PESTEL Analysis of Thailand for Church's Chicken: Opportunities and Threats for Expanding Business

This research report analyzes the external environment of Thailand using a PESTEL framework to assess the potential for Church's Chicken to expand its business and introduce a new product, 'Chicken Roll'. The report identifies key political, economic, social, technological, environmental, and legal factors that could impact the organization's success. It also explores opportunities and threats associated with the Thai market, including the country's strong tourism industry, aging population, and environmental concerns. The report concludes with recommendations for Church's Chicken to navigate the Thai market effectively and capitalize on its potential.

RESEARCH REPORT

TABLE OF CONTENTS
1 Introduction...................................................................................................................................1
2 Product..........................................................................................................................................2
3 PESTEL analysis of Thailand.......................................................................................................3
3.1 Political..................................................................................................................................3
3.2 Economics..............................................................................................................................4
3.3 Social.....................................................................................................................................5
3.4 Technology............................................................................................................................6
3.5 Environmental........................................................................................................................7
3.6 Legal......................................................................................................................................8
4 Opportunities for organisationin Thailand....................................................................................9
5 Threats for organisationin Thailand............................................................................................10
6 Recommendation........................................................................................................................11
References......................................................................................................................................12

LIST OF FIGURES
Figure 1: Chicken roll as new product.............................................................................................2
Figure 2: Aging society of Thailand..............................................................................................10

1 Introduction
External environment and their factors are the essential points which an organisation should
focus while deciding to expand their business or market at any other place or country. In the
below report study will be conducted on the Church’s Chicken which is dealing in the fast food
restaurants and now they want to set a new market in Thailand. For establishing a new market in
the new place, it is important for the organisation to evaluate the external environmental factors
which may affect their product. With the help of this report, new product, PESTEL, opportunity,
and the threat of Thailand will be identified and discuss.
1

2 Product
Church’s Chicken is the fast food restaurant which is an American food chain, and they are
specialized in the fried chicken. The organisation has their chain in many places, but they
decided to expand their business at the new place and want to bring a new product to the market.
Thailand is the place they decided to use as a new target market. As this organisation is
specialized only for chicken dishes so according to this new product should be related to chicken
only. “Chicken Roll” is the most suitable and attractive dish which can be bring by the
organisation in the Thailand market. According to the taste of Thailand and type of tourist visit
there will love this type of dish.
Figure 1: Chicken roll as new product
(Source: Yo Free Samples, 2018)
2

3 PESTEL analysis of Thailand
3.1 Political
Political factor reflects the government stability and their regulations for the country which need
to be followed by every organisation established there for their business. As per the research, it is
identified that Thailand regarding politics is quite unstable and in the not stable situation. There
is no stability of the government which creates lots of legal issues and illegal problems. There is
a high-risk factor for the new organisation or new business to invest there because of there no set
rules or regulations from the government side. Thailand is mainly a constitutional monarchy, and
they are switched between the military junta and parliamentary democracy for many years
(PESTEL analysis of Thailand, 2018).
Thailand has become an industrialized country and has dealt in exports business also from the
1990s. Tourism, agriculture, and manufacturing are the major sectors in which Thailand is
dealing. These factors show that Church’s Chicken organisation can go for Thailand option for
expanding their business. Thailand political factor is conducting in the framework of the
constitutional monarchy, and their prime minister is head of the government. Their judiciary is
independent of the legislative branches. By considering all the factors of the Thailand Political
factor, it will be suggested to the organisation that they can go for this option and start their new
product in the Thailand market.
3

