Market Feasibility Report. Australian Wild Tuna, in the Thai market.

Table of Contents
Introductions4
Executive summary4
Introduction4
Sam’s Australian Wild Tuna Pty Ltd4
Internationalizing a Product1
Advantages5
Disadvantages6
Economic Environment6
Socio-Cultural Environment7
Social Prestige7
Daily Life8
Buddhism8
Swot Analyses9
Strengths9
Weaknesses10
Opportunities10
Threats10
Market Feasibility11
References11

Market Feasibility Report

Executive Summary
The following report analyses the market feasibility of the developing country of Thailand for Australian Wild Southern Blue Fin Tuna, for an organisation named Sam’s ‘Australian Wild Tuna Pty Ltd’. Global economic integration is battled by disadvantages such as risking large dedications of resources are discussed for internationalisation of a product in general. As the economy is seen to be growing but a great fallen yield in the Thai fishery market, the window of opportunity to infiltrate such a successful market in the world is crucial yet to do this the correct social prestige in the way business should be conducted, how the product impacts daily life and the Buddhist culture amongst the Thai is explored for essential prior-knowledge. Major Strengths and opportunities are found to outweigh weaknesses and threats in order for a concluding that the market is feasible for Australian Wild Tuna if applying the correct knowledge and accommodating for the different economy and socio-cultural environments.
Introduction
The purpose of this report is to identify if the Thai market is practical for the introducing of Australian Wild Tuna. This is explored through a brief summary of the company in who produces the product, followed by the general advantages and disadvantages of product internationalisation. The Thai economy and socio-cultural environments are explored in order to determine the key strengths, weaknesses, opportunities and threats of doing so, and a conclusion on the feasibility of the markets and likelihood of the products success.

Australian Wild Tuna Pty Ltd

The Southern Ocean is thousands of kilometres from any major populated regions, helping it be one of the cleanest of the world and this is supplier for Sam’s ‘Australian Wild Tuna Pty Ltd’ located in Castle Cove, Sydney. As a long time fisherman, Samuel O’Brien began to sell his fish privately in1990. Samuel in 1994 established ‘Australian Wild Tuna Pty Ltd’. The organisation is now a producer domestically in Australia of Southern Bluefin Tuna, and nationally expanding especially in focus of regional towns of Australia. Sam’s Tuna prides itself on high quality product but also holding the capability of handling the whole process of catching, feeding, ranching, processing and also freezing its product avoiding use of any outside contractors.

Internationalizing a product
Advantages of internationalizing a product: * The idea of spreading business risk so ‘not all your eggs are in one basket’ if problems occur. * Maximize overall volume of sales thus expand market share * Produce profit margins that are preferred then that of the domestic market. * Customer base is diversified, which reduces the reliance on domestic markets. * Global economic integration- the possibilities are endless as an open door to accessing new ideas and ways of information and advancing performance and capabilities through the learning of new technologies and methods. (Hsu,Y 2011) * With a foreign presence, the product or organisations gains certain credibility as it is seen as a more dominating to the customer. * Increased competition leads to increased product quality as well as competitive pricing. This increase in competition helps organisations who are internationalising minimise risk of losing market share to clients who themselves use internet to find goods and services therefore a larger customer base. (Brady,D.L 2010) * Minimize cost per-unit for providing/manufacturing the product as economies of scale is increased, this also in turn with offsetting cumulative costs of undertaking business at domestic market (elevated energy prices, import obligations etc. * To offset seasonal fluctuations in local markets - Demand may fall in domestic market for economic reasons, through a focus on the other countries that may be under-going a more healthy economic growth; this will stabilize sale fluctuations that are related with the seasonality or economic cycles of demand.
Disadvantages of internationalizing a product includes * A firm having to develop a physical presence in the offshore market, having to accommodate for different customer base, different competitors, and other individual unique characteristics of the market. It can be difficult to acquire the appropriate knowledge and seize opportunities within the market to succeed in the long run. * Sam’s Australian Wild Tuna Pty Ltd would have to dedicate resources for the conducting of the foreign market through acquiring personnel who could adhere to the need for the culture, religious and language barriers, of international transactions. Factors such as currency, financing methods, documentation, and freight forwarders are all further knowledge needed by management and resource allocation will be of a large strain. * The exchange rate fluctuations impact the organizations that are transporting and exporting their product as it will lessen sales due to a change in the cost of the product to its foreign buyers. * Barriers of trade and tariff requirements can put your organization at a disadvantage along with restricted access to information on the local markets; the organization is seen to be an outsider * Further disadvantages of internationalizing a product include the instability of foreign investment and economic downturns, political polices and regulations regarding business operations and requirements that can severely affect success and profits.

