Sangchai's strategy makes competition irrelevant
Bunyarit Chansuwan: Strategy is to create new demand rather than compete with rivals for market share.
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Sangchai Air Quality Co Ltd, a local household-products trading firm, has adopted a new business strategy called Blue Ocean Strategy to escape a competitive market.
The strategy, brainchild of Professor W Chan Kim and Professor Renee Mauborgne, speaks of developing a situation where the competition is irrelevant, rather than competing within the confines of the existing industry or trying to wean customers away from rivals, the so-called Bloody or Red Ocean Strategy. "The strategy is to create new demand in the market-place rather than competing with existing rivals for market share," said Bunyarit Chansuwan, general manager of Sangchai Air Quality Co Ltd. Sangchai Air Quality Co Ltd is a subsidiary of Sangchai Group, which has been importing air-conditioner parts and accessories such as compressors, air ducts, thermostats and other control equipment to supply to local air-conditioner factories for more than 30 years. Bunyarit said Sangchai Air Quality Co Ltd had been set up three years ago to import air-conditioning products from Honeywell in the US. "At that time only three major brands existed in the Thai market, Honeywell, Amway and Bion Air from the US. We developed the market and enjoyed annual growth of more than 100 per cent," he said. Now, there are more than nine major brands of air-conditioners on the market, mainly from Korea, Japan and China. "We have been able to achieve a leading market share of 40 per cent in modern retail channel in a matter of three years," said Bunyarit, adding that the total air-conditioner market in Thailand had been about Bt1 billion in sales value last year, of which 90 per cent was due to customers in Bangkok. Portable air-conditioners accounted for 60 per cent of the market in Thailand, with the other 40 per cent being industrial and commercial products. Honeywell portable air-conditioners are now available in more than 60 modern retail outlets such as Home Pro, Power Buy and Index Living Mall. "Our business strategy is quite clear," said Bunyarit. "Under the criteria, we will focus on premium customers of B class and higher who are educated and health-conscious. We will also concentrate on innovative products with good design," he said. He added that nine different models of Honeywell air-conditioners were available at prices ranging from Bt8,000 to more than Bt30,000. The company is considering joining up with a major direct-selling company such as Gifferine or Mistene to distribute Honeywell products. "We distribute air-conditioners to serve the high-potential market. Health products, including nutrition foods, fitness centres and air-conditioners are a sunrise market with tremendous demand. "There are about 10 million consumers able to afford our premium air-conditioners, and there is still more room for us in the market-place," said Bunyarit. He said Sangchai also brought Honeywell fans to the Thai market to target premium customers who wanted trendy designs. They sell between Bt3,000 and Bt4,000. "We plan to launch two or three new products by the end of this year, one of them a circuit-breaker from Siemens in Germany," said Bunyarit.
Kwanchai Rungfapaisarn The Nation
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