DETERMINING THE FUTURE EXPORT COMPETITIVENESS OF THAI FOOD INDUSTRIES

RESEARCHED, WRITTEN, AND PRESENTED BY: SARASIT BOOPPANON

A DISSERTATION PRESENTED TO RAMKHAMHAENG UNIVERSITY IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF DOCTOR OF PHILOSOPHY (BUSINESS ADMINISTRATION) 2010

Dissertation Title: Student: Date: Faculty Advisory Committee:

Determining the Future Export Competitiveness of Thai Food Industries Mr. Sarasit Booppanon ___________________

Chairperson ( Dr. Carlos Alsua ) Member ( Assoc. Prof. Dr. Piboon Puriveth ) Member ( Prof. Miguel Orta )

Ramkhamhaeng University approved this dissertation in partial fulfillment of the requirements for the degree of Doctor of Philosophy in Business Administration. Dean of Graduate School ( Assoc. Prof. Dr. Piboon Puriveth ) Director of the Institute ( Examination Committee Chairperson ( Dr. Carlos Alsua ) Member ( Assoc. Prof. Dr. Piboon Puriveth ) Member ( Prof. Miguel Orta ) )

ABSTRACT Dissertation Title: Determining the Future Export Competitiveness of Thai Food Industries Mr. Sarasit Booppanon Doctor of Philosophy Business Administration (English Program) 2010

Student: Degree Sought: Major: Academic Year: Advisory Committee: 1. Dr. Carlos Alsua, Chairperson 2. Assoc. Prof. Dr. Piboon Puriveth 3. Prof. Miguel Orta

Thailands highly active export-based economy has, over the long run, been growing rapidly to reach its current position, being one of the worlds leading exporters of food and food products. The research which makes up this dissertation comes from years of international academic theory and an indepth domestic study of current conditions in the food industries of Thailand. Seminal works from Barney, Aaby and Slater, Cavusgil and Zou, Kim and Mauborgne, Kotler, and more are referenced throughout the background research conducted in preparation for this study. In fact, the conclusions made from this study add to the existing theories and studies completed by these past and current authors. Resource-based theory is used as a basis for the reasoning in much of the qualitative elements of this dissertation. In
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application, this theory is used as a tool to assist Thai export companies in the food industry with identifying not only their resources, but also their capabilities. That is, many of the companies surveyed have valuable resources but have not, as of yet, been able to deploy them in the form of capabilities. The research tool used in this dissertation is a unique, highly-focused survey that was sent out to over 350 food export-based organizations based in the Kingdom. The valuable data points mined from the 350 unique responses have been statistically verified to ensure they could be used to base the thesis on. After verification, the author analyzed the data points in order to compare them with the original hypotheses presented. Several factors and variables are defined and used in the quantitative analysis. Particular statistics used for the data analysis include the confirmatory factor analysis (CFA) and the structural equation modeling (SEM). Factors influential to the generation of advantages in the competition of the food export industry in the future comprise the organizational effectiveness factor, the market mix factor, the resource readiness factor, and the business allies network connection factor. Pairing the results of the statistical analysis with the wealth of background research on resource-based theory and export competitiveness, certain implications are presented. In turn, the author makes suggestions for the application of this dissertation along with ideas for further research to be done in this field and related fields.

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ACKNOWLEDGEMENTS I would like to express my genuine appreciation to my advisors, Prof. Dr. Carlos Alsua and Assc. Prof. Dr. Piboon Puriveth for their time, full support, and personal mentorship and guidance throughout the dissertation process. Their professional judgment and advice have contributed to both the direction and depth of this research. I would like to especially thank Assoc. Prof. Dr. Piboon Puriveth for his counseling with my dissertation. I would like to also thank the faculty of the business program (English Program) at Ramkhamhaeng University for the kind assistance received. I am deeply indebted to my family who constantly encourages and supports me throughout these years of my study. I will always be grateful for the opportunity and assistance they have provided me with. They are the inspiration for my life and the primary reason for me to strive to do my best. Sarasit Booppanon

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TABLE OF CONTENTS Page (4) (7) (10) (13) 19 19 24 24 25 27 26 36 38 47 55 58 64 66 68

ABSTRACT ...................................................................................... ACKNOWLEDGEMENTS............................................................... LIST OF TABLES ............................................................................ LIST OF FIGURES........................................................................... Chapter 1 INTRODUCTION .................................................................. Introduction and Statement of the Problem ....................... Research Objective............................................................ Operational Definitions in this Study ................................ Scope of the Study............................................................. 2 LITERATURE REVIEW ....................................................... Part 1 Literature Supporting the Theory Framework ...... Part 2 Overview of World Trade and Market Characteristics Part 3 Theory and Concept of International Trade ......... Part 4 Concept of Marketing Strategy ............................ Part 5 Thailand and Thai Food ....................................... Part 6 Related Research.................................................. The Economic Environment Factor ................................... Five Forces Model Analyses ............................................. Thai Government Export Assistance Program ..................

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Chapter Export Strategy of Thailand .............................................. Research Model and Hypothesis ....................................... Research Questions and Research Hypothesis................... 3 RESEARCH METHODOLOGY............................................ Research Tools .................................................................. Data Collection.................................................................. Data Analysis .................................................................... Conclusion ........................................................................ 4 RESULTS AND DATA ANALYSIS ..................................... Results of the Analysis of General Data ............................ Determination of Convergent Validity .............................. Determination of Discriminant Validity ............................ Comparison of Model Statistic Validity with Empirical Data between the Hypothesized Model and the Modified Model ................................................................................ Conclusion ........................................................................ 5 CONCLUSION OF THE RESEARCH RESULTS, DISCUSSIONS, AND SUGGESTIONS ................................ The Population and Sampling Group ................................ Conclusion of the Research Results .................................. Discussion of the Research Results ................................... Anticipated Interests and Benefits Received .....................

Page 70 71 78 97 110 115 116 120 124 124 131 210

221 231 213 213 214 222 232

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Chapter

Page

Restraints and Suggestions Concerning the Issues of Research in the Future ....................................................... 234 APPENDICES A List of Experts Consulted for Examination of the Framework Development Instrument ................................................... 238 B Questionnaire .................................................................... 239 REFERENCES .................................................................................. 253

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LIST OF TABLES Tables 1 Composition of Gross Domestic Product at Current Market Prices, 1970-2005 ................................................................... 2 Value of Agricultural Exports by Product, 2004-2009............ 3 Export Markets for Agricultural Products of Thailand ........... 4 Export Competitiveness Measurements Used in Previous Research ................................................................................. 5 The Indicators of the Variable Factors in the Firm Competencies 6 The Indicators of the Variable Factors of the Marketing Mix . 7 The Indicators of the Variable Factors for the Readiness of Resources................................................................................ 8 The Indicators of the Variable Factors for Linking of Allied Business Network ................................................................... 9 The Indicators of the Variable Factors of the Exporting Business 10 The Indicators of the Variable Factors in Creating Competitive Advantage............................................................................... 11 Sample Descriptive Statistics.................................................. 12 The Level of Opinions of Respondents on Generation Competition Advantages ........................................................ 13 Normality Scattering............................................................... 14 The Result of the Confirmatory Factor Analysis of Organization Effectiveness Using the LISREL Program..............................
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Page 21 22 22 34 99 102 104 106 108 100 124 128 154 182

Tables Page 15 The Results of the Confirmatory Factor Analysis for the Marketing Mix Using the LISREL Program ............................................ 187 16 The Results of the Confirmatory Factor Analysis of Resources Readiness Using the LISREL Program ................................... 191 17 The Results of the Confirmatory Factor Analysis of Business Allied Network Connections Using the LISREL Program...... 196 18 The Results of the Confirmatory Factor Analysis for the Generation of Advantages in the Export Industry Using the LISREL Program .................................................................... 202 19 The Results of Convergent Validity Analysis ......................... 205 20 The Results of the Correlation Coefficient Analysis for the Examination of Discriminant Validity .................................... 211 21 Path Coefficients, Standard Errors, and T-Values of Parameter Estimations of the Hypothesized Structural Equation Model.. 212 22 Path Coefficients, Standard Errors, and T-Values of Parameter Estimations of the Hypothesized Structural Equation Model (Adjusted).................................................................... 214 23 Comparison of Model Statistical Consistency Values between Hypothesized Modes and Modified Models ........................... 221 24 Direct Influences, Indirect Influences and Total Influences of the Model ........................................................................... 223 25 Direct Influences, Indirect Influences and Total Influences of the Model (Modified) ......................................................... 224
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Tables 26 Conclusion of the Hypothesis Tests ........................................

Page 230

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LIST OF FIGURES Figures 1 Level of Factors Influencing Competitive Advantage ............ 2 A Strategic Model of Export Performance by Aaby and Slater (1989) ..................................................................................... 3 Conceptual Model of Export Performance By Cavasgil and Zol (1994) ............................................................................... 4 Strategic Export Performance Model by Naidu and Prasad (1991) ..................................................................................... 5 General Model for Assessing Export Performance ................. 6 A Conceptual Model by Cooper and Kleinschmidt (1985) ..... 7 Conceptual Framework........................................................... 8 Scattering of Attitudinal Data Variable of the Organization Effective (ATT) ...................................................................... 9 Scattering of Attitudinal Data Variable in the Operation Management (SAT) ................................................................ 10 Scattering of Organizational Determination Data Variable (DET) ..................................................................................... 11 Scattering of Technology and Research Data Variable (TEC) 12 Scattering of Product Data Variable (PRO) ............................ 13 Scattering of Product Pricing Data Variable (PRI) ................. 14 Scattering of Market Scattering Channel Data Variable (PLA) 15 Scattering of Market Promotion Data Variable (POM)...........
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Page 28 30 31 32 33 73 80 133 134 135 136 137 138 139 140

Figures Page 16 Scattering of Financial Readiness Data Variable (FIN) .......... 141 17 Scattering of Personnel Readiness Data Variable (PER) ........ 142 18 Scattering of Physical Readiness Data Variable (PHI) ........... 143 19 Scattering of Business Partners Relations Data Variable (REL) 144 20 Scattering of Governmental Support Data Variable (GOV).... 145 21 Scattering of Food Industrial Group Data Variable (FOO) ..... 146 22 Scattering of Supply Chain Network Data Variable (SUP)..... 147 23 Scattering of Product Differentiation Strategy Data Variable (DIF) 148 24 Scattering of Low Cost Strategy Data Variable (COS) ........... 149 25 Scattering of Trade Business Strategy Data Variable (BUS) .. 150 26 Scattering of Market Sharing Data Variable (MAR) .............. 151 27 Scattering of Export Value Data Variable (EXP).................... 152 28 Scattering of Low Cost Strategy Data Variable (SUC) ........... 153 29 Showing Correlation between Standardized Residual and Standardized Predicted Values ............................................... 156 30 The Correlation between the Standardized Residual and the Independent Variable of Attitudes in Running the Work Operation (ATT) ..................................................................... 157 31 The Correlation between the Standardized Residual and the Independent Variable of Satisfaction in the Work Operation Result (SAT)........................................................................... 158

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Figures 32 The Correlation between the Standardized Residual and the Independent Variable of Organizational Determination (DET) ..................................................................................... 33 The Correlation between the Standardized Residual and the Independent Variable of Technology and Research (TEC)..... 34 The Correlation between the Standardized Residual and the Independent Variable of Food Products (PRO) ...................... 35 The Correlation between the Standardized Residual and the Independent Variable of Products Price (PRI) ........................ 36 The Correlation between the Standardized Residual and the Independent Variable of Distribution Channel (PLA) ............ 37 The Correlation between the Standardized Residual and the Independent Variable of Market Promotion (POM) ............... 38 The Correlation between the Standardized Residual and the Independent Variable of Financial Readiness (FIN) ............... 39 The Correlation between the Standardized Residual and the Independent Variable of Readiness in Human Resource (PER) 40 The Correlation between the Standardized Residual and the Independent Variable of Physical Readiness (PHI) ................ 41 The Correlation between the Standardized Residual and the Independent Variable of Readiness in Relationships (REL) ... 42 The Correlation between the Standardized Residual and the Independent Variable of Governmental Readiness (GOV) .....
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Page

159 160 161 162 163 164 165 166 167 168 169

Figures 43 The Correlation between the Standardized Residual and the Independent Variable of Food Industrial Groups (FOO) ........ 44 The Correlation between the Standardized Residual and the Independent Variable of Supply Chain Networks (SUP) ........ 45 The Correlation between the Standardized Residual and the Independent Variable of Different Product Strategy (DIF) ..... 46 The Correlation between the Standardized Residual and the Independent Variable of Low Cost Strategy (COS) ................ 47 The Correlation between the Standardized Residual and the Independent Variable of Trade Business Strategy (BUS) ....... 48 The Correlation between the Standardized Residual and the Independent Variable of Market Sharing (MAR) ................... 49 The Correlation between the Standardized Residual and the Independent Variable of Export Value (EXP) ........................ 50 The Correlation between the Standardized Residual and the Independent Variable of Export Success (SUC) ..................... 51 The Result of Second Order CFA Analysis of the Firm Competencies Measurement Model (FIRM)........................... 52 The Result of Second Order CFA of Measurement Modeling for the Marketing Mix Factor Variable (MARK) ......................... 53 The Result of Second Order CFA of Measurement Modeling for the Resources Readiness Factors Variable (RESO) ................

Page 170 171 172 173 174 175 176 177 181 186 191

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Figures 54 The Result of Second Order CFA of Measurement Modeling for the Business Allies Network Connection Factor Variable (NETW).................................................................................. 55 The Result of the Confirmatory Factor Analysis CFA of the Variable Measurement Model on Organizational Export Strategy (STRA) ..................................................................... 56 The Result of the Confirmatory Factor Analysis CFA of the Variable Measurement Model on Competitiveness Advantage (COMP) ..................................................................................

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CHAPTER 1 INTRODUCTION

Introduction and Statement of the Problem

Thailand, with its high capacity for food production, is among one of the largest food suppliers in the world. Its production capabilities not only meet the domestic demands of the country, but have also allowed for a thriving and lucrative export sector. Thailands food production has become a strategic link in the countrys quest to maximize its position in the global marketplace. It was not long ago that the food exporting industry within Thailand lacked the global brand power of its other agro-competitors. However, at present, the situation has changed due to the industrys insistence on meeting and exceeding international standards and diversifying its product output to meet global demands. Extensive research has been completed in both the private and public sectors, leading to a more focused approach in how individual companies remain export competitive and how the government allocates its financial support for the countrys entire export industry.

Thailand in the International Economy

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As a major food producer and exporter, Thailand has the capability to become one of the prominent players in the food industry. It already holds top positions in the rice and rubber export markets. One of the issues that Thailand must deal with is the appreciation or depreciation of its currency, the Thai Baht. Over the past three years, the baht has slowly appreciated and depreciated when compared to the US dollar, typically trading around 32:1, but most recently appreciating to 30.1:1 internationally and 28.9:1 locally. Many observers see the appreciation of the baht as being bad for Thai exports since foreign companies can procure fewer goods for the same price when compared to past times. However, officials in Thailand have stated that the effect of the strong baht will not be fully felt until months in the future due to two main factors (Rungkasiri, 2010). Firstly, export orders and exchange rates are commonly agreed upon months in advance. Secondly, Thailand has been diversifying the destination for its exports. In the past, ASEAN, Japan, the US, and the EU were its main trading partners. Currently, China has been importing a large percentage of Thai goods, typically in the form of raw materials and semi-finished goods used in Chinese manufacturing (Rungkasiri, 2010).

Domestic and International Financial Crises 1997 Financial Crisis

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While Thailand is currently running a successful current account surplus, it experienced severe problems in the late 1990s, during and after the Asian Financial Crisis. The loss of international competitiveness of Thai products then was reflected in the negative growth of exports in 1996. Optimistic analysts disregarded the alarming indication of a serious fundamental economic problem seen from the effect of slow growth in world demand. Emergent problems of price deflation, mismanagement of loans, and an increasing number of non-performing loans lead to a domestic financial crisis in Thailand. Domestic problems added to international trade problems. Thailand was forced into currency turmoil, payment difficulties, and an external debt crisis.

Late 2000s
The declining global economic conditions were felt in the export economies of East Asia in 2009. Sharp declines in buying power from the affected countries caused a decrease in global demand that year, but the resilient Thai export market has rebounded strongly. Despite the upswing, the world has seen that a financial crisis in developing countries can have a profound effect on industrialized countries and further spread to other parts of the world causing a significant drop in global growth. Markets are highly integrated and interdependent globally. Declining world demand for consumer goods threatens export-model economies, which will likely lead to

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a global economic downturn without government intervention to prop up faltering financial systems.

Brief History of Thai Exports

Thailand has a long history of exporting agricultural products, especially from the 1940s to the 1970s; rice had been the dominant Thai export item. The 1970s saw Thailand experiencing an agricultural boom with double-digit growth in this export sector. Early in the 1980s though, prices and demand of agricultural commodities began to fall, which stifled Thailands export growth (FDIC, 1996). It became clear that in order to continue to be active in the international market place, a country must make necessary adjustments to satisfy the ever-changing demands of the world. As the structure of world trade shifted from raw agricultural products to manufactured products (Drucker, 1986), Thailand quickly made adjustments and followed suit. Thailands export structure shifted to processed foods, textiles and garments, electronics, jewelry, leather products, wood products, computer components, automobiles and automobile parts. Most of these products were resource intensive and labor intensive in nature. This allowed for a competitive advantage due to Thailands abundance of resources and low cost of labor. Unfortunately, this economic strategy is easily mimicked by other developing countries and can easily be challenged by a nation with lower production costs.

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Thailands Shift to Manufactured Goods

Thailands exports have shifted from an agricultural base to manufacturing. A study of Thailands exports shows that export growth rates of many products have tended to decline since 1996. Exports of technologyintensive products grew by 10.73 percent, while traditional agro-product exports grew by only 2.94 percent; industrial product exports rose by a mere 2.10 percent.
Table 1 Composition of Gross Domestic Product at Current Market Prices, 1970-2005 GDP (in millions Year Agriculture Manufacturing Other of baht) 1970 25.9 16.0 58.1 147,385 1975 26.9 18.7 54.4 303,319 1980 23.2 21.5 55.3 662,482 1985 15.8 21.9 62.3 1,056,496 1990 12.5 27.2 60.3 2,183,545 1995 10.9 28.2 60.9 4,202,835 2000 9.0 29.1 61.9 4,922,731 2005 10.2 30.3 59.5 6,924,273 Note. From National Economic and Social Development Board, Office of the Prime Minister

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Table 2 Value of Agricultural Exports by Product, 2004-2008

Items Value of total exports Value of agricultural products Top ten principal agricultural exports Rubber and rubber products 221,233 250,516 331,745 330,499 Rice and rice products 114,150 99,093 104,593 126,872 Fish and fish products 74,223 87,735 90,368 91,207 Shrimp and shrimp products 67,278 71,357 86,300 81,781 Wood and wood products 60,314 60,167 61,158 58,686 Fruit and fruit products 38,958 43,698 46,518 48,486 Sugar and sugar products 37,725 34,574 33,376 48,797 Prepared or preserved meat or blood of 20,820 27,339 28,707 31,989 the species Gallus domestic Cassava and cassava products 34,092 34,190 43,479 47,931 Paper and paper products 34,077 39,947 45,102 47,139 Other agricultural products 180,307 187,902 200,257 215,270 Note. From Center for Agricultural Information Office of Agricultural Economics, 2008.
Table 3 Export Markets for Agricultural Products of Thailand

Unit: Millions of Baht 2004 2005 2006 2007 2008 3,867,224 4,341,016 4,932,848 5,296,507 5,853,034 883,177 936,519 1,071,618 1,128,658 1,339,412

375,552 213,418 115,015 84,403 56,835 55,499 54,749 50,277 47,721 47,688 238,254

Market 1999 2000 2001 World 291,956.1 312,529.9 306,758.6 Asian 36,513.0 37,596.8 39,951.6 EU 37,727.0 43,599.6 37,055.4 Japan 64,035.6 69,294.0 75,229.1 USA 48,569.7 45,161.3 34,930.3 Note. From Information and Communication Technology Customs Departments, 2003.

Unit: Millions of Baht 2002 (Jan - April) 2003 (Jan - April) 93,110.8 115,979.0 12,546.3 15,642.0 11,502.5 15,372.9 24,596.5 24,530.7 9,919.9 13,422.4 Center with Cooperation from the

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Resource-based theory, which examines a set of key resources within a certain organization, has been used in this study to form the theoretical approach. Resource-based theory is an established theory since Edith Penrose (1959). Many other authors have contributed to the study of resource-based theory such as Wernerfelt (1984) and Barney (1991). In the 1990s, this theory continued to gain popularity, and it is now regularly accepted for use in export research. This study applies resource-based theory to the relationship between a firms capabilities and its export strategy. This study also attempts to understand the role that certain capabilities play in the overall proactive nature of Thai exporters. The result of this research will improve performance amongst Thai export firms. The international trade policy of the Thailand Development Research Institute Foundation (TDRI) shows that to improve its competitive international market share, it is necessary to improve both food products and market extension simultaneously. For example, companies must conduct market research on foreign customers regarding their unique needs in order to develop and improve Thai products. Moreover, it is necessary to have good service and export management systems.

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Research Objectives
The objectives of this study include the following: 1. To study factors having an impact on competitiveness of Thai food exports. 2. To verify the Linear Structural Relationship (LISREL) of factors influencing the competitiveness of Thai food exports. 3. To study direct paths, indirect paths and total paths of factors influencing the competitiveness of Thai food exporters. 4. To create a model of the influence of the competitiveness of Thai foods industries exports in accordance with the hypothesis, congruent with the empirical data collected.

Operational Definitions in this Study

Operational definitions in this study are defined as follows: Capabilities are tangible and intangible assets that are firm-specific and created over time through complex interactions among resources. International trade is the term used to describe the exchange of goods and services with foreign countries. Exports are goods and services produced in one country but bought sold and shipped to a different country.

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Competitive advantage is the product or market allocation decisions that generate economic rents (Makadok, 2001). Porter (1986) defines competitive advantage as a function of providing superior buyer value when compared to the competition. It can also be thought of as performing activities at a comparable cost as competitors but doing so in unique ways that create considerable buyer value and command premium prices. In short, firms with competitive advantage either can produce products at lower cost than their competitors can, or they can produce differentiated products to satisfy the requirements (known and unknown) of consumers. This idea touches on elements of demand management as well. Export success is defined in terms of export sales profitability, growth in export sales value, and proportion of export sales value to total sales value of the firm.

Scope of the Study

The scope of this study selects an industry with a real potential for success. The following four industries were chosen on the basis of local resources and are recognized by the Thai Department of Export Promotion (DEP) and the Ministry of Commerce as high potential export industries. The DEP has a program to encourage and support exporters from these industries to build international brand names and trademarks in order to enhance their labels abroad and be legally protected under intellectual property law.

CHAPTER 2 LITERATURE REVIEW

The purpose of this chapter is to conceptualize the constructs of this research. For this purpose, the relevant literature is reviewed and summarized. This chapter is divided into seven parts, focusing on the following five theories: mercantilism, the theory of absolute advantage, the theory of comparative advantage, resource-based theory, and international marketing capabilities. Much of the original breakthrough research done in the field of export competitiveness was completed in the 1990s, as internet and intranet capabilities became common. Electronic data interchange (EDI) helped bring about instant information access of exports and the entire supply chain.

Part 1: Literature to Support the Framework Definitions of Export Competitiveness

Export competitiveness can be broadly defined as a firms outcome achieved through international sales (Shoham, 1998). Outcomes encompass

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financial and strategic aspects of competitiveness and should also cover a time horizon sufficient to capture change (Shoham, 1998). Cavusgil and Zou (1994) defined export competitiveness as the extent to which a firms objectives, both economic and strategic with respect to exporting a product into a foreign market, are achieved through planning and execution of export marketing. Export competitiveness can also be conceptualized as a strategic response by management to the interplay of internal and external forces (Cavusgil & Zou, 1994). At the firm level, Slater (1996) proposes three elements to focus on in order to sustain competitive advantage, including customer value of the product, service, or a combination of the two. Superior value can be gained by providing the greatest benefits to customers through differentiation strategies. A sustainable superior value is created by the ability to prevent the competition from undermining the original firms competitive advantage. A firms specific capabilities to sustain competitive advantage are quality, speed, excellent service, cost control, innovation, and the learning culture of the firm. Bartlett and Ghoshal (1987) suggests that a firm can create its competitive advantage from its network coordination. The research team studied more than 250 managers at multinational corporations to determine their conclusions. Firms can also pool and share resources to reduce costs and focus on innovation (Porter, 1990; Kogut, 1991). Porter (1990) suggests two basic types of competitive advantage: lower cost and product differentiation (See Figure 1).

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Investment Level - National differences - Scale economy - Scope economy Competitive Advantage: Lower cost Differentiation

Firm Level - Quality - Service - Cost - Innovation - Learning

Figure 1 Level of Factors Influencing Competitive Advantage Note. From Slater (1996), Porter (1990), and Ghoshal (1992)

Differentiation advantage is the ability to produce unique products with superior value in terms of quality, special features, and better after-sales services. Lower cost advantage is defined as the ability of a firm to produce, design, and market the relative product more efficiently than its competitors. This includes conducting all activities within the firm at a low cost with highly productive labor and manufacturing (Porter 1990). The two types of competitive advantage then take on the additional dimension that is the competitive scope of the firm (Porter, 1990). The focus of a firm applies the firm's activities on a broad or narrow front, depending on the strategy taken. The scope of competitive advantage is the breadth of the firms targeted area,

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and the firm must choose the range of products that it plans to produce. A broadly fronted scope is reflected in the company's wide product lines. The narrow front is generally known as the niche strategy (Porter, 1990). Competitive advantage can be measured by innovation, productivity, learning, efficiency, risk management, and product quality (Porter, 1990; Ghoshal, 1992). This present study concentrates on both innovation and productivity to measure a firms competitive advantage because both innovation and productivity are able to cover other proposed measures well. Accordingly, innovation reflects the differentiation advantage, and productivity reflects the lower cost advantage (Porter, 1990). Both innovation and productivity can be measured objectively in the field of managerial accounting (Kaplan, 1990). However, most research in competitive advantage creates scales and questions to measure competitive advantage subjectively (Styles, et al, 2008). This study measures a firms competitive advantage by using export performance, a method accepted by managerial accounting researchers in measuring differentiation within a firm. Aaby and Slater (1989) reviewed and synthesized the export performance of a number of firms between 1987 and 1988. They identified a wide range of variables associated with a firm's success in exporting and defined two board categories of independent variables: Firm characteristics Strategy and firm competencies that increase the effectiveness of export strategy.

