One of the most popular markets in Thailand apparently is the green tea market. The competition is fierce, old and new faces, big and small, and all of them have the expectation that the sales of their green tea products will soar up in the chart eventually. Oishi Group Public Company Limited, nobody in Thailand will never heard of this company as it is the current green tea leader, is expecting that the market value will reach impressive ten billion baht by the end of this year. The currently green tea market value is at eight billion baht.
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Such as the new players, T.A.C. Beverage Company Limited has invested about 50 million baht to promote the new products, green tea products “Shenya”. They have launch two flavours of Shenya into the market. As the same as other players, their products are shelved in most of the convenience stores. Regarding the promotional strategy by T.A.C. beverage Company Limited plans to increase the growth through a discount rate in price strategy, that it will sell their product “Shenya” at 15 baht for a set period of time, as other selling it at 20 baht.
Another notable green tea company is Uni-President Company Limited. They launch the green tea products to Thailand in 2001, as we all know in the name of “Unif” brand or as we know “Unif-Green Tea”. The company use to be the market leader of green tea until Oishi took over the throne for a short time.
Unif and Osishi have been encounter to each other for over the past year and exchanging their seat on the top of green tea pedestal many times. The stance of Unif was to boost sales, and try to capture public attention by make use of emotional advertisement campaigns. One good example of it is the “worm” television advertisement. And at the same time, Oishi was investing in hi-technological as in anti-contaminated equipment. Oishi tend to use the strategy as in concerning the customer relationship management. As to be mention earlier that most green tea firms distribute their products at different convenience stores. But, Oishi has decided to sell their green tea products at any place that the crowd of people gather together, such as sport festival or entertainment events. With this strategy, Oishi would be able to penetrate and get in touch with different type of customers more effectively and easily.
Political problem will affect the trade political conditions
Raw material price is varying.
When raw material price become vary, the company cannot adjust the price of the product to match with the price of it raw material.
As the worker employment rate increase, the supply of employment surely increases but the paid decrease.
Technology development in information and specific communication using internet.
The opportunity by using internet increase as to do marketing activities in which including more competitors.
– In the present day people turn to a healthy and more environmental friendly product.
-The compete of business specific in idea about concern healthy to increase adaptation.
– In business area the competition in a specific idea concerning health have become more popular to increase adaptation
– Concerning the opening hour for department store.
There are many factors in which will affect the decision of managers of many organizations, the help analysis those factors, PESTEL model can be used. The Political factors, in which the policies in which government have set the opening hour of department store or office in which can affect the revenue of the company easily. However, the organization still has the help of “7-eleven” in which can be open 24 hour, selling ratio product over night. Also the Political problem can affect the trade political condition as the trader will become more worry about the situation inside the country. Economic factors will related to the raw material price in which if the price is vary the company will have a hard time or sometime cannot adjust the price of the product to match the price of the raw material correctly. It is a grave matter in gaining profit or causing a loss if the price is too unstable. Worker employment rate is related to the social factors. It is good that the rate of employment increasing mean people got jobs to do and get paid, but the paid will be decreasing as in common sense. Technology factor is an important factor that will support the company reputation and marketing. By using internet and development of communication marketing activities become more fierce and also with more competition. Environment factor is the factor that people have paid attention to in the present day as by using a material that preserving the environmental friendly will increase the good reputation for the company and in return the customers will gain a healthy diet product from the company. For the legal factor issue will be related to the political factor as to be concerning about the opening hour for department store.
Five Forces Model
Current rivalry among existing firms:
-The growth in sale of industry is slow
-High cost of fixing and inventory storage costs.
-No switching cost or differentiation
-Large additional of capacity space require.
-Vary of competitors.
-Not much of strong opponents
-Low risk strategy
-Easy to exit
Potential entry of new competitors:
-Potential cost disadvantages doesn’t exist
-Not much different in products.
-Require a minimal amount of capital
-Minimal switching costs
-Government policy protection is out of reach.
-Large economic scale
-Able to control distribution access channel.
Potential development of substitute products:
-Few or little substitutes of goods.
-Several not-so-good substitutes.
Bargaining power of suppliers:
-A supplier is enabling or able to gain ability to do whatever the buying industry does.
-Supplying industry has a lot of companies.
-Substitute product do exist for suppliers
-Industry is count as an important customer.
-Minimal switching cost in supplier product
-Differential in supplier’s product doesn’t exist.
Bargaining power of consumers:
-Complete information will be present for the buyer
-Having a standard in purchases or undifferentiated
-Purchases are significant part
-Buyer may have to faces few switching cost.
-Buyers purchase small amount of volumes
-Buyer is unable to manufacture products.
We have used five forces model to analyze the industry and competitors of “Oishi Green Tea”. The results above provide at the top have shown the result of analyzing the five force model.
As the result has shown, there is only one topic as low bargaining power of suppliers that provide a positive result for Oishi. In contrast, there are 4 topics that have high current rivalry among the existing firm, high potential entry of new competitors, high substitute products nod high bargaining power of buyers will definitely giving a negative effect on Oishi company.
As in conclude, this industry, the market is not attractive to Oishi. The company should widen and invest more in to other industry such as a coffee market for example. In present day, Oishi has launch new brand as “Coffio” to expand their business.
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