The toy manufacturer, which is owned by Korean businessman Young Tae Park, has been in business in Thailand for 17 years and focuses mainly on exports to the US and European countries. But like other exporters, it has faced tough price competition following China's entry into its markets. Some toy-makers are even seeing dim business prospects ahead in Asian markets.

However, Parks Toy is trying hard to turn a crisis into an opportunity. It sees some lights of opportunity still burning in the US and European markets, and is undergoing a change in its business strategies.

Among other things, it has declared "pay-back time" for its Chinese competitors. It has developed a new brand of Grade A toys called "Anee Park", and is selling them in China.

"Before we can fix the problem, we have to know its roots," Park explains.

Chinese manufacturers enjoy a big advantage because of low labour costs. Although the cost of labour in China is rising slightly, Park believes Thailand's labour costs are still acceptable. The problem is that workers here do not work to their full capacity, he says, especially during long holidays, when many are absent.

"Our labour problem is that we can use only 70 per cent of work capacity. This has a major affect on the business because we are unable to manufacture in time to meet orders."

Low labour costs aside, China also has its own raw materials, while Thailand still needs to import them from Korea. Some Thai toy manufacturers recently tried to source their materials locally, but found suppliers were incapable of meeting demand.

So low labour costs and locally sourced materials are the two main factors enabling Chinese manufacturers to produce toys at half the price of their Thai counterparts.

"China can sell at only 40 or 50 US cents each, while we have to sell for more than $1," Park says.

China's manufacturing capacity is also seen as a big advantage when high demand from a giant market like that in the US must be met.

Parks Toy pondered what its advantages might be, and it concluded that they were quality, design and after-sales service. And these things, it believes, should be enough to create business opportunities.

The company's owner says Parks Toy needs to turn away from the price-cutting war and instead focus on product quality.

"Customers placing orders in China have seen the prices rise a bit, but the main problem is low product quality and poor after-sales service," he says. "When they buy 100 items, they can use only 60 or 70 of them. But if they place an order with us, we guarantee all 100 items. This will help build customer confidence."

Parks Toy has also opened its own shops in Thailand, to sell its Anee Park brand toys, and plans to extend its business to leading shopping centres in the near future.

Moreover, as well as expanding the company's customer base locally, Anee Park toys have also been shipped to China.

"We fetched Bt5 million from the first lot. So we see the demand for high product quality right there," Park says.

Another good examp le of its efforts to turn a crisis into opportunity is its "Magic Wagon" brand. Parks Toy executive Patwut Saengruji explains that product difference, customisation and business-to-business dealings are the three main points of the company's new business plan.

"What we cannot beat, we cannot beat. We have to make things differently, and this helps us to create business opportunities," he says.

"We cannot beat German manufacturers in terms of capacity, but we can make things differently. We may focus on quality and make only a limited number of products. These will be attractive to collectors."

The main markets for Magic Wagon are the US, European countries, Japan and Thailand.

Patwut says the company needs to thoroughly understand a market before products can be made for it.

"Thais may like this toy, but foreigners may like another. We have a different nature. We have to make sure we know what they really like, and then we make them what they want," he says.

This philosophy also fits easily with the company's efforts to extend its business into manufacturing customised products tailored to customers' orders.

After putting the company's new business strategies in place, Parks Toy recorded a 30-per-cent rise in sales, and the rise is expected to continue.

Jeerawat Kongkaew

Krungthep Turakij