The analysis of the problem and threat of small and medium-sized enterprises in northeast Thailand

Thongphon Promsaka na Sakolnakorn,prince of Songkla university, Thailand.

TOPICES TO BE COVERED
1.Introduction 2.Review of literature 3.Objectives of the study 4.Research methodology 5.Results and discussions (a)Results of in-depth interviews (b)Analysis of the problems and threats 6.Conclusion 7.Future aspect of the study

INTRODUCTION
A small business (also called mom-and-pop) is a that is privately business owned and operated, with a small number of employees and relatively low volume of sales. The investment of small scale enterprises in plant and machinery is from Rs 25 Lakhs to 5crores in case of product category and Rs 10 Lakhs to 2 crores in case of service category whereas the investment of medium scale enterprises is Rs 5crores to 10 crores and 2crores to 5 crores in case of product and service sector respectively

ESTABLISHMENT OF SMEs IN VARIOUS SECTORS:

Agricultural Inputs Meat products

Electro-medical equipment

Textiles and Garments

Leather and leather goods

Engineering; Electricals; Electronics

Computer Software

Sports goods

Chemicals & Pharmaceuticals

Plastics products

Computer Software, etc

Food Processing

REVIEWS OF LITERATURE
1. 2. 3. 4. 5. (Khamanarong, 2002) Nimnian Patcharin (2009) (Siringoringo) 2009 (Kalyani) 1992 ( Lemuel)2009:

KEY WORDS
Small and Medium-sized Enterprises Problem and Threat Northeast of Thailand

Objectives of the study

1.To study the problems of small and medium-sized enterprises in the northeastern region of Thailand. 2.To analyze the problems of the operation and management of small and mediumsized enterprises in the northeastern region of Thailand.

RESEARCH METHODOLOGY
1.Research design: Qualitative method employing in-depth interviews(lasting from 30 minutes to two hours) 2.Sample size:30 entrepreneurs in small and medium-sized enterprises in northeastenThailand. 3.Content analysis and descriptive statistics was also used.

Results of the in depth interviews

The study categorized the industries into four categories : 1.Manufacturing sector 2.Wholesale sector 3.Retail sector 4.Service sector.

SMEs in the manufacturing sector

1.Textile industry : situated in non poor village in the baan-kaew district of the Chaiyaphum Province. 2.Yawning industry: situated in district of the Chaiyaphum Province having 200 entrepreneurs. 3.Drinking water enterprise: situated in the Nakom Ratchasima province.

Manufacturing sector
4.Leather enterprise: Situated in Kumuang district of the Buri Ram province. 5.Furniture enterprise: Situated in Pon district of the Khon Kaen province. 6.Artificial flower enterprise: Situated Lemg Nok Tha district of the Yasothon province

FINDINGS (Manufacturing sector)

1.Textile industry :(a) High level of competition among entrepreneurs engaged in the same business. (b) Lack of marketing knowledge (C) Financial management such as giving credit to customers (d) Lack of support from the government.

CONTINUED
2.Yawning industry: (a) High competition in the awning market - there are 200 entrepreneurs in the village as well as others from nearby villages. (b) High cost of transportation (C) There are similar product that offer more advantages than the product that the entrepreneurs produce.

CONTINUED
3.Drinking water enterprise :(a) There are many competitors in the market. (b) The high cost of transportation directly affects the selling cost. (c) Lack of funds. (d) Lack of the government support.

CONTINUED
4.Leather enterprise:( a) marketing problem such as promotion and public relations (b) lack of government support ( c) lack of special knowledge such as packaging and new technology.

CONTINUED
5.Furniture enterprise:(a) Government does not change or adapt the modernity policy, especially in the case of the policy of importing raw materials from overseas. (b) Government supports the enterprise in the financial process, in fact, it is difficult to request credit from a financial institution.

CONTINUED
6.Artificial flower enterprise:(a) Lack of government support (b) Insufficient knowledge of marketing and a limited selling channel (c) High competition in the market (d)Lack of funds, which makes it difficult to develop their product

SMEs in the wholesale sector

1. Garment shop in Muang district of the Udon Thani province. 2.Enterprise that sells military clothes and adventure tools in the Muang district of the Udon Thani province.

CONTINUED
3. Backrest pillow, drapery, and bedclothes wholesaler in the Yangtalad district of the Kalasin province 4.Consumer products wholesaler in the Muang district of the Ubon Ratchathani province

FINDINGS (Wholesale sector)

1. Garment shop:(a) The birth of die major wholesale superstores has directly affected local businesses because the superstores are more convenient and sell goods at cheaper prices than local stores. (b) There is no policy to protect local business, but the government supports the policy for overseas businesses to invest in Thailand.

