Analysis of Eu Yan Shang

Analysis of Eu Yan Sang (EYS) The strength of EYS from internal environment: • Market Leader Eu Yan Sang is a market leader in traditional Chinese medicine (TCM). Their product quality and professional ethics have been regarded highly by its customers. They enable to charge premium price to customer because of their high quality products. EYS lay in its high brand equity that earned over a century and its renowned brand name and image. • Core Competencies There are over 300 products under Eu Yan Sang brand name, but their core products to pump profits are Bak Fong Pills for women and Bo Ying Compound for infants.

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These two products are continuously to pump profits to EYS’s bottom line and have remained household names since the company opened its doors in 1909 in Hong Kong. Chinese believe that women need to regulate the menstrual function before and after menstruation period thus most of the Chinese women will consume Bak Fong Pills. Where else they also believe infants need to consume Bo Ying Compound before the age of one to prevent any disease. • Supply Chain EYS able to control the total supply chain gives them an excellent competitive edge in the industry.

To complement the new standard, EYS also developing a world first integrated online portal to keep track of traditional Chinese medicine herbs throughout the value chain. The weaknesses arise from Eu Yan Sang: • Management Problem EYS’s management problems arise with different views over the operations of the business that resulted in disgruntled shareholders. They faced lack of vision for future growth strategies that may threaten its survival. • Employees Performance

According the respondent s’ feelings in the survey, salesperson were not particularly informative about certain products benefits and were unhelpful in recommending suitable products. They were perceived as being sloppily dressed in drab uniforms and displaying a rather indifferent attitude towards customers except when the latter were interested in the more expensive TCM products. The opportunities arise from external environment: • Government The Hong Kong government had just unveiled a ten-year strategic plan in building Hong Kong into an international center for Chinese Medicine.

They were ready to invest in and help local Chinese medicinal companies realizes their mission. Besides that, government also introduces a new degree program in TCM. • Expand Market Besides the few countries, EYS also can expand to others Asia countries such as Japan, Korea and Vietnam. These three countries still adapt Chinese medicine today. There is an opportunity for EYS to expand their markets and booms their profits. The threats of EYS: • Prohibition The precious animal parts had to be taken off the shelf since the law was amended to prohibit the sales of parts of endangered species came into force in 1995. • Competitors

EYS face international and domestic competitors that had slackening their sales due to the environment changes. There was a huge influx of western vitamins and health supplementary. The domestic competitors are Tung Fung Hung and Wai Yuen Tong that launched similar convenience products lines. Issues and the Key Issue of EYS Issues: • Health Authorities How if the employees dispense wrong medicine to customers? This is one of the issue problems that arise from EYS. Their training in dispensing medicine usually came from informal because there have been no regulation or registration required so far for practicing Chinese medicine.

If the employees dispense wrong medicine to the customers, EYS will face a lot of problem such as responsible and penalty to the customers. • Labeling Legislation The reason EYS delay stemed mainly from the reluctance to comply fully with the labeling legislation. They need to full disclosure of all ingredients that required by the stringent labeling law. This may cause EYS to disclose their secret family formulate. If the ingredients disclosure to public, there must be a lot of competitors launched the same products. There is a threat to EYS. • Competitors Exists The main competitors Tung Fong Hung expand rapidly in the recent years.

They adopted a penetrative pricing strategy and was about 8% to 10% below that of EYS. TFH is the only traditional Chinese medicine listed on the stock exchange with a healthy daily turnover. Key Issue: • Extensive Reach We can easily purchased EYS products in Malaysia because of their extensive distribution network, comprising over 150 EYS branded retail outlets in Hong Kong, Malaysia, Singapore, Macau and China. EYS also provides a holistic approach in healthcare practices. EYS also can expand to others countries in Asia such as Japan, Korea and Vietnam to achieve higher performance.

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