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 - – central banks are concerned over increasing inflation, geopolitical disruptions, technology disruption, digital marketing is dominated by two big players Facebook and Google, increasing inequality as vast percentage of new income is going to the top 1%, competitive advantages are harder to sustain because of technology dispersion, increasing commodity prices,
increasing government debt because of Covid-19 spendings, wage bills are increasing, 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 -
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.
Superior customer experience
– The customer experience strategy of Nin Tcm in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
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.
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.
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.
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.
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.
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.
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 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.
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.
Diverse revenue streams
– Nin Tcm is present in almost all the verticals within the industry. This has provided firm in Nin Jiom: Selling Traditional Chinese Medicine in Modern Hong Kong case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
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 -
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.
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.
Products dominated business model
– Even though Nin Tcm has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Nin Jiom: Selling Traditional Chinese Medicine in Modern Hong Kong should strive to include more intangible value offerings along with its core products and services.
High bargaining power of channel partners
– Because of the regulatory requirements, Bennett Yim, Vincent Mak suggests that, Nin Tcm is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
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.
Increasing silos among functional specialists
– The organizational structure of Nin Tcm is dominated by functional specialists. It is not different from other players in the Sales & Marketing segment. Nin Tcm needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Nin Tcm to focus more on services rather than just following the product oriented approach.
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.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Nin Tcm supply chain. Even after few cautionary changes mentioned in the HBR case study - Nin Jiom: Selling Traditional Chinese Medicine in Modern Hong Kong, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Nin Tcm vulnerable to further global disruptions in South East Asia.
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.
Capital Spending Reduction
– Even during the low interest decade, Nin Tcm has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
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 -
Redefining models of collaboration and team work
– As explained in the weaknesses section, Nin Tcm is facing challenges because of the dominance of functional experts in the organization. Nin Jiom: Selling Traditional Chinese Medicine in Modern Hong Kong case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
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.
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.
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.
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.
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.
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.
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.
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.
Learning at scale
– Online learning technologies has now opened space for Nin Tcm to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
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.
Better consumer reach
– The expansion of the 5G network will help Nin Tcm to increase its market reach. Nin Tcm will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
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 -
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 level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Nin Tcm needs to understand the core reasons impacting the Sales & Marketing industry. This will help it in building a better workplace.
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.
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.
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.
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 .
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.
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.
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 .
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.
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.
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.
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.
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.