Military clothes and adventure tools

(a)Chinese products are going to claim the market because of lower costs. (b)Even though the profit of this business is small, they still pay a high price for the good location.

Backrest pillow, drapery, and bedclothes wholesaler

(a) The government does not support them in spreading goods to the international market, even though there is a lot of demand and a large number of buyers on the international market.

CONTINUED
2.There is a lack of skillful employees to produce the products because they mostly move to work in the large industrial sector. 3.The management of production costs is challenging because the costs increase constantly, but it is difficult to increase the selling price.

Consumer products wholesaler

1. The damaging effect of the major wholesale superstores and large convenience stores such as Tesco Lotus and Big-C; 2) 2.Lack of management knowledge 3.Lack of funds to develop the enterprise 4.Lack of inspiration to develop the enterprise.

SMEs in the Retail sector

1. Construction equipment business situated in the Banped sub-district of the Khon Kaen province. 2. Clothes retail shop : situated in the Muang district of the Khon Kaen province. 3. Computer equipment business : situated in the Muang district of the Khon Kaen province

CONTINUED
4. Agricultural equipment enterprise : situated in the Muang district of the RoiEt province. 5.Consumer goods retail shop :situated in the Muang district of the Surin province. 6.Furniture shop : situated in the Muang district of the Khon Kaen province.

FINDINGS (Retail sector)

1. Construction equipment business : (a)It is difficult to recruit employees, and the turnover rate is high, especially in the agriculture season. (b). Government supports the enterprise in the financial process, it is difficult to request credit from a financial institution.

Clothes retail shop

1) High competition in the market. 2) Trends that change constantly 3) Little profits 4) The high cost of the good location

Computer equipment business

1.High competition in the market. 2.Business has to use lots of funds for investment, so it is difficult to compete against big entrepreneurs. 3. The cost of the good location is high. 4.The process of requesting credit from a financial institution complicated. 5.It is difficult to recruit skillful employees

Agricultural equipment enterprise

1.Agriculturalists will buy equipment depending on the income 2.The Employee are often absence and the turnover rate is high, especially in the harvest season. 3. Due to Thailand's free-trade policy, Chinese products are imported in greater amounts and more cheaply than local products.

Consumer goods retail shop

1.Lack of business management, so it is difficult to compete against modem shops. 2. There is a lack of funds. 3.The cost of goods is higher than in big retail stores, which may cause a customer to decide to buy at a big store.

Furniture shop
1.High level of competition in the market 2.Lack of financial support because the size of the enterprise is small 3.High product prices compared to the big retail shops.

SMEs in the service sector

1. Thai massage entrepreneur in Nakom Ratchasima. 2. Thai massage shop in the Muang district of the Ubon Ratchathani province. 3.Travel and ticketing business in the Muang district of the Buri Ram province.

CONTINUED
4.Intenet caf in the Muang district of the Khon Kean province 5. Chinese restaurant in the Muang district of the Khon Kaen province 6. Laundry service in the Muang district of the Khon Kaen province.

FINDINDS(Service sector)
a)The good location is expensive. b) The employee turnover rate is high and there is a lack of skillful massagers. c) There is a high level of competition in the market. d) The owner operates the business using his/her experiences. This will limit the opportunities to develop the business.

Thai massage shop

1. Employee turnover rate is high and there is a lack of skillful massagers. 2.There has been an increase in the number of competitors. 3.It is difficult to request credit from a financial institution and there is a lack support from the government.

Travel and ticketing business

1) Number of tourists going to Cambodia through the Buri Ram and Surin provinces has decreased because of the conflict between Thailand and Cambodia. 2)The economic crisis has directly affected the tourism business. 3) It is difficult to get credit from a financial institution..

Internet caf
1.There are high costs due to the development of technology. 2.High level of competition in the business, profits are low because most of the entrepreneurs use discount promotions to convince customers to buy. 3.Cost of copyrights from producers and officials s high.

Laundry service
1)The employee turnover rate is high, and it is difficult to find employees. 2) There is a lack of support from the government. 3) It is difficult to request credit from financial sources.

CHINESE RESTAURANT
1) Good location is expensive. 2) The employee turnover rate is high, and it is difficult to find Thai employees 3) It is difficult to obtain bank loans.

CONCLUSION
The researcher identified 5 problems of SMEs in northeastem Thailand: 1) Public policy and government support 2) Financial support 3) Knowledge capital 4) Labor 5) Marketing.

continued
Having identified these five problems, entrepreneurs must endeavor to solve problems by developing their skills and finding a way to strengthen the business of SMEs and develop their businesses to be more competitive.

FUTURE ASPECT OF THE STUDY

A quantitative method employing a questionnaire should be used to survey entrepreneurs in small and mediumsized enterprises in northeastern Thailand to confirm the results of this study..

THANK YOU