Topic:

CRITICALLY EXAMINING THE VARIOUS FACTOR THAT HAVE DETERMINED

THE GLOBALISATION POTENTIAL OF THESE COMPANIES

Table of content
1. Company Background and Industry Analysis

2.

3.

4.

1.1

What is Quiksilver ...

1.2

History of Quiksilver Company Background...

1.3

SWOT analysis.....................................................................

1.4

Financial Analysis.....

Market specific Issues, Challenges and risks....

2.1

Market specific issues...

2.2

Challenges..

2.3

Risks

Political & Economic Analysis...

3.1

Political Analysis

3.2

Economic Analysis

Key Entry Strategy Plan...

4.1

Distribution of products via the Internet

4.2

Collaboration in the implementation and planning of

the partnership..

5.

11

Conclusion and Recommendation.

12

Appendix..

14

References..

18

Figure
Figure 1: SWOT analysis of Quiksilver

Figure 2: Gross margin detail between 2013 and 2014

Figure 3: Thailand GDP between 2005 and 2014

Figure 4: The EF English Proficiency Index

Figure 5: Thailand country/economy fact sheet

Figure 6: The number of tourist in Thailand

Figure 7: The number of internet users in Thailand

10

Table
Table 1: Industry information

Table 2: Introduction to political of Thailand

1. Company & Industry Analysis

1.1

What is Quiksilver

Quiksilver is a company that designs products, clothing and accessories

about water sports for young-minded people. It illustrates the beach lifestyle and
response needs of water sports such as boarding, wakeboarding or surfing.
Quiksilver are manufacturing products about water sports is distributed worldwide.
There are many branches in many countries that provide authentic retail experience
for their customers.
Industry
Detail
Company Name
Quiksilver
Company Contact Name
Quiksilver, Inc.
Website UCL
http://www.quiksilver.co.uk
E-mail Address
info@quiksilvercanada.com
Address
15202 Graham Street
City
California
State/Province
Huntington Beach
Zip Code/Postal Code
CA 92649
Country
The United States of America
Currency Type
United States dollar
Table 1: Industry information

1.2

History of Quiksilver

Quiksilver was founded by surfer 2 persons. There launched in the market in

1970 in Australian surf shops and The company successfully with boarding,
swimsuits, and other surfing so there has huge profits and due to this success, the
company can produce a wide range to respond the demand of all the customers in
1980 and because sales increasing, the company has expanded its sales channels
through department stores rather than distribution to small specialty shops. In 1990
there have developed in many areas such as distribution, increasing the variety of
products and meet customer needs precisely and has led the market in early 1990.

1.3

SWOT analysis

SWOT analysis illustrates important point of weaknesses, strengths, threats

and opportunities from the implementation of business strategies. It demonstrates
the internal and external factors that affect to the business and make business know

where a business should to focus and pay attention or realize the flaws of the
business (Kotler 2005: 58-60).
SWOT analysis of Quiksilver

Figure 1: SWOT analysis of Quiksilver

Strengths
- Strong financial resource: Strong financial resource represents the
effectiveness, efficiency and ability to operate the business (Lipper 2013).
Quiksilvers financial position is strengthened by the increased number of turnover
because of this it demonstrates the company is capable enough to run the business.
- International business expertise: Quiksilver was launched on the market in
1970, so the company has been in business for 44 years this means that there have
experienced in the business for long time it enable the company has a deep
understanding of the environment of business, markets and customers very well.
Weaknesses
- Lack of global marketing plan: quiksilver has branches in many countries
such as France, Belgium, UK, Ireland etc., but never released in Asia, so it enable
cause lack of planning operations for obtaining market share.
- Product portfolio: Quiksilver 's product portfolio is not yet introduced in
Thailand and the geography and climate including the behavior of customers in
Thailand are huge difference from the group of foreigners.

Opportunities
- The topography of Thailand: Topography of Thailand, there are many sea
area and safe in many aspects such as safety from the monsoon or dangerous
animal. It is also a center of ASEAN and also a high number of tourists so it means a
good opportunity of performing business in Thailand.
- Under China-ASEAN free trade agreements: According to China-ASEAN
free trade thus making the import or export of goods not subject to tax. For this
reason, businesses can make a profit and reduce costs in several areas, including
the opportunity to expand our business to other countries.
Threats
- Corruption: Corruption in Thailand is on the threshold is very high and it is a
common phenomenon in Thailand it can be wherever such as corruption in an
endorsements thing, permits and licenses (Suwanmala 2007). For this reason, to run
business in Thailand may cause to waste money in this field.
- Political risk is dark spot in Thailand: Management policy of Thailand is also
insecurity and a lack of support from the government on foreign investment, including
the lack of credibility in the administration of government (Anon. 2011).

