PESTEL analysis of Thailand

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PESTEL analysis of Thailand

This detailed PESTEL analysis of Thailand aims to address some of the political, economic, social, technological, environmental, and legal factors that affect Thailand today. Thailand is officially known as the kingdom of Thailand. It was formerly known as Siam. The largest city and the capital of the country is Bangkok.

Political factors affecting Thailand

Thailand is a nominally constitutional monarchy. It is also a parliamentary democracy. The hereditary monarch is the Head of State and is protected by lèse-majesté (to do wrong to majesty) laws which allow any critics to be sentenced to jail for three to fifteen years. However, the monarch has limited powers. The prime minister is the head of government. It is worth noting that the country’s military seized power in a coup that took place in 2014.

Thailand is a member of the ASEAN forum (Association of Southeast Asian Nations). It has developed close ties with all other ASEAN members over the years and it is a key regional ally of China. Its relations with many other global actors are also good. However, Thailand has some border disputes with Laos, Cambodia, and Myanmar.

Corruption hampers economic and social development and needs to be tackled seriously. Thailand ranked joint No 99 with the Philippines (out of 180 countries and territories) in the Transparency International’s 2018 Corruption Perceptions Index in 2018 (Bangkok Post, 2019). Most sectors in Thailand have high risks of corruption, and therefore, a lot needs to be done to deal with it.

Economic factors affecting Thailand

Thailand is the 25th largest economy in the world. Its nominal GDP for the year 2018 was $455.378 billion (Statistics Times, 2019). It has made great economic progress and moved from a low-income to an upper-income country in a relatively short time (World Bank, 2019). It is widely known for its sustained and impressive poverty reduction efforts.

Thailand is one of the largest export economies in the world. Its main exports are machinery including computers, electrical equipment, vehicles, mineral fuels, broadcasting equipment, organic chemicals, and plastics. Its main imports are gold, vehicle parts, crude petroleum, integrated circuits, and office machine parts.

However, the economy of Thailand grew at a slow rate (in fact, slowest in five years) in the second quarter of 2019. This is due to sluggishness in exports, flagging domestic demand, and rising US-China trade tensions (Reed & Shane, 2019). Thailand’s unemployment rate was 0.90% in October 2019, which is one of the lowest in the world. However, many critics say this low rate of unemployment is mostly due to that fact that there is no incentive for anyone to stay jobless for long. Consequently, they enter the so-called ‘informal’ sector or look for part-time jobs and are regarded as employed in the official statistics.

Social factors affecting Thailand

The next element to address in the PESTEL analysis of Thailand is the social environment. The total population of Thailand, as of December 2019, is around 69 million. There is no official state religion in the country; however, Buddhism is the most widely practised religion. Other major religions are Islam, Christianity, and Hinduism. The life expectancy for men is 71 years, while 79 years for women. The major language in Thailand is Thai (BBC, 2019).

The people of Thailand are generally very friendly. They are very hard working as well. Thailand is a diverse country and tensions between ethnic groups are few and far between as people love to live freely and practise their faith as they wish. Consumer behaviour is rapidly changing as more and mor people are seen on spending money on experiences such as dining out and leisure travel.

Many Thai women are very educated, and tech savvy; hence well-paid. Thai consumers are very brand conscious and do not mind paying some extra for their favourite brands. The demand for luxury products such as smartphones, jewellery, designer watches & sunglasses, and luxury cars is on the rise. However, Thai society faces some big social challenges. For example, adolescent pregnancy, ageing population, human trafficking, and corruption to name but a few in this regard.

Technological factors affecting Thailand

Thailand is gradually becoming a technologically advanced country. The government offers a variety of incentives for organisations to adopt new technologies. The investment of Thai companies in innovation and tech infrastructure is also noteworthy. Consequently, the country is expected to see a rise in e-commerce and similar tech activities in coming years.

Thai companies now supply tech products and services abroad. For instance, CCS Advance Tech (a Thai company) manufactures and supplies aerospace and aviation components to global companies including Boeing and Airbus (Lowe, 2019). Thailand is also a leading Southeast Asian country in the use of social media. Facebook, YouTube, Line (a Japanese company), Instagram and Twitter are the most used social media in the country. However, it is worth mentioning that tech activities are mostly Bangkok-centred. Therefore, more initiatives are required to take those activities across the country.

Environmental factors affecting Thailand

As stated above, Thai people are very friendly and hospitable. Tourism is an important contributor to the country’s GDP and provides employment to 6 million people. A record 38.27 million tourists visited Thailand in 2018, and the number of tourists is set to rise in coming years (Bangkok Post, 2019).

Delicious food, hospitable people, affordable cost, vibrant night life, over 1,500 miles of coastline, stunning beaches, rich history and culture, and an abundance of wildlife give convincing reasons to millions of people to visit the country. However, rapid economic development has taken a toll on natural resources. Loss of biodiversity, air and water pollution, deforestation, water scarcity and desertification are some of the major environmental challenges facing Thailand today.

Legal factors affecting Thailand

The last element to address in the PESTEL analysis of Thailand is the legal landscape of the country. However, the discussion here is somewhat limited as the issue is beyond the scope of this article. Thailand has standard employment laws ensuring the rights of people at work. It has some strict rules in areas such as disrespecting the Thai Royal family, bribery, use of drugs, drinking, gambling, littering, overstaying in the country, and smoking.

We hope you like the article ‘PESTEL analysis of Thailand’. You may also like reading PESTEL analysis of Singapore and PESTEL analysis of China. Other relevant articles for you are:

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Last update: 07 December 2019

References:

BBC (2019) Thailand country profile, available at: https://www.bbc.co.uk/news/world-asia-15581957 (accessed 05 December 2019)

Bangkok Post (2019) Corruption rises in Thailand, global watchdog says, available at: https://www.bangkokpost.com/thailand/general/1619930/corruption-rises-in-thailand-global-watchdog-says (accessed 03 December 2019)

 Lowe, M. (2019) Thailand to embark on becoming a technologically advanced country, available at: https://news.cgtn.com/news/3d3d674d3241544e33457a6333566d54/index.html (accessed 06 December 2019)

Reed, J. & Shane, D. (2019) Thailand’s economic growth slows to five-year low on weakening exports, available at: https://www.ft.com/content/2e8749e0-c22c-11e9-a8e9-296ca66511c9 (accessed 02 December 2019)

Statistics Times (2019) List of Countries by GDP (Nominal), available at: http://statisticstimes.com/economy/countries-by-gdp.php (accessed 03 December 2019)

World Bank (2019) Thailand Overview, available at: https://www.worldbank.org/en/country/thailand/overview (accessed 01 December 2019)

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Author: M Rahman

M Rahman writes extensively online with an emphasis on business management, marketing, and tourism. He is a lecturer in Management and Marketing. He is a graduate of Leeds Metropolitan University and London South Bank University.