Global Strategic Management, International Strategic Management, Thai Sugar Industry with Processes, Value-chain, Five-forces and SWOT Analysis

Essay by XxploreUniversity, Bachelor'sA, September 2007

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1. Problem/Key Issue

How to maintain the competitiveness of the Thai Sugar Industry in a dynamic and volatile global market?

Porter's Five Forces Analysis on Global Sugar Industry

Threat of new entrants - LOW

The industry requires sugar manufacturing firms to have necessary capital investments such as land and building, warehouses, factories, labor, etc. Moreover, these facilities can be utilized for sugar production including its by-products (i.e. molasses and bagasses) only. This represents the high exit barriers.

Threat of substitute products - LOW

Substitutes to sugar do exist in the market. These substitutes such as artificial sweeteners, starch syrup are available but are not widely used all over the world.

Threat of buyers' growing bargaining power - LOW

Up to extended consumers (end users), they do not exert much control on the prices since the demand for sugar is inelastic which represents no significant power of buyers.

Threat of suppliers' growing bargaining power - RELATIVELY LOW

Sugarcane growers are considered as suppliers for sugar industry.

Since the world's plantation of sugarcane has been constantly increasing, especially from Brazil, this signifies low bargaining power from suppliers (i.e. sugarcane growers).

Threat of intense segment rivalry - VERY HIGH

Sugar industry can be classified as a consolidated industry. The rivalry among the nations to be prevailing in the global market is exceedingly intense.


SWOT Analysis for Thai Sugar Industry (2006-2007)



Geographic location - proximity to global sugar market

Inelastic domestic demand

High technology and procession

Increase in the area planted to cane

Low productivity

Delivery processes



By-products of sugar cane


Significant decline in world oil prices leading to lower transportation cost

Trade barriers

Exchange rate fluctuation.

Considerable tariffs on sugar exported to Russia

Significant decline in world oil prices resulting less interest in the use of alternative...