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 - – geopolitical disruptions, competitive advantages are harder to sustain because of technology dispersion, supply chains are disrupted by pandemic , central banks are concerned over increasing inflation, increasing energy prices, increasing commodity prices, there is backlash against globalization,
cloud computing is disrupting traditional business models, challanges to central banks by blockchain based private currencies, 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 -
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.
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.
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.
Ability to recruit top talent
– Nin Tcm is one of the leading recruiters in the industry. Managers in the Nin Jiom: Selling Traditional Chinese Medicine in Modern Hong Kong are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
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.
Innovation driven organization
– Nin Tcm is one of the most innovative firm in sector. Manager in Nin Jiom: Selling Traditional Chinese Medicine in Modern Hong Kong Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Successful track record of launching new products
– Nin Tcm has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Nin Tcm has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Ability to lead change in Sales & Marketing field
– Nin Tcm is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Nin Tcm in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
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.
Analytics focus
– Nin Tcm is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Bennett Yim, Vincent Mak can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
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.
High switching costs
– The high switching costs that Nin Tcm has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
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 -
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Nin Jiom: Selling Traditional Chinese Medicine in Modern Hong Kong, is just above the industry average. Nin Tcm needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Nin Jiom: Selling Traditional Chinese Medicine in Modern Hong Kong, it seems that the employees of Nin Tcm don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Nin Tcm is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Nin Jiom: Selling Traditional Chinese Medicine in Modern Hong Kong can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
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.
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.
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.
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.
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.
Aligning sales with marketing
– It come across in the case study Nin Jiom: Selling Traditional Chinese Medicine in Modern Hong Kong that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Nin Jiom: Selling Traditional Chinese Medicine in Modern Hong Kong can leverage the sales team experience to cultivate customer relationships as Nin Tcm is planning to shift buying processes online.
Workers concerns about automation
– As automation is fast increasing in the segment, Nin Tcm needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
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 -
Using analytics as competitive advantage
– Nin Tcm has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Nin Jiom: Selling Traditional Chinese Medicine in Modern Hong Kong - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Nin Tcm to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Sales & Marketing industry, but it has also influenced the consumer preferences. Nin Tcm can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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.
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.
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.
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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Nin Tcm can use these opportunities to build new business models that can help the communities that Nin Tcm operates in. Secondly it can use opportunities from government spending in Sales & Marketing sector.
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.
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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Nin Tcm in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Sales & Marketing segment, and it will provide faster access to the consumers.
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.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Nin Tcm in the consumer business. Now Nin Tcm can target international markets with far fewer capital restrictions requirements than the existing system.
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 -
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.
Easy access to finance
– Easy access to finance in Sales & Marketing field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Nin Tcm can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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.
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.
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.
Shortening product life cycle
– it is one of the major threat that Nin Tcm is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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.
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.
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 .
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 .
Increasing wage structure of Nin Tcm
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Nin Tcm.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Nin Tcm.
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.
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.
