4. Outward FDI and enterprise competitiveness
Success in operating abroad is not automatic and there
is no guarantee that outward FDI will contribute to increasing
the overall competitiveness of an internationalizing enterprise.
Much would depend on the motive, corporate strategy, capacity
of the firm (for managing international business activities
involving complex cultural and legal issues) and the extent of
synergy created by the outward FDI activities for the group as a
whole.
There are instances of successful Thai enterprise
internationalization, as well as of failures. For example, outward
FDI activities contributed about 32% to S&P’s overall revenues
from its restaurant business and 20% to the group’s revenues in
2005. The share of revenues from overseas restaurant activities
has also been increasing as has the average annual revenues
generated by each overseas branch compared to branches in Thailand. Outward FDI activities contributed to the steady
increase in the sales of Thai Union in the period 2002-2004.
The share of overseas sales in the total sales of Thai Union rose
from 39.5% in 2002 to 49% in 2004. In the case of Saha Union,
its energy business in China is profitable and the firm has decided
to expand its power plants’ capacity. Internationalization has
also contributed to the diversification and growth of the business
activities and revenues of Saha Union. Internationalization has
helped Siam Cement and CP to expand their market bases and
to become industry leaders in the region. Pranda Jewelry is
expanding its overseas activities because of increasing demand
and growth potential for its products.