The Ministry of Finance
UNIVERSITY OF FINANCE — MARKETING
TRƯỜNG ĐẠI HỌC TÀI CHÍNH - MARKETING
STRATEGIC INTERNATIONAL BUSINESS MANAGEMENT Lecturer: Tran Thé Nam
Members:
Nguyén Ngoc Bao Anh Nguyén Ngoc Tra Mi Mai Quynh Dong Nhi Lê Vương Trâm Anh Lê Thanh Thiên Võ Ngọc Phương Trang
HO CHI MINH CITY, 2023
Trang 2TABLE OF CONTENTS
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I INTRODUCTION
1 About Trung Nguyen
Trung Nguyen Group is a company that operates in various fields such as coffee production, processing, trading, brand licensing, distribution services, modern retail, and tourism Trung Nguyen Coffee is a well-known brand in Vietnam and is currently available in more than 60 countries worldwide
“Connecting and growing coffee lovers and enthusiasts around the world” Trung Nguyen is committed to its mission statement, which affirms a customer-centric approach The company's purpose is to connect with and develop its customers Trung Neuyen specializes in coffee and operates globally con 89% ey r &- ` Trung Nguyen has achieved many prestigious awards during 27 years of establishment and development:
- Asia-Pacific Business Excellence Certification 2014
- Trung Nguyen Coffee was selected by the Ministry of Foreign Affairs as a "Cultural Diplomacy Ambassador”
- Top 4 strongest brands in Vietnam market in "Top 1000 Top Brands in Asia" surveyed by Asian-Pacific Campaign 2020
2 About Thailand
Thailand, also known as the Land of Golden Pagodas, is a kingdom with geographical and climatic conditions like Vietnam It is one of the most popular tourist destinations in the world, ranking 9th worldwide and attracting more visitors than any other country in Southeast Asia Thailand is a popular destination for investors, businessmen, and expats due to its strategic location in Southeast Asia, skilled workforce, and proactive government
policies
Trang 4Thailand's coffee market is valued at 30 billion baht and is growing rapidly Vietnamese coffee with unique flavors is becoming popular among locals Instant coffee and "three-in- one" package coffee are the most popular coffee products in this market
Il POLITICAL ENVIRONMENT
1 Ideology
Thailand's first constitution, which was ratified on December 5, 1932, by King Prachadhipok (Rama VII), is still considered the basis Thailand's economic development ultimately shifted toward a parliamentary but still capitalist route in the 1980s
A constitutional monarchy serves as the organizational structure for the Thai governmental machinery The Senate and the House of Representatives are the two legislative branches of the National Assembly The Prime Minister, who oversees the government, is chosen by the National Assembly and has executive authority
2 Political stability
The disputes that have frequently propelled Thailand into instability over the last 20 years —hbetween the army and the Shinawatra family, between rural and urban regions, and between the yellow and red-shirt factions—have diminished If the ruling coalition can manage to split, it will have more success and stability The winning coalition needs to convince the military that the transition to a new government will not threaten the military or the Thai monarchy
3 Government perspectives on international business trade
Thailand prioritizes building strong relations and partnerships with neighboring countries, particularly through key regional economic cooperation frameworks such as ASEAN, GMS, ACMECS, IMT-GT, and BIMSTEC
With an export-oriented policy and becoming an important link of the global production chain, Thailand changed its economic structure to adapt to globalization and actively signed and participated in many regional and international cooperation mechanisms Thailand is also a major trade and investment partner of GMS countries and has provided many support packages to bring the regional economy forward
Joming the GMS helped Thailand play to its strengths by strengthening connectivity among the six countries of the subregion through transport systems and cooperation agreements to jointly develop the regional economy sustainably, contributing to hunger eradication, poverty reduction for countries (Nguyén Ha Phirong, 2022)
