The Aspect of Entrepreneurship in Emerging Economies - Blackmore Vitamins Products in Thailand - Assignment Example

The Aspect of Entrepreneurship in Emerging Economies: Blackmore Vitamins Products in Thailand Student’s Name Institutional Affiliation Table of Contents 1.0 Table of Contents…………………………………………………………………………….2 2.0 Executive Summary………………………………………………………………. ………..3 3.0 Introduction…………………………………………………………………………………..4 4.0 PESTEL-C, Strength and Weakness as Experienced by Blackmore Vitamins Company….5 4.1 Entrepreneurial Business…….……………………………………………………...5 4.2 Entrepreneurial Skills…………………………………………………………………5 4.3 Strengths of the Market………………………………………………………...........8 4.4 Challenges Encountered………….………………………………………………….10 4.5 Opportunity and Expected Demand……………..…………………………………..11 5.0 PESTEL+ C Analysis………………………………………………………………………12 6.0 Systems and Procedures in the Business and Implementation Strategies…………….……13 7.0 Community Participation and Social Entrepreneurship…………………………….……...14 8.0 Conclusion and Recommendations….………………………………………………….......15 References…………………………………………………………………………………….....17 2.0 Executive Summary The process of creating a business venture entails deeper scrutiny and research. The aspect of developing an extensive analysis into a business environment’s government policies, competition, suppliers, target market as well as need for growth and development comes in handy. Successful entrepreneurs are expected to possess certain characteristics which put them ahead of others. They are also expected to master and embrace essential skills as need arises. Skills such as decision-making, communication, enterprising as well as people skills are some of these skills that prove way beyond ordinary entrepreneurship. In order to operate effectively under certain communities successful entrepreneurs learn the importance of its surrounding societies. In that case they are expected to provide necessary support as needed by these communities in a process known as corporate social responsibility. They are also expected to provide educational sponsorships, participate in matters dealing with environment conservation as well as construction of social amenities within the scope of the area at hand. However, it is worth noting that entrepreneurship does not succeed without mentioning challenges involved. In our case some of these challenges involve financial constraints, government as well as market reception, implementation strategies; selection of effective suppliers as well as finding competent sales force since the products requires intensive sales skills. 3.0 Introduction Blackmore Vitamins ltd is an internet based company which provides health-related solutions to its users. The company has its establishments in Australia where it benefits from large customer base as well as steady market. The company was established in 2000 to assist with consulting services but later expanded to include forums where people got direct responses for their specific ailments. In the 2007, the company perceived the need to provide a platform upon which it’s already established clientele could access health related products. This fact leads to the involvement of the company into trading activities which supported availing of the products to consumers. Taking into account the fact that the company saw it fit to venture into new markets, south East Asian market and particularly Thailand provided a favorite destinations. Blackmore vitamins perceived the need to enter Thailand market since it is an emerging economy and is also experiencing population boom. Population boom is a fact which is considered favorable for tapping the increase in market for Thais. Blackmore Vitamins Company understands competition and it has prioritized competition strategies to stay ahead of the market. 4.0 PESTEL-C, Strength and Weakness as Experienced by Blackmore Vitamins Company: 4.1 Entrepreneurial Business: Following intense research analysis into potential markets in which our products could be sold and generate revenue as well as break-even faster Thailand befitted the market niche. The main reason for selecting Blackmore Vitamins resulted out of the fact that our research assumptions postulated a significant deficit in health-related products. 4.2 Entrepreneurial Skills: In order to come up with a unique and innovative product it is fair that the report include some of the skills which are considered crucial in the course of both product and market identification processes. These skills are discussed as below: I) Technological skills: in this case, the process of identifying both the product and market upon which the product was considered marketable technological skills were needed wholly. For instance, it took a relative amount of time and energy into deploying Search Engine Optimization skills in the course of looking up for both potential products as well as markets (Carbone, 2009). This skill also widened as the research involved joining forums upon where opportunities for business could be identified, developed and established altogether. For instance, the team took to joining numerous Blackmore forums: a website that provides free health memberships to potential individual markets. II) Financial skills: successful entrepreneurs’ possess relevant financial skills. These skills are used to develop a business plan that is later used in formulating expected budget for the project at hand. Money is needed for initial capital, business registration processes as well as other miscellaneous expenses that may include travel expenses as well as accommodation costs. Financial skills are considered to be one of the core abilities of successful entrepreneurs since it determines the amount of money needed to start-up the project. With this skill, entrepreneurs are placed at an upper hand upon which they can use to determine business worthiness of the project at hand. III) Enterprising skills: it’s one thing to come up with an idea and another to implement it to produce relevant and successful results. Successful entrepreneurs are expected to not only innovate but formulate ideas which will be translated to effective business activities (Carbone, 2009). For this reason, abilities and willingness to build up business operations is an initial step upon which successful entrepreneurship is based. IV) Decision making skills: the aspect of making effective decision creates a fundamental