New Generation Fish Spa - Case Study Example

Student Name & ID Number Course Name & Number New Generation Fish Spa Date of Submission This assignment is solely the work of (student’s name). All ideas and views of other people included or referred to are acknowledged and appropriately referenced. Executive Summary Fish spa is a new business scenario that maximises the use of live fish for skin treatment. The report discusses scenarios of starting fish spa in Thailand – New Generation Fish Spa. Generally, it is a business plan that explores future success of the business through development of probable, possible and preferred scenario options. The vision of the organisation is to create and environment and provide service that is applicable to all marketing segments. The data and information available has been analysed to understanding Thailand business environment. The information available has been analysed with the help of PESTEL and SWOT analysis in understanding better and developing base of starting a viable and sustainable business. Analysis of PESTEL and SWOT shows that Thailand is a ripe business environment in which it can sustain New Generation Fish Spa. Table of Contents Table of Contents 3 1.0 Introduction 4 1.1 Background – Future Vision 4 1.2 Aims and Objectives 4 1.3 Scope 5 2.0 Environmental Scan 5 2.1 Political 5 2.2 Economic 6 2.3 Social 7 2.4 Technological 8 2.5 Legal 9 2.6 Ecological 9 3.0 Resources – Microanalysis 10 3.1 Opportunities and Strengths 10 3.2 Threats and Limitations 11 4.0 Key Strategic Issues 11 5.0 Reference 12 Appendix 14 Chart 1 14 Graph 2 14 Graph 3 15 SWOT Analysis Matrix 15 1.0 Introduction This report is prepared on behalf of New Generation Fish Spa, a company owned by the author of the report. New Generation Fish Spa is a new start-up business that the author wants to start within the next five years, and whose core purpose is providing therapy spas. The business offers numerous spa related services that includes refreshments. It will be located in Thailand. Thus, the report serves as a business plan that strategically positions the business for future success through development of possible, probable and preferred scenario options. 1.1 Background – Future Vision The vision of New Generation Fish Spa is to go beyond the zone of the ordinary to extraordinary. The organisation will strive to create a harmonious environment that is filled with love and beauty. The sole purpose is to enhance natural beauty, to maximise on beauty, to cultivate an inner awareness of joy, peace, good health and love. The organisations seen itself providing the best wellness and beauty services at all times focusing on internal matters and thus treating clients differently. Generally, the vision of New Generation Fish Spa can be summarised by this phrase “A spiritual fish spa experience, spa with a conscience”. 1.2 Aims and Objectives This report applies Futuring tools and techniques to analyse the future operating environment of the new start up business, New Generation Fish Spa. It specifically utilises the PESTLE analysis approach to identify political, economical, social, technology, legal and environmental issues, which may influence the future competitive positioning of the business, in order to predict a preferable and optimum future scenario. 1.3 Scope The report develops a business plan that is limited to Futuring strategic positions. Additionally, it will carry out an external SWOT analysis to add value to the outcomes of the Futuring analysis. All the strategic requirements are also limited to New Generation Fish Spa. 2.0 Environmental Scan 2.1 Political Thailand operates under a constitutional monarchy type of government. The constitutional monarchy type of government has helped Thailand to provide political continuity, despite frequent bouts of government instability and military coups (Country Fact Sheet 2009). The last recorded coup was in September 2006, and election was held in 1997, People Power Party (PPP) won the election and was dissolve in 2008 for the Democrat Party (Country Fact Sheet 2009). As for the Next Generation Fish Spa business, the political landscape of the country could only have a minimal effect on the business. Corporation taxation is set at a maximum rate of 30%; value-added tax is set at 7%; and personal income taxes rates increased to 37% on annual taxable earnings exceeding Bt4m (Thailand: Country Fact Sheet 2009). The World Banks (2009) reports that in Thailand, total tax rate as a percentage of profit is equivalent to 37.2%. The tax law in Thailand could negatively influence the business, particularly the owner, as the Next Generation Fish Spa will initially operate under sole proprietorship. With the high personal income tax rate in Thailand, tax expenses would generally be high. Nevertheless, Thailand has numerous policies and agreements that supports doing business. For example, Thailand has numerous free trade agreements, bilateral trade, trade blocks that encourages investments. Moreover, business start-up in Thailand may not be difficult as the government promotes pro-investment policies in the country. According to the World Bank’s Doing Business report (2009), starting a business in Thailand is generally easy, as it only takes an entrepreneur about 32 days to set up a business compared to 41 days in other East Asia and Pacific countries. Chart 1 in the appendix section illustrates positive business climate of Thailand. 