Business Strategies Used by Micro-SMEs in a Bangkok Street Location: Tawanrung Market

I have successfully completed the presentation of the paper “Business Strategies Used by Micro-SMEs in a Bangkok Street Location: Tawanrung Market” at the 9th SMEs in a Global Context Conference being held here in Vientiane (http://www.laosmeconference2012.com/index.html). We have a gala dinner tonight and the second day of the conference tomorrow. Here is the abstract:

Although a reasonable number of studies of street market vendors have taken place, in both developed and developing markets around the world, these have mostly been conducted from a sociological perspective. They have aimed to explicate issues such as the relationship between vendors and the state, the use of space in an urban setting, the resistance demonstrated by vendors against oppression and the value of street-vending in the struggle against poverty. However, there have been fewer attempts at describing street vendor systems from a business perspective and from, in particular, collaborative and cooperative means of increasing business within a particular geographical area. This study uses an ethnographic and qualitative research method to describe and analyse a specific street vending area located in and around the Ladprao 62 region of Bangkok. This area consists of several different discrete street vending regions that are distinct in terms of time of operation, type of goods sold and relationship with other vending operations. The demographic details of the street vendors also varies, to a certain extent, on these variables. Operations are managed with respect to business objectives and personal and familial circumstances: for example, seasonality of agricultural production in the home towns of migrants means there are periods when production is temporarily although predictably halted. Other halts are less predictable. In order to increase business success, street vendors will generally maintain cooperative relationships with each other and share information so as to increase aggregate sales, rather than seeking to gain short-term competitive advantage over neighbours or competitors. Since the pool of customers is comparatively limited over a fixed period of time, there is little benefit to individual vendors seeking to drive out competitors since network externalities exist, particularly in the case of takeaway meal choices. This paper describes a variety of business strategies enacted within the Tawanrung Market area and indicates how these have been changing over time and with respect to new entrants and potential substitute products. In a system of creative destruction typical of capitalism, it is found that there are both winners and losers.

Keywords: street vending, micro-SMEs, economic geography, business strategy

Area of Submission: SME Networking and dissemination of information

Vientiane
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GLB: Khun Supoj Claims Evidence Will Exonerate Him

It has been quiet in 64 this afternoon but yesterday and this morning some helpful chaps were around to help dismantle some of the protective kit being used to protect Khun Supoj’s house from possible flood – he himself has hit back today to claim that he is collecting evidence, which he does not wish to reveal at the current time, which will clear his name.

Interestingly, he has begun to resign from high profile public sector board membership which I noted the other day was characteristic of Thai society. The board membership of a public sector body offers an opportunity for different members to combine their different networks and thereby increase their strength overall (of course, they may not always wish to join up with certain other people).

There are several different types of network which are active in Thailand. The first type to consider is the regional network (since this is essentially what the Bhumjaithai faction is) – in this, at various geographical levels (e.g. village, tambon, provincial) an important person (chao por) distributes resources and develops relationships of asymmetric power but mutual dependency as the leading person strengthens a network that, like Maoist strategy, replaces the existing state structures.

The second form of network is organizational and ranges from the weak (e.g. at schools and universities) to rather stronger ones (e.g. at the military level). This kind of network can become sufficiently strong that, in some organizations (or across different organizations) it subverts the official lines of communication and orders and replaces it, at least on some occasions, with those that represent the interest of the network. This has been seen in various of the military coups that the Thai people have suffered.

The third form of network is class-based: specifically, it is the upper class (other classes are not permitted to obtain power and hence are not relevatn here) – members of it come into contact with each other regularly in educational, social and civil societal institutions. In addition to name, reputation and deportment, issues of ‘taste’ and ‘refinement’ have been invented and reproduced in different forms so that it can be determined immediately who is a member, who might be admitted with suitable guarantees and who is forever destined to be an outsider.

So, all of these three types of network are united in the characteristic Thai system of public sector cross-board membership (private sector networks are quite separate). This provides the benefit that different types of network can be combined, when those representing them are amenable.

In the current case, then (based on the anecdotal evidence that has been provided in the public domain), a regional network (Bhumjaithai) is united with an organizational network (Ministry of Transportation) and any other networks represented by the other members of the boards – this is just the hypothesis with which I am working at the moment.

Since – it is alleged – that bribes have been involved in various governmental contracts, it is evident that private sector networks are excluded from the ruling network system. This would help explain the 2006 events, of course.

The Great Ladprao Burglary and State Governance

One of the problems with Thailand’s political system as a whole is that a small number of people get to share numerous important public positions, which makes them incredibly powerful through being able to distribute resources and influence. The victim of the Great Ladprao Burglary, Perm Sec of the Ministry of Transport Supoj Saplom (other spellings are available) is also on the board of Thai Airways International and the Mass Rapid Transit Authority and was due to be nominated for Chair of the Board of the State Railway of Thailand (no doubt he holds other positions as well).

It is understandable why such people get invited onto boards – they are the ones who can (f they wish) get things done or stop things getting done. However, a civil servant in Thailand is both unelected and largely unaccountable and policies prepared by the democratically elected government (in the brief periods we are permitted to have one) can be blocked or else can be pushed though only with considerations for committee members.

It is not a good place to start from and powerful interests would aim to stop any changes occurring – the Thai media disgracefully follows the establishment line that any attempt to change is ‘undermining checks and balances’ or attempts to favour certain individuals or groups.

Perhaps the best place to start would be through providing (no doubt against their will) transparency concerning the activities of leading people. There also needs to be some kind of public campaign to educate people that multiple posts does not necessarily indicate the wisdom, virtue and competence of the people involved.

