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 - – supply chains are disrupted by pandemic , wage bills are increasing, geopolitical disruptions, technology disruption, central banks are concerned over increasing inflation, increasing transportation and logistics costs, increasing energy prices,
increasing government debt because of Covid-19 spendings, digital marketing is dominated by two big players Facebook and Google, 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 -
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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 -
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.
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 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.
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.
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.
Low market penetration in new markets
– Outside its home market of Nin Tcm, firm in the HBR case study Nin Jiom: Selling Traditional Chinese Medicine in Modern Hong Kong needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
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.
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.
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.
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.
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.
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 -
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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 -
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.
Stagnating economy with rate increase
– Nin Tcm can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
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.
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.
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.
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.
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 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Nin Tcm in the Sales & Marketing industry. The Sales & Marketing industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
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.
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.
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.