2.2 Economic Structural adjustments following the 1997-98 Asian financial crisis, the Thai economy has recovered with its GDP growth rate averaging 4.7% a year in 2004 up to 2008 (Country Fact Sheet 2009). As for 2009, the Economist Intelligence Unit asserts that the economy contracted by 3.2% because of the Global Financial Crisis (Country Fact Sheet 2009). Nevertheless, economic outlook for 2010 is generally positive, as analysts expect a return to growth (Emerging Markets Economic Outlook 2009), and this may likely be reflected in future economies. Consumer confidence in Thailand has also increased, rising for four straight months in a year in September (Emerging Markets Economic Outlook 2009). Personal consumption has likewise improved, evidenced by a 4.5% increase (Emerging Markets Economic Outlook 2009). The increase in consumer confidence could have positive implications to the business, as increased consumer confidence equate to higher spending and consumption. The Bank of Thailand held the interest constant at 1.25% and intends to keep it in that level until the recovery is much more stable (Emerging Markets Economic Outlook 2009). Graph 2 in the appendix illustrates the changes of interest rate for the period 2007-09. Commercial banks and other lending institutions base their interest rate on central bank directives, and thus the interest rate is favourable. Spa business is categorised as other therapy sectors and thus the taxation rules and legislations follows any other therapy rules. Nevertheless, since animals are involved (fish), the business is required to notify the local authority to be provide and assisted in development of the business and obtaining the appropriate papers. 2.3 Social The Thai population is generally homogenous, whereby more than 85% speak a dialect of Thai and share a common culture. The core population includes Central Thai, which comprises 33.7% of the population, North-eastern Thai, which comprises 34.2%, Northern Thai, which constitute 18.8% of the population; and Southern Thai, which make-up 13.3% of the population (U.S. Department of State 2009). As majority of the population speak the native dialect, advertising and promotional initiatives will be executed using the native Thai language as well as English, as the elite group in Thailand has English as its second language (U.S. Department of State 2009). Moreover, the country is an important tourist destination, thus importance of inclusion of foreign language – English. Majority of the population is in the rural areas, mostly concentrated in the rice-growing areas of central, northeastern, and northern regions. However, as Thailand continues to industrialize, the urban population (mostly in Bangkok), now constituting 31.6% of the total population is expected to increase (U.S. Department of State 2009). As for the fish spa business, good choice of location may be considered important, as it targets urban population. Health and wellness are important to Thais, resulting to the popularity of spa treatments (Bill 2002). At present, spa treatments are only appealing to middle-aged to elderly but as well as to younger customers (Bill 2002). The increasing popularity of spa treatments may be considered promising for the fish spa business. Consumer behaviour and purchasing power is determined by cultural and traditional practices. Fish is a major component in the culture of Thais and thus may appreciate extensive benefits that are associated with this practice. 2.4 Technological Technology is an important factor in development and sustainability of the economy. Any country that has good technological infrastructure increases the chances of development, a factor that Thailand has placed into consideration. Thailand has a high quality telecommunication system, especially in urban areas like Bangkok (U.S. Department of State 2009). At present, there are 7.02 million fixed telephone lines in use; 62 million users of mobile telephones; 1.231 million Internet hosts, and 16.1 million Internet users (CIA 2009). In view of the high rate of Internet users, on-line advertisements may be effective in increasing customer awareness on the newly established business. Furthermore, creating a website may also be an effective means of reaching out to the larger population. Transport is a major factor for business development, and Thailand has provided different means of ensuring transport is effective. Means of transport include rail, air, sea and road, even though the infrastructure is not efficient, it accomplish most tasks that are required for transport. Banking system has also developed since it accepts numerous means of banking ranging from wire transfer books to plastic cards. Most institutions, organizations and business support the use of plastic cards and this is usually convenient for those people who do not want to carry large sums of paper money. 2.5 Legal Small entrepreneur businesses are the pillars of many economies and countries are developing guidelines to ensure that small businesses succeed. Thailand understands importance and the power of small business in driving the economy, and thus the government has provided an environment that is conducive for small businesses (Thailand Legal Basics 2009). This has encouraged increase in number of business that is controlled by the local authorities and central government. The government does not condone inappropriate competition and laws are in place that addresses this issue. These laws also protection the consumers against poor work or inappropriate business ethics that can be employed by a business. Taxation is based on the type of business and the size of business. Small businesses are required to file for returns, and this will define amount of taxation. Regarding employment laws, Thailand observes minimum wage depending on the location of the workplace (Thailand Legal Basics 2009). The business is required to comply with minimum wage and also ensure that employees observe the eight hours per day working conditions. Generally, the legal system of small business and international business is favourable for a small investor. It is advisable for any foreign direct investment to follow the requirements; following the requirements will improve consumer perception and may result in the business