Our Neighbour Kept Millions or Billions of Baht at Home in Bags

The latest from the great Ladprao burglary of our near neighbour the Perm Sec of the Ministry of Transport Supoj Saplom is that police now seem to believe that some 100 million baht in cash was stolen from his home (everyone seems to be away from that home now and presumably have taken any liquid assets with them).

So, on the day he was celebrating his daughter’s wedding, Khun Supoj seems to have come a cropper that will blight the rest of his life – the NACC (National Anti-Corruption Commission) has begun an investigation and, given how long these things seem to take in Thailand. he can expect to be under suspicion for many years to come.

People find it very easy to believe the worst – the large house, the fact that the Transport Ministry is considered an ‘A Grade Ministry’ in terms of revenue opportunities and the poor states of transportation in the country (as the floods recede, there seem to be more potholes in the roads, for example) all seem to provide compelling evidence that something must be wrong. Of course, there have been so many scandals over the years (some genuine scandals and some manufactured by certain invisible hands) that it seems inevitable that everyone is at it.

This is one of the causes and the effects of a low trust society such as we have here. We are in chicken-egg territory here to some extent but low trust reduces the possibilities of developing the social solidarity necessary for real change in the country.

The Great Ladprao 64 Robbery

The big news from Ladprao 64 is of course the burglary just down the soi at the house of the Perm Sec of the Ministry of Transport. It is a large house and compound – ten times what we have or more – which just goes to show how uneven the development of Bangkok is. One large hi-so house can be next door to what is little more than humble shophouses but the people inhabit different worlds.

The burglary has given rise to all kinds of rumours (some of which are repeated in the article I linked to above). As is typical of reporting in Thailand, there are several contradictory versions in circulation and people seem to be saying the opposite of what they were saying five minutes before. And so forth.

At first, the story was that a few burglars had broken in, threatened a maid, picked up a few things and then left. Then it was said that threats were made ‘to kill everyone in the house’ (all the non-staff residents were out at a wedding for the daughter). Then it was said that six or eight men were involved all dressed in the full ‘men in black’ regalia – long-sleeved black t-shirts and trousers, masks and guns. This is the outfit associated with military personnel acting out of hours. One of these men threatened the staff, apparently, that ‘we just want back what he took from our boss,’  although it was not made clear what this might actually be.

Now the latest development is that, again according to rumour, the millions and perhaps billions of baht in cash were stashed in the house – the thieves grabbed two hundred million baht and left hundreds of millions behind. There are varying reports of how much money was found on the four men who have now been taken into custody (can anyone imagine any possible circumstance under which there might be a dispute over how much cash was recovered from suspected perps by police officers?). As a result, the Perm Sec (now with added ‘political’ rumours) has been moved to an inactive post and investigations are supposedly being started by the Money Laundering Office and the Corruption people. He himself has claimed that he was ‘set up.’

If I look out the window, I can see the house concerned. However, they rather like their privacy and there is a big wall all around. They did have some help in preparing the walls for possible floods …

Flood Threat Recedes from Ladprao 64

We have made it to Sunday lunchtime and the water is generally receding. The klnogs and reservoirs are all quite full so it is possible that a burst bank might lead to localized flooding – which might also result from sabotage of the existing sandbags and barriers.

Other than that, though, it looks like we really are going to get away with it here in Ladprao 64. We are one of a number of little pockets who have kept dry – as I mentioned before, it is not really possible to be able to predict in advance how floods unprecedented in modern Bangkok will affect areas of variable elevation. If the same thing happens next year, presumably authorities will have learned from this year and so do things a little differently and, hence, the pattern of flooding will change in ways equally unpredictable. Perhaps we would get our feet wet while people who suffered this year get away with it.

An alternative would be for the authorities to take a properly long-term and large-scale view of the situation and mobilize the resources – well, there is not much chance of that because of obstruction from certain institutions who would think their role as Green Father Christmas will be threatened, not to mention other vested interests.

Never mind – lucky that global climate change is all a con so we don’t have to worry about this kind of thing becoming ever more likely in the future. Eh? Oh.

The Worst Has, Once More, Passed Us By

The situation in our part of Ladprao remains the same today – there is no change in the nearby sois and the rain shower that occurred an hour or so ago did not stimulate any overflows. The msot recent high tide has passed (last night was Loy Krathong with its attendant full moon) and reports are that flood levels in most places are starting to decline. There is still a long way to go, of course, and many people have suffered because of the natural disaster.  Let us hope things now go as predicted and the waters recede so that we are back more or less to a normal way of life within a couple of weeks.

We have not heard of people breaking down dikes or barriers recently – have they stopped doing it, are they still doing it but no one is reporting it or was the damage actually caused by the fingers of the invisible hand?

The cost of the floods has been enormous, with more than 500 people now said to have been killed as a result.  Attention increasingly shifts to the need to rebuild the manufacturing sector and restoring tourism, investor confidence and so forth. It would be nice to think that, at this time of tragic emergency, all sectors of society will join together …..

Alas, no.

Disappointingly but as widely expected, bloodstained hypocrite Abhisit Vejjajiva is leading the attempt to try to undermine the democratically elected government in concert with an aacademic from Chulalongkorn University who is planning to sue on some strange basis – Chulalongkorn University also gave us the doctors who broke the Hippocratic Oath by refusing to treat police officers who had been wounded by the neo-fascist PAD thugs. Expect lengthy stories in the press about obscure claims of misconduct as the forces of reaction try to engineer another judicial coup. They have learned nothing.