This independent study found that T

This independent study found that Thailand has comparative advantage in the exportation of gems and jewelry commodities to Japan in all categories. Thailand has RCA indices of more than 1 in all items except for diamond. The RCA index of precious stone was the highest. However, except for diamond, the RCA indices had declined significantly especially in the exportation of platinum jewelry. This implies that Thailand was gradually losing its comparative advantage in the Japan’s gems and jewelry market

According to the five competitive forces model, Thailand is gradually losing comparative advantage and growth rate because of highly competitive nature of competition. Thai exporters face many competitors like Italy, Hong Kong, India and People Republic of China. These competitors have their own unique advantages and disadvantages. For example, Italy is known for high quality products with innovative designs but sustain higher costs while India take advantages in term of low cost labor and abundant resources. In addition, buyers do influence competitive nature. Today, buyers have more choices to choose from whether it is in design, price, or quality. Buyers could easily switch to competitors’ product if they offer grater values. External factors such of new entrants, substitute products or suppliers have moderate effect in term of trade. New entrants are discouraged by barriers to entry, such as large capital requirement and economic of scale.
For substitute products, there is no direct substitution as customers for genuine gems and jewelry are in different market segment than imitation jewelry. Suppliers can pose risks in escalating production costs however Thai producers and relevant government agencies are
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working together to secure new sources of raw materials to main competitive production