benefiting more. 2.6 Ecological Thailand enforces several environmental regulations that seek to protect the quality of the environment (Pollution Control Department 2009). Businesses are therefore expected to comply with applicable environmental regulations. For the fish spa business, it would be important to take note of the ‘Effluent Standard for Inland Aquaculture’, as the business will be housing fishes in pools and aquariums. Nevertheless, additional regulations and standardisation are supposed to be fulfilled. The government of Thailand has continuously improved on environmental preservation through employing policies that are beneficial to the sector. Some factors that they have placed into consideration include limiting benzene, terminating the use of leaded gasoline, reduction of aromatic content, and reduction of sulphur. Improvement of emission standards was enacted and frequent inspection and maintenance program is encouraged. The motor vehicle policies were formulated because the number of vehicles was growing faster has illustrated by Chart 3 in the appendix section. Apart from the national requirements, in the international scene, climate has become a major concept in which every country, organisation and individuals are required to employ daily activities that champion preservation of environment. Generally, even if there area no restrictions or regulations that takes care of the environment, it is important to cultivate culture of preservation. 3.0 Resources – Microanalysis 3.1 Opportunities and Strengths Opportunities and strengths are those provisions that support the ideals of the organisation. They are the foundation that the organisation relies upon. Opportunities and threats are further discussed in the appendix section. 3.2 Threats and Limitations These factors inhibit the success of the organisation. Threats are internal weaknesses that prevent and organisation from effectively fulfilling its aims while limitations are external conditions that prevents success of the organisation. These are also discussed in the appendix section. 4.0 Key Strategic Issues Based on the information is this report and future business scenario, some factors that will contribute to success of preferred scenario, and means of acquiring relevant resources to facilitate success. Strategies that will be employed include: The fish will be bought from local distributors and sometimes internationally imported depending on the market conditions and scenarios. Since the means of advertising are cheaper, local and international media will be used doubled up with Internet through development of website. The website will be developed in such a way that it supports and enable exchange of views and means of ensuring the entire business can be moulded based on the views of customers. The design of the building and internal design should factor into consideration ambiance, beauty and relaxation. Games and part time activities should be include when the customers are relaxing in the spa. For example, fish based video games and other entertainment means should be included. The business should involve local community and customer in understanding fundamentals of fish. For example, the community should be taught on the importance of fish, where the fish come from, and how the span plus the fish treats the skin. 5.0 Reference Aboagye, H & Chakroborty, C 2007, ‘Purchasing power parity, inflation and central bank independence: a panel conintegration test of emerging economies’, Journal of American Academy of Business, vol. 10, no. 2, pp. 7-14. Bill, G 2002, ‘Would you like to swing on a spa?: Best known for its youthful image, Club Med is broadening its family appeal by opening health facilities at 18’, Financial Times, 21 September, p. 2. (online Proquest). Carpenter, M & Sanders, G 2008, Strategic management, a dynamic perspective concepts and cases. Prentice Hall, Australia. Doing Business 2009, Thailand: Explore Economies, viewed 16 December 2009, Pollution Control Department 2009, Thai Environmental Regulations, viewed 05 December 2009, . Tilleke & Gibbins Advocates & Solicitors 2008, Doing Business in Thailand, 16 December 2009, ‘Thailand: Country fact sheet’ 2009, EIU ViewsWire. 8 Dec. (online Proquest). ‘Thailand’ 2009, Emerging Markets Economic Outlook, pp. 46-50. (online Proquest). Thailand Board of Investment 2009, Cost of doing business in Thailand, viewed 05 December 2009, . Trading Economics 2009, Thailand Interest Rate, viewed 16 December 2009, Thailand Legal Basics 2009, viewed 16 December 2009, U.S. Department of State 2009, Background Note: Thailand, viewed 05 December 2009, . Thailand Board of Investment 2009, Thailand, viewed 16 December 2009, US Commercial Service 2009, Frequently Asked Questions, 16 December 2009, World Bank 2009, Doing Business: Thailand, viewed 05 December 2009, . Appendix Chart 1 Graph 2 Graph 3 SWOT Analysis Matrix Positive/ Helpful Negative/ Harmful Internal Origin It will be the first organisation to introduce fish spa Available resources are enough to support the requirements of the sector Cheap labour force Attitudes of fish been food rather than for therapy use Economic crisis may affect the organisation Lack of enough capital for expansion purpose External Origin Thai’s increasing focus on health and wellness could open a magnitude of opportunities for the business more customers are expected to see the treatment as a natural alternative to medical treatment Other market segments are been introduced into benefits of fish spa treatment Increase in environmental awareness may result in development of fish spa as alternative Importance of water therapies Numerous number of fish suppliers Customers of spa are becoming more demanding on their spa experiences Pressures for the organization to improve on amenities and decorations Unsanitary conditions is a cause of concern Read More