Retail Market in Thailand Assignment Example | Topics and Well Written Essays - 2500 words

Retail Market in Thailand - Assignment Example The Thai retail environment has distorted radically in the years since the 1997 financial crisis, which saw lots of Thai shareholders having to sell their shares to foreign-owned multinational retail operators, as well as the Thai government's policy to hold trade liberalisation in its wish to contribute in the World Trade Organisation (WTO) and AFTA (ASEAN Free Trade Area) (David W. Raisbeck, 2003). To struggle the financial crisis, the Thai government followed trade deregulation. Thailand has since welcomed an influx of large-scale multinational hypermarket, supermarket and specialist retailers, which are eager for a share of the Thai retail market. This has raised protests from several Thai academics and traditional retailers, which have raised the "nationalist" alarm bells. Numerous Thai-owned minute and medium-sized retailers have been pushed out of business since they could not fight with the much better multinational discount stores, as some better Thai retailers have been bought out by foreign conglomerates. ... investors possess relative advantages in terms of a noise financial base, superior economies of scale, lower costs of production and superior bargaining power, due to their much larger order volumes (E.G., 2005). Foreign Direct Investment (FDI) "In this increasingly open world, FDI has become an important driving force for economic globalisation". (Xinhua News Agency, 2002) It can be supposed that FDI is fine and essential for the development of Thailand. FDI is regarded as a source of power in the globalisation process that sets apart the modern world economy. The process has reduced the value of territorial boundaries and every area of the world is in single way or another engaged in the process (FAOSTAT, 2005). The region should thus raise its international share of FDI. The supposition is based on the possibly incontrovertible roles that FDI can play in the growth of the region. This justifies the anxiety about the call for and ability of the region to increase its international share of FDI inflows. FDI in Thailand Foreign direct investment has been an significant constituent of Thailand's economic development process. Given the rising meaning of industrial competitiveness in an gradually more spirited global marketplace and the possible of the association linking FDI and technological improvement, this research discover two questions opposite Thai policy makers: (i) what are the most effectual ways in which technology relocate can take place during FDI; and (ii) how can such transfers be accelerated and improved during FDI promotion policies FDI in Emerging Markets It is a reality that Thailand, like several other emerging market of this world, needs a considerable inflow of external resources so as to fill the economy and foreign exchange gaps related

Identification of Reasons for Preference of Wholly Owned Subsidiaries Essay

Identification of Reasons for Preference of Wholly Owned Subsidiaries Compared to IJVs - Essay Example This paper illustrates that over the years international joint ventures have been a successful mode of entry into the host country. It benefits the foreign companies forming the joint ventures with the local company in two ways. Firstly, the advantage of the local partner’s knowledge about the political systems, competitive conditions, culture, and business system of the host country. Secondly, the benefit of development cost and risk sharing with the local partner. In some countries, these kinds of joint ventures are the only feasible market entry mode that is available to the foreign companies. On the contrary, the wholly owned subsidiary is the most costly mode of entry into the overseas market. However, wholly owned subsidiary or rather setting up independent company owned by the parent company gives the full control to the company in terms of its operation handling and gaining the whole profit from its operations. The companies who adopt this kind of entry mode should be prepared to bear the risk and cost associated with having its expanded operations in the overseas market. The companies in the past years thought that the joint ventures will give them the expertise to acquire a position in the market, but this was not as easy as the local partner tie down the new entrant to the direction of its operations in his own way. For instance, Proctor & Gamble failed in India where they entered the market through joint venture but succeeded in China through its wholly owned subsidiary. As the forecast states that China by 2050 would be a leading economy followed by U.S and India, so now the companies feel that setting up their own company in these markets would be necessary for their survival as well as for sustained growth. With the influence of WTO, which now provides less restriction on foreign-owned companies in markets of China and India, many companies are now focusing on establishing their wholly owned subsidiary rather than going into any kind of in ternational joint venture.