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The Aaby and Slater strategic export model proposed direct relationships between competencies, strategy, and performance; and an indirect relationship between firm characteristics and performance, with strategy as an intervening variable. The weakness is that it seemed to be limited to management influences only, which left out external environment influences, an element examined in this paper (See Figure 2).
External Environment

Competencies - Technology - Export / market knowledge - Planning - Export policy - Management control Strategy - Market selection - Use of intermediaries - Product mix - Product development

Firm Characteristics - Firm size - Management commitment - Management perception towards: - Financial incentives - Market potential - Risk Figure 2

Performance - Propensity to export - Export sales - Exporters vs. non-exporters - Level of exporter - Perceptions towards export

A Strategic Model of Export Performance by Aaby and Slater (1989)

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Cavusgil and Zou (1994) made an important research contribution in order to overcome the weakness in previous reviews and focused on export performance by including both internal and external determinants of export performance. They suggested that export performance could be conceptualized as a strategic response by management to the interplay of internal and external forces. Internal forces relate to organizational characteristics such as firm and product, and external forces include industry and export market characteristics (see Figure 3). This strategic management model also considers strategy and resources as factors, which are firm-specific influences on performance.
Internal Forces (Organizational Characteristics) - Firm characteristics - Product characteristics External Forces - Industry characteristics - Export market characteristics

Export Performance

Figure 3

Conceptual Model of Export Performance by Cavusgil and Zol (1994)

Naidu and Prasad (1994) presented a conceptual framework for export development strategy and performance. The paper notes that a firms

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resources and competencies exert a major influence on that firms export development strategy, which in turn, interacts with the international marketing environment leading to performance (See Figure 4).
Performance International Marketing

Strategy

Competitive

Capabilities

Resources Figure 4

Competencies

Strategic Export Performance Model by Naidu and Prasad (1994)

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Environment

External Influences Export Performance Competencies - Technology - Export / market knowledge - Quality Marketing Orientation Planning for CS Management control Communication Management opinions of risk and profit Firm Characteristics - Firm size Management perception toward: Competition Delivery and service Distribution Internal Influences Figure 5 General Model for Assessing Export Porformance Note. From the Aaby and Slater General Model for Assessing Export Performance, 1989 p. 9

Strategy

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From the five theoretical models mentioned earlier, it appears to be that Slater (1996), Porter (1990), and Ghoshal (1992), and Cavusgil and Zou (1994) treat both internal and external forces as the major driving forces of export performance. On the other hand, neither Aaby and Slater (1989) nor Naidu and Prasad (1994) include external forces as a major driving force of export performance. They have only considered a firms characteristics, competencies and managerial characteristics in their analytical studies.
Table 4 Export Competitiveness Measurements Used in Previous Research Export Competitiveness Export Performance - Export marketing strategy - Managers attitudes and perceptions - Managers characteristics - Firm characteristics and competencies - Industry and foreign and domestic market Characteristics Export Sales Level Internal (controllable) - Export market strategy - Management attitudes and perception (uncontrollable) - Management characteristics - Firm characteristics and competencies Illustrative Studies

Aaby and Slater, 1989, Da Rocha and Christensen, 1994

Cavusgil (1984) Cavusgil and Zou (1994), Chetty and Hamilton (1993)

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Table 4 (Continued) External (uncontrollable) - Industry Characteristics - Foreign market characteristics - Domestic market Characteristics Product Attributes - Differentiation Strategy - Export performance Product Adaptation and Product Strength Product Quality Firm Size Differentiation Strategy Promotion Price Adaptation Market Orientation Management International Experience

Porter (1990), Ghosal (1992)

King (2007), Fazeli (2000) Cavusgil and Zou (1994), Fazeli (2000), Christensen et al. (1987) Green (2005), Porter (1990) Chetty and Hamilton (1993), Shoham (1998) Aaby and Slater (1989), Porter (1990) Aaby and Slater (1989), Cavusgil and Zou (1994) Chetty and Hamilton (1993) Styles, et al. (2008), Van Gils (2000) Aaby and Slater (1989), Christensen et al. (1987)

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Part 2: Overview of World Trade and Market Characteristics Important Role of Exports
Exports remain an essential component of the Thai economy, as the production capabilities of the country are greater than domestic demand for the goods and services produced here. One of the widely-accepted indicators to compare export levels among countries is the amount of exports as a percentage of gross domestic product (GDP) (Exports, 2010). According to the World Bank, Thailand is an export driven economy, with exports amounting to over 70% of the countrys GDP. The most recent data is as follows: Year Exports as a % of GDP 2005 74 2006 74 2007 73 2008 77

Note: Data from: Exports of Goods and Services (%GDP). The World Bank, 2010.

The export sector is the key factor driving Thailands economic growth. Exports have helped accomplish the following: 1. Driven organizations to expand investment and create demand for labor. When exports grow, companies expand production and increase capital investments, especially in consumer goods industries. It is therefore

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one of the factors causing an increased demand for labor. In turn, unemployment drops when exports increase; this is another major benefit of running a current account surplus. 2. Helped in the importation of foreign currency. Foreign currencies contribute to the amount of stable reserves in a countrys treasury. This will help stabilize the Thai Baht, because with an increase in foreign currency reserves, Thai public and private entities can repay debts with a choice of whichever currency is the most advantageous to use at the time. Thai export companies can also remain stable with goods and services exported with foreign currency as payment. American Dollars, Japanese Yen. British Pounds Sterling, and EU Euros are the most widely-accepted currencies in world markets; however the International Monetary Fund (IMF) and certain countries such as China and Russia would like to see an increase in the use of the IMFs SDR as a world currency (Exports, 2010). This may prove to be important to Thailand, as China becomes the largest importer of Thai goods. 3. Created added value. This allows products to have higher value. Dating back to hundreds of years ago, countries would try to limit the importation of finished goods, and would only import raw materials, when able, to use in their own domestic manufacturing and value-added processes (Drucker, 1986). 4. Reduced manufacturing costs. When the original manufacturer of the product acts within the domestic market alone, volume is not very high. When goods are exported to foreign countries, volume will increase. This

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reduces the cost per unit for the manufacturer, thus increasing profits. A benefit for Thailand is that its labor and capital supplies can produce far more than domestic demand would allow, thus creating the substantial export sector currently present in the country. 5. Helped advance the spread of technology. Expanded export production helps improve the level of technology in production. World markets are intense competitive environments. The use of technology in production increases competitiveness which helps enhance the technology of another country as well.

Part 3: Theory and Concept of International Trade Mercantilism

This theory of trade began back in Europe during the seventeenth and eighteenth centuries when modern states were beginning to develop (Rugman, 2002). Mercantilism was popular in the eighteenth century when gold specie was the de-facto world currency (Rugman, 2002). The theory assumed that the power and strength of a nation would rise as the nations wealth increased. Exports increased gold stock while imports reduced gold stock. The rationale was to increase the economic power of the country by promoting exports and discouraging imports. The protectionism mechanisms were intended to protect the countrys interest first and foremost. Secondly, if an external force were to attack the country, gold could be used to hire soldiers to fend off the attackers

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or sue for peace. Without an adequate supply of gold, a country could not pay its soldiers (or mercenaries) and defend its national interests. In addition, exports increase domestic production and reduce the unemployment rate. Mercantilism was based on two wrong assumptions. Firstly is that gold has value in itself. Gold, as a medium of exchange, has value only when it is used or traded for other products or services. Secondly, the theory failed to recognize the benefits gained from the comparative advantage of using the nations resources in the most efficient way possible. Another question arises from the imbalance of supply and demand. If all nations promote exports and impede imports the supply of products offered would be greater than the demand. The market is out of equilibrium and trade on excessive supply will no longer be beneficial to the supplier. The notable mercantilism writers of the time were themselves statesmen and merchants. Their thoughts were never collected into one solid philosophy until much later, but the tenets of this thought process was dominant during that time period.

International Trade
An analysis of the potential in the successful exportation of Thai products among international competition is important. International trade theories explain trade between countries. The behavior of exported or imported products should be based on cost comparisons as measured by the amount of products that can be produced by sacrificing another product that

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we want (Drucker, 1986). The concept was developed by David Ricardo and called comparative advantage theory (Theory of Comparative Advantage).

Useful Indices
Over time, this theory has developed into a set of quantitative metrics used to analyze the comparative advantages of products in a variety of indices including the comparative advantage index display (Revealed Comparative Advantage Model: RCA) model, market share constant (Constant Market Share Model: CMS), the actual rate of protection (Effective Tate of Protection: ERP) and domestic resource cost (Domestic Resource Cost: DRC), which analyze the potential exportation of Thai products against the potential of competing countries. This study applies the analytical index of comparative advantage (Revealed Comparative Advantage Model: RCA) by determining the rate of exports of countries studied compared with the rate of world exports (Dominguez, 1993). In addition, indices are used which are based on changes in market share in the relevant period. The ratio of the index reflects the comparative advantage or disadvantages of exporting countries by a given portion of export products. In addition, the ratio also demonstrates the ability to produce specialized products according to the interests of the country studied. Comparative advantage also appears in products in the interest of the study when compared with other countries and their respected policies.

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The policy on Trade and International Trade

Thoughts regarding trade policy and international trade have continued to evolve from the pre-Christian era. The evolution of ideas and trade policies are divided into the following five phases (Acedo, 2006). Phase one Ancient: Consistent trade was essential and beneficial to countries. Causes of trade ranged from differences in available resources to the exploitation of a conquered area. Phase two Medieval: Commercial profit was regarded as a sin. Trade was usually in the form of finished products and raw materials. Phase three Popular Commercial Trading Policy: Trade was focused on winning an advantage in international trade over partner countries. Trade surpluses were desired. 1. Gold and silver was seen as a form of wealth accumulation and perceived as the best way to ensure political power and national identity. 2. Countries used nationalistic policies in the pursuit of wealth accumulation. 3. Raw materials were imported without duty to facilitate domestic manufacturers while taxation of finished goods was made to protect domestic manufacturers. 4. Trade with colonies was exclusively trade between parent and colonial cities. Products were exported from the colonies to the mother city (tax applied) before being forwarded to other cities. Additionally, shipping was monopolized by the major power.

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Resource-Based Theory
There are certain factors that led to the creation of resource-based theory. The starting point for the formulation of strategy must be some statement of the firms identity and purpose. Identifying customers and the best ways in which to serve them are essential elements of every business, especially those in the export business. However, when the external environment is in a constant state of flux, the firms own resources may be a much more stable basis on which to define an identity. Hence, the definition of a business, in terms of what it is capable of doing, may offer a more durable basis for strategy than a definition based upon the needs that the business seeks to satisfy. However, customer needs cannot be ignored totally because they are also very important to the sustainability of the company. In resource-based theory, a firm is viewed as a collection of productive resources (Penrose, 1959; Wernerfelt, 1984). These resources are worth more to the firm than their individual market values because of the specialized links between them within the firm (Penrose, 1959; Barney, 1991). Resource-based theory suggests that differences in firms' strategic resources are causally related to differences in product or service attributes, and thus, to competitive advantages and differences in performance (Alvarez, 2007). Strategic resources are those firm-specific resources that we view as valuable, scarce, and imperfectly imitable, and that provide a disproportionate contribution to perceived customer value (Barney, 1991). Firms are viewed as

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bundles of resources (Wernerfeldt, 1984), which include all inputs that allow a firm to operate and implement its strategies (Baron, 2007). Firms' resources can be tangible or intangible, and may be developed within the firm or acquired in the market (Barney, 2001). The literature presents various classifications of resources, which can be summarized as input factors, assets, and capabilities or competencies (Barney, 1991; Barney, 2001; Drucker, 1986; Makadok, 2001). Input factors are generic resources that can be acquired in the market. Supply chain enabled factors include management-specific components (e.g., computer skills, order processing skills, unloading skills). Input factors are transformed to become part of the firms assets or capabilities and competencies. Assets are stocks of available factors that are owned or controlled by the firm (Barney, 2001). The resource-based view of the firm provides a foundation for understanding the dynamics of firm performance. When the external environment is highly uncertain or volatile, the resources and capabilities of the firm provide a more durable basis for strategy that a definition based upon the needs which the business seeks to satisfy (Bell, et al, 2000). If a firm does not posses capabilities it needs to be successful, it can cooperate with other firms to obtain the needed capabilities, attempt to develop capabilities, or acquire a firm with needed capabilities (Barney, 2001). The critical resources of the firm do not necessarily have to reside solely within the firm. These resources span firm boundaries (Rugman, 2002). Since uncertainty in the business environment is an undeniable fact, an integrated

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export model from receipt to configuration to delivery becomes a primary driver to achieve improved levels of organizational performance. According to Daft (2009), the resource-based view of the firm explains how a companys resources drive its performance in a dynamically competitive environment. The resource-based view combines the internal analysis of phenomena within companies with the external analysis of the industry and the competitive environment. Furthermore, the resource-based view sees companies as very different collections of physical and intangible assets and capabilities. The resource-based view of the firm further builds on Penroses (1959) ideas on the theory of the firm and provides a high-level view of the organization as a set of resources and capabilities. Dunning (2008) defined a firms capabilities as what the firm can do as a result of teams of resources working together. Barney (1991) further specified that capabilities are the internal attributes of the firm which include all of the financial, physical, human, and organizational assets used by a firm to develop, manufacture, and deliver products or services to its customers. Firms must choose whether to develop or acquire capabilities, strategy, and profitability of the firm (Enders, 2004). The central key to a resource-based theory is the comprehension of the relationships between resources, capabilities, competitive advantages, and profitability. In particular it is important to have an understanding of the mechanisms through which competitive advantage can be sustained over time. This requires the design of strategies which exploit each of the firms unique

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characteristics to achieve maximum results. Resources of the firm are the foundation for its long-term strategy because internal resources provide the basic direction for the firms strategy while also being the primary sources of profit. Thus, each company can be considered unique at a certain time and configuration.

Marketing Strategy Concept

A firm can also be proactive in identifying customer needs and developing products that satisfy those needs. Such strategy requires that the organization devote energy to understanding input from the customer. This can include market research, the process of talking to users, and personnel rotation in order to try different unique staff configurations. Proctor and Gamble, General Mills, McDonalds and most consumer product companies use this customer-based philosophy.

Export Markets
Overall, the total value of exports of food and food parts has recovered since it dropped following the 1997 economic crisis. Food exports for 2009 were projected at 722 billion baht, which represented an 8.4 percent decline from a year earlier. Thailands food exports had previously been projected to increase significantly that year thanks to improvements in product quality, as

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well as improving economies in its main export markets, as predicted by the government-backed National Food Institute (NFI). In addition, Thai export companies should take note of the most recent statistics from the NFI that show 2010 as being a good year for exports. Food exports are predicted to expand by 10% annually through 2014, capping a top value of 1.1 trillion baht by that year. 2009 boasted food exports of 750 billion baht. The top export markets for Thai food are Japan and the United States, with each country taking approximately 17% of the total (Exports, 2010). Another area of special focus is the Halal market, food produced under specific guidelines abiding by Muslim food standards. There is a sizable Muslim population in Thailand, especially in the southern-most provinces. This area of the country could become more stable if Halal food manufacturing is encouraged here (Exports, 2010).

Part 4 Concept of Marketing Strategy Four Ps Literature Review

Philip Kotler stated that marketing managers have to specify a mix of marketing variables that will best serve each target market. The variables the marketing manager controls are known as the elements of the marketing mix. These elements are more commonly referred to as the Four Ps which are product, price, place and promotion (Kotler, 1997). Each of these elements

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consists of variables and policy decisions that must be made on a case-by-case basis.

Product Policy
Product policy management is concerned with all the elements that comprise the goods, services or ideas that are offered by the marketing team. Included are all possible tangible matters such as brand recognition and warranties. Many goods are offered with an accompanying service, which is often an order winner for the salespeople in the field (Kotler, 1997).

Price Policy
Pricing policy determines the cost of products to the customers. Typically this is a point somewhere between the floor created by the costs to the firm and the ceiling created by the size of the quantity demanded. According to economic theory, price is the only major element that can affect quantity demanded, while several other factors such as consumer confidence and brand strength can affect demand (Esteve-Perez, 2006). An important consideration of pricing policy is pricing within the channel of distribution; a margin made by the middlemen who assists in the marketing effort must often be taken into account. Discounts to middlemen generally include functional, quantity, seasonal and cash discounts, as well as promotional allowances. An

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important point to remember is that price is the only revenue-generating element of the marketing mix (Kotler, 1997).

Placement Policy
Distribution policy covers the place variable of the marketing mix and has two components - channel management and logistics management. Channel management is concerned with the entire process of setting up and operating the contractual organization, consisting of various types of middlemen such as wholesalers, agents, retailers and facilitators. Having a strong professional network can often lead to better channel management. Logistics management is focused on providing product availability at appropriate times and places in the marketing channel. Following modern business concepts such as lean manufacturing, just-in-time management, and supply chain management, one can see how this element of the marketing mix is deeply rooted in demand management. Placement is often considered the element of the marketing mix which has the longest lead time, because changes made within the distribution or supply chains take time to implement. Communication policy uses promotion tools to interact with customers, middlemen and the public at large. The communications element consists of these following tools: advertising, sales promotion, personal selling and publicity. Since the purpose of product communication is to persuade the public, this is the most visible and sensitive of the marketing mix elements (Fazeli, 2000).

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Blending the various elements into a coherent program requires tradeoffs based on the type of product or service being offered. It will change if the product is detergent versus a fighter jet. The stage of the products life cycle (a new product versus one that is being revived) and the resources available for the marketing effort (money and personnel), are important for a successful marketing campaign (Green, 2005).

Product Differentiation
Some of the most important characteristics of products are the elements that distinguish them from one another. In order to make customers perceive products from one firm are different from products from competing firms, the products must be produced with a different creation and design product process from the competition. There are three aspects of product differentiation that a company must consider when creating and offering products for sale. They are product innovation, unique features and value added product (Hofmann, 2006). In the Thai food industry specifically there are many ways to differentiate the product itself with some attributes such as the taste, the packaging, or the ingredients targeted to certain markets (Van Gils, 2000).

Product Quality

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This is the most important competency as assessed by exporters. The quality might include the durability, design, reliability and product attributes (King, 2007). The export companies must keep this in mind as their priorities. The quality of the Thai food business can be generally classified into the quality of its production and the quality of its finished products. (Dunning, 2008). The production quality normally controlled by government in export countries is classified as ISO 9002, HALAL, HACCP, GMP. These classifications focus on production process and hygienic standards. In addition, some import countries request such certificates before passing through custom clearance. Adding Value with Thai Brands Design is one factor that can differentiate a product from others and attract interest, along with its functions and characteristics. If Thai products are to compete on a global level, design capabilities must improve to create a distinctive brand that stands out from others. The strategy for accomplishing this includes organizing design competitions for products and packaging to stimulate new ideas and hone professional skills to an international level, organizing domestic and foreign exhibitions to display the works of designers, and providing opportunities for designers and business people to work together (Hunt, 2010). Creating good brand names certainly enhances the image of Thai goods and services in the minds of consumers by creating recognition and engendering confidence, as well as popularity and acceptance. Thailands

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brand aims to cultivate an understanding among consumers around the world that Thailand offers a great diversity of high-quality goods and services. These companies can include the brand logo on their packaging, an inducement to maintain the quality standards that have earned them a good reputation. One area which Thai products may want to improve on is packaging. There are foreign companies whose sole focus is innovative packaging that gives products a certain high quality feel. Companies like MeadWestvaco, International Paper, and Avery Dennison have empowered countless companies to be able to demand higher prices as their products are perceived to be of higher quality (Feeney and York, 2010).

Price Adaptation
Chetty and Hamilton (1993) concluded that the importance of export pricing had little effect to export performance. They suggested that more research needs to be done on the effect of price-related factors. Generally, price adaptation seems to positively influence export sales, export growth and export profits (Chetty and Hamilton, 1993) but is insignificant in others (Besanko, 2008). However, there is still very little literature that indicates the relationship and the effects of price adaptation on export performance.

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Place or Channel Adaptation

Place and channel adaptation are both elements of the marketing mix and are important determinants of export sales, profits and growth. This could probably be explained by the fact that an adapted product and channel can satisfy foreign consumer needs and preferences. (Dunning, 2008) The appropriate selected channel allows a firm to transfer more easily into a foreign market. In Middle Eastern countries, where the demand for Thai food is increasing sharply, there is an opportunity for Thai exports to approach the selling agencies through world trade exhibitions and large food fairs around the world. The Thai government supports half of the expenses including the shipping cost of the product display (Exports, 2010).

Export Promotion Strategies.

1. Trade negotiations to open markets and eliminate trade barriers at regional and multilateral levels, particularly in major markets, such as the US and the EU. The last round of US-Thai free trade talks were held almost five years ago, and talks have yet to be renewed (Exports, 2010) 2. Maintain and grow shares in major export markets with promotional activities. Some 400 activities are planned, including organizing international trade fairs in Thailand, participating in overseas trade fairs, organizing trade delegations, and doing joint promotions with overseas

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department stores. In addition, the Thai government will continue programs to induce Thai producers and service providers to create higher value, to increase the efficiency and effectiveness in both the public and private sectors for greater competitiveness, and to continue to develop information systems. 3. Push exports to markets with promising potential with consumer sales promotions, particularly to markets in which Thai goods are popular and considered better value than those from competitors, such as in ASEAN, China, India, the Middle East, and Africa (Ghana, South Africa, Senegal and Nigeria). 4. Increase international trade though promotion of the Thai service trade industry. This includes existing services such as Thai restaurants, entertainment, education, spas and hospital services as well as new services such as franchises, design and construction, auto repair, and custom fashion tailoring on the Internet. 5. Reduction in trade logistics costs through development of elogistics systems to offer electronic certification services domestically and internationally. There is also promotion and development of trade logistics providers (TLP) within the country to offer more efficient and streamlined logistics services to Thai manufacturers and exporters. 6. Design and quality development is undertaken to create value of Thai products and services. Particular focus is placed on product and packaging design development, consultation, development of Thai designers, utilization of foreign experts to give advice and consultation as well as the promotion of Thailands Brand (Department of Export Promotion, 2009).

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International Marketing Capabilities

From the viewpoint of an individual firm, marketing is the segment of business concerned with the planning, promoting, distributing, pricing, and servicing of goods and services desired by intermediate and ultimate consumers (Hunt, 2010). Marketing includes such business activities as (Hunt, 2010): 1. Analysis of current markets and potential markets. 2. Planning and developing of products that consumers want, clearly identified in a suitable package. 3. Distribution of products through channels that provide services or conveniences demanded by purchasers. 4. Promotion of products including advertising to inform and educate consumers about products or services, or to persuade consumers to try new, improved products and different ways of satisfying their wants and needs. 5. The setting of a price which reflects both a reasonable value (and utility) of product to consumers, as well as a satisfactory profit or return on investment for the manufacturer. 6. The technical and non-technical services given to consumers both before and after a sale is made to ensure satisfaction and possibly pave the

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way for future sales necessary for company survival, growth, and perpetuation. The definition of international marketing is different from the general definition of marketing only that goods and services are marketed across political boundaries (Hunt, 2010). This difference changes in important ways the nature of marketing management, the solution of marketing problems, the formulation of marketing policies, and the implementation of such policies.

Part 5: Thailand and Thai Food

Thailand is one of the worlds major producers and exporters of foods and is also a leader in the diverse product offering of foods, mainly due to an abundance of agricultural products, such as vegetables, fruits, seafood, livestock, and field crops. Moreover, Thai cuisine is well known and appreciated for its taste, and Thailand is recognized for meeting the highest international quality standards. Exports of Thai food products have increased every year with more than 10,000 factories processing foodstuffs and more than 2,000 exporters, using 85 percent local inputs and generating nearly US$1 billion in annual foreign exchange earnings that benefit Thailands economy substantially. Important food exports are seafood (chilled, frozen prepared and canned), canned pineapple, and chicken (chilled, frozen, and prepared). Thailand is also the leading exporter of rice and rubber (Exports, 2010). Other food exports included rice products, wheat products and other ready-to-

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eat products, spices, soups and prepared foods, and animal and vegetable oils (Exports, 2010). The major export markets for food exportation were Japan, the United States, the European Union, and ASEAN. New markets that have shown significant growth include Burma, the Philippines, Taiwan, Cambodia, France, Egypt, Laos, Russia, and Turkey. China is also importing a lot of Thai food and other Thai products in general (Exports, 2010). Thailands exports of ready-to-eat and ready-to-cook foods, organic agricultural products, and other health foods are expected to continue to experience substantial growth, as will exports of Halal foods. These trends reflect a consumer preference in major markets, particularly in Japan and the EU for convenience and saving time as well as health consciousness and a concern for safety, particularly amongst senior citizens. In response, the Thai government and private sectors have established and are meeting the highest food safety standards with traceability. A new wave gaining momentum and popularity in the industry is fusion food that combines different cuisines with no particular national identity. Another area that helps boost exports in using attractive, environmentally friendly packaging that appeals to consumers. Another growth area for food exports is Thai fruit products that generate substantial income for Thai farmers. The US is a major new market that is opening up with an agreement that permits the import of six certain fruits. They are as follows: mango, pineapple, rambutan, lychee, jackfruit, and longan.

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Thai Food
Thai food is one of the aspects of Thai culture that is uniquely Thai. It is recognized around the world. The art of Thai cooking is both a science and an art. The science is exhibited when the food is cooked to maintain the quality whereas the art is made meticulously to create a harmony of flavor, aroma, and color.

Definitions and Identity of Thai Food

Food is not only a means to which people gain energy and maintain function. Thai food is considered the combination of a rich collective cultural history transmitted through generations. The characteristics of Thai food exhibit salty, sweet, sour and spicy balance with each spoonful. Using fresh ingredients allows for the cuisine to be adopted by health conscious consumers.

Classification of Thai Food

The aroma of Thai food is generally divided into the following categories or may be divided according to the cooking method that is employed:

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1. Curries can be sub-classified based on the number of spices found in the mixture. Curry is a primary or basic component of many Thai soups such as Muslim curry. Curries are found in an array of colors such as yellow, orange, red, and green, which add to the aesthetic appeal of the dishes. 2. Other foods can be identified through the ways in which they are prepared. Examples of cooking techniques employed include: boiled, raw, grilled, and mixed.

Part 6: Related Research

This section will present many documents and related information about competitiveness, resource-based theory, international trade theory, and marketing strategy definitions from previous studies. Analysis on the structure of wood production by Somporn and the Most Noble Order of Jin Bora (1991) found that the transition from the existing production to fruit bearing trees has allowed for an increase in trade. A study on the export of fruit Isvilanonda (1992) reported the export of fruit processing it in 1990 was valued at approximately 11.1 billion Baht, with pineapple processing being the most important export. In addition, the reports of the Division services exports and Department of Export Promotion in 2001 found that Thailands exports both fresh and processed fruit and vegetables were valued at 36.4 billion Baht, representing 12.85 percent of total food exports. The national planning strategy has set measures to develop five

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particular types of fruit including durian, mangosteen, rambutan, lychee and longan (Bureau of Export Services, 2003) to create a sustainable market. The study conducted by Somporn and Board (2002) on the sources of market fruit production in the North, included lychees, longan, strawberries and oranges. They found that the areas planted with longan were likely to increase by 15 percent per year with yields totaling some 212, 203 tons and exports valued at 2, 097.50 million Baht. In addition, this research also sought to find the link between market prices of longan sold in Chiang Mai and Bangkok. The price is affected by changes in the supply of production resources. This affects prices in the wholesale markets before making an impact on global markets. Fazeli (2000) pointed out that a national goal should be to produce a higher level of living standard for its citizens and the ability to raise living standard depends on productivity. However, Makadok (2001) revealed that a nations competitiveness should combine the rising and sustainable living standards and the ability to export to the world market. The resource-based view did not represent a pendulum swing to an opposing view, but rather explicitly called for dual focus on industry analysis and firm capability (Mahoney, 2001). The line separating strategic approaches is blurred, and static versus dynamic is not a clear-cut distinction. For instance, the capability of analyzing industry forces and generating new insights provides one of the ways a firm can achieve competitive advantage (Mahoney, 2001). Diagnosis can be an organizational capability, and thus

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process (learning to analyze) and framework (Porters five forces) coexist in the resource-based view. Porter (1990) proposed that productivity be considered as a measurement of national competitiveness. He introduced the Diamond theory to determine the competitive strengths and weaknesses of countries, which include the following four dimensions: resources conditions (for example, human resources, and research and information infrastructures), a business environment that invests in innovation, a demanding local market, and supporting industries. The resource-based model of business strategy focuses on how sustained competitive advantage is generated by the unique bundle of resources that are at the core of the firm (Barney, 1991; Wernerfelt, 1984; Makadok, 2001). Resource-based strategy relates sustainable competitive advantage to complex organizational systems, described as rent-producing resources or core competencies, developed over time within specific firms. These competencies, of firm-specific resources (FSRs), are unique that heterogeneous firms result from a unique mixture of physical, human and intangible resources (Barney, 2001). The resource-based model fits transaction cost economics, which are the basis for the internalization models of the multinational firm. Both theories are concerned with asset (resource) specificity. However, the resource-based model focuses on both protecting unique resources and applying these (FSRs) to gain strategic advantage while transaction cost economics concentrates strictly on the avoidance of opportunism and efficient

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asset governance. In addition, the transaction cost model assumes the same economic activities can be performed (at different costs) via markets or hierarchies while resource-based strategy treats the organization as a unique bundle of assets that will not function in the same way in an alternative relationship (Nothnagel, 2007). It the resource-based theory is, as Conner argues, a more general theory than the oligopoly and transaction cost concepts currently applied to studies of the multinational, then a model of multinational competitive advantage based on resource-based theory should be considered complementary to and more general than the current models of the multinational firm. The textile and clothing industries focused on labor costs due to the intensive nature of the work. This is a very important factor, and it is known that in many developed countries high wages create a disadvantage for firms, who must look elsewhere to acquire labor (Makadok, 2001). In Thailand, there is export competition amongst fresh, chilled, and frozen shrimp varieties. An objective of Thailand was to learn about the general conditions and productivity of this industry. Study have been created that look into the comparative advantages of countries listed and their ability to compete in a global market: Thailand, India, Indonesia, Vietnam, Ecuador, Mexico and China. From these studies, the following observations were made: 1. Producers sell their produce and create special focus groups of consumers to realize their demands.