1.4

Financial Analysis

Financial Analysis made aware of the financial data of the Company, which is
one of the indicators of the effectiveness and efficiency of the business and will help
the company determine the direction in the implementation of the industry as a
whole. The financial statements are useful for making decisions about financing and
expansion of the company. It also helps in planning, marketing, and shows the
effectiveness of the operations of the company (Gartenstein 2011).
From the financial information of Quiksilver demonstrate increasing of gross
margin in the Americas and EMEA, on the other hand, there was a declined slightly
in the gross margin of the Asia Pacific region. However, the total of gross margin
remains stable by 50.9% was as follows:

Figure 2: Gross margin detail between 2013 and 2014

2. Market specific issues, Challenges and Risks

2.1

Market specific issues

To conduct business in Thailand, it must be an overview of the many aspects

that is the entrepreneur has to understand all that is to the GDP of the country very
well. GDP is a measure that represents the things that are produced by people and
businesses and also, including the wages of the employee or the rate of salary, total
money value of all services produced and goods in the specified time (Koba 2011).
According to figure 3 illustrates the GDP of Thailand from 2005 to 2013. The GDP
increased steadily from 161.34 in 2003 to 365.564 in 2013 except in 2010 GDP
dropped from 2009 by 8.868 because of flooding in Thailand. All of the above
demonstrate the economic growth, as well as the attractiveness of doing business in
Thailand that the development and continued growth.

Figure 3: Thailand GDP between 2005 and 2014

2.2

Challenges

This challenge refers to the challenge of doing business in Thailand because

Thailand is a country which different from the country of main company in many
aspects such as geography, language, culture or lifestyle so there is a challenge in
many forms in this report will discuss the main challenges to be faced for doing
business in Thailand.
2.2.1 The shortage of ability workers

Working with a foreign company, the employees need to have the ability to
communicate to the employer is there must able to speak, read and write English.
From the above mentioned, the level of knowledge of the English language can be

measured from The EF English Proficiency Index (EF EPI). The EF English
Proficiency Index (EF EPI) is a measure English proficiency level in each country in
the form of a report (EF Education First 2013). In addition, from below you can see
that Thailand ranked at 55, it refers to level of knowledge of English in Thailand is
very low so, this is the one of major factors of Thailand also it be the one of
dispensable challenges.

Figure 4: The EF English Proficiency Index

2.2.2 Piracy issues
Kelly, Chira-aphakul (2001) the problem of piracy is a problem that has
existed in Thailand for long time and Thailand remain in watch list about piracy of
America since 1994. Because of this, the production and sale of goods in Thailand
has to face unavoidable with this problem.

2.3

Risks

This risk is discussed the quality of the country's key institutions, including the
financial system, the nodal agency of the Government. There is also corruption in
different ways. These risks are some of the most difficult for investment in Thailand.
2.3.1 The corruption in Thailand
Corruption in Thailand is high intensity with corruption in a multi-step, multiagency and in many areas. From this fraud with Thailand for so long and corruption
know very well is a corruption of the government in 2001 to 2006 from this cause,
caused protests in many areas and the economic downturn, all of which impact to
investment, whether the low ability of customer purchases or the number of tourists.
2.3.2 Customer buying behavior risks

Purchasing behavior of customers is how to choose products or consumer

goods varies according to the characteristics of the individual Kotler and Keller
(2011). Purchasing behavior of Thailand are very different, especially the difference
in a residential area. Due to different cost of living in each of these things affect
purchasing behavior such as income of the population of Thailand's capital there
income higher than other provinces, as a result, the population of the capital has a
high ability to make a purchase. In addition, the factor of the topography is one of
impact to purchasing for example the area around the beach is popular with clothing
or accessories that suit the area.

3. Political & Economic Analysis

3.1

Political Analysis

Thailand is the regime with the King as Head of State and administered by the
Minister in democratic system. The government has freedom to govern the country
without reporting to any authority (Wandile n.d.).