4 Political relations between Vietnam and Thailand
Trang 5Til, ECONOMIC ENVIRONMENT
1, Economic and income growth
Data from NESDC showed that Thailand is Southeast Asia's second-largest economy in the first quarter of 2023 grew 2.7% from a year earlier, thanks to a recovery in tourism Growth in 2024 is expected to moderate to 3.6 percent and to 3.4 percent in 2025, with tourism and private consumption remaining the primary drivers of growth while external demand weakens, according to the report
Thai Rate Path In Question as Inflation Continues to Ease
Thailand CPIY/y M™Core Inflation ™BOT Benchmark Rate 1u9519d EU) Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun 2018 2019 2020 2021 2022 2023
Source: Thai Commerce Ministry, Bank of Thailand Bloomberg @
On July 26, Thailand's Finance Ministry forecast 2023 total inflation of 1.7%, lower than the previous forecast of 2.6% In addition, the country's public debt is expected to be at 60.2% of GDP this year, then fall to 59.6% in 2024 and to 59.5% in 2025 The projected poverty headcount when measured at the upper-middle income poverty line (US$6.85 a day in 2017 PPP), is anticipated to decline to 9.1% in 2023 and maintain a downward trajectory throughout 2024 and 2025 62 60.630 60 58 56 55.490 54 52
0
Oct'20 Jan'2l Apr'22l Jul'2l Oct'2l Jan'22 Apr'22 Jul'22 Oct'22 Jan'23 Apr '23
@ Private Consumption: % of Nominal GDP: Quarterly: Thailand
Trang 6Thailand’s Private Consumption accounted for 60.6 % of its Nominal GDP in Jun 2023, compared with a ratio of 54.1 % in the previous quarter This is a positive sign for the Thai
economy
2, Income gap
According to a report by Thailand's NESDC, the income threshold for people at the poverty line was 2,803 baht/month in 2021, Thailand's poverty reduction efforts have helped bring the poverty rate In the 12th National Socio-Economic Development Plan, Thailand aims to reduce its poverty rate to below 6.5 percent 37.00 2014 2015 2016 2017 According to the World Bank, Thailand's Gini coefficient (a measure of income inequality) fell from 36.5 in 2017 to 35.1 in 2021 In particular, the income gap between the richest 10% and the lowest 40% of the total population of Thailand, has decreased from 250% in
2017 to only 220% in 2021
Bangkok and greater Bangkok areas 39.05
Trang 7Trung Nguyen because rising income levels of people can help their consumption rate increase
3 Economic relationship between Vietnam and Thailand
Vietnam and Thailand are two countries with close diplomatic relations since August 1976, jointly members of ASEAN and other subregional organizations in the region
Within regional and international cooperation frameworks, the two countries have always strengthened close cooperation, supporting and supporting each other A number of joint cooperation mechanisms that the two sides participate in, such as APEC, ASEAN, AC, EAS, ASEM, EWEC, IV LEGAL ENVIRONMENT 1 Legal system Thailand has a predominantly Civil law legal system Thai law has its traditional bases in ancient Hindu Code of Manu, modified to conform to local custom The power of the King of Thailand is symbolic The National Assembly consists of two Bodies, the Senate and the Sejm, which hold legislative power The government is headed by the Prime Minister elected by the National Assembly and holds executive power The courts are the highest judicial body and independent of the executive and legislature Thailand's two judicial bodies are the Ministry of Justice and the courts of Thailand
2, Acknowledge each other’s laws
Experts in economics and law judge that the area of business arbitration is becoming more developed and consolidated Countries throughout the world have acknowledged the rulings of Vietnam's commercial hub The most convincing proof comes from the fact that a Vietnam International Arbitration Center (VIAC) decision was acknowledged and upheld in Thailand a few months ago (SGGP, 2017)
3 Views and government act towards foreign enterprises