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2. Producers sell the difference by positioning their price to reach maximum output with the minimal inputs. 3. Producers seek out methods to ensure cost reduction in order to keep prices low for customers. The World Bank studied the comparative advantage of exporting and marketing rice in and from Thailand (Exports, 2010). The comparative analyses of the advantages are listed (RCA). Thailand, the United States, India, Vietnam, China and Pakistan, were chosen for the study. The case study showed that the United States, Vietnam, Thailand, China and Pakistan had the potential advantage. The findings of the model market share were constant and so was the expansion of the Thai export items. The changes increased the external factors, which correlated into a growth of total exports around world. Distribution markets have grown, as Thai exports of rice are higher than average in regards to other exported items. The results demonstrated the expansion of rice exports were not increasing as originally expected as a result of domestic factors. The study also found that the value of exports was dictated largely by the expansion of exports throughout the world. Distribution markets were directly impacted by the advent of competition. Human resource policies are defined as the people who work in an organization and their relationship with that organization (Millmore, 2007). Different terms are used to describe these people such as the following: employees, associates, personnel, and human resources. They often are used interchangeably.

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Human resources represent the single most important cost in many organizations. Organizational labor costs range from 36% in capital-intensive firms like commercial airlines to 80% in labor-intensive firms like the postal service. How effectively a company use its human resources can be a dramatic effected on its ability to compete (or even survive) in an increasingly competitive environment (Millmore, 2007).

The Economic Environment Factor

Through the process of formalization on trade agreements, economic cooperation between the countries became essential. Complex bilateral contracts are scrutinized by the World Trade Organization (WTO), which focused on ensuring fair and free avenues of international trade. The WTO seeks to reach agreement in the following areas: 1. Tax benefits and smooth functioning of international trade practices (i.e. elimination of unfair trade practices and economic integration). 2. Ensure that access to global markets is not artificially restricted or manipulated to a members advantage.

Factors, Social and Cultural Environment

The values of consumers are influenced by 2 main factors, which are social environment and culture. Marketing firms focus on exploiting trends to

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gauge the market and tailor products to meet the public demand. Factors that will support increased exports include the following: - Trends toward global economic and trade revival. - Thai manufacturers and exporters being increasingly recognized for goods of high quality and international standards, as well as quality service. - This has meant that many buyers are now returning to Thailand to order goods. - Successful FTA negotiations between Thailand and various countries have brought about an increase in exports. - The close cooperation between Thai private and public sectors actively engaging in market expansion and penetration, particularly towards new markets such as China, India, The Middle East, Latin America, Eastern Europe and Africa. Risk factors that may affect exports include the following: - Further increase and fluctuations in global crude oil prices. - Downward economic trends in major markets e.g. the sub-prime crisis in the U.S. which may continue to impact the economic trends in major markets as well as trade partners. - The value and stability of the Thai Baht. - Increase in one-tariff barriers in major markets such as the US, EU and Japan.

Five Forces Model Analysis

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Michael Porters trusted strategic management model, the Five Forces Model Analysis, has been used by most notable export companies in their quest for effective management policies. Porter originally designed the Five Forces Model Analysis as a part of his broader analytical methods. According to Porter (1986), companies have been able to utilize the Five Forces in order to do the following: 1. Sell their produce and sell to a special focus group of consumers with specific needs. 2. Sell the difference. The manufacturer and product must be positioned to differentiate from competitors and consumers. 3. Exercise cost reduction to achieve the lowest input values that translate into the highest output levels (Cost Advantage). A development strategy is secondary in: 1. Creating Front Business (Strategic Partnership) is a merger of the competition to increase sales and bargaining power or to reduce costs and overhead. 2. Multinational marketing (Internationalization). Joint ventures are set up to create new companies in different countries, maintain benefits, and practice in foreign companies as an independent company by increasing efficiency and expanding markets. Jean Garner (2009) stated that a differentiation strategy had direct influence on export performance since the firm was able to differentiate their

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products and services to gain the competitive advantage over the intense competition. Differentiation is a key that leads to sustainable goals. Aaby and Slater (1989) stated that the export strategy is characterized by the type of marketing mix employed. Product differentiation is at the heart of this mix and has direct impact on export performance. Differentiation can be meant by a products appearance, design, quality, utilization, and international appeal attributes. Aaby and Slater (1989) explained that the managements international experiences seem to have a positive effect on export sales, profits, growth and the composite measures of export performance. This is perhaps due to the fact that managements international experiences help a firm to identify and leverage international opportunities while avoiding international threats. Angela Baron (2007) has mentioned in her research that the success of export marketing strategies were through the effective matching of products and supporting services to the requirements of overseas buyers. Export market characteristics have a direct impact on export performance of a firm because the firm can only play its role to the level that market characteristics allow the firm to do so, therefore it is very critical for a firm to study and understand the characteristics of the markets that they serve to be able to perform and compete well.

Government Export Assistance Programs

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Government always has direct impact on export performance of a firm, whether it is aware or unaware of the exporters. Government creates rules and regulations and also sets all the tariffs and taxes that all parties who participate in the industry have to follow. Government also helps develop export through supporting promotions and help expand the market for exporters by penetrating new markets and preserving the existing ones. Government can also build a positive image of goods and services and thereby increasing the markets confidence in the product in terms of quality and prompt delivery of service to the market (Daft, 2009). Thai Government continues to promote and support various measures by employing an aggressive marketing approach in order to increase the value of exports to both new and existing markets. In addition, it attempts to develop the potential of businesses internationally, particularly the Thai service industry (Voon, 1998). It also encourages trade partnerships with new economy countries such as the Czech Republic, Bahrain, and Brunei as well as supporting the development of brands and other value added initiatives for Thai products and services. Exports contribute greatly to a countrys economic prosperity. Throughout its numerous years of service, the Department of Export Promotion (DEP) successfully exported its products to the world market, in particular, industrial and agricultural goods as well as service businesses. Thailand must constantly change its international trade strategies in order to create new opportunities for Thai businesses; the country must move from

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being a manufacturing nation to a trading nation, or an investor country, as well as focusing more on our service industry. The Department of Export Promotion realizes the importance of continentally adjusting its priorities in line with current economic conditions so that it may fully support Thai exporters in areas of production and marketing to expand export opportunities. Support is also provided to exporters in areas of knowledge and information management, particularly, the export business, trade regulations as well as strategic trade negotiations. Furthermore, it closely monitors changes in trade conditions in major markets so this information can be disseminated to exporters for early planning and decision making. It also offers advice and consultation on international trade and facilitates networking of Thai exporters for efficient exports to the overseas market (Exports, 2010).

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Export Strategy of Thailand

Several important strategies that need to be undertaken include: - Utilize marketing strategies to maintain exports of Thai products and services to existing markets while increasing exports to new markets. - Develop and promote new Thai service businesses to be competitive as well as develop an efficient information system to facilitate business contacts. - Raise Thailands status as a trading nation by supporting and encouraging Thai businesses to expand overseas through franchising, opening of overseas branches (internationalization), foreign investment, and business network expansion as well as supporting the establishment by the private sector of international trade marts. - Strengthen Thailands position within ASEAN by promoting mutual investment and increasing integration at both private and government levels with the aim of fostering cooperation in areas of product and technological development as well as cooperation within each countrys service businesses. - Increase Thailands export competitiveness by developing trade logistics to reduce investment costs and to streamline exports processes.

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Bolster Thailands readiness toward the future free trade market by creating a stable export foundation through development of provincial manufacturer capabilities, particularly Small and Medium Enterprises (SME), and domestic products. (Department of Export Promotion, Annual Report, 2008).

This chapter of literature reviews the theories of export competitiveness by using empirical studies of export competitiveness at a firm level. The issue considered in the present is the impact of different factors on firms export competitiveness. Five main theoretical models referring to export competitiveness are reviewed by Aaby & Slater (1989). Aaby & Slaters (1989) strategic export model forms the base for many other papers on the topic. It proposed direct relationships between competencies and strategy, performance, and indirect relationship between firm characteristics and performance, with strategy as an intervening variable. The weakness in their review seemed to be limited to the management influences, which left out the external environment.

Research Model and Hypothesis

The purpose of this chapter is to present the relationship of export competitiveness with its internal and external forces. The theories and concepts of the study from the literature review in chapter 2 have been applied to the key theoretical and conceptual framework for the study. The research

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hypothesis, research variables and operational definition of the variables are defined for testing.

Nature of Firm Firms Export Strategy - Market selection - Product police Nature of Market and industry Export Performance - Export growth - Export intensity

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Figure 6

Aaby and Slater (1989).

Conceptual Framework From the theoretical frameworks, the researcher has explored more into the nature of the firm, nature of market and industry and export competitiveness. The researcher has combined the theoretical model by Aaby and Slater with a theoretical model by Cavasgil and Zou (1994) and from many studies that have researched the determinants of export competitiveness; several broad groups of determinants of export competitiveness have been identified. They are as follows: - firm characteristics - firm competencies - resource value - marketing mix - firm industry characteristics - export market characteristics - government export assistance programs and firm export strategy. Firm characteristics, firm competencies, resource value, marketing mix, firm industry characteristics, export market characteristics, government exports assistance are clearly presented in a model.

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The determinants of export competitiveness can be conceptualized as a strategic response by management to the interplay of internal and external forces (Acedo, 2006). The internal forces are related to organizational characteristics such as firm characteristics (Cavusgil and Zou, 1994), firm competencies (Aaby and Slater, 1989), and marketing mix (Alvarez, 2007). The external forces include industry characteristics (Cavusgil and Zou, 1994), export market characteristics (Cavusgil and Zou, 1994), government export support (Daft, 2009) and a firms export strategy (Porter, 1990). - Export competitiveness: the distinguishing features or qualities of a particular firm which are determined by firm size, management commitment, management perception toward financial incentive, market potential, risk, profit, competition, distribution and delivery and service (Aaby and Slater, 1989). - Competitiveness: it is concerned with the long-term performance of a selected unit (firm, industry, or country) related to its competitors (Dunning, 2008). - Export sales: this is the total revenue in value that is generated by selling the products to international markets. Normally it is measured in annual fiscal year by five consecutive years (Aaby and Slater, 1989).

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- Export intensity: the degree of the difference in export volume compared with the last five years (Aaby and Slater, 1989). - Market share: size of consumers to purchase Thai food in the target group as the EU, the US, or other major economies of the world (Enders, 2004).

Moderator Variables
- Firm Export Strategy: firm ability to perform an activity to export for competitiveness (Green, 2005). - Market Selection: the marketing export competitiveness has positive relationships since the export activities need to explore market conditions, which are the conditions in the target markets, the level of customer satisfaction, and the methods to conduct effective export performance (Hofmann, 2006). - Product Policy: the quality might include the durability, design, reliability and product attributes (Hunt, 2010). - Business Strategy: strategy that defines how an organization will seek to meet its export marketing goals and growth (King, 2007). Independent Variables

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- Firm Characteristics: the distinguishing features or qualities of a particular firm which are determined by firm size, management commitment, management perception toward financial incentive, market potential, risk, profit, competition, distribution and delivery and service (Aaby and Slater, 1989). - Firm Size: the total number of employees is the appropriate definition of size. Other measures such as net assets, production rate, and total sales, are usually highly correlated with the total number of employees but may not reflect the actual number of interpersonal relationships that are necessary to effectively structure an organization (Makadok, 2001). - Firm Export Experience: the gaining of skills and knowledge through work and practice rather than education or training (Mahoney, 2001). - Firm Competencies: firm ability to perform an activity (Makhija, 2003) and the concept of resource value (Nothnagel, 2007): the tangible and intangible assets semi-permanently tied to the firm. - Finance: identifies a capability as the potential input from the capability as the potential input from the resource stock to the production function and capabilities as tangible and intangible assets (Rugman, 2002).

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- Human resources: defined as the people who work in an organization and their relationship with that organization (Styles, 2008). It can have a dramatic effect on its ability to compete (or even survive) in an increasingly competitive environment. - Physical: identifies the environment of business related to resources in organization to competitiveness (Teng, 2002). Marketing Mix variables in this study can be grouped into four major factors: 1. Product: the distinguishing features and qualities of a particular product that comprise both technical and economic factors with the latter divided between price and non-price factors (Styles, 2008). 2. Price: the amount of money customers have to pay to obtain the food products. It comprises of list price, discounts, allowances, payment period, and credit terms. 3. Place: includes company activities that make the product available to target consumers. In this study it means channels or locations, inventory, transportation, and logistics that the products have been sold through. 4. Promotion: means activities that communicate the merits of the product and persuade target customers to buy it. In this study it is composed of advertising, price reduction, product trial, and membership privilege.

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5. Firm industry characteristics: the distinguishing features of a group of firms producing a similar product or service which are determined by the threat of new entrants, rivalry among existing firms, threat of substitute products or services, bargaining power of buyers, and bargaining power of suppliers (Porter, 1990). 6. Export market characteristics: the relative competitiveness of a particular market. It determines the ease and cost of doing business within that market. Four basic characteristics of a market shape a private enterprise system: pure competition, monopolistic competition, oligopoly, and monopoly (Rugman, 2002). 7. Government export assistance programs: financial and logistical arrangements developed by a countrys department of foreign trade and delivered to domestic exporters via the departments field offices, usually located in the countrys important cities (Makadok, 2001). In addition government roles are policies towards export promotion, R&D promotion, tax, regulations, and education policies. In this study: Department of Export Promotion, Ministry of Commerce.

Research Questions and Research Hypothesis

The major purpose of this study was to explore the reason why some Thai food exporters have a better export competitiveness than others by investigating all attributes of export competitiveness, with both internal and external factors. This study seeks to explore and describe some answer and to

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learn whether export competitiveness varies in accordance with the interplay of internal and external forces in the firm.

Research Questions
The following are the research problems of the present study. 1. Can firm characteristics of Thai food exporters explain export competitiveness? 2. Can the competencies of Thai food exporters explain export competitiveness? 3. Can resource value exporters explain export competitiveness? 4. Can the marketing mix of Thai food exporters explain export competitiveness? 5. Can the characteristics of Thai food exporters explain export competitiveness? 6. Can export market characteristics of Thai food exporters explain export competitiveness? 7. Can government export assistance programs for Thai food exporters explain export competitiveness? 8. Can a firms export strategy of Thai food exporters explain export competitiveness? Expected Outcome Based on the previous research on the determinants of export competitiveness, this studys expected outcome is that firm characteristics,

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firm competencies, resource value, marketing mix, firm industry characteristics, export market characteristics, government exports assistance programs and a firms export strategy have a direct impact on export competitiveness. The results from previous research revealed that export competitiveness stemmed from relationships with many different factors. Operation environment, firm managerial characteristics, and export marketing strategy acting alone could not sufficiently explain the differences in export competitiveness.
Efficiency of the Firm (EFFI) Export strategy of the organization (STRA)

Marketing Mix (MARK)

Creating competitiveness in food Industry (COMP)

Readiness of Resources (RESO) Figure 7 Conceptual Framework

Linking of Allied Business (NETW)

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From Figure 7, the conceptual framework of the research study consists of exogenous latent variables and endogenous latent variables as follows: 1. Exogenous latent variables EFFI = Efficiency of the Firm RESO = Readiness of Resources NETW = Linking of Allied Business Network 2. Endogenous latent variables MARK = Marketing Mix STRA = Export Strategy of the Organization COMP = Creating Competitiveness From the conceptual framework, it can be concluded that the factors influencing the competency of the competition in the export of Thai food industry falls into six factor groups: 1. Efficiency of the Organization 2. Readiness of Resources 3. Linking of Allied Business Network 4. Marketing Mix 5. Export Strategy of the Organization 6. Competitive Advantages in the Thai Food Industry The details are as follows: 1. Efficiency of the Organization means that the executives plan the policy on trade business, laying the visions, the administration and strategies. The targets, the objectives and the strategies are set to achieve the success of the organization.

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2. Readiness of Resources means that the organization is capable of providing factors necessary for the management in the manufacturing, the marketing, and the export to get good quality resources for the manufacturing of products. 3. Marketing Mix means the utilizing of marketing tools to satisfy the needs of customers. The tools consist of the products, the prices, the distribution channels and the marketing promotion. These four elements are employed in the export administration to achieve the objectives of the organization (Kotler, 1997). 4. Linking of Allied Business Network means the linking of business activities with the industry, the government and the private sectors involved to exchange knowledge, concepts, information technologies and guidelines on business cooperation with each other to reach the advantages in capital cost or in the differentiation which will bring about the creating of competitiveness advantages (Mahoney, 2001). 5. Implementation Business Export Strategy means the way of managing business resources to the highest efficiency to reach competitive advantages (Millmore, 2007). This research study sets the export strategy in three dimensions which are the strategy of creating differences, the strategy of low capital cost, and the strategy of trade business. 6. Competitive Advantage means that the Thai food export business is capable of creating growth in the market share. The value of the rate of growth can be computed with the average rate of growth of the past three years even though there is presently high competition (Song, 2004).

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The symbols and the meanings utilized in the model pictures are as follows: FIRM means latent variables of the efficiency of the organization. RESO means latent variables of the readiness of resources. MARK means latent variables of the marketing mix. NETW means latent variables of the linking of allied business network. EXPO means latent variables of the export business. COMP ATI SAT
COM

means latent variables of the competitiveness advantages. means observed variables of the executives attitudes. means observed variables of the satisfaction of the organization. means observed variables of the commitment of the organization. means observed variables of the technology and research. means observed variables of the readiness in finance.

mean sTEC OM obser FIN ved SAT varia bles of the mean satisf

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PER N SAT PHY PER REL N PHY mean SAT GOV PER s REL N obser FOO PHY SAT ved mean GOV PER varia s REL SUP N bles obser FOO PHY mean SAT of the ved GOV PRO PER s satisf varia REL SUP obser N actio bles FOO PHY mean SAT ved PRIO n of of the GOV PER varia s VRE the satisf N obser REL bles LPH organ actio PLA of the mean PHY SAT ved YPE izatio n of PRE PER s satisf varia RN n the DEF PRO N obser actio bles SAT organ SUP mean SAT of the n of ved izatio LOW FOO s satisf varia the n GOV obser organ actio bles BUS mean REL ved of sthe izatio mean n of PHY satisf varia the n s obser PER obser actio bles organ ved N

means observed variables of the readiness of personnel. means observed variables of the readiness in physical properties. means observed variables of the relationship with customers. means observed variables of the support from government. means observed variables of the food industrial groups. means observed variables of the chains of food supply. means observed variables of food products. means observed variables of the possibility of distributing goods. means observed variables of marketing promotion. means observed variables of the strategy of differentiation. means observed variables of low-cost strategy. means observed variables of business strategy.

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SHA VAL SUC

means observed variables of the rate of market share. means observed variables of export value. means the success of export. means regression coefficient from cause variables to effect

variables. means the relationship between the deviation of the observed variables. Hypotheses of Study From the above conceptual framework, the researcher has formulated 11 hypotheses of study by considering the relationship of influential factors on creating competitiveness advantages of Thai food industry, which are 1. Efficiency of the organization 2. Marketing mix 3. Readiness of resources 4. Linking of allied business network 5. Export strategy of the organization 6. Creating competitiveness in the Thai food industry

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Efficiency of the organization Efficiency of the organization is the work performance within the organization where every individual member is committed to doing his or her best in exporting food abroad. The vision, the commitments and the export strategies are set for each individual in the manufacturing and distribution units to have an attitude of cooperation, to work satisfactorily in reaching the organizations goals, to receive good results and good pay. The organization should provide and develop the facilities and the machinery by utilizing modern manufacturing technologies including employing research studies to develop standardized, good-quality products for export. All these elements are factors in the creation of competitiveness in international markets. The researcher concludes that the efficiency of the organization has a positive result to the factors of marketing mix, to the export strategies of the organization, and to the creation of competitiveness of food export to international markets. (Song, 2004) and the following hypotheses are formed: Hypothesis 1: The efficiency of the organization has a positive influence on the factors of marketing mix. Hypothesis 2: The efficiency of the organization has a positive influence on the export strategies.

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Hypothesis 3: The efficiency of the organization has a positive influence on the creation of competitiveness. Readiness of Resources The resources in the organization are important to the short-term and long-term success of the organization. The readiness of resources in the organization consists of the readiness in finance, the readiness in personnel, the readiness in the physical properties, and the readiness in the relationship with customers. The readiness in these four aspects produces an impact on the liquidity of the organization in doing business, in finance, in having high credit-worthiness, in having enough financial sources. For the readiness in personnel, knowledge should be continually given by arranging seminars and trainings to reinforce more skills to the skilled workers to be ready to compete. In the case of the readiness in physical properties, the ability in implementing machinery and high technological tools is emphasized to develop the manufacturing of good-quality products. As for the readiness in creating good relationships with customers, establishing friendships between organizations is utilized because negotiations will be smooth and business successful. It can be concluded that readiness in resources brings about positive results to the factors of marketing mix, the export strategies, and the competitiveness of the organization in food industry export (King, 2007). The following hypotheses are then formed:

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Hypothesis 4: Readiness of resources has a direct positive influence on marketing mix. Hypothesis 5: Readiness of resources has a direct positive influence on export strategy. Hypothesis 6: Readiness of resources has a direct positive influence on creating competitiveness in exporting food industrial products.

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Marketing Mix Marketing mix consists of variables in different types of food products, the price, the distribution channel and marketing promotion. These four elements are applied to the principles of international market share by arranging the marketing mix according to the target market in each country, aiming at the products and the development of export strategies. The factors involved are the culture, the language, the politics, the money exchange and the different legal structures of each country. Marketing mix is implemented to seek a target to achieve competitiveness or the value greater than just a competition, which gives satisfaction to customers more than the competitors do. Marketing mix increases the ability or efficiency of manufacturing goodquality products, the creative thinking, and the ability to fulfill the demands of the customers in the international markets of the same standardized products or in the special international markets of the same or different standards. The researcher then concludes that marketing mix has a positive effect on the export strategy of the organization and on the creation of competitiveness of food products exported to international markets (EstevePerez, 2006). The hypotheses are hence formed as follows: Hypothesis 7: Marketing mix has a direct positive influence on the export strategy of the organization. Hypothesis 8: Marketing mix has a direct positive influence on creating competitiveness.

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Linking the Allied Business Network Linking the allied business network is another form of extending the scope of business performance. It consists of the cooperation with the government sectors, the forming of industrial food groups and the system of the chains of supply and transportation. Cooperation with the government sectors facilitates the manufacturers in many forms of export activities. Forming industrial food groups helps share any elements needed with each group such as raw materials, technology, and transportation by cooperation within the supply chain of different food products. The three components in the network enable the organization to utilize its potential to enlarge its network, develop or alternate the chain of manufacturing, and be able to advance into new industries. The cooperation with allied business networks is a good opportunity for different business units to help each other to fulfill and achieve what they lack. It can help not only in the saving of capital cost of each firm but also in the managing of resources and properties to the highest benefits of the world. The competitiveness of the food industry comes from the support from the groups involved such as the cooking ingredients group, the animal feeds group, the processed fruit and vegetables group including the transportation industry group. These supporting groups are formed into an industrial cluster. The cluster is a group of different related business groups situated in the nearby location to reduce the time and distance of communication and transportation. These business groups can also help each other in providing essential elements in every step of manufacturing process, from the beginning

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to the final product. Therefore, the Thai food industry is able to create competitive advantages because of these industrial clusters. These related industrial clusters provide resources to the industry to distribute products, so they enable the food industry in Thailand to compete in the world markets without depending on the related industries from abroad. The risks of fluctuating transportation costs and the exchange rates can also be reduced. There is also cooperation in research and development of technology. The related industry cluster helps add value to the business and creates competitiveness in food industry in the foreign countries. The researcher concludes that the linking of the allied business network has a positive result in marketing mix, in export strategy, and in creating competitiveness in food industry abroad (Barney, J., 1991; 2001). The hypotheses are formed as follows: Hypothesis 9: Linking of allied business networks has a positive influence on the export strategy of the organization. Hypothesis 10: Linking of allied business networks has a positive influence on the competitiveness advantages of food industry abroad. Export Strategy of the Organization The organization's export strategies are the management goals that stress the importance of the international strategy to expand food markets globally. These strategies are the differentiation strategy, the low-cost

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strategy, and the trade strategy. Strategy acts as the main guideline for all organizations involved, used to set goals which are compatible with the strategy formulation and techniques used in each business area such as its finance, its marketing, and its human resources including its manufacturing management. These goals help executives plan the proper administration suitable for the products and the services to be developed so that the organization gains the highest competitive advantage. Cost advantage strategy aims at the manufacturing of products and the services in the level that are acceptable by the markets but with lower production costs than that of the competitors in order to increase the profits and expand the market boundaries. The kinds of products and services presented are not very outstanding or do not have any uniqueness, but the level of quality is standardized because they are aimed at the mass market level where the consumers are very price sensitive. A differentiation strategy is where the business aims to be outstanding in terms of uniqueness of their products and services. This strategy emphasizes technological development of better manufacturing processes, higher product quality and the faster delivery of goods. Business activities that create competitiveness must be done to maintain the cost of manufacturing at appropriate levels while high profits are possible because of the outstanding characteristics of the products. Implementation of a business export strategy is the application of the planned strategy into practical use. An important factor in implementing strategy is that the specific competencies of the business organization must be

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considered because this will lead to an implementation that is unique and different from the competitors in terms of efficiency, speed in meeting the customers demand, outstanding value-added to merchandise and services, and the strong image of the organization in the customers eyes. These are the most important elements in creating long-term competitiveness in implementing business strategy. The main efficiency of the business that is outstanding relative to the competitors in any area must be brought out in the strategy to create competitiveness. It can be concluded that implementing business export strategies would have a positive result in the factors of marketing mix, of export strategy and of the creation of competitive advantages in food products. (Esteve-Perez, 2006) and the hypotheses are formed as follows: Hypothesis 11: Implementation business export strategy of the organization has a direct positive influence on the creating of competitive advantages in the food industry. The researcher has implemented the factors from his literature review to form a conceptual framework and hypotheses by drawing patterns of linear structural relationship of the six factors which are influential in creating competitiveness in the Thai food export industry. These six factors are utilized in the analysis and the test of the hypotheses in the study. The patterns are presented in the Lisrel Model in picture 2 as follows:

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LISREL Model From picture 2, the LISREL Model consists of: 1. Exogenous latent variables consist of EFFI = Efficiency of the organization RESO = Readiness of resources NETW = Linking of an allied business network 2. Observed variables (exogenous latent variables indicators) ATI = Attitudes of exogenous SAT = Satisfaction of the organization COM = Commitment of the organization TEC = Technology and research FAN = Readiness in finance PER = Readiness in human resources PHY = Readiness in the physical properties REL = Relationship with customers GOV = Support from the government FOO = Food industrial group SUP = Food chain system 3. Endogenous latent variables MARK = Marketing mix BUSI = Business strategy COMM = Creating competitiveness 4. Observed variables (endogenous latent variables indicators) PRO = Food products

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PRI = Price PLA = Distribution channel PRO = Sales promotion DEF = Differentiation strategy LOW = Low-cost strategy BUS = Business strategy SHA = Market share VAL = Export value SUC = Success of export 5. Inaccuracy of Exogenous latent variables is d1-d12 6. Inaccuracy of Endogenous latent variables is e1-e10 The analysis of the structural equation using latent variables in the analysis consists of the measurement model and the structural equation model.

Conclusion
In this chapter the researcher has reviewed the literature concerning the theories of the international trade about creating competitiveness in the international markets. Paul Krugmans New Trade Theory and the theory of comparative advantage are already in existence, which are the international theories about creating competitiveness and the capability in the competition in international trade markets. Paul Krugman tried to find reasons why there are trade and investments in the foreign countries and how they existed. Paul Krugman and Raymond Vernon concluded that some countries do not have

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enough advantages in resources or in the capital cost because they lack other factors essential and influential to trade business and investments abroad such as knowledge, skill, expertise in manufacturing techniques including the change of technology. All the mentioned factors can change the advantages or disadvantage in foreign markets. In addition, the researcher has studied the industrial competitiveness theories such as resource based theory which emphasizes the importance of the internal factors of the organization; which are the resources of the organization. He also studied the concept of creating competitive advantages by coordinating the inside factors with the outside environments to develop a strategy. The modern strategy called Blue Ocean Strategy in which the firm does not attack the opponents but instead aims to make opponents outmoded and old-fashioned is also studied. From the above literature review, the concepts and theories, six variable groups are formed into a conceptual framework. They are divided into four groups of free variables or exogenous latent variables consisting of the following: 1. efficiency of the organization 2. readiness of resources 3. linking of allied business networks The three endogenous latent variables consist of the following: 1. marketing mix 2. business strategy of the organization

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3. creating competitiveness The measurement model and the structural equation model together with eleven hypotheses are set up to be employed in the analysis.

