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# 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
#xx SUPPLEMENTAL
#xx SUPPLEMENTAL
#xx DATA ANALYSIS
#xx LIMITATIONS
#xx RELOCATIONS
#xx DATA ANALYSIS
#xx FASHION CAPITALS
#xx FASHION CAPITALS
#xx FASHION CAPITALS
#xx FASHION CAPITALS