Thailand currently sits at number 21 in the World Bank's "Ease of Doing Business" rankings while Vietnam only ranks at 70th Thailand’s government agencies play a crucial role in supporting and facilitating the establishment of International Business Centers (IBC) in the country With the atm of promoting economic growth, the government is incentivizing and streamlining processes to attract international businesses
The Board of Investment (BOI) offers non-tax incentives to promote investment in IBCs The purpose of these incentives is to promote the provision of services that add significant value The Revenue Department provides tax incentives for IBCs in Thailand The goal of these incentives is to decrease the amount of corporate income tax paid by eligible companies The specific incentives available can vary depending on the nature of the IBC’s operations and the services it provides (MPG, 2023)
V CULTURAL ENVIRONMENT 1 Consumer perspectives
Trang 8452.138.240 445 157.299 saso 439 902 TỦ mer 099.335 Lá“ 436 311.795 420.067.192 418027.152 2.2L),
According to KResearch’s latest survey, the top debt was concentrated in three areas including house loans (34.5 percent of the participants), business loans (18.1 percent), and car or motorbike loans (12.4 percent)
Despite the increase in the average income of a household around 27,352 baht per month in 2021, a household still spends an average of 21,616 baht per month or 79 percent of their income for monthly expenses (Erich Parpart, 2022)
2, Product perspectives
Many Thai Lan consumers caught up in the coffee whirlwind, especially the instant and instant coffee segment, are willing to pay a much higher price for a good cup of coffee Thailand's foodie business is booming, with an estimated annual market value of 36 billion baht and growing
Thailand has 8,025 cafes in operation, up 4.6% from 2017 Thailand's coffee market is worth 36 billion Baht; of which 20 billion Baht of the instant coffee segment Coffee consumption in Thailand is growing at an average rate of 15% per year Coffee consumption per capita in Thailand is about 300 cups/vear
Thailand exports only about 7% of its total coffee production each year Basically, the country does not produce enough coffee for domestic demand and mainly relies on imports of around 50,000-60,000 tons per year
VI SOCIAL ENVIRONMENT
1 Population
Trang 9Yearly Country's Thailand
% Yearly Migrants Median Fertility Density Urban Urban Share of World Global
Year Population Change Change (net) Age Rate (P/Km*) Pop% Population WorldPop Population Rank
2023 71,801,279 0.15% 104,249 18,999 40.2 1.32 141 52.0% 37,322,064 0.89% 8,045,311,447 20 2022 71,697,030 0.13% 95/927 18,999 39.7 1.32 140 513% 36,793,252 0.90% 7,975,105,156 20 2020 71,475,664 0.24% 167,901 35,526 38.8 1.34 140 49.9% 35,698,325 0.91% 7,840,952,880 20
In 2023, Thailand's population is expected to grow by 104,249 Natural population growth is projected to be positive If migration remains at the same level as the previous year, the population will increase by 18,999 people
2 Birth rate
In 2022, Thailand's birth rate reached its lowest level in 71 years Anukul, Dr Somchai Jitsuchon of the Thailand Development Research Institute expressed concern that, If the current birth-rate trend continues, children will account for just 13.3% of Thailand’s population in 2040, the working-age population will fall to 55.5%, and the elderly population will rise to 31.1% (The Nation, 2023)
a ae war -Y
Thailand has been an “aged” society since 2005, meaning 10% of the population is 60 or older, anc will become a “super-aged’ society by 2051 when 28% of the population will be 60 or older
Change ïn age structure over the next 25 years (percentages) 60+yrs old 16 20 im eo FALLING at TM: Number of births and deaths in past years 15-59 vrs old > l2 0-14 y¡s old 2015 2021 2051 2040 Ÿ Ratio of workers to the eLderly š — S S 4950 1960 1970 1980 1990 2000 2010 2020 iii | lí Í i Ỉ ii 1 elderly/ 1 elderly/ lelderly/ | 1elderly/ Source: Macrotrends.com 4.2 workers | 3.2 workers § 2.1 workers | 1.7 workers
Source: The National Statistical Office
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