CHAPTER 3 RESEARCH METHODOLOGY

This chapter presents the research methodology used in this research study. Quantitative research is the main method used in the surveying and collecting of data from the sample groups who are the executives of the food exporting businesses in Thailand. The researcher has done the literature review studying the concepts, the theories and the research studies concerning the field of food manufacturing and food exporting including the collecting of statistical figures from the food exporting units in order to bring them into use as the supporting data for the data which are collected from the field surveys. The details of the field surveys are as follows:

The Population and the Sample Groups

The Population The population used in this study is food exporting industrial groups who do business in exporting food products out of Thailand. The researcher has collected data from the list of Thai food exporters whose names are classified according to the types of food as below:

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1. 2. 3. 4. 5. 6.

Canned food Sea food Processed fruit and vegetables Instant food Food ingredients Other types of food promoted by the Department of Export Promotion

The population frame used in this research study consists of 1,732 individuals who were still in the export business as of December 31st 2009. Sample Groups The sample groups are randomly selected from the population frame chosen, on the basis of probability sampling by using a simple random sampling method. The proportional stratified sampling is used to calculate the size of the sample groups, using one observation variable for one sample. There are twenty-one observable variables in this analysis. Therefore, it is estimated that there are 210 sample groups (210*10) all together. Like the past studies, which used questionnaires in collecting data, the questionnaire was sent by mail. It was found that the rate of replies was low, approximately 26 per cent (Styles, 2008). Therefore, in order to get enough data for the analysis, the researcher limits the size of the samples, taking into consideration the numbers of replies. The size of the sample groups was

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calculated to be 808 answered copies (210*100/26 = 808). Consequently, the researcher then sent out 808 copies of the questionnaire. From the literature review and the research study papers involved, the researcher can limit the variables for the study into six variable groups (six dimensions), consisting of the following: 1. Firm competencies 2. Marketing mix 3. Readiness of resources 4. Linking of allied business networks 5. Exporting strategies 6. Creative competitive advantages In summary, the indicators of variables and the definitions of performance are firm competencies, marketing mix, readiness of resources, linking of allied business networks, and the export strategies of the firm. Firm Competencies According to Chetty and Hamilton (1993), Aaby and Stater (1989), Dunning (2008), Enders (2004), and Green (2005), firm competencies are defined as the executives vision for the firm through the setting of objectives for the management and the workforce to achieve together. The objectives consist of four dimensions as follows: 1. The attitudes in the administration of the executives 2. The satisfaction in the results of the performance

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3. The determination of the firm 4. Technology and research The attitudes in the administration of the executives. The concepts which the executives have in managing the firm according to the objectives set and the success achieved in exporting food products to the world markets. There are five indicators in this dimension. The satisfaction in the results of the performance. Business performers are satisfied with the results of the past exporting business. There are four indicators in this dimension. The determination of the firm. The firm has business administration and source management that support the exporting business to a proper level of business performance. There are five indicators in this dimension. Technology and research. The firm utilizes the technology and the research development that enable the firm to produce better quality and nutritionally superior products which finally gives the exporting business a competitive edge. There are five indicators in this dimension. All the indicators are shown in Table 5.
Table 5 The Indicators of the Variables in the Firm Competencies Code Questionnaire The executives think that the success of the firm must result from the long-term FIR 1 advantages and profits. The executives believe that exporting will create the chance to make more profits FIR 2 than doing domestic business. FIR 3 The executives have set good plans and strategies for exporting.

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The executives utilize modern technologies and facilities in making plans. They stern the importance of data system in the administration. FIR 5 The firm is able to prevent any problems from happening in the future. Table 5 (Continued) FIR 6 The firm is satisfied with the exporting sales. FIR 7 The firm is satisfied with the results of the profits in the exporting business. FIR 8 The firm has a continuous increase in exporting market share. FIR 9 The executive are capable of analyzing the existing problems reasonably. The firm manufactures standard products according to the standardization of the food FIR 10 industry. FIR 11 The firm utilizes modern facilities for the communication within the company. The executives have always cooperated with each other in making important FIR 12 decisions. There are brainstorming sessions to get opinions and performance trends in solving FIR 13 the existing problems from all the members of the working team. FIR 14 The firm is always seeking new opportunities in the new exporting markets. FIR 15 The firm has continually improved and developed its manufacturing technology. The firm has a competent research working team and personnel in developing FIR 16 products which are as good as or better than those of the competitors. The firm has manufacturing technology as good as or better than that of the FIR 17 competitors. FIR 18 The firm has continually invested in technology. The research and product development personnel have higher knowledge and FIR 19 capability than that of the competitors. FIR 4

Marketing Mix The factors of marketing mix are defined as the performing of business through marketing mix to create product acceptability by manufacturing

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internationally standardized quality products, using pricing as the tool in marketing, and distributing products widely to the customers (Makadok, 2001). There are four dimensions as follows: 1. Products 2. Price 3. Distribution channels 4. Sales promotions Products. The manufacturing of internationally standardized food products is important to ensure the products are safe from non-toxic chemical compounds. The products are manufactured according to the standards set in different markets using modern manufacturing processes and are quality controlled in every step. There are five indicators used in this dimension. Price. The cost of products set from the capital cost of every type of product according to industrial standards. There are four indicators in this dimension. Distribution channel. Global distribution of products to the consumers. There are three indicators in this dimension. Sales promotion. Increase in sales volume by promoting market sales to stimulate the demands of customers, using different methods such as price discounting, and giving out free gifts. There are four indicators in this dimension. All the indicators are shown in Table 6

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Table 6 The Indicators of the Variable Factors of Marketing Mix Code Questionnaire PRO 1 Your products are highly accepted among the customers. PRO 2 Your firm has manufacturing standards according to the demands of the customers. PRO 3 The firm has a quality control system according to that of the international standards. The firm has continually improved and developed new products to meet the needs of PRO 4 the market demands. PRO 5 The firm thinks of capital costs before selling the price of the products. At present, the prices of the products of your firm are lower than those of the same PRO 6 products of your competitors. PRO 7 The rate of the costs of products for exportation is low. The firm emphasizes the importance of delivering products in accordance with the PRO 8 quantity and quality stated in the contract. PRO 9 The firm sets marketing plans to increase the exporting value. The firm has good relationship with the distributors and cooperate with each other in PRO 10 distributing products more effectively. The firm participates in the food trade exhibitions in foreign countries supported by PRO 11 the government in seeking new exporting markets. The firm has developed the ways of distribution to the most advantage of the PRO 12 consumers. The firm is capable of conducting advertising campaigns and doing marketing PRO 13 promotions. There are reductions to the customers who continuously buy a large number of PRO 14 products from the firm. PRO 15 The firm abides by the standards of environment rules for exporting. PRO 16 The firm uses Thailand brand as the selling point. The firm uses the Halal trademark for exporting to export products to Muslim PRO 17 Countries.

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Readiness of Resources Readiness of resources means the business management of the firm is adept in doing every business activity. The readiness in finance can help in seeking investment capital and managing it effectively. The readiness in human resources provides qualified personnel. Having skillful workmanship and the readiness in having a good working environment suitable for the management in the firm are important. The readiness in the relationship with business partners, having close cooperation with each other all the time, is essential. In summary, the readiness which enables the creating of competitiveness internationally consists of the readiness in finance, the readiness in human resources, the readiness in physical properties and the readiness in the relationship with customers (Barney, 2001; Makhija, 2003). The readiness in finance. The business management should have a good financial situation capable of seeking investment capital funds. The business funds must be enough to enable a feasible financial situation for any situation that would require high trade-credit worthiness. There are four indicators in this dimension. The readiness in human resources. Business management provides continual training courses and seminars to the personnel. The personnel have knowledge and ability appropriate for their responsible tasks and duties. The workforce is more skillful, more knowledgeable and more competent than that of the competitors. There are four indicators in this dimension.

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The readiness in the physical properties of the business. The business firm invests in machinery and facilities capable of manufacturing modern products in order to gain a competitive advantage over rival firms (on the same industrial products.) There are five indicators in this dimension. The readiness in relationship with the business partners. The business firm is capable of creating friendliness among the related business firms, enabling negotiations as fellow businesses. There are four indicators in this dimension. The total of 16 indicators for the four dimensions described above is shown in Table 7.
Table 7 The Indicators of the Variable Factors for the Readiness of Resources Code Questionnaire FRI 1 The firm has a feasible financial situation. FRI 2 The trade credit-worthiness of the firm is high. FRI 3 The firm has high competency in seeking investment capital funds. FRI 4 The firm has skillful, knowledgeable, and capable workforce. The firm utilizes financial resources in the exporting activities more than in the FRI 5 domestic market business. The firm has competent, knowledgeable personnel/executives who have equal or FRI 6 more experience than those of the competitors. The research and product development personnel have more knowledge and FRI 7 competency than those of the competitors. The firm has designer experts who are more knowledgeable and more qualified than FRI 8 those of the competitors. The firm has enough quantity of good-quality raw materials to manufacture food FRI 9 products.

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Table 7 (Continued) FRI 10 The firm has low-price raw materials to manufacture food products. FRI 11 The efficiency and quality of the machinery are better than those of the competitors. FRI 12 The firm has continually developed the process of quality-testing system. FRI 13 The executives are competent of negotiating with the customer countries effectively. FRI 14 The firm is efficient in delivering products punctually. FRI 15 The firm participates in the marketing strategies of the customers abroad. FRI 16 The firm has a standardized system of measuring the satisfaction of its customers.

Linking of Allied Business Network Linking of allied business network means the business has a cooperative network in the government sector, the private sector, and the food industrial groups. This is necessary so that they can cooperate in the development of the export process, the international standards of manufacturing, and having a transportation system within the network which permits mutual benefits. There are three dimensions involved as follows: 1. The government sectors 2. The food industrial groups 3. The food industrial chains The support from the government sectors. Government promotion agencies in international exportation create international level strategies to help the exporters complete business deals with customers in foreign countries and are therefore able to open new markets abroad, for example organizing food exhibitions in foreign countries. There are five indicators in this dimension.

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Food industrial groups. The gathering of food industries to cooperate in sharing manufacturing factors as well as technology to develop the manufacturing of Thai food products to compete in the world markets. There are four indicators in this dimension. Food industrial chains. Grouping to deliver and distribute food products to create negotiation power in transporting both domestically and internationally. There are five indicators in this dimension. There is the total of 15 indicators in these three dimensions as shown in Table 8.
Table 8 The Indicators of Variable Factors for Linking of Allied Business Network Code Questionnaire NET 1 The stability of politics has an impact on the decision of exporting. The announcement of the government policy in free trade has an impact on the NET 2 exportation. NET 3 Trade deals help maintain the status and potentiality of Thailands exportation. NET 4 Trade grouping can reduce taxes among the trade partners. NET 5 The governments promotion in exportation investment is advantageous to the firm. The firm has continually cooperation in the exchanges of ideas and technologies NET 6 within the industrial groups. The firm cooperates with the food industrial groups in the development of food NET 7 products. NET 8 The firm cooperates with the network groups in the development of water sources. NET 9 The firm has continually cooperated with food institutions in doing research studies. The firm can reduce the duration of delivery good after receiving orders, using the NET 10 least time as possible. NET 11 The firm has effective domestic and international transportation systems.

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Table 8 (Continued) The firm has developed the competence by combining the working force with the NET 12 members of the chains of supply. The firm is flexible in the performance through the cooperation within the chains of NET 13 supply. The firm shares in the decision about the resources of raw materials of the firms NET 14 which are suppliers. The firm has developed or set up the methods of evaluating the operations of NET 15 business which can be used in all the chains of supply.

Exporting Strategies of the Firm Exporting strategies of the firm are defined as the ways of seeking business materials which give advantages to business performance by applying different business strategies to create advantages in every market channel. There are three dimensions: 1. Product differentiation strategy 2. Low investment cost strategy and 3. Trade business strategy The details of exporting strategies are as follows: 1. Product differentiation strategy means that the business has its own methods of manufacturing products. It has developed and improved the quality of products to meet the needs of the consumers in each region, making use of the advantages of manufacturing Thai food to satisfy the tastes of both Thai and foreign consumers. There are five indicators in this dimension.

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2. Low investment cost strategy means that the companys planning of guidelines and methods for creating advantages over the competitor is based on using a low investment cost in manufacturing. There are three indicators in this dimension. 3. Trade business strategy refers to the methods of marketing such as creating trust in trademarks and manufacturing good quality products for sale in foreign countries. There are four indicators in this dimension. There is the total of 13 indicators as in Table 9
Table 9 The Indicators of Variable Factors of the Exporting Business Code Questionnaire The food products of your firm have the uniqueness that cannot be imitated by the STR 1 competitors. The expansion of the cooperation between the government sectors and the private STR 2 sectors has an impact on the exportation of goods to many countries of the world. Your firms products are considered to be modern and well-developed in every STR 3 aspect compared to those of your competitors. Your firms products are value-added (for example, essential food substances are STR 4 added or good quality sugar is used to enhance better health.) STR 5 Your firm utilizes high quality product manufacturing strategy. STR 6 Your firm utilizes low price strategy. STR 7 Your firm utilizes the firms brand name for the selling point. STR 8 Your firm utilizes the good reputation of the industrial groups for the selling point. Your firm has continually invested in doing research studies and developing methods STR 9 of manufacturing products. Table 9 (Continued) Your firm conducts surveys on the demands of the markets in order to adapt and STR 10 improve the products to meet the needs of the consumer markets.

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Your firm improves and updates the standards of the products to meet the needs of the targeting markets. STR 12 Your firm has continually designed and manufactured new products to the market. STR 13 Creating competitive advantages in the Future of Food Industry. STR 11

Creating Competitive Advantages The final variable group is the ultimate result of the first five variable groups. This variable group is called creative competitive advantages. The goal of much business theory is to create competitive advantages that are not temporary, but sustainable. The large investment of resources up-front should bring about great rewards for the company for considerably longer than the set-up period. Food exporting businesses of Thailand can maintain or increase the market share and the growth of the exportation value under the present highly competitive situation. There are three indicators in this dimension as follows: 1. Market share 2. Value of the exportation 3. Success in exportation The details of creating competitive advantages are as follows: 1. Market share. The firm has to seek new markets and new customer groups to help expand the business. There are five indicators in this dimension. 2. Value of the exportation. These are the profits from the total sales of food products in foreign countries. There are four indicators in this dimension.

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3. Success in exportation. The firm has continually had an increase in the market share and in the customer groups in the foreign countries. There are five indicators in this dimension. There is the total of 14 indicators in these three dimensions which are shown in Table 10.
Table 10 The Indicators of the Variable Factors in Creating Competitive Advantages Code Questionnaire COMP 1 Your firm has high market share. COMP 2 The value of exporting of your firm increases every year. COMP 3 Your firm has more market share of the same product than your competitors. COMP 4 The profits in export sales are higher than those in domestic sales. COMP 5 The total sales in the past five years increased. (in baht) COMP 6 The profits in the past five years increased. The high competitiveness in domestic trade forces the firm to turn to doing COMP 7 exporting. COMP 8 Your firm has a working unit which has direct responsibility for exporting. COMP 9 Your firm has created its own trademark. COMP 10 The governments policy can increase great potentiality of the manufacturers. COMP 11 The firm emphasizes the increasing of customers in every country.

The Research Tools

This research study utilizes questionnaire as the research tool to collect data about the factors which influence high competitiveness in the future of food exportation industry of Thailand. The data points are about the competency of the firms, the marketing mix, the readiness of resources, the

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linking of allied business networks, and the export strategies of the firms. The structure of the questionnaire consists of three parts as follows: Part 1 The questionnaire about the general characteristics of business. It consists of 8 items. Part 2 The questionnaire about the factors which influence the creating of competitiveness in food exportation for Thailand. There are 6 groups as follows: 1. The competency of the firm in the business administration. It consists of the attitudes in business management of the executives, the satisfaction of the results of the management, the strong determination of the firms and the technology and research. There are 19 questions in a rating scale format. The scale is from 1 to 5, where 1 indicates total disagreement and 5 indicates total agreement. 2. The factors of the marketing mix which the firm uses in the marketing management. This part consists of the products, the price, the locations and the sales support. There are 16 rating questions. The scale is from 1 to 5. A score of 1 indicates total disagreement, and a score of 5 indicates total agreement. 3. The readiness of resources which the firm uses in the management. It consists of the readiness in finance, in human resources, in physical properties, and in the relationship with customers. There are 17 rating scale questions. The scale is from 1 to 5. A score of 1 indicates total disagreement, and a score of 5 indicates total agreement.

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4. The linking of allied food business networks which the firm uses in its management. The questionnaire consists of the questions on the governments policies, the food industrial groups, and the food industrial chains. There are 15 rating scale questions. The scale is from 1 to 5. A score of 1 indicates total disagreement, and a score of 5 indicates total agreement. 5. The exporting strategies of the firm. This part consists of strategy of differences, the strategy of low investment cost, and the strategy of trade business. There are 12 rating scale questions. The scale is from 1 to 5. A score of 1 means totally disagree and a score of 5 means totally agree. 6. The concepts of creating the competitiveness advantages in order to increase and develop market shares. It consists of the market share, the exporting value, and the success in exportation. There are 11 rating scale questions. The scale is from 1 to 5. A score of 1 means totally disagree and a score of 5 means totally agree. Part 3 The questionnaire discusses the opinions of other factors which the firms presume to have an effect on, creating competitiveness in the future of food industry. There are two questions in this part.

The Checking of the Validity of the Research Tools

The questionnaire written to be used in this research study was submitted to experts and the advisory committee to study and check for the correctness of the content validity. The question analysis method is used in considering and estimating the rating scale in order to check the items

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Objective Congruence Index of the questionnaire and the objective of the research study. Five experts considered and gave the rating scale of the properness of the questionnaire. The rating scales are as follows: +1 means it is certain that the questionnaire can be effectively used in getting information relevant to the objectives set. 0 means it is not certain that the questionnaire can be effectively used is getting information relevant to the objectives set. -1 means it is certain that the questionnaire cannot be effectively used to get information relevant to the objectives set. After receiving the questionnaire which was studied and evaluated from the experts and advisory committee, the researcher has improved the content of the questionnaire according to the advice and suggestions given. The questionnaire was then calculated to find the Item Objective Congruence Index. A questionnaire that has 0.7 IOC or above is considered to have content validity and is suitable to be used as the indicator of the variables (Makhija, 2003). After the content validity of the research tools had been checked, the corrected and improved questionnaire was pre-tested with the samples that had the same characteristics and qualities as the samples that are to be used in this research study. The thirty samples to be used are the members of the food industrial association. The researcher wanted to check the correctness of the variable scale; therefore the data points were analyzed using factor analysis technique to classify variables as follows:

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1. Checking the proper use of the factor analysis technique with the Kaiser Meyer Olkin statistics (KMO); the KMO should not be lower than 0.50. 2. The Principal Component Analysis technique is used. The factor analysis aims to clarify and reduce variables, and to examine the correctness of the scale by calculating the factor loading using individual factor. The factor has at least a 0.60 eigen value which is more than 1 KMO but not less than 0.50 (Hunt, 2010). The reliability analysis of the questionnaire is done by measuring the internal consistency using Cronbachs alpha coefficient technique which examines the quality of the tools by individual item and as a whole. The quality of the individual item is considered from the value of Item Total Correlation which should not be less than 0.30. The total quality as a whole is considered from the value of Cronbachs alpha coefficient which should not be less than 0.70 (Hunt, 2010). The results of the factor analysis and the reliability analysis (n = 30) shows that the dimensions of variables KMO Eigen % Cronbachs values variance alpha explain the coefficient efficiency of the firms marketing mix readiness of the four resources linking of the allied network business management strategies. Creating Competitiveness in Food Industry The results of the thirty preliminary data analysis using factor analysis F and Varimax Rotation technique conclude that the six groups of

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variable factors are suitable for and capable of doing the analysis. The values of KMO are between 0.50 and 0.82 with the Eigen value of each factor landing between 1.86 and 6.49. Each factor has the variance explained between 51-90 and 93.22 per cent. The reliability analysis has the Cronbachs alpha coefficient values between 0.82 and 0.92.

The Data Collection

1. The researcher has sent a letter in advance to invite the targeted people to cooperate in providing data. The reasons, objectives, and the importance of the research study are also included in the letter. 2. The researcher has posted letters asking for cooperation in filling out the questionnaire. Enclosed in the letters are addressed envelopes with the fixed duration of time for the returning of the questionnaire. The researcher has used the Thailand Post Ramkhamhaeng office in sending and receiving the questionnaire. If any firm fails to return the questionnaire by the due date, the researcher will call them for cooperation so that enough data is provided for the analysis. The collection of data was done between March and April 2010. The sending of the questionnaire was done in two steps. The first step was done in March 2010, and at the due date it was found that there were only 150 replies. Therefore, the researcher called to ask for cooperation once again. The second step was done in April 2010. The questionnaire was sent again alongside the

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phone calls. The results of the data collection of both steps are that there were 356 answered questionnaires returned, and there were 87 unanswered questionnaires returned because these were the questionnaires which had not yet been received. Then, the data received were checked for correctness and accuracy. Code books were carried out to prepare for the data analysis which was performed in specific computer programs.

Data Analysis
The researcher first analyzed the collected data from the answered questionnaire. It was found that from the 870 questionnaires sent by mail, 87 questionnaires were returned unanswered because they were unable to reach the receivers due to the changes of the addresses. There are then 356 questionnaires which have been completely filled out and 6 questionnaires which have not been completely filled out. Therefore, there are 350 questionnaires which can be used in the analysis. In summary, the rate of the answered questionnaire is 32.25 percent. After the accuracy of the questionnaires was checked, the preliminary data points were analyzed to describe the general characteristics of the sample groups and to clarify them by descriptive analysis method, by percentage, mean, standard deviation, minimum and maximum values. The Preliminary Data Analysis First, the analysis began with the rate of the answered questionnaires, using descriptive analysis methods to explain the nominal and category

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variables, to calculate the percentage values and the frequency of the variables, including the correlation variables. The value of each pair of correlation variables must not exceed 0.80. The factor analysis by the software program in social studies was then used to check the accuracy and the overall theoretical content of the variable groups being studied. The reliability analysis was also completed to check the clarification of data by considering the mean, the standard deviation, the distortion and the maximum of the variables before the data points were analyzed to respond to the objectives of the research study and also to test the hypotheses of the study. The Data Analysis The objectives of this research study are to study the factors which influence the competency of creating competitiveness in food industry of the future food manufacturers; to test the structural relationship of the factors which influence the competitive advantages in the future food industry; and finally to study the direct, indirect and the aggregated influences of the factors which influence the competitive advantages in the future of the food industry in Thailand. The abstract variables are in the forms of latent variables, which cannot be valued directly. Thus, in order to be able to measure the value, the researcher utilized the Confirmatory Factor Analysis (CFA) to test the capability of the indicators used in measuring the abstract variables for the accuracy and the directness of the structure of the scale. The analysis of the Structural Equation Model (SEM) and the path analysis of variables are done by using the LISREL Prelis 8.52 program.

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The LISREL Analysis Program The LISREL program is the data analysis for the causal model research with latent variables and several indicators. The program provides an estimation of inaccuracy and the relationship between the fractions to alleviate the initial agreement of the original causal model analysis. The results of the analysis are accurate and the LISREL model also has the general characteristics covering almost every advanced statistical data analysis including the analysis of variance or ANOVA, multiple regression analysis, the analysis of covariance ANCOVA, multi-sample analysis of multi group analysis, factor analysis, path analysis, and several other types of analysis (Enders, 2004). The LISREL analysis helps analyze all the data from the study of the relationship between several variables, whether it is multiple correlation analysis, commonality analysis or canonical correlation analysis. The confirmation or the support in the form of cause and effect shows that which free variables cause instabilities or differences to the follow-up variables. It also shows that such causes from those free variables together with other variables are the causes of instabilities in the follow-up variables. They may be directly, indirectly, or possibly both related to the analysis by the LISREL program. The data analysis uses the causal model. The variables used in the model consist of two categories: 1. Exogenous variables are the variables in which the researcher is not interested in the cause. Thus, these variables do not appear in the model.

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2. Endogenous variables mean the variables which the researcher is interested to study to find out which variables are influenced by other variables. The causes of endogenous variables are clearly shown in the model. In addition, the clarification of variable types in the research model according to the characteristics of variable scale can be grouped into two types as follows: 1. Latent Variables There are hypothetic variables which cannot be directly measured but have a theoretical framework and an outcome in the form of noticeable behavior. Latent variables are free from inaccurate measurement. The researcher studies latent variables by measuring the noticeable behavioral variables and estimating the latent variable scales by applying the noticeable variables which are the indicators of the latent variables to the factor analysis. In the analysis model, a circle or an oval pattern is used to represent a latent variable.

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2. Observed Variables or the Indicators These are the variables which are measurable or observable by using the made-up instrument. In the analysis model, a square is used to represent an observed variable.

Conclusion
This research study uses a quantitative research method to survey and collect data from 350 sample groups who are the executives of food exporting industry in Thailand. A questionnaire is used as the research tool in collecting data. The questionnaire was formed from the review of the literature and the content validity was examined for accuracy by the experts and the five members of the advisory committee. The collecting of data was done by mailing the questionnaire to the food exporters of Thailand. To sum up the result, the rating of the answered questionnaires is 32.23 percent. The variables used in this study are consisting of: 1. Competency of the firms 2. Marketing mix 3. Readiness of the four resources 4. Linking of the allied networks 5. Business management strategies 6. Creating competitiveness in the future

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The researcher analyzed the data by utilizing the Prelis 2.52 program in social studies and the Structural Equation Model (SEM) (LISREL 8.52) Descriptive analysis was used to explain the variables. Factor analysis and Confirmatory Factor Analysis (CFA) were used to check and estimate the tools. The analysis of the objectives of the research and the testing of the hypothesis of the research were done by Structural Equation Model (SEM).

CHAPTER 4 THE RESULTS OF DATA ANALYSIS

The results of the analysis of the quantitative data of this research are reported using descriptive statistics and using multivariate statistics in the data analysis. In this respect the analysis of the data must be consistent with the primary agreement. The results of the data analysis are presented in 6 parts respectively as follows: Part 1: The general data of the sampling group responding to the questionnaire form. Part 2: The level of opinion in factors of the generation of competitiveness in the future food export industry. Part 3: The examination of the primary statistical agreement of the data comprising the quality examination of the data according to the primary statistical agreement of data including examination of data according to the primary agreement on the analysis of the constructed equation with the LISREL Program. These primary agreements are composed of the characteristics of normal scattering of data or normality, the verification of constant variance, and homoscedasticity of scattering and

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examination of the linear relation between horizontal and linearity variables. Part 4: The confirmatory factor analysis of measurement models of each latent variable by convergent validity and discriminant validity. Part 5: The analysis of the correlation path and hypotheses test by analyzing the causal model with the LISREL Version 8.52 Program. The author made an analysis of the influence of the advantage generation variable of the food export industry in the future and finally the conclusion of the hypotheses test results. Part 6: The result of the hypothesis test of the model of generation of competition advantage of food export industry in the future.