Economic environment
Thailand Economy * GDP: US$387.24 billion (2013) * GDP per capita: US$5,675 (2013) * GDP growth: 2.92 per cent (2013) * Population: 68.2 million (2013) * Trade with Australia: AU$19.4 billion (2012-13) (Dfat.gov.au, (2014)

As a developing country the structure of income in Thailand is very poor, with a quite outstanding gap between the rich and poor. Having a reasonably developed fishing industry due to the coastal location, the advanced fishing marketplace and its independent policy of foreign relations has allowed the development of it’s the fishing industry, especially that of Tuna. Thailand operates with a free economic policy as it is a very export-orientated economy. The state of the economic system is dependent on external markets such as Euro, Japan, America etc. The industry of manufacturing, especially electronics is reasonably developed, and the financial crisis of 1997 impacted massively on Thailand, but it has been recovered since 1999. The current external debt of Thailand is 35.6 % of GDP with a global rank of 99. The unemployment rate is at 1.15% while inflation rate is sustained at 2.09%. (Tradingeconomics.com, (2014). With approximately 2725 km of coastlines, Andaman Bay and The Gulf of Thailand are the two natural fishery marines of Thailand. Also a 1,100 square kilometre freshwater farm, Thailand is third after Japan and China in marine fishery countries in Asia, with in excess of 500,000 jobs in the industry alone. (Parris,H & Grafton,R.Q 2006)
Thailand recuperated via a fiscal stimulus enhancement by its government, yet suffered from the wake of Tsunami of Japan with severe floods in late 2011. Damaging the agricultural and manufacturing industries GDP growth fell 0.1% in 2011, but then grew a staggering 6.4% in 2012 through the world’s economic recovery, with this year’s current growth expected to be at 3.9 - 4.2%.
Thailand’s Government has endured a number of large infrastructure developments and spending schemes to assist domestic demand and aid private consumption. This includes support for rice farmers and a national minimum income award, to ease the dependence on their exporting market for economic stimulation.
Australia developed the harvest strategy policy in 2007 devoted to advancing technology in order to strengthen Australia’s fishing Industry. A national forum has embraced relationships with countries, especially Thailand as a neighboring country, the Pacific Islands Forum Fisheries Agency is continuing to strengthen development of fishery in the Pacific Area.
TAFTA
In 2005 Thailand entered its first free trade agreement, and that was with Australia. The Thailand-Australia Free Trade Agreement (TAFTA) eliminates and lowers the Thai tariffs on Australian imported goods. Previously Thailand’s tariffs were of up to 200% of Australian products, now this drop has opened a large window of opportunity to export and range products and has climbed to more than double, towards South-East Asia’s second biggest economy.
AANZFTA
Also involved in the ASEAN-Australia-New Zealand Free Trade Area (AANZFTA), with this inclusion Thailand is among one of the vigorous districts in the world, helping to further eliminate commitments and further provides widespread tariff decline.
Socio-Cultural environment
Social Prestige in regards to business:
Social prestige shows and helps understand the way in which people communicate. As a new foreign business in the heart of the fishing industry, Australian Wild Tuna Pty Ltd will have to accommodate and learn the correct way of conducting and dealing business in the way of the Thai, as communication is essential in order to successfully develop relationships and proceed business dealings. (Baker,W.E & Sinkula,J.M 2005)

Trust and personal ties are significant to Thai people. With a robust sense of chain of command within business organisations, and also that of family dealings. The dependence of the lower on those who are regarded as higher is clear through decision-making revolving about a centralized hierarchical nature of power. With all decision makers majorly authoritarian, they will decide independently as the inferior ‘lesser’ Thai is naturally unassertive, they obey.

For Australian Wild Tuna Pty Ltd, flexibility and patience is key when negotiating with Thais. Their focus on a strong hierarchy means that Australian Wild Tuna Pty Ltd, would have to appoint one colonial manager for a face/spokesman of the organisation (males are preferred) who should be at the top of the domestic hierarchy for Australian Wild Tuna Pty Ltd as Thai are easily confused and displeased when there are a number of managers to deal with.

Due to low government interference, many small business operate in Thailand as a lot of the population is self-employed. Titles are also highly regarded, so the spokesman chosen should include a number of titles on their business card which also displays two sides, one English and one Thai.