3.2 Economics
According to the research and analysis, it is identified that Thailand is on the 27th position as the
world’s largest place in the world and second largest economic place in the Association of
Southeast Asian Nations (ASEAN). It is also predicted that Thailand economy grows by the
3.2% in the year 2017 and GDP also grows by 3.2% in the year 2016. This growth in Thailand is
occurred due to the improvement and changes in the FDI (Foreign Direct Investments). On the
other side, this type of growth creates high employment which reduces the low unemployment in
Thailand. This will show that Church’s Chicken organisation can expand their business in
Thailand as this the most attractive place for tourist people so they can target the market by
launching a new product in the Thailand market and attract customers.
As per the economic growth of Thailand, this will also become a positive point for the
organisation to establish their position and brand there (Thailand PESTEL, 2018). They can also
contribute to the Thailand government for enhancing their economic and financial positive.
Many tourist people also select Thailand for its well established economic condition because
they want a luxury trip for their vacations and want to prefer the places like Thailand. Church’s
Chicken is the organisation want to expand their business in Thailand so that they can enhance
their economic condition and revenue per year. This investment in the Thailand market will help
the organisation to enhance their brand value and image in the market between the tourist people
who visited Thailand.
4

3.3 Social
The social factor is related to the culture or values followed by the people who are living there. A
social factor always related to the local people and their culture which attract the outsiders and
tourist. It is the most critical factor which is required to be followed by every organisationwho
wants to establish their market at the same place. Social factor needs to be considered by the
organisation when they bring any new product or service in the market. As per the study, it is
identified that Thailand follows Buddhism culture and people are following the same culture
there. Buddhism is the main culture and religion of Thailand and around more than 95% of the
populations is following this religion, and it is estimated that they are practicing as the Buddhists
in Thailand (PESTEL include all the macro environmental factors, 2018).
Thailand is the free country as there are no pressures on the people to follow a particular system
of anything. They are free to follow any religion there, and there is no pressure on them to
commit to any particular belief system. This social factor and religion following in Thailand will
help the organisation to understand their values and beliefs, and according to that, they need to
provide services or products which do not violate their culture and hurts their feelings. As per the
culture and religion of Thailand, Church’s Chicken need to consider the social culture
responsibility factor so that they can easily get connected with their culture and values and
influence them towards their brand and food they are providing to the people.
5

3.4 Technology
In the current time, people are following easy and advance system for their comfort level. To get
the comfort in any condition, technology is the best thing which can be adopted by the person or
the service provider organization. While considering the technology factor in Thailand, it is
identified that Thailand is the prospering in respect of the technology factor. Thailand is the
country which is enjoying their status of one of the leading manufacturing hubs in Asia. The
government of Thailand has officially identified the four important areas in which digital
commerce, digital innovation, and digital content and digital entrepreneurship (External
environmental factors affecting the organization, 2018).
This type of areas adopted by Thailand will help the organisation to consider the factor of
customer satisfaction. It is identified that Thailand is also encouraging technology and its use for
their people and customers satisfaction. They adopted various types of new and advanced
technology for their customers in that they provide digital and e-commerce facilities to their
customer so that they can do online booking, a digital payment, and other digital transactions.
This fact will help the organisation to enhance their market with the help of advanced
technology. With the help of Thailand technology factor, they can enhance their services and its
quality by providing online facilities and online purchasing facilities. This will give them the
advantage of the digital economy and enhance their business capabilities.
6

3.5 Environmental
Thailand is the committed towards the environmental goals which protect the environment and
cover the sustainable development of the country. Thailand government created and framed
various types of strong environmental policies and legislations. They also establish their
environmental institutions which mainly focus on the implementation of the policies for
addressing the environmental condition of the country and they are energy concern at the
provincial and national level. But sometimes due to increasing pollution level will increase the
chances of hazardous wastes, rise domestic solid and also enhance the wastages of industries.
These types of activities happened in the environment can disturb the entire system of the
government in respect of the environment protection (Jawjit et al., 2015).
Church’s Chicken is the organisation that is dealing the restaurant services and wants to start
their food chain in Thailand for this environment protection act is also required to be followed by
them. They need to focus on the industries or restaurant wastage which they require to avoid so
that environment condition of Thailand can be maintained. Most of the time Thailand has the
savanna and tropical climate which is influenced by the tropical monsoon climate in the year.
This will become the responsibility of the organisation to provide food and other drinks facilities
as per the environment condition and taste of the customers (Igarashi et al., 2015). Thailand
climate is attractive to the customers or tourist, so this place is known only for the travel and
tourism destinations. Environmental protection Acts or legislations framed by the Thailand
government need to be considered by the organisation when they are planning to expand their
business.
7