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The Results of the Analysis of General Data

Part 1: General Data of the Sampling Group Responding to the Questionnaire Forms The results are shown in Table 11.
Table 11 General Data of the Sampling Group Responding to the Questionnaire Forms
S a m p le D e sc rip tiv e S ta tistic s (n = 3 5 0 ) V ari ab l e / In d i c ato r N um ber S iz e o f B usine ss L e ss th a n 5 0 m illio n b a h t 193 5 1 -2 0 0 m illio n b a h t 92 2 0 1 -5 0 0 m illio n b a h t 32 M o re th a n 5 0 1 m illio n b a h t 62 R e g i s te re d o f B u s i n e s s L e ss th a n 5 0 m illio n b a h t 172 5 1 -2 0 0 m illio n b a h t 155 2 0 1 -5 0 0 m illio n b a h t 17 M o re th a n 5 0 1 m illio n b a h t 6 T y pe o f B usine ss S in g le o w n e r 59 L im ite d P a rtn e rsh ip s 24 L im ite d c o m p a n y 257 O th e rs (p le a se sp e c ify ) 10 A re th e re an y f o re i g n p artn e rs h i p s ? 1 0 0 % T hai 289 F o re ig n c o m p a n y 28 F o r e i g n p a r t n e r s h i p ..% 23 O th e rs (P le a se sp e c ify ) 10 In w h i c h p arts o f th e w o rl d are y o u r c u s to m e rs ? (Y o u c a n c h o o se m o re th a n o n e a n sw e r) A sia 271 E urope 135 A m e ric a 5 M id d le E a st 1 P e rc e n t 5 5 .1 4 2 6 .2 8 9 .1 4 1 7 .7 1 4 9 .1 4 4 4 .2 8 4 .8 6 1 .7 1 1 6 .8 5 6 .8 6 7 3 .4 2 2 .8 5 8 2 .5 7 8 .0 0 6 .5 7 2 .8 6 7 7 .4 2 3 7 .1 4 1 .4 2 0 .0 5

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Table 11 (Continued) S a m p le D e sc rip tiv e S ta tistic s (n = 3 5 0 ) V ari ab l e / In d i c ato r N um ber T h e w o rl d o f y o u r c u s to m e rs (Y o u c a n c h o o se m o re th a n o n e a n sw e r) A sia 271 E urope 130 A m e ric a 95 M id d le E a st 44 O th e rs (P le a se sp e c ify ) 5 In c o m e N e t p ro fit m o re th a n 5 0 m illio n b a h t 80 N e t p ro fit le ss th a n 5 0 m illio n b a h t 224 N o g a in , N o lo ss 33 L oss 13 Y e ar o f b u s i n e s s L e ss th a n 5 y e a r 95 6 -1 0 years 102 1 1 -1 5 years 48 1 6 -2 0 years 46 M o re th a n 2 1 y e a rs 59 T o tal am o u n t o f e x p o rti n g o f th e f i rm L e ss th a n 1 0 p e rc e n t 79 1 1 -2 0 percent 135 2 1 -2 5 percent 81 M o re th a n 2 5 p e rc e n t 55

P e rc e n t 7 7 .4 2 3 7 .1 4 2 7 .1 4 1 2 .5 7 1 .4 2 2 2 .8 6 6 4 .0 0 9 .4 3 3 .7 1 2 7 .1 4 2 9 .1 4 1 3 .7 1 1 3 .1 4 1 6 .8 6 2 2 .5 7 3 8 .5 7 2 3 .1 4 1 5 .7 1

This study gathered data from food export industry executives carrying out business operations in Thailand. There were a total of 350 persons. The results of the analysis found that 193 respondents (or 55.14%) were entrepreneurs with business size (as of Fiscal year 2008 business operation) and assets of less than 50 million Baht computed as 55.14%. 92 respondents (or 27.71%) were entrepreneurs with business size and assets between 51-200 million Baht, and 32 respondents (or 12.00%) were entrepreneurs with business size and assets between 201-500 million Baht.

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The results of the analysis also found that 172 respondents (or 49.14%) were entrepreneurs with registered capital of less than 50 million Baht, 155 respondents (or 44.28%) were entrepreneurs with registered capital between 51-200 million Baht, and 6 respondents (or 1.71%) were entrepreneurs with registered capital of more than 501 million Baht. In terms of type of business operations, the results showed that 257 respondents (or 73.42%) were in the form of a company limited, 59 respondents (or 16.85%) were single owner firms, and 24 respondents (or 6.86%) were in the form of company partnerships. The results of the analysis showed that 289 respondents (or 82.57%) were 100% Thai companies where 28 respondents (or 8%) were Western companies, and 10 respondents (or 2.85%) were African-based companies. For market regions of the customers, there were 271 respondents or (77.42%) with Asian countries as their main territory, 135 respondents (or 77.42%) were from European countries, 5 respondents (or 1.42%) were from Africa, and 5 respondents (or 1.42%) were from various other regions. Business operation results showed that 224 respondents (or 64%) had a net profit of less than 50 million Baht, 80 respondents (or 22.86%) had a net profit of more than 50 million Baht, and 13 respondents (or 3.71%) recorded a business operation loss. The results of the duration of most business operations concluded that 102 respondents (or 29.14%) have been in operation between 4 to 6 years, 95 respondents (or 27.14%) have operated their business between 1 to 3 years, and 46 respondents or (13.14%) have operated their business between 10 to 15 years.

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The results on the gross export showed that 160 respondents (or 22%) had gross exports between 21 to 30%, 100 respondents (or 19%) had their gross between 10 to 20%, and 95 respondents (or 0.69%) has the gross between 40 to 50%. Part 2: The Level of Opinion on Factors Relating to the Generation of Advantage in the Competition of Food Export industry in the Future The level of opinion of the sampling group in respect of factors relating to generation of advantages on competition of food export industry manufacturers in Thailand are separated into 6 main parts which are: 1. The level of opinions on organizational effectiveness factor comprised 4 dimensions including the attitudes on the business operation of the management, the satisfaction towards business operation results, organizational determination and technology and research. 2) The level of opinions concerning marketing mix factors comprised 4 dimensions including food product, product pricing, scattering channels and marketing promotion. 3) The level of opinions concerning readiness of resource variables comprised 4 dimensions including financial readiness, personnel readiness, business physical readiness and relation with business partners. 4) The level of opinions concerning business allies network connection variables comprised 3 dimensions including governmental support, food industry group, and food industrial chains.

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5) The level of opinion concerning organizational export strategy comprised 3 dimensions including different product strategies, low cost strategies, and business trade strategies. 6) Level of opinion concerning the ability to generate advantages in the competition e.g. market share, export value and export success. See Table 12
Table 12 The Level of Opinions of Respondents on Generation Competition Advantages Standard Variable/Indicator Mean Deviation Firm Competencies Factor 3.218 .325 Attitudes in Running the Management 3.098 .324 Satisfaction TW Work Operation 3.452 .641 Organization Commitment 3.104 .327 Technology and Research 3.102 .321 Marketing Mix Factor 3.597 .661 Food Products 3.602 .652 Product Price 3.500 .552 Scattering Channels 3.610 .654 Marketing Promotion 3.676 .663 Resources Readiness 3.676 .654 Financial Readiness 3.885 .550 Personnel Readiness 4.104 .650 Physical Readiness 3.558 .717 Relations with Business Partners 3.636 .632 Linking of Allied Business Network 3.672 .667 Governmental Support 3.363 .665 Food Industry Group 3.541 .816 Supply Chain Network 3.532 .635

Interpretation Medium Level Medium Level Medium Level Medium Level Medium Level High Level High Level High Level High Level High Level High Level High Level High Level High Level High Level High Level High Level High Level High Level

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Organizational Export Strategy Different Products Strategy Low Cost Strategy Business Trade Strategy Table 12 (Continued) Variable/Indicator Generation of Competition Advantages in Food Industry Market Sharing Export Value The Success of the Export

3.414 3.340 3.365 3.420 Mean 3.670 3.885 3.752 3.850

.853 .654 .653 .645 Standard Deviation .665 .560 .665 .653

Medium Level Medium Level Medium Level Medium Level Interpretation High Level High Level High Level High Level

The results of the analysis showed a mean value of 3.218 with the management administration attitude in the medium level, satisfaction dimension of work operation was in the medium level, organization determination dimension in medium level and technology and research dimension in medium level. The results of this analysis were in the high level with an average of 3.597. Food product dimension (PRO) was in the high level with a mean of 3.500. Scattering channel dimension (PLA) was in the high level with a mean of 3.610. The marketing promotion dimension (PRO) was in the high level with a mean of 3.676. For the results of the analysis of the level of opinions of the generation of competition advantages in food industry in the future overall for resources readiness (RESO), the opinion of producers in the food export industry was in the high level with a mean of 3.676 with the Financial Readiness dimension at

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the high level with an average of 3.885. Personnel Readiness dimension was in the high level with mean of 4.104. In respect of the Physical Readiness dimension, there was a high average of 3.558, while the relations with business partners index (REL) was in the high level with a mean of 3.636. For the results of the analysis of the level of opinions of the generation of competition advantage in food industry in the future overall for business allies network connection (NETW), the opinions of producers of food export industry were in the high level with a mean of 3.672 with the governmental support dimension (COR) in the high level with a mean of 3.363; the food industry group dimension was in the high level with a mean of 3.541, and the supply chain network dimension was in the high level with a mean of 3.532. The results of the analysis of the level of opinions of the generation of competition advantages in food industry in the future overall for organizational export strategy (STRA) was in the medium level with a mean of 3.414. The different products strategy dimension (DIF) was in the medium level with a mean of 3.340 The low cost strategy dimension (COS) was in the medium level with a mean of 3.365, and the business trade strategy dimension (BUS) was in the medium level with a mean of 3.420. The results of the analysis of the level of opinions of the generation of competition advantages in food industry in the future overall for ability in generation of advantages in the competition (COMP), the opinions of producers of food export industry for export landed in the high level with a mean of 3.885, with an export value dimension (EXP) in the high level with a mean of 3.752, and the export success dimension in the high level with a mean of 3.85.

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Part 3: The Examination of the Primary Statistical Agreement The examination of the quality of the data is consistent with the primary agreement of the application of the multivariate analysis for construct equation model including 1) the characteristics of normal scattering of data or normality, 2) the examination of constant variance and homoscedasticity of scattering, and 3) the examination of linear relations between horizontal and linearity variables. Additionally, the confirmatory factor analysis of the measurement model of each latent variable by convergent validity and discriminant validity was also conducted by the author. The data analysis with multivariate statistics and the examination of the agreement of data with the statistic primary agreement are considered very essential because in the data analysis with multi variables, if any variables have properties which are not in accordance with the primary data, there may be an odd result with hidden characteristics. This would make it inconsistent with the primary agreement, thereby deviating from the data, which is not in accordance with the primary agreement. Therefore the primary agreement of multivariate analysis for the constructed equation model statistical analysis would require data points to be examined whether they meet with the following primary agreement or not. Examination of the characteristics of normal scattering of data or normality.

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The examination of characteristics of normal scattering or data normality to determine the effectiveness of the estimation of the variables or robustness of the estimation, the analytic statistics used in the t-Test and F-test were with primary agreement that the variables must be distributed in a normal form (Hofmann, 2006). The examination of the data normality scattering may be made by the scatter plot examination. The results of the scatter plot examination of each variable found that diagonal linearity was derived. It can be concluded that each variable was with the scattering character of a normal curve (Hofmann, 2006). The results were shown as per Figures 8 to 36.
Normal Q-Q Plot of att

Expected Normal

-1

-2

-3 2 3 4 5

Observed Value

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Figure 8

Scattering of Attitudinal Data Variable of the Operation Management (ATT)

Normal Q-Q Plot of sat

Expected Normal

-1

-2

-3 2.5 3.0 3.5 4.0 4.5 5.0 5.5

Observed Value

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Figure 9

Scattering of Attitudinal Data Variable in the Organization Management (SAT)

Normal Q-Q Plot of det

Expected Normal

-1

-2

-3 2.5 3.0 3.5 4.0 4.5 5.0 5.5

Observed Value

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Figure 10 Scattering of Organizational Determination Data Variable (DET)

Normal Q-Q Plot of tec

Expected Normal

-1

-2

-3 2.5 3.0 3.5 4.0 4.5 5.0 5.5

Observed Value

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Figure 11 Scattering of Technology and Research Data Variable (TEC)

Normal Q-Q Plot of pro

Expected Normal

-1

-2

-3 2 3 4 5

Observed Value

Figure 12 Scattering of Product Data Variable (PRO)

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Normal Q-Q Plot of pri

Expected Normal

-1

-2

-3 2.0 2.5 3.0 3.5 4.0 4.5 5.0

Observed Value

Figure 13 Scattering of Product Pricing Data Variable (PRI)

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Normal Q-Q Plot of pla

Expected Normal

-1

-2

-3 2 3 4 5

Observed Value

Figure 14 Scattering of Market Scattering Channel Data Variable (PLA)

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Normal Q-Q Plot of pom

Expected Normal

-1

-2

-3 2.4 2.7 3.0 3.3 3.6 3.9 4.2 4.5 4.8 5.1

Observed Value

Figure 15 Scattering of Market Promotion Data Variable (POM)

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Normal Q-Q Plot of fin

Expected Normal

-2

-4 2 3 4 5

Observed Value

Figure 16 Scattering of Financial Readiness Data Variable (FIN)

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Normal Q-Q Plot of per

Expected Normal

-1

-2

-3 1 2 3 4 5

Observed Value

Figure 17 Scattering of Personnel Readiness Data Variable (PER)

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Normal Q-Q Plot of phi

Expected Normal

-1

-2

-3 2 3 4 5

Observed Value

Figure 18 Scattering of Physical Readiness Data Variable (PHI)

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Normal Q-Q Plot of rel

Expected Normal

-1

-2

-3 1 2 3 4 5 6

Observed Value

Figure 19 Scattering of Business Partners Relations Data Variable (REL)

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Normal Q-Q Plot of gov

Expected Normal

-1

-2

-3 2 3 4 5

Observed Value

Figure 20 Scattering of Governmental Support Data Variable (GOV)

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Normal Q-Q Plot of foo

Expected Normal

-1

-2

-3 2 3 4 5

Observed Value

Figure 21 Scattering of Food Industrial Group Data Variable (FOO)

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Normal Q-Q Plot of cha

Expected Normal

-1

-2

-3 2 3 4 5

Observed Value

Figure 22 Scattering of Supply Chain Network Data Variable (SUP)

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Normal Q-Q Plot of dif

Expected Normal

-1

-2

-3 1 2 3 4 5 6

Observed Value

Figure 23 Scattering of Product Differential Strategy Data Variable (DIF)

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Normal Q-Q Plot of cos

Expected Normal

-1

-2

-3 3 4 5 6

Observed Value

Figure 24 Scattering of Low Cost Strategy Data Variable (COS)

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Normal Q-Q Plot of bus

Expected Normal

-1

-2

-3 2 3 4 5

Observed Value

Figure 25 Scattering of Trade Business Strategy Data Variable (BUS)

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Normal Q-Q Plot of mar

Expected Normal

-1

-2

-3 1 2 3 4 5 6 7

Observed Value

Figure 26 Scattering of Market Sharing Data Variable (MAR)

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Normal Q-Q Plot of exp

Expected Normal

-1

-2

-3 1 2 3 4 5 6 7

Observed Value

Figure 27 Scattering of Export Value Data Variable (EXP)

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Normal Q-Q Plot of suc

Expected Normal

-1

-2

-3 1 2 3 4 5 6

Observed Value

Figure 28 Scatting of Low Cost Strategy Data Variable (SUC) Table 13 Normality Scattering N=350

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Variables Organizational Effectiveness Management Attitudes Satisfaction Organizational Determination Technology and Research Marketing mix Food Products Product Pricing Scattering Channel Marketing Promotion Resources Readiness Financial Readiness Personnel Readiness Physical Readiness Allied Network Connection Trade Cooperation Food Industry Group Supply Chain Network Organizational Export Strategy Differential Strategy Low Cost Strategy Business Trade Strategy Competition Advantages Market Sharing Export Value Export Potentiality

Mean 4.44 4.40 3.82 4.40 3.80 4.10 4.04 4.10 3.69 3.62 3.18 3.66 4.16 4.94 4.93 5.90 4.66 3.77 4.04 3.53 3.12 3.64 4.65 3.03 3.53 3.51

S.D. 1.43 1.32 1.33 1.33 1.30 1.31 1.36 1.52 1.50 1.45 1.50 1.58 1.67 1.23 1.22 1.13 1.12 1.33 1.36 1.52 1.47 1.44 1.08 1.09 1.52 1.18

Skewness -0.22 -0.19 -0.11 -0.17 -0.15 -0.02 0.13 0.09 0.10 0.09 0.17 0.15 -0.33 -0.66 -0.65 -1.11 -0.31 0.35 0.13 0.09 0.33 0.14 -0.23 -0.35 0.09 0.41

Surkosis -0.49 -0.38 -0.21 -0.20 -0.23 -0.5 -0.54 -0.68 -0.63 -0.62 -0.47 -0.72 -0.82 0.02 0.03 1.20 -0.20 -0.21 -0.54 -0.68 -0.77 -0.48 -0.29 -0.70 -0.68 -0.54

In the results of the correlation matrix analysis according to Table 16 it can be seen that there is no noticeable relation of any pair being with

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correlation higher than 0.80 showing that the variables brought for this analysis had no multi-colinearity problem in the analysis in any way. Examination of Constant Variance and Homoscedasticity. The homoscedasticity test is an application to regress analysis in which independent variable and dependent variable are metric variables. Homoscedasticity characteristics mean the properties of the dependant variable which are distributed indifferently in all value of the independent variable (Hofmann, 2006). The method of examination is possible by generation of scatter plot showing the correlation between the standardized residual with the standardized predicted values to examine the smooth variable and homoscedasticity (Hofmann, 2006) by considering the value showing the standardized residual. If there is random scattering without a uniform increase or decrease, then it could be concluded that there is homoscedasticity and a smooth variation. From Figure 28, it was found that the standardized residual scattered non-uniformly without knowing the standardized residual being with the form tending relatively to a uniform incremented or decremented. It can be concluded that the data points are in accordance with the primary agreement of homoscedasticity of existence of scattering, and there is an even variation as shown in Figures 29 to 52.

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Figure 29 The correlation between Standardized Residual with Standardized Predicted Value

The results of the correlation matrix analysis according to Table 16 showed that there was no noticeable relation of any pair being with correlation higher than 0.80, showing that the variables brought for this analysis had no multicolinearity problem in the analysis in any way. Examination of Linear Correlation All types of analytical statistics with the basis of Pearsons correlation coefficient analysis must be in line with the primary agreement that the relation between each pair of variables is of a linear form. The examination method can be examined through the scatter plot which shows the relation

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between the standardized residual with each independent variable for examination of the linearity relation between the variables (Hunt, 2010). From the scatter plot, it was found that the standardized residual was scattered non-uniformly without knowing the standardized residual tending to increment or decrement relatively uniformly. It can be concluded the data points were in accordance with the primary agreement of the linearity correlation as shown here.
2 1

-1

-2

-3

-4

-5 1.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0 5.5

att

Figure 30 The Correlation between the Standardized Residual with the Independent Variable Attitudes in Running the Work Operation (ATT)

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-1

-2

-3

-4

-5 2.5 3.0 3.5 4.0 4.5 5.0 5.5

sat

Figure 31 The Correlation between the Standardized Residual with the Independent Variable the Satisfaction in the Work Operation Results (SAT)

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-1

-2

-3

-4

-5 2.5 3.0 3.5 4.0 4.5 5.0 5.5

det

Figure 32 The Correlation between the Standardized Residual with the Independent Variable the Organizational Determination (DET)

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-1

-2

-3

-4

-5 2.5 3.0 3.5 4.0 4.5 5.0 5.5

tec

Figure 33 The Correlation between the Standardized Residual with the Independent Variable Technology and Research (TEC)

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-1

-2

-3

-4

-5 2.0 2.5 3.0 3.5 4.0 4.5 5.0 5.5

pro

Figure 34 The Correlation between the Standardized Residual with the Independent Variable Food Products (PRO)

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-1

-2

-3

-4 1.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0 5.5

phi

Figure 35 The Correlation between the Standardized Residual with the Independent Variable Products Price (PRI)

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-1

-2

-3

-4

-5 1.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0 5.5

pla

Figure 36 The Correlation between the Standardized Residual with the Independent Variable Product Channel (PLA)

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-1

-2

-3

-4 2.0 2.5 3.0 3.5 4.0 4.5 5.0 5.5

pom

Figure 37 The Correlation between the Standardized Residual with Independent Variable Market Promotion (POM)

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-1

-2

-3

-4

-5 1.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0 5.5

fin

Figure 38 The Correlation between the Standardized Residual with Independent Variable Financial Readiness (FIN)

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-1

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-3

-4 1 2 3 4 5 6

per

Figure 39 The Correlation between the Standardized Residual with Independent Variable Readiness in Human Resource

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-1

-2

-3

-4 1.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0 5.5

phi

Figure 40 The Correlation between the Standardized Residual with Independent Variable Physical Readiness (PHI)

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-1

-2

-3

-4 0 1 2 3 4 5 6

rel

Figure 41 The Correlation between the Standardized Residual with Independent Variable Readiness in Relationship (REL)

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-1

-2

-3

-4 -5 1.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0 5.5

gov

Figure 42 The Correlation between the Standardized Residual with Independent Variable Governmental Readiness (GOV)

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-1

-2

-3

-4

-5 1.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0 5.5

foo

Figure 43 The Correlation between the Standardized Residual with Independent Variable Food Industrial Group (FOO)

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-1

-2

-3

-4

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cha

Figure 44 The Correlation between the Standardized Residual with Independent Variable Supply Chain Network (SUP)

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-1

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-3

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dif

Figure 45 The Correlation between the Standardized Residual with Independent Variable Different Product Strategy (DIF)

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-1

-2

-3

-4 2.5 3.0 3.5 4.0 4.5 5.0 5.5 6.0

cos

Figure 46 The Correlation between the Standardized Residual with Independent Variable Low Cost Strategy (COS)

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-1

-2

-3

-4 -5 1.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0 5.5

bus

Figure 47 The Correlation between the Standardized Residual with Independent Variable Trade Business Strategy (BUS)

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-2

-4

-6 0 1 2 3 4 5 6

mar

Figure 48 The Correlation between the Standardized Residual with Independent Variable Market Sharing (MAR)

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-1

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-3 0 1 2 3 4 5 6

exp

Figure 49 The Correlation between the Standardized Residual with Independent Variable Export Value (EXP)

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-1

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suc

Figure 50 The Correlation between the Standardized Residual with Independent Variable Export Success (SUC)

Part 4: The Confirmatory Factor Analysis of the Measurement Model of Each Latent Variable The purpose of a confirmatory factor analysis is to analyze the measurement model of latent variables derived from the constructed variable measure in accordance with the measurement theory fixed from the literature survey and the relevant research studies. This is necessary to find out whether they are consistent with the empirical data. Then they will be used to examine the convergent validity and discriminant linearity.

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The author studied the attitudes and behavior of food export industry producers in Thailand which are latent variables with abstract characteristics which cannot be measured, directly comprised of the following: (1) organizational effectiveness variable (2) marketing mix variable (3) resources readiness variable (4) business allies network variable (5) business export strategy (6) ability to generate competitive advantages The data points were collected from the 97-item questionnaire form conducted on a sampling group of 350. The results of the confirmatory factor analysis demonstrated in the measurement model are consistent with external measurement models such as the Organizational Effectiveness Factor Measurement (FIRM). In respect to internal measurement models like the Marketing Mix Factor Variable (MARK), Resources Readiness Factor Variables (RESO), Business Allies Network Connections (NETW), Export Strategy Factor Variable (STRA), and the Ability of General Competition Advantages (COMP) using the second order CFA as shown in Figure 51 and Tables 9 to 14 respectively. The results of the examination of the construct reliability are shown in Table 23 and discriminant validity is shown in Table 9.

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The Result of the Second Order CFA of the Organizational Effectiveness Factor Variables (FIRM) for Construct Linearity Examination Derived from the Confirmatory Factor Analysis Against Empirical Data The Organizational Effectiveness Factor Measurement model analysis (FIRM) used second order CFA with the LISREL program examining 4 variable dimensions including Business Operation Attitudes (ATT) comprising noticeable variables from 5 questions including AT1, ATT2, ATT3, ATT4, and ATT5. Business operation satisfaction dimensions included noticeable variables from 5 questions including SAT6, SAT7, SAT8, SAT9 and SAT10, Organizational Determination (DET) comprising noticeable variables from 4 question including DET11, DET12, DET13, and DET14 and Technology and Research Dimension (TEC) comprising noticeable variables derived from 5 questions including TEC15, TEC16, TEC17, TEC18 and TEC19. In the construction of an equation model analysis, especially in the measurement model, there is an agreement that allows deviation to be correlative which is identical to the real condition. After making an adjustment to the model it was found that the measurement model was consistent with the empirical data with a Chi-Square (2) value equal to 5.40 and a degree of freedom (df) equal to 3, thereby making a relative chi- square which can be determined from the following equation: 2/ df = 1.80

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This is considered as passing the fixed criterion of not exceeding 2 (Millmore, 2007). The RMSEA equal to 0.040 was considered as having passed the criterion, being less than 0.05 (Millmore, 2007). The consistency from Goodness of Fit (GFI) being equal to 0.997 should be considered as passing the criterion, since it must be more than 0.9. The Adjusted Goodness of Fit (AGFI) being equivalent to 0.976 is considered to have passed the fixed criterion, as it must be more than 0.9 (Millmore, 2007). The factor loading found that all values pass the fixed criteria, which must be valued at more than 0.5 (Millmore, 2007). On considering the variable construct reliability (or CR), it was found that all values pass the criterion according to the specification that the variable construct reliability not be less than 0.6 (Millmore, 2007) with the value of the Work Management Attitudes Variable (ATT) being equivalent to 0.89, the Work Operation Satisfaction Variable (SAT) being equivalent to 0.92, the Organizational Determination Variable (DET) being equivalent to 0.89, and the Technology and Research Variable being equivalent to 0.91. In considering the level of latent variability on the organizational effectiveness factor, it was found that the factor loading passed the criterion with a construct reliability value being 0.92 and a variance extracted (VE) value being equivalent to 0.85. These must be more than 0.5 (Millmore, 2007). The details of this can be viewed in Table 9. The Second Order CFA analysis of the Organizational Effectiveness Measurement Model is shown in Figure 50, the number 0.92 with VE 0.85 values.

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0.82
ATT

ATI1 ATI2 ATI3 ATI4 ATI5 SAT6 SAT7 SAT8 SAT9 SAT10
SAT10 SAT10

0.96 0.90 0.96 0.91

0.89
SAT

0.96 0.78 0.92 0.91 0.81 0.90

DET

0.92
FIRM

0.89

0.91

0.79 0.91 0.90 0.90

DET11 DET12

DET13
DEDET 13

DET14

TEC15
TTEC1 5

TEC

0.87 0.96 0.95 0.94

TET16

TEC17 TEC18 TET19

Chi-Square=5.40, df=3, P-value=0.14054, RMSEA=0.040 Figure 51 The Result of Second Order CFA analysis of Firm Competencies Measurement Model (FIRM)

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The result of the second order CFA of the organizational effectiveness factor variables (FIRM) for construct linearity examination derived from the confirmatory factor analysis against empirical data.
Table 14 The Result of the Confirmatory Factor Analysis of Organizational Effectiveness with LISTEL Program Factor Validity Variables/Noticeable Variable Loading SE T-value Coefficient (R2) Work Operation Attitudes (ATT) 0.89 0.83 ATT1 0.82 0.67 ATT2 0.96 0.04 26.11 0.91 ATT3 0.90 0.04 24.96 0.81 ATT4 0.96 0.04 26.11 0.91 ATT5 0.91 0.04 25.23 0.85 Work Operation Result Satisfaction(SAT) 0.92 0.85 SAT6 0.96 0.92 SAT7 0.78 0.04 18.14 0.60 SAT8 0.92 0.04 21.12 0.85 SAT9 0.91 0.04 19.10 0.78 SAT10 0.81 0.04 18.56 0.75 Organizational Determination (DET) 0.89 0.84 DET11 0.90 0.82 DET12 0.79 0.04 18.13 0.60 DET13 0.91 0.04 21.10 0.84 DET14 0.91 0.03 20.10 0.78

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Table 14 (Continued) Factor Variables/Noticeable Variable Technology and Research (TEC TEC15 TEC16 TEC17 TEC18 loading 0.91 0.87 0.96 0.90 0.95 SE t-value Validity Coefficient (R2) 0.83 0.69 0.89 0.80 0.89

0.04 0.03 0.04

24.23 23.66 21.22

From Figure 50 and Table 14, the Organizational Effectiveness Measurement model can be seen as a model indicating the factor loading of the work operation satisfaction variable with the maximum factor loading (SAT) equal to 0.92, the technology and research variable (TEC) being with factor loading value equal to 0.91, and the organizational determination variable being with factor loading of 0.89. On considering the Standard Error (SE) and statistical t value, it was found that each factor loading value was different from 0 statistically significant at the level of 0.001. In respect to the reliability validity (R2) which is the value telling the ratio of variation between noticeable variables with the communalities, it was found that the work operation satisfaction (SAT) was the maximum R2 equal of 0.85 and the organizational determination variable (DET) was equal to 0.84. The conclusion of the measurement model analysis by the confirmatory factor analysis for the organizational effectiveness variables found that the model was consistent with the empirical evidence after adjusting the model without cutting off any questions from the measurement model. Furthermore, all factor loading values passed the criteria, having a value more than 0.5. All variable construct reliability values passed the

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criteria with a value more than 0.6 and variance extracted value of all variables passed the criteria having a value of more than 0.5. The analysis of the measurement model of the Marketing Mix Factor Variable (MARK) using second order CFA methods with the LISREL Program by examining the variable factors of 4 dimensions comprising Food Products (PROP) consisting of noticeable variables from question items POL1, POL2, POL3, and PL4; Product Price Dimension (PRI) is comprised of noticeable variables from question items PRI5, PRI6, PR7, and PRI8, and the Distribution Channel Dimension (DIS) is comprised of noticeable variables from question items of distribution channel dimension Question Items DIS9, DIS10, DIS 11, MET11 and DIS12. The marketing promotion (SAL) is comprised of variables from marketing Promotion Variable question Items SAL13, SAL14, SAL15, SAL16 and SAL17. The results of the analysis revealed that the measurement model was consistent with the empirical data after adjusting the model with a Chi-Square (2) value equal to 113.46 and a degree of freedom (df) of 85, thereby making relative Chi-Square derived from the equation 2/df equal to 1.33 with RMSEA equal to 0.26. The consideration of Goodness of Fit (GFI) was equal to 0.976 and the Adjusted Goodness of Fit (AGFI) was equal to 0.947. Considering the factor loading value, it was found that marketing mix question items (MARK) of all items passed the criteria having values more than 0.05. When considering the variable construct reliability it was found that all values passed the criteria. The Food Product Variable construct reliability (PRO) had a value of 0.77, the Produce Pricing Variable (PRI) had a value of 0.58, the distribution channel variable (DIS) had a value of 0.68, and the marketing promotion variable (SAL) had a value of 0.83. When considering the level of the variable latent marketing mix factor variable, it

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was found that factor loading values passed the criteria of all values with the calculation results showing that construct reliability had the value equal to 0.95, thus passing the criterion. The variance extracted value (VE) was equal to 0.81, also passing the criterion. See the details from Table 23. The second order CFA of Full Measurement Model of Marketing Mix factor is consisted of food product sub-variable (PRO), product pricing (PRI), market distribution channel (DIS) and market promotion (SIL) as shown in Figure 52.

