International Business Environment M&S Textiles

Question: Discuss about theInternational Business Environmentfor MS Textiles. Answer: Environmental Analysis of Thailand There is an extensive need to perform the analysis of the host country where MS Textiles wants to have its business expansion as this analysis helps in understanding the potential advantages and risks associated with the host country, Thailand. Following is the analysis of the legal, political and economic business environment of Thailand for having successful operations of MS Textiles. Business Environment (Legal) There is a combination of Western Laws and the traditional Thai Laws in the legal system of the country of Thailand. For appealing, the highest court is the Constitutional Court but there is restricted jurisdiction to the constitutional issues. Senate nominate the members are the King appoints them. There is jurisdiction of the Court of justice on the civil and the criminal cases as well as they are managed in three tiers that comprises of, the Supreme Court of Justice, the Court of Appeals and the third is Courts of first instance (Feeny, 2011). As per the trade regulations, it has been analysed that the government of Thailand incorporates a highly liberal attitude against the international trade and business. There is removal of barriers related to non-tariff, duties and the tariffs because of having membership in the renowned ASEAN i.e. the Association of Southeast Asian Nations and WTO i.e. World Trade Organisation. The domestic as well as the international organisations are offe red with governmental grants, as well as there are benefits such as exemption of import duties, reduced taxation etc. (Al-Swidi and Shahzad, 2014). Business Environment (Political) Thailand is considered as a politically instable nation and has to manage numerous anti-governmental protests. The instability is a great threat for MS Textiles performing business in Thailand. The government of Thailand devise numerous strategies for strengthening the electronic, automobile, textile and agricultural industry. This gives an opportunity to MS Textiles to have successful business operations in Thailand. The government encourage the participation of the private sector and specially the medium and small scale organisations (Chittithaworn, et al., 2011). Thailand is a constitutional monarchy where the country is headed by the Kings. The rapidly expanding and large markets of Thailand facilitate leading MNCs, inspires local innovators, permit FDIs and also have sustained market environment for global organisations (Phongpaichit and Baker, 2004). Business Environment (Economic) Thailands economy is considered as middle class economy. It is forecasted that the economy will grow with a 7 percent CAGR for reaching US$522 billion by the year end 2017. The country is one of the members of ASEAN and also has close association with the ASEAN nations (tradingeconomics, 2016). The economy of the Thailand is advanced by growth in cost-effective labour, vibrant markets and high export value attracts the foreign investors with a supporting Government that encourage investment through guidelines and policies focus on free trade and liberalisation. In the last two decades, there is extensive reduction in the levels of unemployment, poverty and inflation. It empowers MS Textiles to have a sustainable trade and business in the regions of Thailand (Zadek, 2006). Advantages of Doing Business in Thailand Cheap labour Low cost of living Good infrastructure Safe place High availability of skilled labour Government support Free economy and trade Economic development (Wong, 2013) Disadvantages of Doing Business in Thailand Increased corruption Language barriers Augmented market competition High level of imitation Restriction related to the Pollution (Wong, 2013) Recommendations From the legal, political and economic analysis of Thailand, it has been identified that there are several potential risks and potential challenges in the external environment of the country. Following are the recommendations which can help MS Textiles in having suitable and successful business operations in Thailand: There is a need of adequate capital for investment; it is advisable to MS Textiles to have proper financial planning before having global expansion in the regions of Thailand. It is recommended to MS Textiles to have the establishment of the unit at such as place from where there can be easy transport facility. As there is increased traffic in Thailand so the distance in the units must be shortened. As there are numerous differences in the cultures of the host and home country, therefore it is recommended to MS Textiles to appoint a mediator or a cross-cultural advisor which can help the company in overcoming the challenges of diverse culture and language barriers. References Al-Swidi, A.K. and Shahzad, A., 2014. The business competitiveness of Thailand in the ASEAN region.Business and Economic Research,4(1), p.48. Chittithaworn, C., Islam, M.A., Keawchana, T. and Yusuf, D.H.M., 2011. Factors affecting business success of small medium enterprises (SMEs) in Thailand.Asian Social Science,7(5), p.180. Feeny, D.H., 2011.The political economy of productivity: Thai agricultural development, 1880-1975. UBC Press. Phongpaichit, P. and Baker, C.J., 2004.Thaksin: The business of politics in Thailand. NIAS Press. Wong, V., 2013. What are the Pros and Cons of Running a business in Thailand. Accessed on: 21st April, 2017. Accessed from: https://www.servcorp.co.th/en/blog/2015/what-are-the-pros-and-cons-of-running-a-business-in-thailand/ Zadek, S., 2006. Responsible competitiveness: Reshaping global markets through responsible business practices.Corporate Governance: The international journal of business in society,6(4), pp.334-348.