3.6 Legal
Legal factor in the PESTEL analysis will refer to the laws, regulations, Acts framed by the
Thailand government. Thailand follows some of the legal systems which combine the traditional
Thai and the laws related to the western. The government of Thailand mainly holds the liberal
attitudes in respect of the international trade and business. They also hold membership in WTO
(World Trade Organization) and the ASEAN (Association of Southeast Asian Nations)
organizations. These organizations committed Thailand for eventual or reducing the non-tariff,
duties and tariffs barriers while trading in the set frame time (Ti et al., 2015).
These factors related to the legal terms of the Thailand government will help the organisation to
understand the related factor so that they can create and apply strategies according to this only.
The Church’s Chicken must consider the legal system followed in Thailand and the organisation
to which they are connected. Staring a new business branch or chain in any new place will
require its registration and implementation for which they need to follow legal process and
formalities which are covered in the Thailand law (Biamukda and Tan, 2016). It is also identified
that if there is any legal issue raised than the constitutional court of Thailand is the best and
highest court to appeal.
8

4 Opportunities for organisation in Thailand
SWOT analysis is conducted to identify the strengths, weaknesses, opportunities, and threats to
the organisation when they establish their food chain in the Thailand market. With the help of
SWOT analysis, it will become very easy for the organisation to under the area of concern and
area of opportunity for them. Church’s Chicken organisation is planning to launch their new food
product in the Thailand market so that they can expand their business in the market between the
customers and for this; they need to analyze the opportunities in Thailand. As per the research
and SWOT analysis of Thailand for Church’s Chicken, it is identified that they have flexibility
for international mobility which helps the organisation to target large market (SWOT analysis of
Thailand, 2018). Thailand is one of the leading countries in the world which is considered in the
tourist destinations, so their connectivity is also very high and huge.
With the help of high connectivity with the market and with the tourist, it will become easy for
the organisation to segment their market as per their expectations. Huge level of connectivity
with other places and customers is the biggest opportunity for Church’s Chicken to influence and
attract the tourist towards their new product which is “Chicken Roll.” It becomes easy to
understand that where there is some tourist then targeting the customers will become flexible for
the organization. Another most significant opportunity for Church’s Chicken is that Thailand is
the leading country in respect of the economic in entire Asia. They cannot face any issue
regarding economic, and this will provide them a high amount of revenue or income from the
Thailand market (Wong et al., 2014). There is no health and safety concern in Thailand which
can also be taken as the favourable opportunity for the Church’s Chicken organization.
9

5 Threats for organisation in Thailand
Threats in the Thailand market also required being identified by the Church’s Chicken
organisation so that they can make strategies according to the analyzed threats. Threats in the
market will reduce the chances of benefits and profitability for the organisation due to which
they can also face loss condition. Strategies and techniques adopted by the organisationmust be
related to the threats just to avoid the dangerous condition and to overcome the critical situation.
As per the research, it is identified that aging society of Thailand is one of the threats to the
organisation (SWOT analysis of Thailand, 2018).
An aging society is the increasing median age of the population in the region which occurred due
to the declining fertility rates in Thailand, and this will disturb the entire social and cultural
process of Thailand. Changes in the climate condition will also create a threat to Church’s
Chicken organisation as they can bear loss during that period. Due seasonal issue tourist will
avoid visiting there during the bad season which will reduce the demand of the tourism and due
to this restaurants and hotels faced high losses (Phadermrod et al., 2016). It is important for the
organisation to to consider this factor as their threat in Thailand, and according to this, they need
to make strategies and plans so that it will less affect their business expansion situation.
Figure 2: Aging society of Thailand
(Source: Chularat Saengpass, 2013)
10

