Attractiveness of beach resort models for formal and informal commerce : a comparative study between Patong Beach and Laguna Phuket, Thailand.

• Main Authors: Ng, Guan Ling., Tham, See Yee., Loh, Shu Xuan.
• Other Authors: Smith, Russell Arthur
• Format: Final Year Project
• Language: English
• Published: 2009
• Subjects: DRNTU::Business::Industries and labor
• Online Access: http://hdl.handle.net/10356/15078
• Institution: Nanyang Technological University

The dichotomy of formal and informal sectors and the operational constraints faced when operating within a beach resort are examined in the context of a comparative study of Patong Beach, an ad hoc beach resort, and Laguna Phuket, an integrated beach resort, both in Phuket, Thailand. Most published research tends to analyze and discuss the spatial dynamics of formal-informal commerce brought by the development of ad hoc and integrated beach resorts. Yet, little research has examined the operation of formal and informal commerce within these two types of resort. This research is motivated by the lack of related studies undertaken in this subject. Porter’s five forces model - threat of new entrants, bargaining power of buyers, bargaining power of suppliers, threat of substitute goods and intensity of rivalry - was applied as a framework to analyse the operational environment of formal vendors, hotels and informal vendors in the ad hoc and integrated resort. Primary data used in the case analysis were collected through field surveys, and secondary data were obtained from published sources. Comparing the strength of each force across the two beach resorts, it was found that the threat of new entrants and intensity of rivalry is high for all forms of commerce in ad hoc resort while the opposite is true for integrated resort. For the threat of substitute goods, all forms of commerce experience a low strength regardless of the resorts they operate in. Nonetheless, bargaining power of supplies and buyers experienced by the formal shops differs between the beach resorts as products are highly differentiated with few direct competitors and suppliers in integrated resort. Overall, the integrated beach resort model appears to provide a more favourable commerce environment and thus, higher profitability potential for the formal-informal sector.