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PRO

0.53 0.76 0.70 0.71

PRO1 PRO2 PRO3 PRO4 PRI5 PRI6 PRI7 PRI8 PLA9 PLA10 PLA11 PLA12 POM1 3 POM1 4 POM1 5 POM1

0.94

0.78 PRI 0.78 0.67 0.72

0.95 MAR K 0.80 PLA 0.87

0.61 0.67 0.68 0.74 0.62 0.84 0.78 0.85 0.91

POM

6 POM1 Chi-Square=113.46, df=85, P-value=0.21300, RMSEA=0.026 7 Figure 52 The Results of second Order CFA of Measurement Model of Market Mix Factor Variable (MARK)

The results of the confirmatory factor analysis of the market mix factor with the LISREL Program consisted of the analysis in each dimension

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construed as market mix factors and question items factoring into each dimension. The result of the analysis is shown as per Table 15.
Table 15 The Results of the Confirmatory Factor Analysis of Market Mix Factor with LISREL Program Factor Validity Variables/Noticeable Variable Loading SE T-value Coefficient (R2) Food Product (PRO) 0.94 0.06 11.32 0.89 PRO1 0.53 0.28 PRO2 0.76 0.07 12.59 0.58 PRO3 0.70 0.07 10.32 0.48 PRO4 0.71 0.06 11.23 0.58 Product Pricing (PRI) PRI15 PRI16 PRI17 PRI18 Distribution Place (PLA) PLA9 PLA10 PLA11 PLA12 Marketing Promotion (POM) POM13 POM14 POM15 POM16 POM17 0.95 0.78 0.78 0.67 0.72 0.80 0.61 0.67 0.68 0.74 0.87 0.78 0.85 0.84 0.75 0.04 0.04 0.05 0.05 0.04 0.07 0.11 0.10 0.06 0.05 0.04 0.09 0.03 18.34 20.23 14.36 14.98 12.09 13.13 11.81 12.61 11.30 18.48 20.87 13.51 20.00 0.91 0.61 0.60 0.45 0.52 0.64 0.38 0.45 0.46 0.55 0.89 0.61 0.71 0.70 0.72

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From Figure 51 and Table 15, domestic and international factor modeling provided a specific factor loading of the food product variable with the maximum factor loading (PRO) equal to 0.83. The next one was market promotion (SAL) with a value equal to 0.77, the market distribution channel variable (DIS) was 0.76, and product price (PRI) was equal to 0.58. Considering the Standard Error (SE) and nature of statistics it was found that each factor loading was different from 0 statistically significant at the level of 0.001. In respect to reliability (R2), which is the value telling the ratio of variance between noticeable variables with the communalities, it was found that the marketing promotion variable (SAL) had a maximum R2 of 0.91. The Marketing distribution channel variable had a value of 0.89. The food products variable (PRO) had a value of 0.76, and the products pricing variable (PRI) had a value of 0.64. The conclusion of the analysis of the measurement model by the confirmatory factor analysis of the market mix factor with the LISREL Program found that the model was consistent with the empirical data. The full measurement model of the market mix has factor loading of all values passing the criteria, placing it higher than 0.5. The values of construct reliability of all values passed the criteria of being more than 0.6, and the variance extracted values of all variables passed the criteria of being higher than 0.5. The Result of the Second Order Confirmatory Factor Analysis (CFA) of the Resources Readiness Factor Variable (RESO) for Construct Linearity Derived from the Confirmatory Factor Analysis Against Empirical Data

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The measurement model analysis of the Resources Readiness Factor (RESO) used the second order CFA method with the LISREL program examining the dimensions of variables of 4 dimensions. The overall Financial Readiness (FIN) factor was composed of noticeable variables derived from question items FIN1, FIN2, FIN3, and FIN4; Personnel Readiness Dimension (PER) factors comprised noticeable variables derived from question items Person Readiness Dimension PER5, PER6, PER7 and PER8. Physical Readiness Dimension (PHI) comprised noticeable variables of PHI9, PHI10, PHI11, PHI12 and PHI3). The Relations with Business Partner Dimensions factor (REL) comprised noticeable variables of REL14, REL15 and REL16. The results of the analysis revealed that the measurement model was consistent with the empirical data after adjusting the model with a Chi-Square (2) value equal to 113.46 and a degree of freedom (df) value of 85 thereby making the relative Chi-Square derived from the equation 2/df equal to 1.33 with an RMSEA equal to 0.26. The factor of Consideration of Goodness of Fit (GFI) was equal to 0.976, and the Adjusted Goodness of Fit (AGFI) factor was equal to 0.947. Considering the factor loading value, it was found that the Marketing Mix question items (MARK) passed the criteria, possessing values more than 0.05. When considering variable construct reliability, it was found that all values passed the criteria with Food Product Variable construct reliability (PRO) having a value of 0.77. The Produce Pricing Variable (PRI) was 0.58, the distribution channel variable (DIS) was 0.68, and the marketing promotion variable (SAL) was 0.83. The level of variable latent of market mix factor loading values passed the criteria of all values. The calculation results found that construct reliability had a value equal to 0.95, thus passing the criterion.

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The variance extracted value (VE) was equal to 0.81, thus passing the criterion. See the details from Table 23 for further data. The result of the second order Confirmatory Factor Analysis (CFA) of the Resources Readiness Factor variable is composed of the Financial Readiness Variable (FIN), the Personnel Readiness Variable (PER), the Physical Readiness Variable (PHI), and Relation with Business Partners Variable (REL) as shown in Figure 53.

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FIN

0.95

0.69 0.55 0.64 0.63 0.70

FIN1 FIN2 FIN3 FIN4 FIN5

0.99
RESO

SER

0.78 0.80 0.79

SER6 SER7 SER8 PHI9

0.96 0.88
PHI

0.74 0.80 0.63 0.74 0.78 0.76 0.82 0.88

PHI10 PHI11 PHI12 PHI13 REL14 REL15 REL16

REL

Chi-Square=203.78, df=197, P-value=0.35521, RMSEA=0.008 Figure 53 The Results of Second Order CFA of Measurement Model of Resources Readiness Factors Variable (RESO)

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Table 16 The Results of the Confirmatory Factor Analysis of Resources Readiness with LISREL Program Observe variable Factor loading SE T-value Validity Coefficient (R2) The readiness in finance (FIN) 0.95 0.06 16.21 0.91 FIN1 0.69 0.48 FIN2 0.55 0.03 14.81 0.30 FIN3 0.64 0.04 13.03 0.41 FIN4 0.63 0.07 12.05 0.50 FIN5 0.70 0.10 11.07 0.69 The readiness in human resources (SER) 0.99 0.05 20.04 0.99 SER6 0.78 0.61 SER7 0.80 0.03 23.05 0.60 SER8 0.79 0.03 21.75 0.63 The readiness in the physical (PHI) 0.96 0.05 17.77 0.91 PHI9 0.74 0.55 PHI10 0.80 0.04 19.70 0.63 PHI11 0.63 0.04 14.23 0.40 PHI12 0.74 0.04 16.02 0.55 PHI13 0.78 0.04 16.91 0.61 The readiness in relationship (REL) 0.88 0.05 17.01 0.78 REL14 0.76 0.57 REL15 0.82 0.03 18.44 0.68 REL16 0.88 0.04 19.98 0.78

From Figure 53 and Table 16, the Resources Readiness Measuring Factor Model was a model identifying the factor loading exactly. In respect to the factor loading, it was found that the Personnel Readiness dimension (PER) had a maximum factor loading equal to 0.99. The next one was the Physical

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Readiness (PHI) factor which had a value equal to 0.96. The Financial Readiness (FIN) factor was 0.95, and the factor with the smallest value was the Business Partner Dimension (REL), being equal to 0.88. Considering the Standard Error (SE) and statistics, it was found that each factor loading was different from 0 statistically significant at the level of 0.001. In respect to the reliability (R2) which is the value showing the ratio of variance between noticeable variables with the communalities, it was found that the Personnel Readiness Variable (SAL) had a maximum R2 of 0.99, with the next closest being the Physical Readiness and Financial Readiness dimensions with values of 0.91. Finally is the Relations with Business Partners Variable with a value of 0.78. The conclusion of the analysis of the measurement model by the confirmatory factor analysis of resources readiness factor found that the model was consistent with the empirical data after adjusting the model. The Financial Readiness Factors measurement (FIN4) and the Personnel Readiness (PER5) factor on both question items were less than 0.5. The rest were with factor loading values passing the criterion being more than 0.5. The values of construct reliability of all values passed the criteria of being more than 0.6, and the variance extracted values of all variables passed the criteria of being more than 0.5.

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The Result of the Second Order Confirmatory Factor Analysis (CFA) of the Business Allies Network Connection Factor variable (NETW) for Examining Construct Linearity Derived from the Confirmatory Factor Analysis Against Empirical Data The measurement model analysis of the Satisfaction Factor (SAT1) using the second order CFA method with the LISREL program examining the dimensions of variables of the 5 dimensions COR1, COR2, COR3, COR4 and COR5), food industrial group dimension (FOO) composed of noticeable variables such as SUP10, SUP11, SUP12, SUP13, SUP14 and SUP15). The results of the analysis revealed that the measurement model was consistent with the empirical data after adjusting the model with a Chi-Square (2) value equal to 203.78 and a degree of freedom (df) of 195, thereby making the relative Chi-Square derived from the equation 2/df equal to 1.03 with an RMSEA equal to 0.08. The Consideration of Goodness of Fit (GFI) was equal to 0.97, and the Adjusted Goodness of Fit (AGFI) was equal to 0.95. Considering the factor loading value it was found that all items passed the criteria, having values of more than 0.05. When considering variable construct reliability, it was found that the trade cooperation question items (COR1), food industrial group (FOO9) and supply network chain (SUP10) had factor loading values lower than the criteria, being less than 0.5. Therefore, the author has cut out the three question items concerning business allies network connections (NETW). Considering the variable construct reliability, it was found that all have passed the criteria, with the variable construct reliability of food industrial group being equal to 0.95, and the trade

194

cooperation variable (COR) having a value of 0.80, and the supply chain connection variable (SUP) having the level of latent variable. It was found that factor loading values passed the criteria of all values with the calculation results having the value equal to 0.94, passing the criterion. The variance extracted value (VE) was equal to 0.83, also passing the criterion. Please see details from Table 12. The second order CFA of Full Measurement Model of Business Allies network connection factor consists of the trade cooperation sub-variable (COR), product pricing (PRI), food industrial group (FOO) and the supply chain network (SUP) as shown in Figure 54.

195

GOV

0.76 0.82 0.88 0.79 0.74 0.78 0.78 0.79 0.76 0.74

GOV1 R GOV2 GOV3 GOV4 GOV5 FOO6 FOO7 FOO8 FOO9 FOO10

FOO

0.99
NETW

0.96

SUP11 SUP12 SUP

0.74 0.80 0.63 0.74 0.78

SUP13 SUP14 SUP15

Chi-Square= 34.00, df=35, P-value=0.51624, RMSEA=0.000 Figure 54 The Results of Second Order CFA of Measurement Model of Business Allies Network Connection Factor Variable (NETW)

The results of the confirmatory factor analysis of Business Allies Network Connection factor with the LISREL Program consists of the analysis

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in each dimension of the Business Allies Network Connection and the question items of each dimension. The result of the analysis is shown as per Table 17.
Table 17 The Results of the Confirmatory Factor Analysis of Business Allies Network Connection with LISREL Program Observe variable Factor loading SE t-value Validity (R2) Support from government (GOV) 0.88 0.05 17.10 0.78 GOV1 0.86 0.67 GOV2 0.76 0.06 18.60 0.57 GOV3 0.82 0.03 18.44 0.68 GOV4 0.88 0.03 19.98 0.78 GOV5 0.79 0.04 18.14 0.63 Food industrial groups (FOO) 0.99 0.05 20.04 0.99 FOO6 0.78 .61 FOO7 0.80 0.03 23.05 0.60 FOO8 0.79 0.04 22.75 66 FOO9 0.75 0.05 21.65 0.89 FOO10 0.76 0.06 20.00 0.69 Food industrial chains (CHA) 0.96 0.05 17.77 0.91 CHA11 0.74 0.55 CHA12 0.80 0.04 19.70 0.63 CHA13 0.73 0.04 12.23 0.30 CHA14 0.74 0.04 16.02 0.55 CHA15 0.80 0.04 16.91 0.61

From Figure 54 and Table 17, the Business Allies Network Connection Factor Measurement Model indicated a specific factor loading exactly. In

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respect to the factor loading, it was found that food industrial group dimension (SER) had the maximum factor loading equal to 0.99. The next one was the supply chain network (NETW) with a value equal to 0.96, and the least was trade operation dimension (COR) with a value of 0.88. On considering the standard error (SE) and statistical t value it was found that each factor loading value was different from 0 statistically significant at the level of 0.001. In respect to the reliability validity (R2), which is the value telling the ratio of variation between noticeable variables with the communalities, it was found that the food industrial dimension (FOO) had a maximum R2 equal of 0.99, with the next closest one being the supply chain network (SUP) with a value of 0.91 and trade cooperation dimension (COR) having a value of 0.78. The conclusion of the analysis of measurement model by the confirmatory factor analysis of Business Allies Network Connection Factors found that the model was consistent with the empirical data after adjusting to the model whereby the certain items were cut out of trade cooperation question item 1, Item 9, the food industrial group variable, and item 10 the supply chain network variable, due to the fact that the factor loading values were less than 0.5. The rest were with factor loading values passing the criterion having values of more than 0.5. The values of construct reliability of all values passed the criteria, being more than 0.6, and the variance extracted values of all variables passed the criteria having values larger than 0.5.

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The result of the second order confirmatory factor analysis of the Organizational Export Strategy Factor variables (STRA) for construct linearity examination was derived from the confirmatory factor analysis against empirical data. The organizational export strategy factor measurement model analysis used second order CFA with the LISREL program examining 3 variable dimensions such as Different Products Strategy (DIF) comprising noticeable variables from question items including DIF1, DIF2, DIF3, DIF4 and DIF5. There is also a low cost strategy (COS) comprising noticeable variables from question items COST6, COS7 and COS8 and Trade Business Strategy Dimension (BUS) comprising noticeable variables from question items of Trade Business Strategy question items BUS9, BUS10, BUS11, and BUS12. The results of the analysis revealed that the measurement model was consistent with the empirical data after adjusting the model with a Chi-Square (2) value equal to 6.98 and a degree of freedom (df) of 7, thereby making relative Chi-Square derived from the equation 2/df equal to 0.997 with RMSEA equal to 0.000. The consideration of Goodness of Fit (GFI) was equal to 0.983, and the Adjusted Goodness of Fit (AGFI) was equal to 0.996. Considering the factor loading value, it was found that all items passed the criteria of having a value more than 0.05, with construct reliability of Different Products Strategy (DIF) equal to 0.90, Low Cost Strategy (COS) equal to 0.89, and Business Trade Strategy (BUS) equal to 0.83. On considering the level of latent variables of Organizational Export Strategy factor variable, it was found that factor loading values passed the criteria of all values with the calculation having a value equal to 0.97, thus passing the

199

criterion. There was also a variance extracted value (VE) equal to 0.83 which also passed the criterion. See details from Table 12. The second order CFA of Full Measurement Model of Organizational Export Strategy factor is composed of the Different Products Strategy Variable (DIF), the Low Cost Strategy Variable (COS), and the Business Trade Strategy (BUS) variable as shown in Figure 55.
0.59 0.59 0.60 0.63 0.53 0.96 0.90 0.78 0.92 0.91 0.81 0.79 0.91 DIF1 DIF2 DIF3 DIF4 DIF5 COS6 COS7 COS8 BUS9 BUS10 BUS11 BUS12

DIF 0.94 0.98 STRA 0.80 BUS COS

Chi-Square=6.98, df=7, P-value=0.43124, RMSEA=0.000 Figure 55 The Result of the Confirmatory Factor Analysis-CFA of the Variable

Measurement Model on Organizational Export Strategy (STRA)

The Result of the Second Order Confirmatory Factor Analysis of the Generation of Advantages in the Competition of Export Industry Factor

200

Variables (COMP) for Construct Linearity Examination Derived from the Confirmatory Factor Analysis Against Empirical Data The Generation of Advantages in the Competition of Export Industry factor variable measurement model analysis used second order CFA with the LISREL program examining 3 variable dimensions such as the Different Products Strategy (DIF) comprising noticeable variables from question items including Market Sharing Dimension (MAR) comprising noticeable variables such as MAR1, MAR2, and MAR3, Export Values Dimension (EXP) comprising noticeable variables such as EXP4, EXP5, and EXP6, and Export Potentiality Dimension (SAT) comprising noticeable variables such as SAT7, SAT8, SAT9, SAT10 and SAT11. The results of the analysis revealed that the measurement model was consistent with the empirical data after adjusting the model with a Chi-Square (2) value equal to 203.78 and a degree of freedom (df) of 197, thereby making relative Chi-Square derived from the equation 2/df equal to 0.008 with RMSEA equal to 0.000. The consideration of Goodness of Fit (GFI) was equal to 0.97, and the Adjusted Goodness of Fit (AGFI) was equal to 0.95. Considering the factor loading value it was found that all items passed the criteria with values more than 0.05, and with construct reliability of Market Sharing Variable (MAR) values equal to 0.80. The Export Value Variable (EXP) was equal to 0.95, and the Export Potentiality Variable (SAT) was equal to 0.86. It was found that factor loading values passed the criteria of all values with the calculation results with a reliability of the Overall Satisfaction (SAT1) with a value of 0.97. This passed the criterion. The variance extracted value (VE) was equal to 0.93, also passing the criterion. Please see details from Table 14.

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The second order CFA of Full Measurement Model of Generation of Advantages in the Export Industry factor consists of the Generation of Advantages in the Export Industry in the future including the Market Sharing Variable (MAR), the Export Value Variable (EXP), and the Export Potentiality Variable (SAT) as shown in Figure 56.
0.78
MAR

0.77 0.78

MAR1 MAR2 MAR3

COMP

0.84

EXP

0.75 0.81

EXP4 EXP5 EXP6

SAT

0.74 0.80 0.63

0.74

SAT7 SAT8 SAT9 SAT10 SAT11

0.78

Chi-Square=203.78, df=197, P-value=0.35521, PRSEA=0.008 Figure 56 The Correlation between the Standardized Residual with the Independent Variable (COMP)

The result of the confirmatory factor analysis of the Generation of Advantages in the Export Industry with the LISREL Program comprises the

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analysis of each dimension regarding organizational effectiveness, with the analytical result being shown as per Table 18.
Table 18 The Result of the Confirmatory Factor Analysis of Generation of Advantages in the Export Industry with LISREL Program
Variables/Noticeable Variable loading Factor SE t-value Validity Coefficient (R2)

Market Sharing (MAR) MAR1 MAR2 MAR3 Export Value (EXP) EXP4 EXP5 EXP6 Export Potentiality (SAT) SAT7 SAT8 SAT9 SAT10 SAT11

0.97 0.05 20.04 0.98 0.78 0.61 0.77 0.03 23.03 0.59 0.78 0.03 21.74 0.61 0.87 0.05 16.09 0.75 0.75 0.56 0.81 0.03 18.44 0.68 0.84 0.03 19.96 0.76 0.80 0.04 17.72 0.89 0.74 0.55 0.80 0.04 19.69 0.61 0.63 0.04 14.22 0.40 0.74 0.04 15.96 0.53 0.78 0.04 15.97 0.60

From Figure 56 and Table 18, the Organizational Generation of Advantages in the Food Industrial Competition factor measurement model identifies the factor loading exactly. It was found that the Marketing Sharing dimension (MAR) had the maximum factor loading equal to 0.97. The next consecutive one is the Export Potentiality Dimension (SAT), having a value equal to 0.95. The least one was the Export Value Dimension (EXP) with a value of 0.87. On considering the Standard Error (SE) and statistical t-value,

203

it was found that each factor loading value is different from 0 statistically significant at the level of 0.001. In respect to the reliability validity (R2) which is the value telling the ratio of variation between noticeable variables with the communalities, it was found that the Market Sharing Dimension (MAR) had a maximum R2 value equal to 0.98. The next subsequent ones are the Export Potentiality Dimension (SAT) and the Export Value Dimension (EXP) with value of 0.75. The conclusion of the analysis of the measurement model by the confirmatory factor analysis of Generation of Advantages in the Competition Factor found that the model is consistent with the empirical data after adjusting the model without cutting off any questions out from the measurement model. All factor loading values passed the criteria, having a value more than 0.5. All variable construct reliability values passed the criteria having values of more than 0.6. Finally, the variance extracted value of all the variables passed the criteria having a value more than 0.5.

Examination of Convergent Validity

Convergent validity examination is an item or indicator with common variation to examine whether certain indicators measure the same variables. The convergent validity examination method has 3 stipulations as follows (Newbert, 2007). Factor Loading. If the factor loading value is high, it means that the common convergent point is high. Factor loading values should be more than 0.5. The value can be viewed from lambda-X or lambda-Y from LISRELs issue completely standardized solution in the output file.

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Variance Extracted (VE). Admissible value should be more than 0.5. The calculation of the equation is shown below:

VE = Variance Extracted of each variable 1 = Standardized Factor Loading such as lambda-X or lambda-Y from LISRELs issue of completely standardized solution of the output file n = Number of questions measuring the variables The Construct Reliability. Admissible values shall have a value of more than 0.6. The calculation of the equation is shown below:

CR = Construct Reliability 1 = Standardized Factor Loading such as lambda-X or lambda-Y from LISRELs issue of completely standardized solution of the output file n = Number of questions measuring the variables 1 = Error Variant such as theta-delta or theta-EPS from LISRELs issue of completely standardized solution of the output file

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The examination of convergent validity should pass all three criteria, and the factor loading value must be more than 0.5. The variance extracted value must be more than 0.5, and the construct reliability value must be more than 0.6 (Newbert, 2007). The necessary detail of factor loading values, the Variance Extracted (VE), and the construct reliability values are shown in Table 19.
Table 19 The Results of Convergent Validity Analysis Lambda X Variable Index (i) FIRM ATT 0.16 SAT 0.15 DET 0.14 TEC 0.12 ATT ATT1 0.33 ATT2 0.09 ATT3 0.32 ATT4 0.31 EXC5 0.32 SAT SAT6 0.08 SAT7 0.40 SAT8 0.39 SAT9 0.38 SAT10 0.40 DET DET11 0.40 DET12 0.36 DET13 0.40

Theta-delta (i) 0.16 0.15 0.12 0.10 0.33 0.09 0.08 0.10 0.09 0.08 0.40 0.39 0.34 0.40 0.41 0.19 0.24

Variance Extracted (VE)

Construct Reliability (CR) 0.92

0.85

0.81

0.92

0.80

0.92

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DET14 TEC TEC15 TEC16 TEC17 TEC18 Table 19 (Continued) Variable MAKE Index TEC19 PRO PRI PLA POM PRO1 PRO2 PRO3 PRO4 PRI5 PRI6 PRI7 PRI8 PLA9 PLA10 PLA11 PLA12 POM13 POM14 POM15 POM16 POM17

0.38 0.42 0.46 0.50 0.50 Lambda X (i) 0.42 0.94 0.95 0.92 0.53 0.76 0.71 0.78 0.79 0.78 0.76 0.81 0.80 0.76 0.78 0.67 0.71 0.86 0.78 0.61 0.67 0.68

0.20 0.39 0.40 0.41 0.41 Theta-delta (i) 0.36 0.11 0.09 0.16 0.72 0.42 0.50 0.39 0.40 0.41 0.39 0.36 0.37 0.42 0.40 0.40 0.50 0.26 0.40 0.63 0.55 0.54

0.79

0.95

Variance Extracted (VE)

Construct Reliability (CR)

0.81

0.95

PRO

0.77

PRI

0.73

PLA

0.86

POM

0.90

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DIF

DIF1 DIF2 DIF3 DIF5

0.61 0.67 0.68 0.84

0.63 0.55 0.54 0.30

0.83

Table 19 (Continued) Variable COS Index COS6 COS7 COS8 BUS9 BUS10 BUS11 BUS12 FIN PER PHI REL FIN1 FIN2 FIN3 PER6 PER7 PER8 PHI9 PHI10 PHI11 PHI12 PHI13 Lambda X (i) 0.58 0.57 0.69 0.78 0.67 0.72 0.71 0.97 0.98 0.97 0.98 0.90 0.89 0.91 0.58 0.59 0.73 0.95 0.99 0.96 0.95 0.88 Theta-delta (i) 0.66 0.65 0.53 0.40 0.40 0.48 0.50 0.05 0.45 0.50 0.05 0.20 0.19 0.17 0.66 0.65 0.47 0.09 0.02 0.09 0.08 0.22 Variance Extracted (VE) Construct Reliability (CR) 0.58

BUS

0.86

RESO

0.95

0.97

FIN

0.90

PER

0.83

PHI

0.90

0.97

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REL

REL14 REL15 SAT9

0.69 0.67 0.76

0.52 0.55 0.43

0.80

Table 19 (Continued) Variable HALA Index STA QUL GOV STA1 STA2 STA3 STA4 QUL5 QUL6 QUL7 GOV8 GOV9 GOV11 COR FOO SUP COR2 COR3 COR4 COR5 FOO6 FOO7 FOO8 Lambda X (i) 0.84 0.80 0.82 0.78 0.78 0.79 0.79 0.80 0.75 0.73 0.74 0.80 0.78 0.76 0.82 0.88 0.59 0.58 0.64 0.51 0.95 0.99 0.96 Theta-delta (i) 0.30 0.36 0.33 0.39 0.40 0.37 0.38 0.36 0.43 0.43 0.45 0.37 0.39 Variance Extracted (VE) Construct Reliability (CR) 0.87

STA

0.95

QUL

0.95

GOV

0.86

NETW

0.90

0.89

COR

0.83

FOO

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Table 19 (Continued) Variable SUP Index SUP10 SUP11 SUP12 SUP13 SUP14 SUP15 MAR EXP RIP SAT MAR1 MAR2 MAR3 EXP4 EXP5 EXP6 SAT7 SAT8 SAT9 SAT10 SAT11 GRO NEW GRO2 GRO3 GRO4 Lambda X (i) 0.88 0.78 0.78 0.79 0.79 0.81 0.95 0.98 0.89 0.81 0.84 0.83 0.72 0.83 0.76 0.80 0.77 0.67 0.61 0.60 0.72 0.77 0.87 0.56 0.59 0.78 Theta-delta (i) Variance Extracted (VE) Construct Reliability (CR) 0.97

0.95 0.08 0.04 0.18 0.31 0.30 0.31 0.49 0.32 0.42 0.36 0.40 0.55 0.63 0.62 0.49 0.05 0.05 0.68 0.66 0.39

COMP

0.81

0.96

MAR

0.91

EXP

0.87

SAT

0.79 0.95 0.97

DECT GRO

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GRO5 Table 19 (Continued) Variable NEW Index NEW6 NEW11 NEW13 NEW14 NEW15

0.77 Lambda X (i) 0.76 0.80 0.82 0.72 0.58

0.41 Theta-delta (i) 0.43 0.45 0.68 0.66 0.67

0.58 Variance Extracted (VE)

0.83 Construct Reliability (CR)

0.58

0.83

The Discriminant Validity Examination

The Discriminant Validity Examination checks to see that all the variables are different. That is, each variable has an identity and is not identical with other variables (Nothnagel, 2007). The Discriminant Validity Examination can be made by comparing the variance extracted (VE) value with the correlation coefficient squared (r2). If VE is more than r2 it means that that pair of variables has discriminant validity value. Using both convergent and discriminant validity examinations should be used when checking new tests (Nothnagel, 2007). The results of the Discriminant Validity Examination found that the variance extracted (VE) of each latent variable has more value than the correlation coefficient squared of each pair of latent variables with other latent variables. Therefore, it can be concluded that all the variables have been checked using discriminant validity values.