platform upon which entrepreneurs can use to base relevant judgments. For instance, in our case we made a sound decision into the type of venture which we aspired to pursue and after an intellectual and extensive analysis we managed to distinguish a vitamin-related product which we believe would find market in Thailand. It should be noted that successful entrepreneurship is based on making key decisions while still taking chances to face challenges and other plights with boldness knowing very well that experience determines perfection: core factor in success. V) People skills: in the bid to stand-out above competitions successful entrepreneurs are expected to possess this skill since people, in one way or another are involved and attracting a large customer base depends on the image of a business. It is upon this fact that well established companies employ experts in this area to deal with the image of the Company. CEO, s is people deployed within companies who possess relevant skills needed for representing an entity in the business world (Martin, 2011). VI) Sales skills: these skills are also known as marketing skills. It is assumedly clear that every business involves selling. In this case, our business involves selling vitamin products in Thailand market. While performing this activity, money skills come-in handy as successful entrepreneurs understand that in order to stay in business for substantial period of time, money is an obligation that comes in handy. However, it is safe to indicate that selling skills are not only attributed to selling of goods or services it also involves selling the business plans to potential investors as well as job opportunities that will be created as a result of commencing business. VII) Communication skills: research indicates that communication skill is far the most important skill for an entrepreneur who is driven to succeed in any business venture for which he or she is interested. It is needed for the purpose of developing the aforementioned skills. Planning, selling and decision making skills require proper communication in order to attain desired results. In that case, our business venture is well equipped with these skills for a proper start-up procedure. 4.3 Strengths of the Market: The following illustrations support our basis for selecting Thailand as our venturing location for the vitamin related product: Low Cost of Doing Business: In our research findings we managed to locate a report which presented facts findings by an international Board of Investment which compared the cost of living as well as venturing businesses in Thailand to other regional competitors that included such countries as Malaysia, China and Singapore. The report showcased Thailand above the rest postulating that its economy is placed at fair position upon which local and foreign investors could place their respective investments and in turn expect positive results (Alita, 2005). Improved competitiveness: a recent World Bank report postulated that Thailand’s economy is greatly improving at a much faster rate as compared to its competitors (Alita, 2005). The improvement in growth is attributed wholly to decreasing inflation rates, minimal external threats, increased national savings as well as a decline in the country’s budget. Effective Procedures in Starting a Business Venture: notably our research findings have indicated that the procedures followed in opening up a business venture in Thailand is simple. The procedure is also cost effective and takes a shorter period of time. This, in fact, is contrary to setting up business ventures in other neighboring countries. It is assumedly clear that the absence of barriers in the start-up procedure has acted towards allowing potential investors and entrepreneurs in that case to put their financial resources into production of more resources: profits. In the event that investment is termed as foreign, Thailand register of companies allows for 2 processing days at an affordable cost of 6 % of the total investment. As compared to Singapore and China, Thailand venture start-up requirements are maligned with greater level of transparency which acts to shield foreign investors from inappropriate exploitation (Alita, 2005). In order to open–up a business in Thailand, the register requires only foreign investors to disclose information pertaining to family, form of ownership and a true and fair representation of the financial data as well as the overall nature of business activity to be conducted. To encourage transparency, the stock exchange in Thailand showcases a company’s structure of ownership as well as its financial statements. An Efficient transport Infrastructure: Thailand is interconnected in a way that allows easier and effective movement of goods and people from one city to another. For instance, Bangkok is a hub that anchors, at least, the entire Southeast Asian region. The country is also covered in terms of water transport and its government is considered willing to even improve the infrastructure as a whole. Laem Chabang Port is a recent infrastructure set up by the government to improve sea international freight for both importers and exporters. On our part, this is a plus since it would act towards allowing for easier movements of our products both locally and internationally. This would, in turn, open-up business opportunities needed for further expansion of our venture to other neighboring countries. Business-friendly Taxes and Improved Government Incentives: when corporate tax in Thailand is compared to the rest of its neighboring countries findings have it that it is the lowest and ranges from 30% to as low as 10 %. The criterion used in determining the amount of tax a business venture is expected to pay depends on the amount of profits posted and whether or not the business is listed on Thailand Stock Exchange. On our part, this facet will act towards improving and expanding our business venture since it is a fact that the amount of tax we will pay will be low and that is good for business improvements. In order to encourage growth and development in the business sector the government of Thailand provides for reasonable incentives to business in a bid to allow for expansion-related activities. 