Nin Jiom: Selling Traditional Chinese Medicine in Modern Hong Kong SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Sales & Marketing
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Nin Jiom: Selling Traditional Chinese Medicine in Modern Hong Kong
The Hong Kong brand Nin Jiom was popularly known in the territory by its flagship product Pei Pa Koa Cough Syrup. It was through the profitable mass selling of such an over-the-counter traditional Chinese medicine (TCM) that Nin Jiom thrived through decades of history. By the early 2000s, the rapidly modernizing consumer culture in Hong Kong and the Hong Kong government's new TCM policies required manufacturers of TCM products to adapt constantly to a changing business environment. Nin Jiom's attention to this earned it an annual turnover of several hundred million Hong Kong dollars by early 2000s. The company was able to continue expanding overseas and in mainland China. How did Nin Jiom's products fit in an era when the Hong Kong government and the Hong Kong as well as western public paid more attention to TCM than before? How did the company manage to maintain its success as a TCM brand in modern Hong Kong?
Swot Analysis of "Nin Jiom: Selling Traditional Chinese Medicine in Modern Hong Kong" written by Bennett Yim, Vincent Mak includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Nin Tcm facing as an external strategic factors. Some of the topics covered in Nin Jiom: Selling Traditional Chinese Medicine in Modern Hong Kong case study are - Strategic Management Strategies, Change management, International business, Marketing, Sales and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Nin Jiom: Selling Traditional Chinese Medicine in Modern Hong Kong casestudy better are - – talent flight as more people leaving formal jobs, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing transportation and logistics costs, increasing commodity prices, central banks are concerned over increasing inflation, supply chains are disrupted by pandemic , increasing household debt because of falling income levels,
digital marketing is dominated by two big players Facebook and Google, technology disruption, etc
Introduction to SWOT Analysis of Nin Jiom: Selling Traditional Chinese Medicine in Modern Hong Kong
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Nin Jiom: Selling Traditional Chinese Medicine in Modern Hong Kong case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Nin Tcm, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Nin Tcm operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Nin Jiom: Selling Traditional Chinese Medicine in Modern Hong Kong can be done for the following purposes –
1. Strategic planning using facts provided in Nin Jiom: Selling Traditional Chinese Medicine in Modern Hong Kong case study
2. Improving business portfolio management of Nin Tcm
3. Assessing feasibility of the new initiative in Sales & Marketing field.
4. Making a Sales & Marketing topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Nin Tcm
Strengths Nin Jiom: Selling Traditional Chinese Medicine in Modern Hong Kong | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Nin Tcm in Nin Jiom: Selling Traditional Chinese Medicine in Modern Hong Kong Harvard Business Review case study are -
Digital Transformation in Sales & Marketing segment
- digital transformation varies from industry to industry. For Nin Tcm digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Nin Tcm has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Cross disciplinary teams
– Horizontal connected teams at the Nin Tcm are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Training and development
– Nin Tcm has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Nin Jiom: Selling Traditional Chinese Medicine in Modern Hong Kong Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Organizational Resilience of Nin Tcm
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Nin Tcm does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
High brand equity
– Nin Tcm has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Nin Tcm to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Operational resilience
– The operational resilience strategy in the Nin Jiom: Selling Traditional Chinese Medicine in Modern Hong Kong Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Strong track record of project management
– Nin Tcm is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Effective Research and Development (R&D)
– Nin Tcm has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Nin Jiom: Selling Traditional Chinese Medicine in Modern Hong Kong - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Low bargaining power of suppliers
– Suppliers of Nin Tcm in the sector have low bargaining power. Nin Jiom: Selling Traditional Chinese Medicine in Modern Hong Kong has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Nin Tcm to manage not only supply disruptions but also source products at highly competitive prices.
Highly skilled collaborators
– Nin Tcm has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Nin Jiom: Selling Traditional Chinese Medicine in Modern Hong Kong HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Sustainable margins compare to other players in Sales & Marketing industry
– Nin Jiom: Selling Traditional Chinese Medicine in Modern Hong Kong firm has clearly differentiated products in the market place. This has enabled Nin Tcm to fetch slight price premium compare to the competitors in the Sales & Marketing industry. The sustainable margins have also helped Nin Tcm to invest into research and development (R&D) and innovation.
