| Abstract | The Thai textile industry has been developing for more than 30 years. It started as an import substitution, growing into the country's biggest foreign exchange earner. The industry is integrated with upstream industries, such as fiber manufacturing; intermediate industries, such as spinning, weaving and dyeing; and downstream industries, such as the garment industry. The industry employs more than one million people, 80 percent of whom are in the garment industry. The industries with the highest production are garment, fabric and thread respectively. This research study's main objectives are to analyze the present situation and the opportunities for and challenges to the Thai garment industry and to find out the effects of the Multi-Fibre Arrangement and the Agreement on Textile and Clothing of GATT on the Thai garment industry. In addition, this survey will identify strategies of a Thai garment film in order to acquire competitive advantages over other firms in the local market. (Case Study: Pena House company.) This research uses descriptive methods to explicate the structure of the Thai garment industry. Moreover, quantitative methods were also used as an analytical tool to examine the industry analysis and the customer behavior of a business (Pena House Group Co.). The research results showed that the garment industry commands about 90 per cent of the domestic market, most of the consumption in medium to low quality products with cheap prices, even taking trade liberalization into account. The export garment industry is also a major contributor to the national economy; textile exports have led Thai exports for many years. Seventy percent of export products are garments, the rest are fabric and threads. The important export markets are the United States, Europe, the Middle East, and Japan. Most Thai products are medium to low quality, so the country is becoming less competitive against cheap labor countries such as China, Indonesia, India, Pakistan, and Vietnam. The research also analyzes the SWOT analysis of a garment business: Pena House Group Co. The result shows that even though Thailand has a long history in the garment industry, Thailand still has problems with low quality products because of obsolete technology and machines in the production process. In addition, there are problems with the scarcity of marketing strategies; reactive and proactive strategies and the information networks that should be used to gain competitive advantages over competitors. Although, the Pena House Group Co. has long a relationship with their suppliers, they do not use a completed supply chain system for reducing the costs in raw material and inventory. The customer survey shows that customers over 35 years old are concerned about the quality and the promotion of the product. On the other hand, customers under 35 years old are concerned about price and promotion of the product. In general, most of the customers prefer Pena House Group's products more than other products because Pena House Group's products have great variety of brands. Moreover, Pena House Group is successful because they have a lot of shops around Thailand to serve the customers' needs. The strategy implementations derived from this research study are as follows: the Thai garment industry should manufacture higher quality products and apply the supply chain system in the production process in order to compete with high quality product countries such as Hong Kong, Korea, and Taiwan. At the same time, the government should be well prepared for the garment industly under free trade regime in the year 2006 through an improvement of domestic product standard. At present, the Thai garment industry is hindered in their comparative advantage in low quality garment products compared with the new emerging important garment production countries of the world such as China. Moreover, the government should focus on trade negotiation issues at all levels (both multilateral and regional) to find good strategies for enhancing the bargaining power for protecting trade benefits. |