Thai Beverage Business Strategy and Environmental Impacts

BUSINESS STRATEGY

1
Contents
Introduction............................................................................................................... 1
Overview of firm’s strategy........................................................................................... 1
Environmental impacts................................................................................................. 2
External environment................................................................................................ 2
Internal Environment................................................................................................ 4
Strategic capacities and source of competitive advantage.......................................................5
Value Chain........................................................................................................... 5
VRIO Framework.................................................................................................... 6
Issues and challenges................................................................................................... 7
Conclusion and Recommendation.................................................................................... 8
References................................................................................................................ 8

2
Introduction
In the time when competition has reached to highest levels, it has become difficult for the
management to ensure the success of the organisation without appropriate strategies. In the
making of the strategies the impact of the environment becomes very much crucial. It is
crucial that every organisation understands the environment they are in as well as the
resources they have to make strategies so as to gain competitive advantage over the rivals.
Since the business environment has become highly complex hence the challenges and issues
that are confronting the business also become greater. Thai Beverage is one of the largest
South Asian beverages companies having its distilleries in Scotland, China and Thailand. It is
listed in Singapore Stock Exchange and was founded in the year 2003 (Thaibev, 2018). This
report highlights the strategies of the company as well as it is going to do evaluation of the
environmental impacts. It also provides strategic capabilities of the company along with the
sources that provides competitive advantage to the firm. In the latter section of the report
issues and challenges confronting the company is going to get showcased. At last the
recommendation for the future success has been provided.
Overview of firm’s strategy
Thai beverage is facing many kinds of challenges that are stopping it from its growth. In this
regards they need to make strategies that are efficient and are able to give competitive
advantage to the rivals (McKinsey&Company, 2014). Various types of strategies that are
used by Thai Beverages are:
 Growth strategy: There are different types of growth strategies that are used by Thai
Beverages. Innovation seems to be highly advanced growth strategy. It is their
innovative product diversification strategy that allows them to remain ahead of their
competitors in the Southeast Asian market. They have also strengthened their
distribution network in the core markets and hence expanding their business in
Southeast Asia. With the help of partnerships with the companies like Fraser and
Neave Limited, they have become the leader in production and distribution of
different types of beverages (Thaibev, 2019).
 Diversity: They have attained business sustainability from their diversified revenue
streams which are core to their plan and also include income contribution from their
non-alcoholic beverages segment and overseas sales. By acquiring Oishi group public
company limited they become number 1 green tea beverage producer in Thailand.

3
They also acquired Sermsuk Public Company Limited a beverage producer having
most extensive distribution network in Thailand then they also acquired assets from
Yum Restaurants International (Thaibev, 2019).
 Branding: They started to do brand development where they have reorganised
ThaiBev’s management structure and streamlined their core businesses into three
product categories which includes beer, non-alcoholic beverages and spirits. They are
also making changes in their products and packaging on the regular basis. They are
making glamorous packaging that attracts people towards their business. Most of their
packaging reflects premium international spirits. In the year 2018, they expanded into
ready-to-drink spirit segments where different variants of bottles are available.
“Chang” beer is one of its most branded products. “Federbrau” is another premium
beer and they have also made changes in the scotch whiskey that are also available as
premium products (Thaibev, 2018).
 Reach: They have robust and extensive network and they have used the strategies of
adding larger networks and technologies so as to boost the overall supply chain
process. They have made partnerships with bigger luxury hotels and have gained the
support of 270,000 retailers all across the Thailand (Thaibev, 2019). They have a unit
to manage five distribution channels in total namely modern trade, HORECA,
traditional trade, Sermsuk and cash vans. They have also strengthened their logistics
so that they could reach to each and every distribution centres on time.
Environmental impacts
Environmental factors have larger impact on the business and hence it is critical for the
businesses to understand the influence their current business environment has on their
operations.
External environment
For understanding the external environment, PESTLE analysis can be used:
 Political: The political environment in Thailand is weak and the rise in the conflict
between the constitutional monarch and people has increased in the past few years.
The power of the government is immense and they have been supporting the
expansion of the companies within the country. Recently, corporate welfare
programme has been launched in the country where they have been supporting the