As wealth determines status in Thailand, when conducting business, bribes may be requested, accepting these bribes are called “eating”. Although, gifts are seen differently as bribes are of cash and gifts are not.

Daily Life:
Daily life of Thai is their different diet to that of the average of Australian, as rice is the primary food in every daily meal, with only one main serving, a usual meal will include, rice, soup, shellfish and fish. As a Food in Daily Life, Tuna is a major source of protein in their simple diet, and this is clearly relevant to the Australia Wild Tuna product which could potentially find its way into the Thai daily diet thus being a positive impact on a part of Thai Socio-culture.
Overharvesting of marine fisheries as dropped fishing yields by 90%, as environmental issues are now critical, the Australian Tuna, will rectify for this damage as it may lessen the further demand from their own coastal surroundings, providing a subsidy as natural resources are only limited, therefore supporting their environments. (Kwintessential.co.uk,(2014)

Buddhism in Thailand
Buddhism is held by over 92% of the population, their belief of life not beginning with birth or ending with death, is from the belief of every soul lives numerous lives as learning lessons within each life they live and karma from their actions in previous walks of life.
It is important that those who are operating within the Thai culture form Australian Wild Tuna Pty Ltd show little to no sign of selfishness a yearning for an outcome as they believe it will result in suffering. Their path to inner peace is to remove all desire, this is called ‘nirvana’, completely in harmony with all surroundings, and free of suffering and and further walks of life. (Kwintessential.co.uk, (2014).

SWOT Analyses
The below SWOT analysis could assist Australian Wild Tuna Pty Ltd avoid unsuspected risks in helping discover internal strengths in utilizing prospective business strategies and opportunities.
Strengths:
The economic and socio-cultural environment remains embracing due to the pre-established economic relationship between Australia and Thailand.
Currency, as the Australian currency is able to purchase more, so for market entry, establishment of a physical presence and more, the currency allows greater purchasing power as the Australian dollar is worth more than that of the baht.
The current GDP growth is favorable as governments are spending and with statistics of last year’s growth of 6.4%, this year’s economic outlook also looks promising
Assisting Australian Wild Tuna Pty Ltd, is the notion of a number of international organizations including the Indian the Western and Central Pacific Fisheries Commission (WCPFC), Ocean Tuna Commission (IOTC), the Conservation of Southern Bluefin Tuna (CCSBT) and more have successfully worked with the Australian fishing body, to enhance and contribute the success of the industry.\
Thai with majority of population being self-employed, have a great labor supply capacity.
Thailand’s political structure consists of the statutory monarchy with the Prime Minister as the lead of the government dealing with associated political undertakings. The government has focused majorly on international business practices, seeking attention to foreign investors/entrepreneurs in stabilizing relationships for their significant trading partners.
The key advantage to selling Australia’s Wild Tuna in Thailand is the fact is is regarded as one of the major players of the industry, with a coastal location, and the country is also favored with preferential trade policies. With Thailand embracing in foreign trade as its recent step for economic progression, in 2004 Australia and Thailand have signed a Free Trade Agreement, promoting and enhancing the relationship between these countries.
TAFTA & AANZFTA – Free trade agreements are of great benefit, being already in place this allows a lot easier business process with the pre-established relationship, and also the Australian made product will be seen with less uncertainty. (Athukorala,P & Kohpaiboon,A 2011)

Weaknesses:
It is hard to compete when receiving and selling in currency that is worth much less especially in a developing country, as return on each product is may be less due to currency conversion rates (if pricing strategies are not conducted appropriately).
Australia has a Tuna Quota requirement law – this impacting on volume supply. (Pomeroy,R.S 2012)
As Tuna production is already a key domestic specialty in the Thai market, there is a relative high entry standard.
Opportunities
Employment opportunities could be emphasized for that of the host country (Thailand)
Not only in the top supplier marketplaces of the globe in fishery industry, Thailand also offers a matured canned tuna practice.( Baker,W.E & Sinkula,J.M 2005)
The economy of Thailand depends heavily on its market share of its major industries; Thailand incorporating the high quality Australian Wild Tuna Pty Ltd product could assist greatly in delivering the sufficient market demands for not only local Thai fishing market, but also it’s overseas market. (Barclay,K 2010)
Recently the yields for fishing has fallen impacting on the Thai economy, The Australian Wild Tuna organization could use this as a source point of entry and assist in making up the decrease, with Australian wild Tuna Pty Ltd being able to infiltrate the market showing its “high quality Australian product”. Also with the organization infiltrating the market, it could create more job opportunities in the Thai economy. (Parris,H & Grafton,R.Q 2006)
As discovered, with a lack of current fishery supply, and seafood a key and common source of protein in their diets, the emphasis on the healthy Australian Wild Tuna, bursting with protein is a great opportunity in order to incorporate it in daily meals.( Mourente,G & Tocher,D.R 2009)
With an already reliable and robust fishery industry, the learning of conducting greater approaches could promise a high quality production method.(Barclay,K 2010)
Threats:
There are no ‘ethical issues’ in relation to marketing Australian Wild Tuna overseas as Tuna is already domestically produced and a very demanded product.
The Australian Wild Tuna may be threatened by the already dominating Thai product as it will be in direct competition in their own market, and locals would rather by their own produced product. (Fletcher, R., and Brown, L. 2008)
Reduction of Tuna supply due to the ever growing issue of global warming.

