A Chinese Medicine Brand Goes International Essay
Wai Yuen Tong is the first pharmaceutical company in Hong Kong to provide affiliate Chinese medical healthcare services. Its business is mainly in producing and selling of dietary health supplements (herbal supplements) and health products. The Company moved from Guangzhou to Hong Kong in the 1950s, while in 1979, Wai Yuen Tong was formally registered as a trademark in Hong Kong. The Company abides by its corporate values while keeping pace with the fast-changing marketplace.
As a result, Wai Yuen Tong has successfully secured its leading position in the Chinese medicine industry. In order to know Wai Yuen Tong more, we need to first know about the characteristics of the Chinese medicine industry. The industry has a tight relationship with regulations and ordinances. In Hong Kong, those generally sold in “health food” products’s ingredients will be regulated by “the Chinese Medicine Ordinance” (p. 549) definition of proprietary products, that is purely of Chinese medicines as active ingredients and products for treatment and health purposes.
“Wai Yuen Tong” is positioned to meet the needs of different people nowadays, so they have introduced a wide range of products, so that the public can feel the brand new look. Those products including Classic Series, Prophylactic
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Also, Wai Yuen Tong introduces new products, such as some health-drink powder which is very popular with the younger generation. New products will help boosting regular customers to buy and enlarge its market size for sure. Wai Yuen Tong’s outlets are all around Hong Kong and the number is increasing as well. Franchising are the key strategies to business development at Wai Yuen Tong. Flagship stores of Wai Yuen Tong are located at Jordan, Yau Ma Tei, and Lai Chi Kok Road in Mongkok. Other outlets are strategically dispersed in other areas in Hong Kong, Kowloon and the New Territories.
It expands its distribution network through franchising and the objective is not only to extend service coverage, but also to accelerate penetration into the market. Here comes to the SWOT analysis of Wai Yuen Tong. In terms of strength, Wai Yuen Tong has high brand credibility due to its 113-year history of the brand. Moreover, Wai Yuen Tong was successful awarded the certification of GMP (Good Manufacturing Practice) awarded by the Chinese Medicine Council of Hong Kong and the Australian Therapeutic Goods Administration in 2006. The awards are the proof of prominence both from within the industry, as well as from the consumer market.
In terms of weakness, as Wai Yuen Tong is one of the listed companies in Hong Kong, its immense structure and management level may make the decision-making process slower and may not adapt to the market change as quick as those small company. The bureaucratic structure of Wai Yuen Tong can be viewed as its weakness. In terms of opportunity, as traditional Chinese medicine and Chinese medicine in the community have become more and more popular that higher and higher recognition is gained, Wai Yuen Tong can grab this opportunity to capture the growing market share.
In terms of threat, the world’s countries are gradually implementing export legislation for traditional medicine to those exporting countries which will increase the cost and decrease the competitiveness of Wai Yuen Tong with no doubt. According to Wai Yuen Tong’s annual report 2011, sales regarding to USA & some other countries, the existing markets, is way less than 3%. It may imply that WTY was not doing well in its international strategy.
Therefore, existing markets will be re-entered instead of finding a new market to find out the rooted problem hindering our international strategy. Only when the rooted problems are solved will we not commit the same mistake and internationalize effectively and efficiently. Being a pharmaceutical company, Wai Yuen Tong has a high research and development cost. In order to survive in the competitive market, she needs to go international and extend her product life cycle for strategic considerations. With the diversified markets, Wai Yuen Tong can export her products easier.