Porter’s Five Forces and Survival Strategies: A Family-Owned Processed Food SMEs in Ubon Ratchathani, Thailand

ABSTRACT

This study examines the competitive environment of small and medium-sized enterprises (SMEs) of processed food in Thailand, by using Porter’s Five Forces framework to analyze the bargaining power of suppliers and buyers, the threat of substitutes, the threat of new entrants, and industry rivalry. This research connects each competitive force to key economic principles such as Barriers to Entry and Price Elasticity of Demand, identifying how these SMEs survive and adapt to intense market pressures. The analysis incorporates real-life case examples of businesses and maps their survival strategies, including vertical integration, niche product differentiation/localization, direct-to-consumer sales, and health-oriented reformulations/product development, to each competitive force. The findings aim to deepen the understanding of how localized strategies and economic principles can be applied in developing economies to ensure the sustainability and competitiveness of small firms.

LEARNING OBJECTIVES

• Apply Porter’s Five Forces framework to assess the competitiveness of SMEs in the Thai processed food sector.

• Identify and analyze survival strategies used by SMEs in response to each competitive force.

• Connect real-world business practices to relevant economic theories such as Transaction Cost Economics, Barriers to Entry, Price Elasticity, and the Principal-Agent Problem.

• Understand the strategic value of local culture, product innovation, and distribution methods in maintaining SME competitiveness in a globalized market.

• Evaluate policy implications and support mechanisms (e.g.,OTOP, government incentives) for rural-based SMEs in Thailand.