4.4 Challenges Encountered: Government Policies: as a developing country, Thailand policies on business development and growth specifically, health-related business receive little or no support. The government agencies established to support businesses, especially when they face obstacles, overlooks the need. In addition to this factor, policies instigated by the government of Thailand do not in any way promote foreign products and this is a challenge to future expansion of the project at hand (Sarnsamak, 2012). Financial Support: in the course of establishing any business venture, finance is always a challenge and in our case this is no exception. In order to survive and yield positive results in this form of business it is required that, as entrepreneurs, we engage in intensive research and development activities as well as marketing since it is a rather newer product in Thailand Market. In this case, the venture calls for finances that will be used in marketing the product, deploying sales people, conducting enlightenment workshops as well as in conducting day-to-day operations. Supply of Products: the product is manufactured internationally and even locally it is limited to certain cartels of ventures. Apart from this fact, locally the product is expensive to purchase from suppliers since there is a few of them in Thailand. The venture is thus opting for an international supplier who will avail the product promptly and at a reasonable price. Labor: since the product under consideration is a newer product in Thailand market, the venture would be expected to employ a substantive workforce who is to be trained before embarking on the selling exercise. It is also fair to indicate that manpower in Bangkok is expensive with labor laws requiring employees to pay a minimum wage of $ 6 per day. This figure is costly especially because the venture will take a substantial period of time before it could yield positive results or even break-even. 4.4 Opportunity and Expected Demand: In Thailand, the local community forms the basis of our demand base since foreigners constitute of an insignificant figure. In addition to this fact, Thai are more welcoming to pharmaceutical products especially because they are cultured and are concerned with maintaining a good health. The opportunity also arose out of the fact that the industry is not yet exploited and putting-up the establishment, at this point in time, promises future growth and developments. In terms of demand, the venture is targeting, mostly, the urbanized population for a start since they are enlightened niche and they also possess an upper hand in creating value for our product. In this case most of the demand is expected to come from Bangkok residents which have an approximate population of 3 million people (Pattaya Today, 2012). Our target is to cover a fifth of this population. Our point of difference arises out of the fact the venture constitutes experts in the field of vitamin-related products and it is ready to invest in enlightening the potential clientele-base on the same. The main need which the business intends to cover is the cultural need attributed to Thailand culture of health. It should be noted that the people of Thailand are already aware of supplementary drugs which they usually derive from herbal products. This sector is already established within the country’s emerging economy. With these factorial bases, the venture is determined to target the urban population who are reluctant to utilize traditional herbs on the claim of poor quality and professional certification for these drugs. 5.0 PESTEL+ C Analysis: Political Environment: Thailand is a democratic nation which means that issues of political instability are not present. In that case, a favorable environment is provided for smooth operations of the business. Taxes are also business-friendly since Thai government advocates for tax incentives as well as lessening trade restrictions. Economical environment: the labor market in Thailand is well placed in terms of skills and abilities. The government has also embarked on formulating strategies which restricts overexploitation of cost of capital items. Interest rates for financial institutions are lowly placed to encourage investments and in that case Blackmore Vitamins is futuristic about expanding its activities as well. Thailand has a low inflation rate of about 4.8 % which is appositive facet for value creation. This also translates to future profits for the Company as a whole. Social-cultural environment: the country’s population is sensitive to matters concerning health. According to the statistics provided the future of Thailand proves fruitful as a population boom is expected. Increase in population translates to increased market which is facet that drives economy of the country. The cost of living in Thailand is relatively meaning that such products as vitamins will easily gain market and demand in that matter. Technological Environment: Thailand is interconnected to the rest of the globe through advanced road and air infrastructure. Regionally, it is connected to its neighbors through road networks a facet which is important for business growth and expansion activities. Internet connection is also well established which guarantees international markets as well as provision of consulting services Ecological Environment; in this case culture forms the basis for its determination. Thus it is safe to indicate that the country provides a business-friendly for expansion activities Logical Environment: in this environment, a fair environment minimally provides a few and simple rules and regulations to be followed in terms of business registration as well as filing for tax returns to relevant authorities. In Thailand, these facets have long been taken of thus providing a reliable environment upon which businesses could increase and posts positive results altogether. Competition: in terms of competition, it is safe to indicate that the country does not suffer stiff competition. In fact it is stipulated that the government has embarked on formulating strategies which will catapult investment in health sector. In this mode it is fair to postulate the opportunity for growth and development for Blackmore Vitamins. 