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Table 20 The Results of the Correlation Coefficient Analysis for Discriminant Validity Examination Correlation Coefficient Square of Correlation Coefficient (r2) VE ENGA OUTS STRA RESO HALA NETW COMP DECT FIRM 0.85 1.00 0.40 0.28 0.26 0.28 0.34 0.32 0.25 MARK 0.80 0.63 1.00 0.46 0.55 0.56 0.54 0.56 0.31 RESO 0.82 0.53 0.68 1.00 0.44 0.44 0.45 0.55 0.31 NETW 0.95 0.51 0.74 0.65 1.00 0.61 0.46 0.64 0.42 STRA 0.88 0.58 0.75 0.68 0.66 1.00 0.65 0.64 0.45 COMP 0.83 0.58 0.75 0.66 0.74 0.61 1.00 0.62 0.32

According to Table 20, the triangle value on the bottom left is the correlation coefficient, and the value in the upper right is the correlation coefficient squared used for comparison with the Variance Extracted (VE) in the consideration for the Discriminant Validity Examination. Part5: The Analytic Results of the Causal Correlation Path of the Linearity Construct Equation Model Shows the Influence of the Factors on the Generation of Advantages in the Competition of the Food Export industry in the Future The analysis of the path of factors influential to the general advantages in the future competition of the producers of food was separated into two parts. The first part is the presentation of the equation model analytic results which was developed from the relating concept, based on the theory and

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research work to be integrated, compared to the generation of the study model. Although the generation of this conceptual model is based on the relating theoretic and research literature studies, the author was afraid that there might be some weak points. As mentioned above, the author has proceeded to present the two types of models which are the hypothesized model and the modified model. The analytic results of the correlation path of the linearity construct equation model built following the hypothesis shows the influence of the factors on the generation of advantages in the competition of food export industry producers in the future. The analytic results of the correlation path of the linearity construct equation model built according to the hypothesis shows the influence of the factors towards the generation of advantages in the competition of food export industry producers in the future comprising the external latent variable of the Organizational Effectiveness Factor and the internal latent variables such as the marketing mix factor, resources readiness factor, business allied networks factor, organizational export strategy factor and the generation of advantages in the competition of food export industry in the future factor. Necessary details of the analysis are shown in Table 21.

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Table 21 Path Coefficients, Standard Errors, T-values of Parameter Estimations of the Hypothesized Structural Equation Model (N=350) Path Diagram Path Coefficients Standard Errors T-values LAMBDA-Y MARK PRO 0.781 --MARK PRI 0.820 0.023 17.312 Table 21 (Continued) Path Diagram Path Coefficients Standard Errors T-values LAMBDA-Y MARK PRA 0.782 0.021 19.415 MARK POM 0.775 0.021 18.210 STAR DIF 0.745 --STAR COS 0.850 0.020 27.251 STAR BUS 0.750 0.023 21.252 NETW GOV 0.752 --NETW FOO 0.520 0.020 12.120 NETW SUP 0.547 0.021 12.330 COMP MAR 0.562 --COMP EXP 0.528 0.032 11.110 COMP STA 0.562 0.020 11.200 LAMBDA-X FIRM ATT 0.807 0.026 19.734 FIRM SAT 0.839 0.029 20.665 FIRM DET 0.806 0.025 18.732 FIRM TEC 0.835 0.021 19.000 RESO FIN 0.792 0.069 12.440 RESO PER 0.907 0.084 12.755 RESO PHI 0.615 0.143 4.51 RESO REL -0.755 0.394 -2.34

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BETA MARK STRA 0.814 0.069 MARK COMP 0.428 0.080 RESO COMP 0.562 0.087 NEWT COMP 0.970 0.842 STAR COMP 0.678 11.253 NEWT STAR 0.280 0.105 Table 21 (Continued) Path Diagram Path Coefficients Standard Errors GAMA FIRM MARK 0.770 0.051 FIRM STAR 0.043 0.066 FIRM COMP 0.078 0.055 RESO MARK 0.825 0.062 RESO STAR 0.827 0.072 Path Diagram = Path Coefficients Table 22 Path Coefficents, Standard Errors, T-values of Parameter Estimations Structural Equation Model (N=350) Path Diagram Path Coefficients Standard Errors LAMBDA-Y MARK PRO 0.791 -MARK PRE 0.821 0.026 MARK PLA 0.796 0.028 MARK POM 0.786 0.025 STAR DIF 0.854 -STAR COS 0.931 0.021 STAR BUS 0.888 0.023 NETW GOV 0.928 -NETW FOO 0.682 0.032

11.806 5.376 11.985 9.325 11.245 0.254 T-values 15.019 0.653 1.408 0.651 0.524

of the Hypothesized T-values -20.312** 19.517** 18.325** -29.085** 26.664** -15.902**

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NETW COMP COMP COMP

SUP MAR EXP SUC

0.681 0.636 0.675 0.742

0.030 -0.038 0.040

15.900** -12.526** 13.457**

Table 22 (Continued) Path Diagram LAMBDA-X FIRM ATT FIRM SAT FIRM DET FIRM TECH RESO FIN RESO PER RESO PHI RESO REL BETA MARK STAR MARK COMP RESO COMP NETW COMP STAR COMP NETW STAR GAMA FIRM MARK FIRM STAR FIRM COMP RESO MARK

Path Coefficients 0.807 0.839 0.806 0.835 0.792 0.907 0.615 -0.755 0.814 0.886 0.428 0.245 0.425 0.854 0.770 0.043 0.078 0.125

Standard Errors 0.026 0.029 0.025 0.021 0.069 0.084 0.143 0.394 0.069 0.075 0.080 0.095 0.987 0.879 0.051 0.066 0.055 0.085

T-values 19.734** 20.665** 18.732** 19.000** 12.440** 12.750** 4.510** -2.340** 11.806** 11.882** 5.376** 2.582** 2.582** 10.235** 15.019** 0.653** 1.408** 2.578**

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RESO STAR 0.693 Path diagram = path coefficients *Significance 0.05 (1.960t-value2.576) **Significance 0.1 (t-value2.576)

0.058

10.910**

From Table 21 and Figure 56, the result of the data analysis shows the finding that the hypothesized model conceptual model was inconsistent with the empirical data showing negative. The main hypothesis of the theoretic model is consistent and in harmony with the empirical data. This was considered from the Chi-Square (2) value which was equal to 1120.59 and the degree of freedom (df) equal to 239, differing from 0 statistically significant (p-value = 0.00). Also, the Relative Chi-Square (2/ df) was equal to 4.69 (according to the standard not to exceed 2). The Goodness of Fit value (GFI) was equal to 0.800 (following the standard that this value should be more than 0.9). The Adjusted Goodness of Fit (AGFI) is equivalent to 0.800 (following the standard that this value should be more than 0.9), and the RMSEA value is equal to 0.86 (following the standard that the value should be less than 0.05). In conclusion, the analytical result of the conceptual model built according to the hypothesized model must be adjusted by allowing the errors to be correlated, being identical to the actual state. The author, therefore, has adjusted the model for hypothesized modeling to be consistent with the empirical data. From Table 28 and Figure 57, the analytical data result found that the modified model was consistent with the empirical data showing the

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acceptance of the main hypothesis of the theoretic model is consistent and in harmony with the empirical data. This was determined based on a Chi-Square (2) value equal to 196.04, a degree of freedom (df) of 177, and a p-value equal to 0.143, thereby making the relative Chi-Square ( 2/df ) equal to 1.11 (per standard this should not exceed 2), the consideration of Goodness of Fit (GFI) equal to 0.968 (per standard this should be more than 0.9), and the Adjusted Goodness of Fit Index Value (AGFI) equal to 0.012 (per standard the value should be less than 0.05). The analytical results of the linearity construct modified model show the influence of the factors towards the advantages in the competition of the food export industry in the future, observed in two parts as follows: 1. The factor part comprising: 1.1 The correlation path between noticeable external variables with latent external variables LAMBDA-X 1.2 The correlation path between noticeable internal variables with internal latent variables (LAMBDA-Y) 2. The construct part comprising the correlation path between internal latent variables with the internal latent variables (BETA). The analytical results were show in Table 23 and Figure 56. The results of the analytical factor show that the adjusted linearity equation model is an influential factor towards the generation of advantages in the competition of the food export industry in the future.

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The Analytical Result of the Correlation Path between Noticeable Variables with External Latent Variables The presentation of the analytical data results on this part is a presentation of the details of the results on the consideration of the important factor variables of the external latent variables. These are the organization effectiveness factor (ENGA) with sub-variables of factor dimensions of the management ability (ATI) and organizational effectiveness. It was found that the most important factor variable that can explain the factor variable of the organizational environment condition was the organizational effectiveness variable with the path coefficient of 0.83. The management ability has a path coefficient equal to 0.82; the details of this are set forth as per Table 26 and Figure 56. The Analytical Result of the Correlation Path between Noticeable Internal Variables with Latent Internal Variables On considering the path coefficient of the noticeable internal variable with the internal latent variable in the factor of organizational export strategy (STRA), it was found that the factor variables which can explain the organizational export strategy factor the best are as follows: - Different Products Strategy (DIF) with path coefficient of 0.74 - Low Cost Strategy (COS) and Trade Business Strategy (BUS) with equal path coefficients with value of 0.72 and 0.71 respectively.

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On considering the path coefficient of the noticeable internal variable with the internal latent variable in the factor of Resources Readiness (RESO), it was found that the factor variables which can explain the factor of resources readiness strategy the best are as follows: Financial Readiness (FIN) with path coefficient of 0.92 Personnel Readiness (PER) with path coefficient of 0.88 Physical Readiness with path coefficient of 0.86 Business Partner Relations (REL) with path coefficient value of at least 0.77.

On considering the path coefficient of the noticeable internal variable with the internal latent variable in the factor Business Allies Network Connection (NETW), it was found that the factor variables which can explain the most adequately are as follows: - Food Industrial Group (FOO) with path coefficient of 0.95 - Supply Chain Network with path coefficient of 0.87 - Trade Cooperation (COR) with path coefficient value of 0.86. Considering the path coefficient of the noticeable internal variable with the internal latent variable in the generation of advantages in the competition factor (COMP), it was found that the factor variable which can explain the generation of advantages in the competition factor the best was the export

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value factor (EXP) with a path coefficient of 0.89. The next closest one was the export potentiality (SAT) with a path coefficient of 0.85 and market sharing (MAR) with a path coefficient value of 0.75. The Analytical Result of the Correlation Path between the Endogenous Latent Variable with the Endogenous Variables The presentation of the analytical data results presents the details of the results in consideration of the important factor variables of the endogenous latent variables. This is the Competitive Advantages in the Thai food industry (COMP) with sub-variables of the factor dimensions of the Success of Export (SUC), Export Value (EXP) and Market Share (MAR). It was found that the most important factor variable that can explain the factor variable of the Competitive Advantages in Thai food industry (COMP) condition is the Export Value, with the path coefficient of 0.80. The details of this variable are set forth as per Table 26 and Figure 56.

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The Analytical Result of the Correlation Path between the Endogenous Latent Variables with the Endogenous Latent Variables The path coefficient of the noticeable internal variable with the internal latent variable in the factor of the Marketing Mix Factor (MARK) was found to have a Product Food variable (PRO) with a path coefficient of 0.74 and the Price (PRI) variable with equal path coefficients equal to 0.73. On considering the path coefficient of the noticeable endogenous variable with the endogenous latent variable in the factor of Organizational Export Strategy (STRA), it was found that the factor variables with the best data were the Different Products Strategy (DIF) variable with a path coefficient of 0.73, the Low Cost Strategy (COS) variable with a path coefficient of 0.71, and a Trade Business Strategy (BUS) variable with a path coefficient of 0.70. The path coefficient of the noticeable endogenous variable with the endogenous latent variable in the factor business allies network connection (NETW) was found to have a favorable factor variable set in the Food Industrial Group (FOO) variable, having a path coefficient of 0.75, the Supply Chain Network (SUP) variable with a path coefficient of 0.84, and the Trade Cooperation (COR) variable with a path coefficient value of 0.85. The path coefficient of the noticeable endogenous variable with the endogenous latent variable in the generation of advantages in the Competition Factor (COMP) was found to be best explained with the Export Value Factor (EXP) variable with a path coefficient of 0.87, the Export Potentiality (SAT)

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variable with a path coefficient of 0.84, and the Market Sharing (MAR) variable with a path coefficient value of 0.73.

Comparison of Model Statistic Validity with Empirical Data between the Hypothesized Model and the Modified Model
According to the analytical results on the comparison of the two models, it was found that after the modification of the primary agreement of the statistical analysis with the LISTEL program allowing error variance to be correlative (Newbert, 2007), the modified model was validly consistent with the empirical data in relation to the necessary details as per Table 23.
Table 23 Comparison of Model Statistical Consistency Values between Hypothesized Model and Modified Model Test statistics Hypothesized model Modified model Chi-sqaure ( ) 1120.59 196.04 df 239 176 df 0.000 0.143 p-value 4.69 1.11 GFI 0.841 0.968 AGFI 0.800 0.945 RMSEA 0.086 0.015 Note. Goodness of Fit Index-GFI, adjusted Goodness of Fit IndexAGFI, Root Means Square Error of Approximation
2 2 /

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From Table 23, a comparison of the analytical results of the hypothesized model with the modified model was successfully made. This showed influential factors to the generation of advantages in the competition of the food export industry in the future. It also showed the changes of the consistency statistics values of the model with empirical data in an improved way with statistical values of 2 groups. The first group of the decreased statistical values was composed of the chi-square (2), degree of freedom (df), relative chi-square (2/df), and RMSEA. The second group consisted of the increased statistical values such as the Goodness of Fit Index (GFI) and the Adjusted Goodness of Fit Index (AGFI). The results of the comparison of statistical values in the first group reduced 2 prior to model modification having a value of 1120.59. After modification the value changed to 196.04. In turn, the df value prior to model modification was 239, and after model modification had a decreased value of 176. 2/df prior to model modification had a value of 4.69, and after modification it decreased to 1.11. The RMSEA value prior to model modification was 0.086 and after modification it had a decreased value of 0.015. Of the values that increased, there was the p-value which prior to modification was 0.000. After being modified, it increased to 0.143. GFI values showed a variance quantity, and the common variances were explained by the model. Prior to modification, the GFI value was 0.84, and after modification the value increased to 0.97. Furthermore, the AGFI is the value showing the variance quantity and the common variances explained by

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modifying the degree of freedom (df). A GFI value prior to modification was 0.80, and after modification it increased to 0.95. In conclusion, the overview of the model after modification was more consistent with the empirical data and passed the standard criteria stipulated. Therefore, in this study a modified model in explaining the factors influential to the generation of advantages in the competition of the food export industry producers in the future was used. The results of the hypothesis test from the modified model by the analysis of direct influence, indirect influential and total influences between various latent variables with the exogenous latent variables of competitive advantages in Thai food industry are shown as per Table 24-25.
Table 24 Direct Influences, Indirect Influences and Total Influences of the Model Dependent Value R2 Influence FIRM MARK RESO STRA NETW MARK 0.48 DE 0.69** IE TE 0.69** RESO 0.81 DE 0.14* 0.79** IE 0.55** TE 0.69** 0.79** STRA 0.82 DE 0.01 0.91* IE 0.63** TE 0.64** 0.91** NETW 0.85 DE 0.06 0.62** 0.28* IE 0.61** 0.23* TE 0.67** 0.87** 0.28*

COMP -

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Table 24 (Continued)
Dependent Value COMP R2 0.83 Influence DE IE TE FIRM 0.05 0.60** 0.66** MARK 0.61** 0.22** 0.85** RESO STRA NETW 0.26 0.26* COMP -

DE-Direct Effect, IE-Indirect Effect, TE-Total Effect * Statistical significance at the level 0. 0.5 (1.960t-value<2.576), ** Statistical significance at the level of .01 (t-value 2.576) Table 25 Direct Influences, Indirect Influences and Total Influences of the Model (with modified figures). Dependent Value R2 Influence FIRM MARK RESO STRA NETW COMP MARK 0.48 DE 0.68** IE TE 0.68** RESO 0.81 DE 0.13* 0.77** IE 0.52** TE 0.67** 0.76** STRA 0.82 DE 0.01 0.81* IE 0.62** TE 0.62** 0.90** NETW 0.85 DE 0.05 0.60** 0.27* IE 0.59** 0.21* TE 0.65** 0.85** 0.27* COMP 0.83 DE 0.05 0.60** 0.25* IE 0.60** 0.21** TE 0.65** 0.84** 0.84** 0.25* DE-Direct Effect, IE-Indirect Effect, TE-Total Effect * Statistical significance at the level 0. 0.5 (1.960t-value<2.574), ** Statistical significance at the level of .01 (t-value 2.574)

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Part 6: The Results of the Hypothesis Tests Table 21 and Figure 56 demonstrate direct influence, indirect influence and total influences of the path correlation factor influential to the generation of advantages in the competition of food export industry in the future. The analytical result details are presented by the author in the correlation values between the causal variables in each path responding to each hypothesis item accordingly as follows: Hypothesis 1: The Organizational Effectiveness Factor directly positively influences the Marketing Mix Factor. The analytical result from Table 28 and Figure 56 explain that Organizational Effectiveness was directly influential positively on the Marketing Mix Factor with statistical significance at the level of 0.1 with the path coefficient being 0.69. This can explain the market mix variance of 48% (R2=0.48); therefore, the analytical result was consistent with the hypothesis set forth. Hypothesis 2: The Resources Readiness Factor directly positively influences the Marketing Mix Factor. The analytical results from Table 28 and Figure 56 explain that the Organizational Effectiveness is directly influential positively on the Marketing Mix Factor with statistical significance at the level of 0.05 with a path coefficient of 0.58. This can explain the Market Mix Variance Factor of

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85% (R2=0.58); therefore, the analytical result was consistent with the hypothesis set forth. Hypothesis 3: The Resources Readiness Factor directly positively influences the Organizational Export Strategy Factor. The analytical result from Table 28 and Figure 56 explain that the Organizational Readiness Factor was directly influential positively on the Organizational Export Strategy Factor with statistical significance at the level of 0.1 with a path coefficient of 0.57. This can explain the Export Decision Variance of the Industrial Food Production in Thailand of 85% (R2=0.85); therefore, the analytical result was consistent with the hypothesis set forth. Hypothesis 4: The Market Mix Factor directly positively influences the Organizational Export Strategy Factor. The analytical result from Table 28 and Figure 56 explain that the Marketing Mix Factor was directly influential positively on the Organizational Export Strategy Factor with statistical significance at the level of 0.1 with a path coefficient of 0.79. This can explain the Organizational Export Strategy variance of 81% (R2=0.81); therefore, the analytical result was consistent with the hypothesis set forth. The domestic and international environmental conditions are directly influential positively to an Organizational Export Strategy with a part coefficient value of 0.91 that can explain the variance factor of the generation of advantages in the competition of 82% (R2=0.82). Therefore, the research result was consistent with past research stating an important factor of an export. For long-term success, the business must make an adjustment to the products to be consistent with the

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market demand. Furthermore, the production strategy for application appropriate with the circumstance will be influential directly and indirectly to the business operation results and able to generate advantages in the business competition. Hypothesis 5: The Resources Readiness Factor directly positively influences the Organizational Export Strategy Factor. The analytical result from Table 28 and Figure 56 explain that the Resources Readiness Factor was directly influential positively on the Organizational Export Strategy Factor with statistical significance at the level of 0.01 with a negative path coefficient value of -0.76. There was an Organizational Export Strategy Variance Factor of 82% (R2=0.82); therefore, the analytical result was inconsistent with the hypothesis set forth. Hypothesis 6: The Business Allies Network Connection Factor directly positively influences the Organizational Export Strategy Factor. The analytical result from Table 28 and Figure 56 explain that the Business Allies Network Connection Factor was directly influential positively on the Export Strategy Factor with statistical significance at the level of 0.1 with a path coefficient of 0.62. This can explain the Organizational Export Strategy variance factor of 85% (R2=0.85); therefore, the analytical result was consistent with the hypothesis set forth. Hypothesis 7: The Organizational Effectiveness Factor directly positively influences the Generation of Advantages in the Competition Factor. The analytical result from Table 28 and Figure 56 explain that the Organizational Effectiveness Factor directly negatively influences the

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Generation of Advantages on the Competition Factor with statistical significance at the level of 0.1 with a path coefficient of 0.57. This can explain the Generation of Advantages in the Competition Variance of 75% (R2=0.75); therefore, the analytical result was consistent with the hypothesis set forth. Hypothesis 8: The Marketing Mix Factor directly positively influences the Generation of Advantages in the Competition Factor. The analytical result from Table 28 and Figure 56 explain that the Marketing Mix Factor was directly influential positively on the Generation of Advantages in the Competition of Food Export industry in the Future with a statistical significance at the level of 0.01. The Generation of Advantages in the Competition of Food Export industry Variance Factor was 78% (R2=0.78); therefore, the analytical result was inconsistent with the hypothesis set forth. Hypothesis 9: The Resources Readiness Factor directly positively influences the Generation of Advantages in the Competition of Food Export industry in the Future. The analytical result from Table 29 and Figure 57 explain that the Resources Readiness Factor was directly influential positively on the Generation of Advantages in the Competition with statistical significance at the level of 0.1. There was an observed negative path coefficient of -0.76, and the Generation of Advantages in the Competition Factor Variance was 75% (R2=0.75). Therefore, the analytical result was inconsistent with the hypothesis set forth.

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Hypothesis10: The Business Allies Network Connection Factor directly positively influences the Generation of Advantages in the Food Export industry Factor in the Future. The analytical result from Table 30 and Figure 58 explain that the Business Allies Network Connection Factor was directly influential positively on the Generation of Advantages with a statistical significance at the level of 0.5, with a path coefficient of 0.28. The market mix variance was 85% (R2=0.85); therefore, the analytical result was consistent with the hypothesis set forth. Hypothesis 11: The Organizational Export Strategy Factor directly positively influences the Generation of Advantages in the Competition of Food Export industry in the Future Factor. The analytical result from Table 31 and Figure 59 explain that the Organizational Export Strategy Factor was directly influential positively on the Generation of Advantages in the Competition of Food Export industry in the Future Factor with statistical significance at the level of 0.05 and a path coefficient of 0.57. Accordingly, the Generation of Advantages in the Competition of Food Export industry in the Future Factor was 75% (R2=0.75); therefore, the analytical result was consistent with the hypothesis set forth.

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Table 26 Conclusion of the Hypothesis Tests Hypothesis The Organizational Effectiveness directly H1 positively influences the Marketing Mix Factor. The Resources Readiness directly positively H2 influences the Market Mix Factor. The Resources Readiness directly positively H3 influences the Organizational Export Strategy Factor. The Market Mix Factor directly positively H4 influences the Organizational Export Factor. The Resources Readiness directly positively H5 influences the Organizational Export Strategy Factor. The Business Allies Network Connection Factor H6 directly positively influences the Organizational Export Strategy Factor. The Organizational Effectiveness Factor directly H7 positively influences the Generation of Advantages in the Competition. The Market Mix Factor directly positively H8 influences the Generation of Advantages in the Competition. The Resources Readiness Factor directly H9 positively influences the Generation of Advantages in the Competition. The Business Allies Network Connection Factor H10 directly positively influences the Generation of Advantages in the Competition.

Result of Hypothesis Test Consistent with hypothesis set forth. Inconsistent with hypothesis set forth. Inconsistent with hypothesis set forth. Consistent with hypothesis set forth. Consistent with hypothesis set forth.

Consistent with hypothesis set forth.

Consistent with hypothesis set forth.

Consistent with hypothesis set forth.

Inconsistent with hypothesis set forth.

Consistent with hypothesis set forth.

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Table 26 (Continued) Hypothesis Result of Hypothesis Test The Organizational Export Strategy Factor H11 directly positively influences the Generation of Consistent with hypothesis set forth. Advantages in the Competition.

Conclusion
The contents in this chapter conclude the results of the study from the quantitative analytical data including the general data of the sampling group, the opinion of the sampling group concerning the generation of advantages in the competition of the food export industry in Thailand; the primary examination of the data for multivariate statistics leading to the confirmatory factor analysis, and the analysis of the correlation of the independent variable influential to the dependant variables linearity construction equation with LISRELs program and the results of the hypothesis tests.

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CHAPTER 5

CONCLUSION OF THE RESEARCH RESULTS, DISCUSSION, AND SUGGESTIONS

The purpose of this chapter is to conclude the results of all the research for conciseness and simple ease of reading, with discussion on important issues. This chapter also reflects the authors view on these issues and finally suggests factors influential to the generation of competitive advantages in the food export industry in the future. The objectives are: 1. To study factors influential to the generation of competitive advantages for the food export industry in the future. 2. To test the constructed correlation model of factors influential to the generation of competitive advantages for the food export industry in the future. 3. To study direct, indirect and total influences of factors influential to the generation of competitive advantages for the food export industry in the future. The conceptual framework of the research was developed from a review of literature dealing with international trade, resource-based theory,

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and strategic business management concepts as well as relevant studies dealing with export competitiveness. These were established in a linearity constructed correlation model comprising a group of external latent variables consisting of 1) the Organizational Effectiveness Factor and the Internal Latent variables; 2) the Market Mix Factor; 3) the Resources Readiness Factor; 4) the Business Allied Network Connection Factor; 5) the Organizational Export Strategy Factor; and 6) the Ability to Generate Advantages in the Future Food Export industry Factor. The population framework used was the food export industry operational in Thailand until 31 December 2010 with export of food conversion industries separated according to product items comprising the following groups: 1) fresh food 2) converted food 3) converted fruits 4) seafood 5) others The sampling group under the study was secured from random sampling from the population fixed for 350 samples using the instrument of questionnaire forms for data collection with cross-sectional data collection methods, making data collection by sending the questionnaire forms to the sampling group by post via return answer post of the Thai Postal Service Co.,

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Ltd. The summary of the data collection with ratio of responses of the questionnaire forms was observed at 59.63%.

The Population and Sampling Group

The population under this research consisted of food export industry entrepreneurs in Thailand conducting business by exporting food to various countries all over the world. The sampling group was 350 entrepreneurs and/or executives working directly in the production or export functions in the food export industry in Thailand. The instrument used in this research was a questionnaire form derived from the integration of qualitative data from insight interviews of executives in the production or export organizations in the food export industry. 10 people were given the initial interview, providing the structure of the concepts found in the questionnaire form. The questionnaire form measured the factors influential on the decision-making process to export conversion food and was separated into 3 sections which are as follows: 1) General information pertaining to the sample group subjects with a total of 8 items.

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2) A model measuring the opinion of the sample group towards the generation of advantages for competition in the food export industry in Thailand with a total of 6 factors and totaling 90 items 3) Additional suggestions in the form of open-ended questions for data analysis. The author used the linearity construct equation analysis technique with the LISREL Program. The research conclusion, the research discussion and suggestions were set forth as per the following details.

Conclusion of the Research Results Conclusions on General Data of the Sampling Group Responding to the Questionnaire
This study collected data from food export industry executives carrying out business operations in Thailand. There were a total of 350 persons. The results of the analysis found that 193 respondents (or 55.14%) were entrepreneurs with a business size (Fiscal 2008 business operation) and assets of less than 50 million baht. 92 respondents (or 27.71%) were entrepreneurs with business size and assets between 51-200 million baht, and 32 respondents (or 12.00%) were entrepreneurs with business size and assets between 201-500 million baht.

