Icbes presentation mr chavalit

# 01 ICBES 2014

# 02

Thai Garment Industry Organizational Characteristics

and Strategic Factors

that Affect Corporate Performance

ICBES 2014

# 03

Chavalit Nimlaor – (Presenter)Dr. Jirasek Trimetsoontorn

Dr. Wanno FongsuwanAdministration and Management College King Mongkut’s Institute of Technology

Ladkrabang

ICBES 2014

KMITL

# 04 TGMA

# 05

1. Abstract/Research Methodology

2. In recent years – 2008 data

3. How far have we fallen and why? - 2013

4. The way out of the dark - 2014 & beyond

5. What does the research tell us?

6. Conclusion/Recommendations

INTRODUCTION

# 06

Thai Garment industry to continue contraction

Quantitative data was obtained from 178 TGMA Association members

Qualitative data was obtained from 10 senior level industry executives

ABSTRACT

# 07

Thai garment industry employed over 1 million people per year

Revenue exceeding 100 billion baht

Thailand’s top export sector

Totally integrated production and supply chain cycle

RECENT YEARS

# 08

Thai garment industry had over 1 million workers

2008

# 09

Thailand had 4,385 establishments

2008

# 10

How far havewe

fallen and why?

2014 HURDLES

# 11 ASEAN

# 12

Perpetual state of decline

Feedstock import

Shortage of skilled labor

Rising mandatory government labor costs

ASEAN competitor’s undercutting Thai companies

2014 HURDLES

# 13 TURMOIL

# 14

‘Thailand in Turmoil over increase in minimum wage’ – October 2013 headline

Minimum wage increased to 300 baht day

Many rural located factories had to close

Provinces use to set their own minimum wage

TURMOIL

# 15

Lampang Province wages went up 81%Tak Province wages increased 85%

Minimum wage of 300 baht day started

Many rural located factories had to close or move outside Thailand

Provinces use to set their own minimum wage-this was the reason for their competitiveness

TURMOIL

# 16

Baht appreciation

Raw material price increases

Labor shortages

Trade liberalization-especially China

Daily minimum wage increase to 300 baht

MINISTRY OF INDUSTRY

# 17

2012 – exports plunged nearly 14% year-on-year to US$4.27 billion

2012 - Apparel exports fell 10% year-on-year to US$2.95 billion

Devastating floods

TEXTILE CLUB (FTI)

# 18

The way out of the dark

2014…and this study

THE FUTURE

# 19 ASEAN 2015

# 20 ASEAN 2015

# 21

To study the relationships and influencing factors of

Organizational Characteristic and Corporate Strategy

that influence the Corporate Performance

of the Thai garment industry.

RESEARCH OBJECTIVES

# 22 THE HYPOTHESES

OrganizationalCharacteristics

Leadership

TeamworkInvestment

Size

H2

H1

# 22 THE HYPOTHESES

InvestmentSize

# 22 THE HYPOTHESES

Leadership

# 22 THE HYPOTHESES

Teamwork

# 23 THE HYPOTHESES

CorporateStrategy

ProductDifferentiation Branding

Research and Development

(R&D)

H1 H3

# 23 THE HYPOTHESES

Research and Development

(R&D)

# 23 THE HYPOTHESES

ProductDifferentiation

# 23 THE HYPOTHESES

Branding

# 24 THE HYPOTHESES

CorporatePerformanc

e

CostAdvantage

CustomerResponsiveness

CompetitiveAdvantage

AssetValue

Profits

H2

H3

# 25 THE HYPOTHESES

# 26

Entrepreneurs must have a clear strategic vision keeping pace with change

Businesses must have timely customer response while maintaining margins and competitive advantage

FINDINGS

# 26-A FINDINGS

#27

The key factor that most directly influences the apparel industry

performance is:

Corporate Characteristic

The industry must embrace R&Dwhich raises the international image

The importance of branding Leadership and workforce teamwork

CONCLUSION

#28

Thai social and economic conditions have changed dramatically

Very limited skilled Thai and foreign workers

Labor intensive industry

ASEAN 2015 – Thailand cannot compete with CLMV countries(Cambodia, Laos, Myanmar and Vietnam)

RECOMMENDATIONS

#29

Thai wholesale and brand name industry very strong in ASEAN

BUT

It is necessary to put Bangkok on the global fashion industry map to compete with London, Paris, New York, Milan and Tokyo

RECOMMENDATIONS

#29

ASEAN growth strengthens the Thai regional fashion supply chainnel(manufacturer, retailer, logistics, supplier and distributor channel)

Become a leader in fashion development

Become a leading ASEAN garment exporter to a potential 650 million consumer and labor supply market

RECOMMENDATIONS

#30

Thailand must become a global garment and fashion industry exporter through large manufacturers

Maintain high value operations in Thailand by focusing on marketing, administration, finance, R&D, logistics control, technical support, production and quality assurance

RECOMMENDATIONS

#31

Relocate or outsource production operations

Or…transform to be a fashion agency for SME garment or fashion companies with their own retail operations

Develop regional branding and expand into the ASEAN market like Fly Now, Saha, Pattana Group

RECOMMENDATIONS

#32

Become an ASEAN wholesale business by supplying new fashions, ‘quick style change’, ready stock or quick response and outsourcing sewing operations to local operators or neighboring CLMV countries

Join together as a cluster/Co-Op to work in the supply chain for the public sector

RECOMMENDATIONS

#32

Promote Thailand as a tourist and fashion

destination!

RECOMMENDATIONS

#33

Thank you for your time

and attention.

RECOMMENDATIONS

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