6 Recommendation
Above report has discussed the Church’s Chicken organisation that is planning to expand their
food chain in Thailand, and they want to bring a new product to the market. According to this
requirement, this report has conducted PESTEL analysis of Thailand through which organisation
can understand the affecting factors for their business. Opportunities and threats for the
organisation in Thailand have also analyzed so that they can make strategies according to this
only. Apart from all these, there some of the recommendations which need to be considered by
the organisation when they enter in the Thailand market for promoting their brand and new
product (Chicken Roll) between the tourists.
It is suggested that they should follow the terms and conditions of the Thailand government and
try to avoid the legal violations conditions. It is also essential for an organisation that they should
follow the culture of Thailand so that people get attracted towards their product and values. As
per the opportunities and threats analysis, it is suggested to them that they should on connections
and long-term customer base which will help them to establish their place in Thailand. To
overcome the threats of Thailand, they should change their food and other services as per the
season and as per the tourist so that they can earn revenue in any condition and try to use
marketing strategy for their services promotion.
11

References
Books and Journals
 Biamukda, S. and Tan, C.C., 2016. Factors influencing high-involvement behaviors in the
real-estate investment in northern Thailand. International Journal of Behavioral
Science, 11(1), pp.31-44.
 Igarashi, Y., Kumagai, T.O., Yoshifuji, N., Sato, T., Tanaka, N., Tanaka, K., Suzuki, M.
and Tantasirin, C., 2015. Environmental control of canopy stomatal conductance in a
tropical deciduous forest in northern Thailand. Agricultural and forest meteorology, 202,
pp.1-10.
 Jawjit, W., Pavasant, P. and Kroeze, C., 2015. Evaluating environmental performance of
concentrated latex production in Thailand. Journal of Cleaner Production, 98, pp.84-91.
 Phadermrod, B., Crowder, R.M. and Wills, G.B., 2016. Importance-performance analysis
based SWOT analysis. International Journal of Information Management.
 Ti, L., Hayashi, K., Kaplan, K., Suwannawong, P., Wood, E. and Kerr, T., 2015.
Contextual factors associated with rushed injecting among people who inject drugs in
Thailand. Prevention Science, 16(2), pp.313-320.
 Wong, K.M., Velasamy, P. and Arshad, T.N.T., 2014. Medical tourism destination
SWOT analysis: A case study of Malaysia, Thailand, Singapore and India. In SHS Web of
Conferences(Vol. 12, p. 01037). EDP Sciences.
Online references
 Chularat Saengpass, 2013 [Online] [Assessed through]
<http://www.nationmultimedia.com/national/Golden-oldies-on-march-30199287.html>
[Assessed on 4th April, 2018]
 PESTEL analysis of Thailand, 2018 [Online] [Assessed through]
<http://www.gtu.ac.in/ABP/GCSR%20PDF%202013/799%20Thailand%20-
%2011-.pdf>, [Assessed on 4th April, 2018]
 Thailand PESTEL, 2018 [Online] [Assessed through] <http://www.lucintel.com/pestle-
analysis-thailand-2017.aspx>, [Assessed on 4th April, 2018]
12

 PESTEL include all the macro environmental factors, 2018 [Online] [Assessed through]
<http://www.sachdevajk.in/2017/09/08/pestle-analysis-of-thailand/>, [Assessed on 4th
April, 2018]
 External environmental factors affecting organization, 2018 [Online] [Assessed through]
<https://www.slideshare.net/danishshoukat2/pestel-on-thailand>, [Assessed on 4th April,
2018]
 SWOT analysis of Thailand, 2018 [Online] [Assessed through]
<https://prezi.com/1d0s9t-5-dpl/thailand-swot-analysis/>, [Assessed on 4th April, 2018]
 SWOT analysis of Thailand, 2018 [Online] [Assessed through]
<https://creately.com/diagram/example/iai9f1qe1/SWOT%20Analysis%20of
%20Thailand>, [Assessed on 4th April, 2018]
 Yo Free Samples, 2018 [Online] [Assessed through]
<https://yofreesamples.com/food-samples/free-fried-chicken-leg-thigh-or-tender-strip-
from-churchs-chicken/>, [Assessed on 4th April, 2018]
13