Strategic capabilities and sources of competitive advantages

Value chain analysis (VCA) is a process where a firm identifies its primary and support activities
that add value to its final product and then analyze these activities to reduce costs or increase
differentiation. (Jurevicius, 2013).

Primary activities

In its inbound logistics stage, In the process of liberalizing the Thai government's liquor industry
in the late 1990s, the couple bid and were conceded to operate the distillery and winery under
the name of Sang Group. Som. After that, TCC continued to expand to other related businesses,
such as beer, wine, sugar, packaging and more, to become a network of distilleries, breweries
and other related liquor businesses (e.g. packaging, distribution). In addition to trading in
alcoholic beverages, TCC also diversifies consumer products, agriculture, real estate investment
and development, and financial services.

In its outbound logistics stage, ThaiBev has entered the organic energy segment in 2009, with
the development and introduction of a new brand, Power Plus. This drink has been launched for
three years: green apple cider, fruit explosion and orange fusion, and is mainly sold through 7-
Eleven stores at Bht10's low competitive retail price. Because of its popularity, Power Plus has
entered the market quickly and expanded into other convenience stores and supermarkets.
(FoodBizD Daily.com, 2009b)

In Marketing & Sale, to enhance the brand image of Power Plus, ThaiBev became a sponsor of
M-Sport aerobic competitions and a major sponsor for the 25th Olympic Games in Vientiane,
Laos, the most important sporting event. in Southeast Asia. ThaiBev hopes its ingenious
advertising blitz will help Power Plus capture a 10% market share in 2010 and in 2012, to make
Power Plus the number two sports drink in Southeast Asia.

In service, to further expand Chang's customer base, 100 million Bht has been allocated
through ThaiBev's subsidiary, Thai DrinkCo. expand home delivery service areas to cover all
districts and neighborhoods of Bangkok with the goal of distributing more than 20 million liters
of drinking water within two years of 2010 (ThaiBevNews, nd). will include multiple

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 comprehensive channels, including traditional and modern commerce with 70 trucks providing
delivery services to households and companies.

Support activities

In Firm Infrastructure, the company's distribution network consists of 753 active agents, more
than 1,000 salespeople and 4,000 vehicles, serving more than 400,000 points of sale
nationwide.

In Human Resource Management, To expand its core business and increase its revenue
contribution from non-alcoholic businesses, ThaiBev purchased 43.9% of Oishi Group Plc. (a
public list fi rm on SET) in September 2008 for US $ 93.8 million (Just-Drinks.com, 2008). After
the tender offer to shareholders was made on October 10 to November 18, 2008, ThaiBev
became the owner of 89.9% of the shares. Oishi Group manufactures and distributes semi-
finished foods, finished foods, bread, ramen and beverages and is Thailand's largest operator of
Japanese food and bread restaurants. In 2010, Oishi Group had two brands leading the market.
Group Oishi Group restaurants ensure about 40-50% of the Japanese Thai restaurant market,
which is considered the fastest growing food restaurant, and Oishi greentea occupies 63% of the
greentea RTD market. Despite having majority ownership, ThaiBev chose to manage the Oishi
Group as an autonomous unit instead of making any significant changes to the group's
activities.

In Technology Development, any contaminant is filtered through a natural process, then the
water is treated in a world-class factory that implements advanced purification processes,
including UV, ozone and dialysis. reverse osmosis. The production facility has been certified by
the US NSF agency. Moreover, Chang drinking water is available in different sizes and packages
to cater to the different needs of customers. In the first quarter ended on March 31, 2010,
Chang soda and Chang drinks produced volumes of 6.4 and 18.5 million liters, up 101.9 and
53.3%, respectively. years ago (ThaiBev, 2010).

In Procurement, Billionaire businessman Charoen Sirivadhanabhakdi and his wife Khunying

Wanna Sirivadhanabhakdi serve as suppliers for distilleries.

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 Another framework used to identify an organization’s resources and capability is VRIO
framework. Based on this framework, a company can diagnose what are its sustainable
competitive advantages based on the evaluation whether it is valuable, rare, inimitable and
supported by organization. The figure below illustrated ThaiBev's VRIO framework through the
company’s resources.

Resources V R I O Competitive implications

Product Yes Yes No Yes Temporary competitive advantage
Service Yes No No No Competitive Parity
Finance Yes Yes Yes Yes Sustained Competitive advantage
Human Yes Yes No Yes Temporary competitive advantage
Resources
Brand Yes Yes Yes Yes Sustained Competitive advantage
Awareness

Accordingly, it can be concluded that financial and brand awareness is a sustainable competitive
advantage of Thai Beverage. The financial status of Thai Beverage is significantly funded by
billionaire businessman Charoen Sirivadhanabhakdi. This is valuable for the company because it
has helped Thai Beverage to maintain its strong position in the alcoholic and non-alcoholic
beverage industry in Thailand, especially in the economic segment, and is among the largest
alcoholic beverage manufacturers in Southeast Asia, making it invulnerable and rare. In
addition, the awareness of the Thai Beverage brand also makes it an organization that has a
sustainable competitive advantage that cannot be copied. As part of its international expansion
plan, ThaiBev has built its global corporate image primarily through the use of global
sponsorship activities. In an initial effort to raise awareness for its products, ThaiBev positioned
itself as an international brand sponsor of the English Premier League Everton football club in
2004. Moreover, a number of community programs has been implemented in the UK, as well as
in Thailand. Therefore, high brand identity brings value to Thai Beverage by attracting more
customers to the company.

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