Table 2: Introduction to political of Thailand

3.1.1 The decline in business confidence for consumers and investors.

The high volatility environment of political uncertainty impact on many aspects
including investment and business operations in Thailand and because of political
violence, such as revolution, protest or political demands cause many businesses
damaged or discontinued business operations immediately. These things made
investors reluctant to invest because it may cause damage to the business and are
not able to predict that when the violence will be end and many things cannot be
controlled or no impact on the stability of these things are causing a high risk of
doing business (Hutchinson 2012). That being said, the impact of political violence
not only individual investors or new investors, but also affects to the investors who
have run business for long time, for example Toyota Motor Corp., may be hesitant to
expand the company due to the political instability of Thailand.
3.1.2 Long term problem of policy administration.
Due to political disputes in Thailand has resulted in the administration or
management in Thailand is difficult for example, specific in 2008, Thailand has the
prime minister's up to 8 people (Thabchumpon 2012). Frequency of changes made
at the prime minister's policy not to operate, or management problems including
working with various ministries and due to the short operate time, the government is
lack of understanding about the problems of the country, thus this allow changing of
the prime minister's policy. As a result, the Management of Domestic is not
continuous, and the impact on investment because the government cannot be
involved in the business planning process.

3.2

Economic Analysis

Thailand is an agricultural country and the newly industrialized countries of

the world. Thailand has exported and imported goods, a lot and including Thailand is
interest to foreign investors by many factors such as geographical factors, wages, or
economic growth continues.

Figure 5: Thailand country/economy fact sheet

From above shows the growth of GDP in many aspects such as GDP
(US$bn) (current prices), GDP PPP, GDP per capita (US$): and GDP per capita
PPP. From data shows that the economy in Thailand growing steadily and this
means investing in Thailand are able to grow and generate profits for the company
because of the GDP increase represents increased demand including the ability of
the purchase will increase. In this report will demonstrate the impact of the Thailand
Economics to investment by follow.
3.2.1 Reducing the cost of infrastructure sectors, exports and imports, which
affects the growth of investment in the country.
Due to the low cost of living in Thailand have resulted in expenditures for
infrastructure in business operation, low as well, which is good for entrepreneurs
because they can reduce costs in many aspects when compared to investments in
other countries, such as the transportation, labor, communications, water and
electricity (Appendix 1).
3.2.2 Economic growth as a result of the increasing number of tourists in
Thailand.
The number of tourists is increasing every year in Thailand directly affect the
rate of economic growth, and some businesses. From below shows the number of
tourists is increasing every year as a result cause economic growth, from information
can be seen that although Thailand is experiencing some problems, such as SARs,
tsunami, floods and political uncertainty, but the number. Tourism continues to
increase, resulting in the growth of the economy. From the foregoing, it probably true
to say that business about travel or about tourists have been affected by the
increase of tourists and economic growth is an important factor in investing in
Thailand.

Figure 6: The number of tourist in Thailand

4. Entry Strategy Plan

Mintzberg, Henry, Quinn and James Brian (1996) discuss Entry Strategy Plan
is planning to approach or strategy, including strategic which direction to take. In
addition, Entry Strategy Plan use for guidelines or direction, also including the
allocation of resources to suit the strategy used to achieve maximum effectiveness
and efficiency.

4.1 Distribution of products via the Internet

Of statistical data shows a significant increase of the use of the Internet and
caused a rapid increase comes from several factors, including the quality of Internet,
a convenient way to using the Internet and the number of channels using the Internet
increasing. With all of these reasons, it could be said that the sale of products via the

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Internet as an important channel to generate a profit and make a company

successful.

Figure 7: The number of internet users in Thailand

4.1.1 Sales and advertising products through social networking.
The number of Internet users increases, resulting in the advertising and trade
on the Internet and, in particular, advertising and commerce through Social
Networking. social networking is a community on the Internet, people can exchange
information, attitudes, feelings and many things have caused the relationship to each
other on the Internet (Rouse 2006) and currently there are many Social Network
such as Facebook, Google+, twitter etc. Social Network, these are so many users as
a way of selling products or advertising as well as it can to spread the news or
information quickly and with less cost.
For the reasons above, Quiksilver, INC. can use this channel to promote,
provide information and advertising products of Companies, because the company's
target audience is people between the ages of 17-40 years, which at this age is the
age that is in use a lot of Social Network, it is consistent to market on Social
Network. In addition, costs for advertising or marketing, when comparing between
Social Network with other forms of advertising can be seen that advertising on the
Social Network has cost less and better value.
4.1.2 Sales via the website directly and delivery.
Nowadays, shopping online is easy and increasingly popular because of the
convenience, speed and security, and because shopping online is not limited to the
purchase through the computer alone anymore but It is available with a mobile
phone or tablet is also a convenient payment systems such as credit cards or
payment through online banking, which is popular such as PayPal, Paysbuy or

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GoogleCheckout. These are a factor to generate profits for business and responding
to the needs of customers.
For this reason, Quiksilverlk limited company able to expand its customer
base in Thailand more versatile and meet the increasing of requirements to purchase
online including delivery in Thailand, the cost is low thus company is allowed to be
created to promote the company by certified delivery to customers within 24 hours.
From the foregoing, it can be said that the sale of via the Internet as one important
strategy for success in business today.

