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In this PESTLE analysis of Thailand, you’ll learn how the country is impacted, impeded, or assisted by six macro-environmental influences: political, economic, socialocultural, technological, legal, and environmental factors.
Political factors: A rift between shirts
The battle between two political groups.
One of Thailand’s largest money-making industries is tourism. People from all over the world come to see the breathtaking monuments, flora, and crystal clear waters of the country. But tourism is very affected by politics, regulations, and policies.
Two groups in Thailand keep the people in a tense political battle: the red-shirt and yellow-shirt groups. These two groups are fractured based on political beliefs. These groups have a lot of power — back in 2010, the yellow-shirt closed Suvarnabhumi Airport, the most prominent airport for international flights. While it was closed, tourism dwindled.
The red-shirt retaliated — not only by protesting political summits like the one held in Pattaya but also by closing off the main intersection in Bangkok. With the road closed off, stores in the area had to close too — which proved to be the right choice, because the demonstration escalated to nearby stores being set aflame and bombed by the red-shirts.
Because of these fights, countries in Europe and Asia have warned citizens to avoid visiting Thailand, citing these fights as the main issue. Tourism dropped again in Thailand but has since recovered over the last nine years.
Economic factors: Declining currency creates an emergency
A problem with the Baht currency.
All countries are impacted by large economic developments and declines, like recessions. It causes economic crises, and Thailand isn’t an exception. In fact, Thailand has suffered many crises since 1997. During that time, the Baht currency exchange rate suffered. The only way to solve the problem was for the Thai government to borrow money from the International Monetary Fund. Even so, companies went bankrupt. International companies weren’t investing in Thai businesses — the currency was still too volatile for investors to invest. Luckily, the country has recovered since then.
Streamlined processes for investors and new business owners.
Now, the government is developing new policies to increase investments and making the regulatory framework more transparent to attract investors from international countries. Starting a business is a simpler practice with streamlined procedures, allowing for more people to become small business owners, which increases competition, product investment, and supply and demand.
An extremely low unemployment rate.
Thailand has one of the lowest unemployment rates in the world — the majority of the population works in the agricultural sector, with more of the younger generation moving into newer industries like cybersecurity. However, one thing that could impede economic growth is the uneven education for children in Thailand. It’s expected for children to receive 12.4 years of schooling before the age of 18, but that can decrease based on the quality of learning. If that happens, it lowers the expectation to 8.6 years. As such, it could be harder for some children to find appropriate employment once they reach adulthood.
Sociocultural factors: Relaxation at its finest
Tourism (medical and otherwise).
Thailand is a large tourism country. Because of its beautiful landmarks and climate, it’s a popular destination for people all over the world. It’s also popular for medical tourism — that is, people wanting to get cosmetic or plastic surgery come to Thailand because the procedures are cheaper than in the United States, Canada, or most countries in Europe. There are even plastic surgery television shows where women are taken to Thailand hospitals to get the procedures they’ve always wanted.
Half of the working population are in agriculture.
Most of the older citizens are in agriculture. Besides tourism, agriculture is the biggest industry in Thailand, with half the citizens working on the farms to produce crops through specific methodologies and the latest technologies. The younger citizens are branching into service industries, tech industries, and entrepreneurship.
A relaxing philosophy.
Thailand’s culture is a mixture of past civilizations, ancient religions, and a very relaxed approach to life. The approach even has a name: “mai phen rai” which translates to “it doesn’t matter.” Nearly all Thai citizens practice Buddhism — you can find ornate and unique buddhist temples all over the country, which is one of the main reasons tourists come to visit.
Technological factors: Not afraid of adopting the latest tech
Using the latest tech to grow top tier crops.
Thai farmers use cutting-edge technology to harvest the best crops possible. They have access to the latest processing and storage plants. Combining the tech with R&D, plus specific methodologies have allowed Thailand to grow its agricultural sector immensely over the last few years.
Rapid growth requires tech-savvy citizens.
Thailand isn’t afraid of adopting new technology outside of farming, though. In Asia, Thailand is one of the leading technology-savvy countries. More people are moving into cybersecurity as a profession because technology is rapidly developing in Thailand and they need more people to secure networks, protect data, and respond quickly to cyber-attacks.
Legal factors: Protecting the royal family
Be careful what you say.
Thailand is a country with many laws, but some are more unique than others. For instance, the Lese Majeste law means you can’t insult, defile, threaten, or defame any image of the royal family in Thailand. People also can’t deface the money — if you do, it could land you in jail. It’s such a serious law that even just publicly talking about the Thai King is frowned upon.
Monitoring social media for illegal drinking.
You must be 20 years old to drink in Thailand, but you can’t drink in pharmacies, petrol stations, or in the many temples or places of worship scattered around the country. Thai police are strict about this and have even begun monitoring social media posts to see if anyone is drinking illegally — either where they shouldn’t be or while underaged.
Environmental factors: A beautiful land ravaged by ecological threats
Dwindling natural forests and species.
Thailand is a large country with over 10,000 species of plants. It’s also home to monsoon forests, mangrove forests, and rain-forests. In these areas, there’s a high amount of biodiversity, but it’s threatened by environmental issues.
Many species are endangered or at risk of extinction because much of the land is being used to expand cities. The government is putting more effort into protecting the land and wildlife, but the natural resources are still in plenty of danger.
Thailand PESTEL Analysis: Bottom line
Thailand is a beautiful country with a philosophy to relax and take it easy. Despite this fundamental belief, the country is politically split by two groups who aren’t afraid to close down airports or set fire to stores in a pinch.
Half of the country works in agriculture, producing top crops with the latest tech and methodologies. The younger crowd is branching towards new industries, particularly in cybersecurity.
With the rapid expansion of new cities, it’s encroaching on the natural land, which is suffering from deforestation. If the land isn’t protected, Thailand’s other primary industry — tourism — will suffer.
Image by Maxssx