Learning organization
- Nin Tcm is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Nin Tcm is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Nin Jiom: Selling Traditional Chinese Medicine in Modern Hong Kong Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Weaknesses Nin Jiom: Selling Traditional Chinese Medicine in Modern Hong Kong | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Nin Jiom: Selling Traditional Chinese Medicine in Modern Hong Kong are -
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Nin Jiom: Selling Traditional Chinese Medicine in Modern Hong Kong, in the dynamic environment Nin Tcm has struggled to respond to the nimble upstart competition. Nin Tcm has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
No frontier risks strategy
– After analyzing the HBR case study Nin Jiom: Selling Traditional Chinese Medicine in Modern Hong Kong, it seems that company is thinking about the frontier risks that can impact Sales & Marketing strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Slow to strategic competitive environment developments
– As Nin Jiom: Selling Traditional Chinese Medicine in Modern Hong Kong HBR case study mentions - Nin Tcm takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Nin Jiom: Selling Traditional Chinese Medicine in Modern Hong Kong HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Nin Tcm has relatively successful track record of launching new products.
High operating costs
– Compare to the competitors, firm in the HBR case study Nin Jiom: Selling Traditional Chinese Medicine in Modern Hong Kong has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Nin Tcm 's lucrative customers.
Need for greater diversity
– Nin Tcm has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Lack of clear differentiation of Nin Tcm products
– To increase the profitability and margins on the products, Nin Tcm needs to provide more differentiated products than what it is currently offering in the marketplace.
Slow decision making process
– As mentioned earlier in the report, Nin Tcm has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Nin Tcm even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Skills based hiring
– The stress on hiring functional specialists at Nin Tcm has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Interest costs
– Compare to the competition, Nin Tcm has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
High cash cycle compare to competitors
Nin Tcm has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Opportunities Nin Jiom: Selling Traditional Chinese Medicine in Modern Hong Kong | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Nin Jiom: Selling Traditional Chinese Medicine in Modern Hong Kong are -
Low interest rates
– Even though inflation is raising its head in most developed economies, Nin Tcm can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Manufacturing automation
– Nin Tcm can use the latest technology developments to improve its manufacturing and designing process in Sales & Marketing segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Nin Tcm can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Nin Tcm can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, Nin Jiom: Selling Traditional Chinese Medicine in Modern Hong Kong, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Developing new processes and practices
– Nin Tcm can develop new processes and procedures in Sales & Marketing industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Buying journey improvements
– Nin Tcm can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Nin Jiom: Selling Traditional Chinese Medicine in Modern Hong Kong suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Building a culture of innovation
– managers at Nin Tcm can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Sales & Marketing segment.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Nin Tcm can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Loyalty marketing
– Nin Tcm has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Creating value in data economy
– The success of analytics program of Nin Tcm has opened avenues for new revenue streams for the organization in the industry. This can help Nin Tcm to build a more holistic ecosystem as suggested in the Nin Jiom: Selling Traditional Chinese Medicine in Modern Hong Kong case study. Nin Tcm can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Nin Tcm to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Leveraging digital technologies
– Nin Tcm can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Sales & Marketing industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Nin Tcm can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Nin Tcm can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Threats Nin Jiom: Selling Traditional Chinese Medicine in Modern Hong Kong External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Nin Jiom: Selling Traditional Chinese Medicine in Modern Hong Kong are -
Consumer confidence and its impact on Nin Tcm demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Nin Jiom: Selling Traditional Chinese Medicine in Modern Hong Kong, Nin Tcm may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Sales & Marketing .
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Nin Tcm with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
High dependence on third party suppliers
– Nin Tcm high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Environmental challenges
– Nin Tcm needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Nin Tcm can take advantage of this fund but it will also bring new competitors in the Sales & Marketing industry.
Regulatory challenges
– Nin Tcm needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Sales & Marketing industry regulations.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Nin Tcm in the Sales & Marketing sector and impact the bottomline of the organization.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Nin Tcm business can come under increasing regulations regarding data privacy, data security, etc.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Nin Tcm will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Nin Tcm can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Nin Jiom: Selling Traditional Chinese Medicine in Modern Hong Kong .
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Technology acceleration in Forth Industrial Revolution
– Nin Tcm has witnessed rapid integration of technology during Covid-19 in the Sales & Marketing industry. As one of the leading players in the industry, Nin Tcm needs to keep up with the evolution of technology in the Sales & Marketing sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Weighted SWOT Analysis of Nin Jiom: Selling Traditional Chinese Medicine in Modern Hong Kong Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Nin Jiom: Selling Traditional Chinese Medicine in Modern Hong Kong needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Nin Jiom: Selling Traditional Chinese Medicine in Modern Hong Kong is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Nin Jiom: Selling Traditional Chinese Medicine in Modern Hong Kong is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Nin Jiom: Selling Traditional Chinese Medicine in Modern Hong Kong is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Nin Tcm needs to make to build a sustainable competitive advantage.