4.2 Collaboration in the implementation and planning of the

partnership.
Collaboration is the cooperating or trying to do the same thing to the person or
group for the purpose or aim to achieve the same communication and
synchronization operations in the same direction may not necessarily work in the
same place, but must to understand to do together (Rouse 2005).
4.2.1 Open Book strategies for investment in Thailand
Open Book costing is the competitive process, which is the cooperation
between supplier and customer to share about cost information (Lysons and
Gillingham 2003). In case of using this strategy, trust is the most importance which is
needed to be concerned. To apply Open Book strategies with Quiksilver, although
this strategy has some limitation, such as the exchange of information means that
business partners shall know the various aspects of the Company is necessary to
establish a long term business relationship but the company has no experience in
several aspects about investment in Thailand, especially the cost in many field of
processes such as production costs, process of transport and distribution consistent.
Thus, using this strategy will reduce costs in several stages, including the allocation
of resources for planning for effectiveness and efficiency operational.
4.2.2 Cooperation in business with the top of shopping mall in Thailand
Cooperation in business with the top of shopping mall in Thailand such as The
Mall group and Central group (Appendix 2) which have many brunch around
Thailand. From this partnership enables the company to sell the products through
branches in different areas of The Mall and Central Group so it can be widely
distributed to satisfy the needs of our customers instantly. This reason is help
Quiksilver to reduce risk in investment of open the shop by customer can buy the
consignment from the department store that is the authorize retail. In the same way,
it is a cost reduction for extending the size of business and including marketing
research in Thailand.

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5. Conclusion
QuikSilver company is a manufacturer and distributor of board and swimwear
including marine equipment for ages. 17-35 years, and the company has experience
in working in a foreign country for long and has branches in many countries and the
finances of the company, the company has a good performance continuously that
demonstrate the performance of business operation that can generate profits for the
company (Appendix 3).
Market opening in both hurdles and opportunity are many factors such as
political factors, economic, social, environmental and technological, so investors
need to have a deep understanding of these factors and especially the politics and
economy, these factors have a tremendous impact on investment and business
operations because of these uncertainties can be devastating to a business such as
the growth slow-down of economic, the business has been damaged by the political
protests, and the discontinuous of policy governance. These make high risk in
business operations of a new investor or entrepreneur who invested a long time.
However, the growth rate of GDP is still high up continuously so there is a
opportunity of running a business in Thailand because of the higher GDP reflects the
economy and demands of the consumer good.
From the foregoing, Quiksilver can be used of business operation strategy in
order to compete for market share and generate profits for the company as an
important strategy is to sell products via the Internet. Due to political instability make
investing a higher risk, thus selling products online is a channel with the least cost
and get worthwhile return such sales or marketing on the Social Network or the
delivery and build websites for direct sales. In addition, another strategy is to
collaborate between partners such as Open Book Costing strategy by applying this
strategy would able to know the costs in different parts of the partnership enables the
company to reduce costs in several ways including the allocation of resources to be
used in the company and one is to cooperate in the distribution of products of a
shopping mall, which is effective for large distributed to various areas.

Recommendation
Business operations in Thailand are different from conducting business in
foreign countries in many aspects of business, so that Quiksilver will have to study
these differences well. Including the need to prepare and plan for different scenarios
that could, for example, as will be discussed below.
-

Considering the climate in the distribution of products in Thailand. Thailand

has a warm climate almost all year round, with temperatures in the range. 2337 degrees Celsius, making it the dress or appliances to suit the temperature
of Thailand, so QuikSilver should focus on selecting products to be sold in
Thailand that is appropriate, such as clothing, jewelry or sports equipment.
Selecting product distribution area which is appropriate for the product target
because of Quiksilvers product target is focus on beach activity. According to

13

the geography of Thailand that consists of beach area in the East and the
South. Therefore companies should select a product distribution including
demand for products in each area.

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Appendix

Appendix 1: Cost of living index

15

Appendix 2: The shopping mall in Thailand

16

Appendix 2: The shopping mall in Thailand

Appendix 3: Results of Operations

17

Appendix 3: Results of Operations

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