Market Feasibility
In conclusion, Thailand definitely shows potential in the economic environment for Australian Wild Tuna. Through research, we discover that the window of opportunity for Australian Wild Tuna Pty Ltd is now, due to the massive decline in the domestic fishery supply due to over harvesting. Through the further SWOT analysis it is clear that as the second-largest fishery supplier in South East Asia with beneficial policies already in place, and a matured canned tuna industry, the emphasis on high quality along with competitive priced Australian Wild Tuna product is highly likely to proceed with success. Continuous and pro-longed success of sustaining the Australian Wild Tuna in the domestic market will accommodate for the socio-cultural aspects of social statuses in the way of conducting business with the Thai, the importance of Buddhism and its impact on their lifestyle along with the incorporation of the Australian Wild Tuna into their staple foods will achieve sustainability of the product. Therefore Australian Wild Tuna’s feasibility of marketing The Australian blue fin tuna will be of successful if the economic and socio-cultural environments are the mold for its marketing.(Biao,X 2008)
References:
Athukorala,P & Kohpaiboon,A 2011,Australian–Thai Trade: Has the Free Trade Agreement Made a Difference?,Australian Economic Review,Volume 44, Issue 4,pp.457–467
Brady,D.L 2010,Essentials of International Marketing, M.E. Sharpe, New York
Biao,X 2008,The development of and prospects for organic aquaculture worldwide,Outlook on Agriculture, Volume 37, Number 4, pp. 255-260
Barclay,K 2010, Impacts of tuna industries on coastal communities in Pacific Island countries,Marine Policy,Volume 34, Issue 3,pp. 406–413
Baker,W.E & Sinkula,J.M 2005,Environmental marketing strategy and firm performance: Effects on new product performance and market share,Journal of the Academy of Marketing Science,Volume 33, Number 4,pp.461-475
Dfat.gov.au, (2014). Thailand - Countries and regions - Australian Government Department of Foreign Affairs and Trade. [online] Available at: http://www.dfat.gov.au/geo/thailand/ [Accessed 16th Sep. 2014].
Fletcher, R., and Brown, L. (2008). International Marketing: An Asia-Pacific Perspective, 4thedition. Pearson Education Australia.
Hsu,Y 2011, Design innovation and marketing strategy in successful product competition, Journal of Business & Industrial Marketing, Vol 26, Iss 4, pp.223 - 236
Kwintessential.co.uk, (2014). Thailand - Thai Language, Culture, Customs and Etiquette | global-etiquette | resources. [online] Available at: http://www.kwintessential.co.uk/resources/global-etiquette/thailand-country-profile.html?highlight=YToxOntpOjA7czo4OiJ0aGFpbGFuZCI7fQ== [Accessed 18th Sep. 2014].
Mourente,G & Tocher,D.R 2009,Tuna Nutrition and Feeds: Current Status and Future Perspectives,Reviews in Fisheries Science,Volume 17, Issue 3,pp.373-390
Parris,H & Grafton,R.Q 2006,Can Tuna Promote Sustainable Development in the Pacific?,The Journal of Environment Development,vol 15, no 3,pp. 269-296
Pomeroy,R.S 2012,Managing overcapacity in small-scale fisheries in Southeast Asia,Marine Policy,Volume 36, Issue 2,pp. 520–527
Tradingeconomics.com, (2014). Thailand Inflation Rate | 1977-2014 | Data | Chart | Calendar | Forecast. [online] Available at: http://www.tradingeconomics.com/thailand/inflation-cpi [Accessed 17th Sep. 2014].