Exploring Key Factors Affecting the Competitiveness of Thailand’s Cosmetic Industry

Neeranard Jinachai, Win Winit-Watjana, Puree Anantachoti

Abstract


Abstract

 

The Thai cosmetic industry has continuously grown, but relevant factors impacting on the industry remained un-assessed. This study was intended to explore key factors affecting the country competitiveness. The Diamond model was adapted as the conceptual framework. An in-depth interview was conducted in five key informants who were cosmetic executives. It was found that three factors currently enhancing Thai cosmetic industry competitiveness were government factor, demand condition, and supporting industries. Gaps in factor conditions, and firm strategy, structure and rivalry were detected. The result showed that many government agencies provided several positive supports for the industry. There were high demands in “made in Thailand cosmetic products. The multinational company (MNC) products were well-liked by the global markets, whereas the products of small and medium-sized enterprises (SMEs) were trusted by and preferred among Cambodia, Laos, Myanmar. Herbal and natural cosmetics were identified as niche market. Supporting industries, especially service business like tourism, massage, and spa enhance cosmetic industry growth. Government created ‘cosmetic cluster’ helped bringing related businesses to meet and enhancing market places.

Conditions that found to be barriers for cosmetic industry were high labor cost, and 100% of imported raw materials and packaging. Strategy that should be improved included focusing on research and development, and blending niche consumer needs to produce good quality, high ended cosmetic products. Although many government agencies try to help the industry, communications between the government and the industry, and co-operations among government parties should be improved.

In summary, to foster the cosmetic industry competiveness, industry’s goals, key performance indicators, and a clear strategic direction for both SMEs and MNCs should be set and frequently evaluate.

 

Keywords: Competitiveness, Cosmetic industry, Diamond model, Thailand

 


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References


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