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The results of the analysis also found that 172 respondents (or 49.14%) were entrepreneurs with registered capital of less than 50 million baht, 155 respondents (or 44.28%) were entrepreneurs with registered capital between 51-200 million baht, and 6 respondents (or 1.71%) were entrepreneurs with registered capital of more than 501 million baht. Under the form of business operation, the results show that 257 respondents (or 73.42%) were corporations, 59 respondents (or 16.85%) were single owner proprietorships, and 24 respondents (or 6.86%) were in the form of company partnerships. The results of the analysis show that 289 respondents (or 82.57%) were 100% Thai companies where 28 respondents (or 8.00%) were Western companies, and 10 respondents (or 2.85%) were African-based companies. Business operation results show that 224 respondents (or 64.00%) recorded a net profit of less than 50 million baht, 80 respondents (or 22.86%) recorded a net profit of more than 50 million baht, and 13 respondents (or 3.71%) faced losses in their business operations. The results of the duration of most business operations concluded that the total number of 102 respondents (or 29.14%) have operated their business between 4-6 years, 95 respondents (or 27.14%) have operated their business between 1-3 years, and 46 respondents (or 13.14%) have operated their business between 10-15 years. The results on the gross export show that 160 respondents (or 45.71%) have a gross export between 21-30%, 100 respondents (or 28.57%) have a

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gross export between 10-20%, and 95 respondents (or 27.14%) have a gross between 40-50%.

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Conclusions on the Level of Opinion

The results of the analysis of opinion level of the decision-making of export producers of the future food export industry in terms of the overall organizational effectiveness factor, the opinion of the food export industry for export in Thailand was in the medium level, with a mean of 3.218, the attitudes in the business operations (ATI) in the medium level with a mean of 3.098. The business operation satisfaction dimension (SAT) was in medium level with average of 3.452. The organizational determination dimension (DET) was in medium level with a mean of 3.104 and technology and research dimension (TEC) in medium level with a mean of 3.099. The results of the analysis of the opinion level of the food export industry producers for export in Thailand in terms of the overall market mix factor, the opinion of the food export industry producers was in the high level with a mean of 3.597, food product dimension (PRO) was in the high level with a mean of 3.602,, product pricing dimension (PRI) was in high level with a mean of 3.500, distribution channel dimension (DIS) was in the high level with a mean of 3.610 and market promotion dimension (SAL) was in the high level, with a mean of 3.676. The results of the analysis of the level of opinions in terms of the generation of competition advantages in food industry in the future in the overall overview of resources readiness (RESO), the opinion of producers of food export industry for export was in the high level with a mean of 3.676 with financial readiness dimension at the high level with average of 3.885.

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Personnel readiness dimension was in the high level with a mean of 4.104. In respect of physical readiness dimension was in the high level with average at 3.558 and relations with business partners (REL) was in the high level with a mean of 3.636. The results of the analysis of the opinion level of the generation of advantages in food export industry for export, in terms of the overall of business allies network connection (NETW) the opinion level of producers of food export industry was in the high level with a mean of 3.672 with governmental support dimension (COR) was in the high level with a mean of 3.363, food industry group dimension was in the high level with a mean at 3.541 and supply chain network dimension was in the high level with a mean of 3.532. The results of the analysis of the opinion level of the generation of advantages in food industry in Thailand in terms of the overall organizational export strategy (STRA) were in medium level with a mean of 3.414. The different products strategy dimension (DIF) was in medium level with a mean of 3.340. The low cost strategy dimension (COS) was in medium level with a mean of 3.365 and business trade strategy dimension (BUS) was in medium level with a mean of 3.420. The results of the analysis of the opinion level of the generation of advantages in food industry in the competition of producers of food export industry in Thailand, in terms of the overall of ability in the generation of competitive advantages (COMP) the opinions of producers of food conversion industry for export was in the high level with a mean of 3.885, with export

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value dimension (EXP) in the high level with a mean of 3.752 and export success dimension in the high level with a mean of 3.850.

The Conclusion of the Results according to the Research Objectives

The results of the research are concluded by the author in the order of the objectives consistent with the research hypothesis as follows: Objective 1: To study factors needed for the establishment of competitive advantages of Thailands food export industry producers; comprising of organizational effectiveness, marketing mix, resources readiness, business allies network connection, organization export strategy, and generation of competitive advantages for the food export industry for future export. The result of constructed equation model analysis found that organizational effectiveness positively influences the opinion level in terms of the generation of competitive advantages for food conversion industrial for export producers in Thailand with a path coefficient of 0.15 and ability to explain variance of 75%. The result of constructed equation model analysis found that the marketing mix factor was positively influences the opinion level in terms of the generation of competitive advantages for producers of food conversion

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industrial for export in Thailand with a path coefficient of 0.13 and ability to explain variance of 92%. The result of constructed equation model analysis found that resources readiness factor positively influences the opinion level in the generation of competitive advantages for producers of food conversion industrial for export in Thailand with a path coefficient of 0.57 and ability to explain variance of 82%. The result of the constructed equation model analysis found that business allies network connection positively influences the opinion level in the generation of competitive advantages for producers of food conversion industrial for export in Thailand with a path coefficient of 0.70 and ability to explain variance of 90%. The result of the constructed equation model analysis found that the organizational export strategy factor positively influences the opinion level in the generation of competitive advantages for producers of food conversion industrial for export in Thailand with a path coefficient of 0.32 and ability to explain variance of 82%. Objective 2: To test the constructed correlation model for the factors influence towards the ability in generating competitive advantages for the food export industry of Thailand with consideration to statistics used in the examination of validity and harmony of hypothesized correlation against empirical data. The conclusion was the linearity constructed correlation model was consistent and harmonious with the empirical data according to the

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hypothesis set forth with the constructed correlation factor model after adjustment which was consistent, harmonious with the empirical data by considering from the statistics used to test consistency and harmony. In conclusion the Chi-Square (2) value was equal to 87.38 with no statistical significance, with p-value of 0.92, degree of freedom (df) was 0.92, RMSEA value equal to 0.000, CFI was 1.00, GFI was 0.95 and AGFI was 0.90 showing that model of correlation developed was consistent, harmonious with the empirical data. Objective 3: To study direct, indirect and total influences of factors influential to the generation of competitive advantages for food export industry in the future. The analytical result of the causal correlation path of ability in the competition of food export industry of Thailand according to objective 1 - to study the correlation path between external latent variable as per construct No. 1. It could be concluded that organizational effectiveness factor (FIRM) comprising of 4 dimension i.e. Work Operation Attitudes (ATT), Work Operation Satisfaction dimension (SAT) Organizational Dedication Dimension (DET) and Technology and Research Dimension (TEC) positively influences the market mix factor with statistical significance at 0.01. The analytical result of the causal correlation path of ability in competition of food export industry of Thailand according to objective 3 - to study the correlation path between external latent variable as per Construct No. 2 concluded that Organizational Effectiveness factor (FIRM) comprising of 4 dimensions of such as Work Operation Attitudes Dimension (ATT),

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Work Operation Satisfaction Factor (SAT), Organization Dedication Dimension (DET), and Technology and Research Dimension (TEC), Market Mix Factor (MARK) comprising of 4 dimensions comprising of Food Product (PRO), Product Pricing (PRI), Distribution Channel (DIS) and Marketing Promotion (SAL) Business Allies Network Connection Dimension (NETW) comprising Governmental Support (GOV) Food Industry Group (FOO) and Food Industry Supply Chain (CHA) directly positively influences Organizational Export Strategy (STRA) is statistically significant at 0.05. In respect of Resources Readiness (RESO) comprising of Financial Readiness Dimension (FIN), Personnel Readiness Dimension (PER), Physical Readiness (PHI) and Business Partners Relations (REL) directly negatively influences the Organizational Export Strategy is statistically insignificant at 0.05. The analytical result of the causal correlation path of ability in the competition of food export industry of Thailand according to objective 3 - to study the correlation path between external latent variables as per Construct No. 3 concluded that the Organizational Effectiveness Factor (FIRM) comprising of 4 dimension such as Business Operation Attitudes (ATT), Business Operation Satisfaction Dimension (SAT), Organizational Determination Dimension (DET) and Technology and Research (TEC), Market Mix Factor (MARK), comprising of 4 dimensions such as Food Products (PRO), Product Pricing (PRI), Distribution Channel (DIS), and Marketing Promotion (SAL), Business Allies Network Connection (NETW), and Food Industry Chain (CHA) positively influences the Generation of Competitive advantages of Food Industrial for Export of Thailand (COMP) is

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statistically significant at 0.05. In respect of Resources Readiness (RESO) comprising of Financial Readiness Dimension (FIN), Personnel Readiness Dimension (PER), Physical Readiness (PHI) and Business Partners Relation (REL) were directly influential negatively towards Generation of Competitive advantages of the Food Industry for Export of Thailand is statistically insignificant at 0.05.

Discussion of the Research Result

Regarding the discussion of the various findings derived from the research on the subject of the generation of competitive advantages for the future food export industry, the author presents the interpretation and assessment of findings derived from this research for production to explain and confirm the research results which were consistent and inconsistent between the findings and the research hypotheses. This is classified by the explanation of the findings mentioning supporting theories applicable in the research study. Furthermore, the author will discuss the data consistent with the hypotheses and discussion of the inconsistent data set forth with necessary details as follows: Discussion of the Results for Data Consistent with the Hypotheses

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Hypothesis 1: Organizational effectiveness directly positively influences the marking mix factor. The analytical result from Table 28 and Figure 56 found that organizational effectiveness directly positively influences the Market Mix Factor with statistical significance at the level 0.1 with a path coefficient of 0.69. This explains the market mix variance of 48% (R2=0.48). The analytical result was consistent with the hypothesis set forth, which is consistent with the study of other such as the export competitiveness study completed by Song (2004). The Organizational Effectiveness derived from the work operation was correlated with the ability in the exportation of products abroad, consistent with the Blue Ocean Strategy of W. Chan Kim and Renee Mauborgne with conclusion that the business must develop and improve the product, marketing process, and organization effectiveness (Kim and Mauborgne, 2005). This book, which started from articles published from this team in the 1990s, believes that there is a large amount of untapped demand, found in non-traditional forms. Furthermore, the boundaries of the market can be redrawn by successful companies implementing Blue Ocean Strategy. Hypothesis 2: The resource readiness directly positively influences the marketing mix factor. The analytical result from Table 28 and Figure 56 found that organizational effectiveness directly positively influences the marketing mix factor with statistical significance at the level 0.05 with a path coefficient of 0.58. This leads to the marketing mix variance factor of 85% (R2=0.85); therefore, the analytical result was consistent with the hypothesis set forth.

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This is consistent with the research of Styles (2008) stating the internal context in an organization is the organizational ability of converting production factors into organizational products This includes the ability to combine resources both physically existing and physically non-existing, tangible and intangible, to derive the result desired by the organization. The personnel in the organization is a scarce thing and difficult to copy (Barney, 1991). Hypothesis 3: Resource readiness directly positively influences the organizational export strategy factor. The analytical result from Table 28 and Figure 56 found that organizational readiness directly positively influences the organizational export strategy factor with statistical significance at the level 0.1 with a path coefficient of 0.57. This explains the export decision variance of the Food Industrial Production in Thailand of 75% (R2=0.75); therefore, the analytical result was consistent with the hypothesis set forth. The domestic and out of country contexts directly positively influences organizational export strategy with a part coefficient value of 0.91. This shows the variance factor of the generation of advantage in the competition of 82% (R2=0.82). Therefore, the research result was consistent with past research showing that an important long-term export strategy would be for the business to adjust to current market conditions in the export markets (Styles, 2008). Hypothesis 4: The marketing mix factor directly positively influences the organizational export strategy factor.

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The analytical result from Table 28 and Figure 56 found that marketing mix factor directly positively influences the organizational export strategy factor with statistical significance at the level 0.1 with a path coefficient of 0.79. This is considered capable to explain the organizational export strategy variance of 81% (R2=0.81); therefore, the analytical result was consistent with the hypothesis set forth. It was also consistent with the study of Teng and Cummings (2002) showing that human capital management is important for export businesses to succeed. This leads to the establishment of an export strategy by making it possible for the organization to continuously increase exceptional food production. The standard should be held high, being more than acceptable to trade partners in various countries. An establishment of product strategy in terms of safety and cleanliness must meet international standards in order for the volume and price of Thai exports to increase. Hypothesis 6: The business allies network connection factor directly positively influences the organizational export strategy factor. The analytical result from Table 28 and Figure 56 found that the business allies network connection factor directly positively influences the organizational export strategy factor with statistical significance at the level 0.1 with a path coefficient of 0.62 and was capable to explain the organizational export strategy variance factor of 85% (R2=0.85); therefore, the analytical result was consistent with the hypothesis set forth. This is consistent with Porters concept stating that a connection of various activities will position a business either in a low-cost structure or a innovation-based positioning (Porter, 1990b).

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Hypothesis 7: The organizational effectiveness factor directly positively influences the generation of competitive advantages. The analytical result from Table 28 and Figure 56 found that the organizational effectiveness factor was directly influential negatively on the generation of advantages on the competition factor with statistical significance at the level 0.1 with a path coefficient of 0.57. Thus, it was capable of explaining the generation of competitive advantages variance of 75% (R2=0.75); therefore, the analytical result was consistent with the hypothesis set forth. This is consistent with research done on the study of the industrial competition of automobile parts from Thailand. This research showed that top level management was highly responsible for the success of the firm (Song, 2004). Hypothesis 8: The marketing mix factor directly positively influences the generation of competitive advantages. The analytical result from Table 28 and Figure 56 found that the marketing mix factor directly positively influences the generation of competitive advantages for the food export industry in the future with statistical significance at the level 0.01 and was capable to explain the generation of competitive advantages for food export industry variance factor of 78% (R2=0.78). Therefore, the analytical result was inconsistent with the hypothesis set forth. This is consistent with the research of Shoham (1998) on the study of the relation between generation of competitive advantages with an adjustment of the marketing mix. The conclusion was that the induction of a suitable marketing mix for application in the implementation of

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marketing strategy can generate competitive advantages in the Health Practices (GHP) industry. There were new product developments and new developments in the packaging businesses associated with this industry that help spur growth. Hypothesis 10: The business allies network connection factor directly positively influences the generation of advantages in the food export industry in the future. The analytical result from Table 30 and Figure 58 found that the business allies network connection factor directly positively influences the generation of advantages with statistical significance at the level 0.5, with a path coefficient of 0.28. This was capable to explain the market mix variance of 85% (R2=0.85); therefore, the analytical result was consistent with the hypothesis set forth. This is consistent with Porters research on mutual cooperation and relation connecting one another throughout industrial groups. This could be within the same industry or may include different connecting industries including the purchasers or procurers and raw material suppliers (Porter, 1990). Hypothesis 11: The organizational export strategy factor directly positively influences the generation of competitive advantages for the food export industry in the future. First of all, the research result was consistent with that of Kim and Mauborgne (2005), showing important factors of long-term export success strategies. Demand management is key to success, whether it is a traditional Red Ocean approach or a more nontraditional, Blue Ocean one.

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Discussion of Research for Data Inconsistent with the Hypothesis Hypothesis 5: The resources readiness directly positively influences the organizational export strategy factor. The analytical result from Table 28 and Figure 56 found that the resources readiness factor directly positively influences the organizational export strategy factor with statistical significance at the level 0.01 with a negative path coefficient value of -0.76 and was capable to explain the organizational export strategy variance factor of 82% (R2=0.82); therefore, the analytical result was inconsistent with the hypothesis set forth. The entire organizational state, of all contexts including personnel resources who are knowledgeable, effective, potential in managing to be able to produce food products which Thailand, is advantageous. The resources and the advantages within the organization leading to the establishment of an export strategy make it possible to compete. However, it was shown that many successful companies in Thailand rank low in resource-readiness, but are still able to compete in the export business. Hypothesis 9: The resources readiness factor directly positively influences the generation of competitive advantages for the future food export industry. The analytical result from Table 29 and Figure 57 found that the resources readiness factor directly positively influences the generation of competitive advantages with statistical significance at the level 0.1, with a

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negative path coefficient of -0.76 and was capable to explain the generation of competitive advantages factor variance of 75% (R2=0.75). Therefore, the analytical result was inconsistent with the hypothesis set forth. This is consistent with the research of Hunt (2010) stating the internal context in an organization is the organizational ability in converting production factors into products including the ability to combine all kinds of resources. All this would affect the generation of competitive advantages. The readiness of resources has not been observed to provide any particular advantage for Thai export firms.

Anticipated Interests and Benefits Received

The author would like to make the presentation of the research results that are beneficial to various aspects comprising academic interests, interests in respect to applications, and research interests with necessary details as follows: Academic Interest Academic interests in respect of new knowledge are as follows: 1. Relation models derived from this study could create a new knowledge from the following: 1.1 Direct influence and indirect influence that can explain the size of influence of each causal variable towards dependent variables directionally. 1.2 The power to predict the export decision making process belonging to Thailands food export industry producers, based on the

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correlation path model between the variables of the ability to produce, to explain, predict, and control the phenomenon from direct influence, indirect influence and total influences. 1.3 For academic interests and the interest of the general public, the study and development model is of great use, possessing the ability for the competition and the strategic management in the food industry in the future. Policymaking Interest 1. To suggest strategy and measurements for enhanced effectiveness and degrees of capacity in the competitive trade of food businesses, such as the public sector preparing promotion projects. The awarded HALAL mark for Thailand food production is a great honor, and launching a campaign for model HALAL Food Product quality could be a great opportunity for Thailands food producers. 2. For the parties interested in the public sector and offices interested in using the research results for application in planning and establishing strategy in business promotion for the food industry groups and businesses. Marketing Interest 1. A guideline for developing the competitive ability and strategic planning in the business organizations in the food industry groups. 2. A guideline for the development of factors and resources which are important and necessary in enhanced capacity in the competition. 3. A guideline to be applied by nearby industrial group entrepreneurs.

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Restraints & Suggestions Concerning the Issues of Research Study in the Future Research Limitations
1. This research received responses mostly from entrepreneurs in the Central Region, therefore, the data/information may not be as extensive as it should be. 2. The research was conducted during a global economic and trade regression in various regions worldwide which impacted export transactions globally. This problem was considered a restraint which affected this research indirectly because Thailand's export overview in terms of business results were not on a level they should be at.

Suggestion for Research Study in the Future

1. Additional research study or research studies in the constructed correlation model of factors which are influential to the decision makings of other industries should be made. Automobile, automobile parts, and the service industries should be analyzed. 2. Additional in-depth research on various food industries which are produced within Thailand additionally should be made with emphasis on products with upcoming trends such as organic food and health foods.

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Conclusion
This chapter is the concluding chapter of the complete research work taken from the research results in Chapter 4 derived from the analytical data of the sampling group subjects and the results of testing the hypotheses of the research. Discussion of the results including both research results that were consistent with the hypotheses and inconsistent with the hypotheses were made. The open-ended questionnaire can be found in its entirety at the end of this chapter. In respect to the results of this research the author has mentioned the interests received from the research and suggestions for interested persons for implementation, including additional research, to which the author hopes that the results of this research will eventually benefit the national education.

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Appendix A List of Examination of Validity of Contents of the Questionnaire Form

1. 2. 3. Professor Dr. Imron Malulim Qualified Person of the Sheikhul Islam Office Mr. Aroon Boonchom Qualified Person Khun Charupha Laisakul Executive Officer of Chor Chaiwat Industry Co., Ltd.

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Appendix B Questionnaire

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461 Nakornsawan Road Chitrada District Dusit Area Bangkok, 10300 March 25th, 2010 To: Product/Export Manager Subject: Asking for Co-operation in filling out the questionnaire Enclosed: A set of questionnaire forms Dear Sir: I am Mr. Sarasit Booppanon, studying for a doctorate Degree (English Programme) in the Faculty of Business Administration, Ramkhamhaeng University. I am now conducting a research study on the topic of which is Creating High Competitiveness in the future of Food Industry. The main objective of the research is to collect data for the use of writing a doctoral dissertation, which is part of the Doctoral Programme. All the data used in this research will be technically essential to the exportation in the Food Industry of Thailand. However, the data collected will be kept confidential and will be presented only in broad generality. I would very much appreciate your kind co-operation in filling out the enclosed questionnaire and returning it to me by April 20 th, 2010. Thank you very much once again for your kind co-operation. Mr. Sarasit Booppanon Doctorate student (English Programme) Ramkhamhaeng University

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Questionnaire Creating High Competitiveness in the Future of Food Industry. The Objective of this research is to study the factors which are effective in creating high competitiveness in the food industry in Thailand so that the results of this research study can be of good use in the field of business administration and the export agents of Thailand. I would like to ask for your kind co-operation in filling out this questionnaire. The data received will be kept confidential and presented only in broad generality. Name of organization: Address: District: Postal code:

Road: City:

Note: Please put a cross (x) in front of the item closest to your opinion. Part 1. General facts about the organization. 1. Size of business (income) 1. Less than 50 million baht. 2. 51 200 million baht. 3. 201 500 million baht. 4. More than 501 million baht. 2. Registered capital 1. Less than 50 million baht. 2. 51 200 million baht. 3. 201 500 million baht. 4. More than 501 million baht.

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3. Type of business 1. Single owner 2. Limited Partnership 3. Limited Company 4. Others (please specify) .. 4. Are there any foreign partnerships? 1. 100% Thai 2. Foreign company 3. Foreign partnerships % 4. Others (please specify) .. 5. In which parts of the world are your customers (you can choose more than one answer) 1. Asia 2. Europe 3. America 4. Middle East 5. Others (please specify) .. 6. Income (2009) 1. Net profit more than 50 million baht 2. Net profit less than 50 million baht 3. No gain, No lose 4. Lose 7. The firm has been doing exporting business for ......years. 8. The total amount of exporting of the firm is Per cent of the total revenue.

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Part 2. Creating Competitive Capacity in Food Exporting Note: Put a cross (x) in the box which is closest to your opinion. There are five levels of opinion as follows: 5 = completely agree 4 = mostly agree 3 = partly agree 2 = disagree 1 = disagree completely Firm Competiveness: Advantageous to Creative Competitiveness Questionnaire 5 4 1 The executives think that the success of the firm must come from the long-term benefits and profits of the firm. 2 The executives believe that exporting will open doors for the firm to gain more profits than doing domestic trading. 3 The executives have lain good plans and strategies in exporting. 4 The executives use modern technologies and facilities in planning; emphasizing the data system in management. 5 The firm has the capacity to prevent any problems from occurring in the future. 6 The firm is content with the total sales income. 7 The firm is content with the results of its profitable exporting business.

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8 9 10 11 12 13 14 15 16

17 18 19

Questionnaire The firm has a continuous increase in the market share of exporting. The executives have high potentialities in analyzing problems reasonably. The firm manufactures standardized goods. The firm has modern intra-communication facilities. The executives cooperated with each other in making important decisions. The firm brainstorms ideas and opinions from all the members in the working team in solving problems. The firm continuously seeks new opportunities in new exporting markets. The firm has continuously developed new manufacturing technologies. The firm has efficient working units and working force to do research in developing better products than other competitors. The firm has equal or better manufacturing technologies as or over other competitors. The firm has always invested in new technologies. The research and manufacturing teams have better knowledge and potentialities over the competitors.

Marketing Mix : Advantages to Creating Competitiveness

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1 2 3 4

5 6 7 8

9 10

11

Questionnaire Your products are highly acceptable among the customers. Your firm sets a high standard in producing goods to meet the demands of the customers. Your firm has a quality control system which abides by the international system in every step. Your firm has developed the quality of the products and continuously manufactured new products to the market. Your firm calculates the investment costs before selling the prices. At present, the prices of your products are cheaper than those of your competitors. The rate of the investment costs of the exporting products is low. The firm stresses the importance of delivering products according to the quality and quantity promised. Your firm makes market plans to increase the value of exporting. The firm has good relationships with the agents, and so enabling it to develops the distributing of goods more effectively. The firm has participated in the road shows abroad arranged by the government in finding new markets. Questionnaire

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12 The firm has an idea to improve the way of distributing goods for the best benefit of the customers. 13 The firm has the capability of advertising and promoting marketing. 14 The firm gives discounts to the customers who buy a large quantity of goods. 15 The firm abides by the standard rules of the environment of export marketing. 16 The firm uses Thailand brand as the selling point. 17 The firm uses the standard Halal certificate to export goods to muslim countries. Readiness of Resources: Advantages to Creating Competitiveness Questionnaire 5 4 1 The firm is financially viable. 2 The firms credit-worthiness in doing business is high. 3 The firm has the capability of raising investment capital funds. 4 The firm has highly skilled workers with good knowledge and competency. 5 The firm uses financial resources in the activities of exporting more than they are used in the domestic markting.

Questionnaire

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6 The firm has the executives and personnel who are as competent and skillful as or more than its competitors. 7 The research and development personnel have better knowledge and competency than its competitors. 8 The firm has better designing experts with good knowledge and competency than its competitors. 9 The firm has enough quantity of good quality raw materials to manufacture good products. 10 The firm has low-price raw materials to manufacture good products. 11 The efficiency and quality of the machinery of your firm are better than those of your competitors. 12 The firm has continually developed the process of testing the quality control. 13 The executives are efficient at negotiating with customers abroad. 14 The firm can deliver goods to the customers punctually as promised. 15 Your firm has participated in marketing strategies with the customers abroad. 16 The firm uses the standardized system of measuring the satisfaction of customers.

Linking of Allied Business Networks: Advantageous to Creating Competitiveness Questionnaire 5 4 3 2

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1 The political stability has an effect on the decision making in exporting. 2 The announcement of the free trade policy of the government has an effect on the firms exporting. 3 Trade deals maintains the status and the potentiality of the exporting of Thailand. 4 Trade Association can reduce the taxes between the trade partners. 5 The governments promotion in exporting is beneficial to the firm. 6 There has been a continual cooperation in exchanging new ideas and technologies within the industrial groups. 7 The firm has participated in the development of manufacturing food products in the food industry. 8 There has been A cooperation in developing the industrial water sources within the network. 9 There has been a continual cooperation with food institutions in the research and development of food industry. 10 The firm has the competency is reduce the duration of delivery time after receiving orders. 11 The firm has a quick transportation system, both domestic and international. Questionnaire 12 The firm has developed the efficiency by combenisy the working force with the members of the chains of 5 4 3 2 1

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supply. 13 The firm is flexible in performing through the cooperation within the chains of supply. 14 The firm shares with the suppliers in the decision making about the resources of raw materials. 15 The firm has developed or set up methods of evaluation the performance of business in all the chains of supply. Exporting Strategies of the Firm: Advantages to Creating Competitiveness Questionnaire 5 4 3 1 The food products of your firm are unique and no other competitors can imitate them. 2 The expanding of the cooperation between the government and the private sectors has an effect on the food exporting to various countries of the world. 3 The food products of your firm are modern and there have been pioneering developments in every aspect compared to the competitors. 4 The food products of your firm have been value added; (for example, essential food substances and good quality sugar and used for better health.) 5 Your firm uses the strategy of manufacturing high quality products. Questionnaire 6 Your firm uses the strategy of setting prices lower than those of your competitors. 5 4 3

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7 Your firm uses the companys brand name for the selling point. 8 Your firm uses the food reputation of the industrial groups for the selling point. 9 Your firm has continually invested in doing research studies and developing production methods. 10 Your firm conducts surveys on the demands of the market in order to adapt and improve the products to meet the needs of the consumers market. 11 Your firm updates the standards of the products according to the needs of the targeting markets. 12 Your firm has continually designed and manufactured new products to the market. Creating Competitive Advantages in the Future of Food Industry Questionnaire 5 4 1 Your firm has high market share. 2 Your firm increases the value of exporting every year. 3 Your firm has more market share than your competitors in the same product. 4 The profits from the export sales are higher than those of the domestic ones. 5 The total sales in the past five years has increased (in baht) Questionnaire 5 4 6 The profits in the past five years have increased. 7 The high competition within the country forces the

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8 9 10 11

firm to turn to exporting. Your firm has a working unit which is directly responsible for exporting. Your firm has created its own trademark. The governments policy can increase the manufactures potentialities. The increasing of the members of customers in each country is satisfying.

Additional Suggestions 1. Other factors which you think are advantageous to creating competitiveness in exporting food industry. The factors you use in measuring the success in exporting food products of your firm are (you can choose more than one choice.) 1. Value of exporting 2. Profits from the exporting 3. The extension of the value of exporting. 4. Others (please specify) Thank you very much for your kind cooperation in filling out this questionnaire. Please return this form in the enclosed envelope to: Mr. Sarasit Booppanon 461 Nakornsawan Road Chitrada District, Dusit Area Bangkok 10300

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