized business. The investment types of Thai food business can be both hotel restaurants and stand-alone restaurants. However, the number of large-sized restaurants is not enough to satisfy local demands. The types of Thai food business in Cambodia were classified by location and business size into types as follows: () Thai restaurants in hotels () stand-alone restaurants () large-sized restaurants () small-sized restaurants. Moreover, the investment of Thai food business can be classified by the ownership type as follows: () wholly owned by Thai entrepreneurs () joint venture between Thai entrepreneurs and Cambodian partners. The food service type can be rendered in the form of a la carte, buffet and catering.... Customer Analysis The findings revealed that customers in Laos consists of () supermarkets, grocery stores, consumer goods stores, restaurants and households, which purchase Thai seasonings and raw materials for cooking purposes. The influence of Thai TV advertising helps promote Thai food products to household audiences. () local and foreign tourists. Most of tourists in Laos are mainly European backpackers, Asian tourists (Korean, Chinese, Japanese, Thai, and Vietnamese) who mostly travel with package tours and Western tourists who are mainly Americans, French and Australians. In similar, customers of Thai foods in Cambodia are foreign tourists (e.g. European, Scandinavian, Chinese, Vietnamese, Korean) who mainly visit Angkor Wat and Angkor Thom.... Competitor Analysis In Laos, the competitor analysis indicated that there are only a few competitors of Thai seasoning and the major competitors of Thai restaurants are Vietnamese restaurants. The competitors in Cambodia are local Cambodian restaurants and Vietnamese restaurants which are the major competitors and threats for Thai restaurants growth. Vietnamese and Cambodian seasonings compete with Thai seasonings on lower prices... Marketing Implications... Growth Strategies For strategic planning, after having analyzed both internal and external environments, the growth strategy is highly recommended for Thai food businesses at the position of SO (Strength and Opportunity) in these two countries [9] as follows: Growth strategy is appropriate for maximizing the strengths and marketing opportunities through () developing Thai food markets through the formation of mergers or joint venture, strategic alliances and foreign direct investment (FDI) in these two countries etc. () focusing on cooking and kitchen know-how management () developing Thai fusion food: creative Thai menu/ Thai modern food () building brand equity (brand image and Thai brand name) () enhancing human resource development (6) utilizing point-of-sale advertising and sales promotion along with internet promotion. In addition, more

6 Universal Journal of Industrial and Business Management (7): 8-87, 0 87 strategies for promoting Thai kitchen should include competitive advantage strategy and differentiation strategy in order to enhance the competitiveness and differentiation from competitors in the food markets. In order to promote Thai brands in these two countries, brand equity strategy are also recommended by incorporating the related pricing strategies, distribution channel strategies and promotion /Integrated Marketing Communication (IMC) strategies with an aim to gain the right positioning in the markets [].... The Logistics Management Plan The strategies of logistics management plan for promoting Thai kitchens into ASEAN markets aimed to achieve three objectives including the development of the cooperation and participation of stakeholders and related sectors, the utilization of information technology system and the expansion of product distribution [8]. The details of the strategies are shown as follows: Strategy : Develop the cooperation and participation of stakeholders and related sectors. This strategy focuses on developing cooperation with government in improving tax and tariff process and communication networks to facilitate Thai logistics system with an aim to promote Thai kitchen into ASEAN markets. Moreover, it also requires entrepreneurs cooperation for managing logistics system efficiently which includes both domestic and foreign cooperation. The details are shown as follows: Developing cooperation with Thai government to improve tax and tariff regulation to increase the competitive advantage in term of timeliness for Thai logistics system Jointly improving the transportation network and infrastructure of logistics system up to the standard in order to facilitate the product distribution. Promoting and educating entrepreneurs on how to use logistics system efficiently for solving product distribution problems Strategy : Utilizing information technology system in facilitating logistics system. This strategy focus on maximizing the benefit and value of logistics management for entrepreneurs by introducing information technology system and electronics system for planning, controlling and evaluating the efficiency of logistics management by Motivating concerned entrepreneurs to utilize information technology system in logistics management in order to gain more efficiency. Utilizing information technology system in tracking and evaluating logistics system efficiency. Developing E-logistics system along with electronics service system and infrastructure to facilitate logistics system. Strategy : Expanding the physical distribution of products. This strategy focus on boosting more distribution of Thai products and ingredients into ASEAN markets by establishing distribution center, developing packaging to meet local consumers demand and building good images of Thai brands []. Setting distribution center near the country borders as the center for supplying more products into ASEAN markets Designing and developing the product labels with local languages to lessen local consumers communication problems Strengthening good image of Thai brands under the slogan Made in Thailand REFERENCES [] Aaker, D.A. (00).Brand Portfolio Strategy: Creating Relevance, Differentiation, Energy, Leverage and Clarity. New York : The Free Press. [] Ball, D.A., Geringer, J.M., Minor, M. S. & McNett, J.M. (00). International Business: The Challenge of Global Competition. (th ed). Boston : McGraw-Hill. [] Blackwell, R.D., Miniard,P. W. & Engel,J. F. (006). Consumer Behavior. (0th ed.) Ohio : Thomson Higher Education. [] Hisrich, R.D., Peters, M.P. & Shepherd, D.A. (008). Entrepreneurship. (7th ed). Singapore: McGraw-Hill. [] Keller, K.L. (008). Strategic Brand Management: Building, Measuring, and Managing Brand Equity. (rd ed). New Jersey : Pearson Education. [6] Kotabe, M., Ang, S.H., Griffiths, K., Marshall, A., Voola, R. & Helsen, K. (0). International Marketing. (rd ed). Singapore : John Wiley & Sons. [7] Ministry of Foreign Affairs, Kingdom of Thailand (0). How will Thailand benefit from being a member ASEAN. [Online]. Availablehttp://www. mfa.go.th/ web/ 69. php. [00, September 9, 8]. [8] Wild, J.J. & Wild, K.L. (0). International Business : The Challenges of Globalization. (6th ed). Boston : Pearson Education. [9] Wheelen, T.L. & Hunger, J.D. (006). Strategic Management and Business Policy : Concepts and Cases.(0th ed). New Jersey: Prentice - Hall. [0] (0). Strategic Management and Business Policy: Toward [] Global Sustainability. (th ed). Boston : Pearson Education.