6.0 Systems and Procedures in the Business and Implementation Strategies: Since the venture is on the introduction stage, our criterion for managing, selling purchasing and employing or rather recruiting workforce is simple and traditional in that matter. The only system that the venture intends to deploy technology is the accounting aiding procedures since it is vital for establishing tax-base. In terms of registration, the venture will enter into the market as a locally owned company this is because of the minimized amount of resources needed to register local-based companies. Through this, the venture will save substantial amount of money which will be used in financing other procedures altogether. Like any other partnership venture the business will be named after a combination of the initials in our respective names. The venture will also be composed in a simple management structure as we will all be functioned to perform duties and responsibilities equally. This factor will also come in hand while sharing profits or losses. Implementation procedures require that the venture establish its location structure and on that aspect, the company will be based in Bangkok since the city provides numerous facilities favorable for growth and development of the venture (TIR, 2011). In order to effectively attract a larger consumer base, the Blackmore vitamins is expected to engage in activities such as door-to-door marketing through which the products is availed to the consumer first hand as they are also likely to benefit from first hand information about illustrations on how to use the product. This a strong marketing implementation plans since trust for the product is enhanced. The company can also choose to retail strategy so that products are availed to the population in small kiosks throughout the country. In this way sales revenue will be increased since availability of the drugs in shops is likely to attract even remote customers. 7.0 Community Participation and Social Entrepreneurship: In order for business to perform well, it is a pre-requisite requirement that it inter-relate its activities with those of the surrounding community. In business world, this is referred as corporate social responsibility and it involves including activities aimed benefiting the community as a whole. This activity involves building such social amenities like schools and hospitals, providing education sponsorship to the unfortunate children as well as participating in activities which protect the environment for business continual operations and for establishing a good rapport. Since the venture is a small business it will be almost impossible to conduct such activities due to a limited amount of finance resource. However, the venture would participate in environmental-based programs since it is possible around Bangkok and its environs (Ndeta, 2011). 8.0 Conclusion and Recommendations: The fundamental reason for putting up business ventures is for growth and development purposes. Business establishments are in one way or another involved in the process of expansion and in our case this fact is not an exception. In order to grow, businesses are expected to accumulate wealth, profits and human capital. Planning for future growth will involve creating financial trust with financial institutions which will facilitate with debt financing. In case the venture grows and thus be listed in Thailand Stock Exchange financial resources will be sourced from the amount of shares entrusted with shareholders. The venture will also embark on saving strategies in which money from these savings plus accrued interest will be injected back into the working capital for the purpose of increasing inventory or rather stock. In order to increase competent and reliable human capital, the venture purports to develop a workable yet efficient recruiting department especially to tap effective sales force. The venture is also of the opinion to outsource competent sales force from recruitment agency in Bangkok since they possess the experience needed for conducting the process. The main focus of the business venture, at hand, is to sale vitamin-related products to Thailand market. In order to come up with this idea of business venture, the un-exploited market as well as promising favorable environment needed for growth and development formed a platform upon which this decision was attained. In Thailand, the costs of doing business are low since government policies and subsidies act to minimize them. The economy is also under a boom as Foreign Direct Investments (FDI) as well as effective government budgets are placed in a fair position. As compared to other business destination within the South East Asia, Thailand is considered efficient in the manner in which registration of business is conducted. The cultural population within the country provides basis upon which marketing will develop since Thai culture calls for sound health matters. This venture will mostly target urban population since it identifies well with the form of products the venture purports to sale. Our main competitors are traditional herbal products but since the urban population does not identify wholly with them our product is expected to gain popularity since it is qualitative and has undergone professional scrutiny. The business venture is expected to be located in Bangkok since it is well interconnected to the rest of the globe which will facilitate easier movements of our goods in and out of the country. This is expected to create further opportunities for growth into the regional market as a whole. References Alita, T. (2005). “Why Thailand?” Thailand Board of Investment’s Investment review Publication, viewed on 13th September 2012 from http://www.business-in-asia.com/why_thailand.htm Carbone, P, (2009). Accelerating Successful Technical Entrepreneurship, Technology innovation Management Review, Issue 2 Martin, F, (2011). Entrepreneurship: Strategic Direction Entrepreneurship, vol. 27 Issues 6 Ndeta, P, (2011). Showcasing Successful Social Entrepreneurship, International Council for Small Business (ICSB), World Conference Proceedings, p. 1 Pattaya Today (2012). Thailand emerges as business hub Sasin Forum, News Article, viewed on 13th September 2012 from http://pattayatoday.net/property-business/business-news/thailand-emerges-as-business-hub-from-sasin-forum/ Sarnsamak, P (2012).Medical Hub: Thai Government Policy “a Burden to Business, New Article, viewed on 13th September 2012 from http://www.thaivisa.com/forum/topic/580942-medical-hub-thai-govt-policy-a-burden-to-business/ TIR, (2011). International business surveys giving high marks to Thailand, viewed on 13th September 2012 from http://www.boi.go.th/tir/issue/201105_21_5/161.htm Read More