Thai Business Leaders Warned to Overhaul Operating Models or Risk Extinction as Global Shocks Become the New Normal

 

Presentations by Deloitte Thailand and PwC Thailand highlight a shared baseline: Thai enterprises must dismantle legacy models, address supply chain vulnerability, and harness AI to navigate persistent global volatility.

 

Thai enterprises face an urgent, structural choice: overhaul their underlying business models and portfolio strategies or face diminishing competitiveness on the global stage.

 

That was the core consensus delivered by top executives from two of the world's leading professional services networks, Deloitte and PwC, speaking at the Thailand Economic Outlook 2027: New Horizon Beyond the Trap conference organised by Krungthep Turakij.

 

While approaching the challenge from distinct operational perspectives—Deloitte focusing on organisational redesign and cost efficiency, and PwC emphasising supply chain resilience and dealmaking capital allocation—both firms converged on a single macro assessment: the era of brief economic crises followed by a return to "normal" is over.

 

Thai businesses are operating in a permanent environment of elevated geopolitical risk, energy transition pressures, tech-driven skill gaps, and tightening ESG regulations.

 

 

Deloitte: Overhauling Operating Models to Survive 'Recurring Black Swans'

Metinee Jongsaliswang, managing director of Deloitte Thailand, warned corporate leaders during her keynote, Business Redesign: Challenges, Opportunities and Competitiveness, that traditional crisis-management playbooks are no longer sufficient to navigate modern markets.

 

 

 

 

"Unforeseen shocks like global pandemics, regional conflicts, and extreme weather events are no longer rare occurrences," Metinee said. "What we previously categorised as 'Black Swans' have evolved into 'Recurring Black Swans'. We are not merely managing short-term disruption; we are living through a permanent structural shift."

 

Metinee pointed to three structural headwinds threatening Thai corporate competitiveness:

1. Geopolitical and Trade Volatility: Ranked by 47% of global CEOs in Deloitte's research as their primary operational threat, geopolitical conflict directly inflates energy, transport, and raw material costs.

2. Energy Grid Strain: Driven by AI compute workloads and hyperscale data centres, electricity consumption across Asia-Pacific is projected to surge from 20% today to 45% by 2050, making clean, reliable power a baseline competitive metric.

3. Advanced Tech Talent Deficit: A severe skill bottleneck that cannot be solved purely by hiring, requiring comprehensive public and private workforce upskilling.

 

To move beyond defensive survival, Deloitte outlined three strategic imperatives for local firms:

 

Realising AI Value via 'China Tech': While AI adoption in Thailand grew from 47% to 60% over the past year, Deloitte data reveals that only 19% of firms have successfully scaled AI across their enterprise.

To manage deployment costs, Metinee advised evaluating Chinese technology options ("China Tech"), which deliver 80% to 90% of Western technology performance at roughly one-third of the total cost.

She recommended a hybrid approach — deploying cost-effective China Tech for baseline operations alongside specialised Western Tech for complex functions.

 

 

Capital Optimisation via Divestments: Over 70% of Asia-Pacific business leaders are planning major asset divestments over the next 12 to 18 months.

Selling off underperforming or non-core assets allows firms to redeploy capital into high-growth digital ecosystems, similar to how Singapore Airlines built its $1.6 billion KrisFlyer digital ecosystem.

 

Redesigning Workflows for 2.5x Returns: Deloitte's research proves that firms that restructure their internal operating models alongside AI implementation achieve 2.5 times higher financial returns than those that layer technology onto legacy workflows — citing examples like Uniqlo's RFID-driven inventory tracking and Luckin Coffee's localised real-time queue management.

 

 

 

PwC: Fixing Supply Chain 'Choke Points' as Capital Pivots to Resilient Assets

Taking the global trade and dealmaking perspective, Chanchon Chotikapanich, Deals Leader at PwC Thailand, presented findings from the latest PwC Global CEO Survey (polling nearly 5,000 CEOs across 109 countries) during her session, Intelligent Infrastructure: The New Growth Advantage in the Digital Economy.

 

Chanchon cautioned that legacy export models centred purely on low-cost production leave Thai businesses highly vulnerable to external economic trade shocks.

 

PwC highlighted three primary megatrends disrupting established commercial markets:

1. Geopolitical Fragmentation and 'Choke Points': Rising tariffs, trade disputes, and shipping route disruptions are forcing firms to identify vulnerable operational bottlenecks.

"The operational impact of global disruptions differs between firms," Chanchon stated. "It is the difference between having your arm squeezed for five minutes versus being choked for five minutes. Corporate leadership must identify their specific operational 'Choke Points' to prepare effective continuity contingencies."

 

2. AI Workflow Transformation: Beyond automation, AI is fundamentally altering R&D and business models. With the World Economic Forum estimating that 40% of core workforce skills face obsolescence, industries from pharmaceuticals to retail must overhaul how work gets done.

 

3. The Financialisation of Carbon: Environmental compliance has shifted from PR to the balance sheet. The European Union's Carbon Border Adjustment Mechanism (CBAM) poses a direct financial risk to over 200 billion baht ($5.88 billion) in Thai exports if domestic suppliers fail to measure and lower carbon emissions across their entire supply chain (Scope 1, 2, and 3).

 

In response to these threats, over 60% of global CEOs are actively restructuring supply chains — moving away from ultra-lean "Just-in-Time" models to localised, resilient supply networks built with inventory buffers.

 

Concurrently, global institutional capital is flowing heavily into defence, aerospace, and specialised tech sectors, with Aerospace & Defense M&A seeing 26% profit margins and a $1 trillion international order backlog.

 

To adapt, Chanchon urged Thai executives to evaluate corporate portfolios. Units that fail to align with digital or ESG requirements should be divested or spun off into Joint Ventures (JVs) to share capital expenditure and eliminate duplicate operational costs — a strategy already picking up momentum across Thailand's energy, petrochemical, and logistics sectors.

 

Before approving future growth plans, PwC advised executive boards to test investments against three key questions:

Choke Point Resilience: Can core operational choke points survive if geopolitical or trade conditions shift overnight?

Capability Acquisition: Does this investment yield a net-new technological edge or structural advantage we currently lack? 

Contingency Allocation: Where specifically should capital be deployed to build operational redundancies against external shocks?

 

 

Leadership Execution: Active Redesign Over Reactive Adaptation

Both Deloitte and PwC concluded that passive adaptation is no longer a viable corporate strategy for Thai business leaders.

 

While reactive changes may allow a firm to survive short-term market stress, securing long-term financial returns and global market share requires corporate boards to proactively redesign their business architectures, reallocate capital into resilient assets, and embed digital and ESG compliance into the core of their daily operations.