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Eu Yan Sang-Managment Assignment

In: Business and Management

Submitted By ryu88leo
Words 2336
Pages 10
Introduction of Eu Yan Sang (余仁生) Company

Eu Yan Sang operates it business globally with mainly specialize in Traditional Chinese Medicine (TCM) and health supplement products. Eu Yan Sang have over 1000 various kinds of Chinese herbals and 300 over TCM products under Eu Yan Sang brand on market. The best selling of Eu Yan San brand’s products- include their Bird’s Nest, Lingzhi Cracked Spores Capsules, Essence of Chicken and etc.

Eu Yan Sang was founded by Eu Kong. In 1870s, Eu Kong left Foshan, Guang Zhou to seek for opportunity in Malaya (Malaysia). Then, he settled down in Gopeng located in Perak, Malaya where the local industry are based on tin mining industry. As at that time, Opium market was flooded globally, Eu Kong realized that most of the tin miners suffered in Opium addiction. Eu Kong determined to free the miners’ Opium suffering with his Chinese Medicine knowledge, and then he opened the first medical shop near Gopeng named ‘Yan Sang’, Yan mean mankind or humanity, Sang mean life.

Eu Tong Sen, Eu Kong’s only son dedicate himself and inherit the company. Eu Tong Sen also has big concerned in Tin Mining business, he was turned into leading figure in tin mining and rubber plantation industries in 1920s. On the place where he launch a tin mines, he open a medical hall to take care his tin miners’ health. Then, he started second shop in Kampar, Perak. At last, Eu Tong Sen expended the business of TCM and developed it to other countries such as Singapore, Hong Kong, China and Taiwan.

From small business to international company with global vision, ambitions, Eu Yan Sang values to care for mankind remains unchanged.

PESTEL Analysis

Political Factors
The Recognition of Traditional Chinese Medicine by Ministry of Health for each nation is inconsistent. Eu Yan Sang focus in TCM products, it is a challenge for Eu Yan Sang to spread its business and products globally, especially toward western country because the recognition of Chinese drugs is altogether different in different parts globally relying on the social and political of their host nations. In a few nations, they are normally utilized as a part of medicinal services and individuals there have simple access to it and it helps extensively to the general strength of the neighborhood individuals. In some different nations, particularly industrialized nations like the United States and Western Europe nonetheless, where stringent arrangements against conventional practices are in power favoring biomedicine, Chinese medicine is confronted with extreme restriction. The Dietary Supplement Health and Education Act of 1994 (DSHEA) and the issuing regulation by the US Food and Drug Administration (FDA) made an alternate class that is not customary nourishment or medication: dietary supplements. Since Chinese medicine is not perceived as drug, numerous TCM products’ formula come to US under the classification of dietary supplements. Numerous Chinese need to go somewhere else to search for data which can not be legitimately indicated in the names of the items. For Example, "help to keep up ordinary blood pressure", "help to keep up a healthy cholesterol level", and etc, are permitted to indicated.

Economic Factors
The supplies of herbals and Chinese Herbal’s extract majority are depending on China because of the agriculture, knowledge on use of herbs, weather condition (include humidity and temperatures) are suitable for plantation of various herbals. Therefore, China plays an important role on impact of the inflation of price of herbs. Past year, China’s worst winter storm and freeze before Chinese New Years seasons was a large disaster on agriculture economy. Most of the agriculture products such as vegetables, fruits and herbals are damaged and frozen by the cold weather. The blizzard causes the price of the agriculture products surge instantly, at the same time, the high demand over the agriculture products during Chinese New Years season also impact the inflation. The inflation of the herbs impact mostly in Asian country included South East Asia. As Eu Yan Sang have most of outlets majority in South East Asia, the inflation of the herbs over the china’s freeze might be a bad impact to their business.

Social Factors
Eu Yan Sang aware about some of the social factors that might affect their sales include the following:- • Nowadays, the trend of the people lifestyle is more health conscious and concern about anti-aging products, especially ladies. Eu Yan Sang in Malaysia and Singapore tend to follow the trend with launch more in anti-aging products range. One of the well known and best selling products under Eu Yan Sang Anti-aging range products are Bird Nest, which Bird Nest are famous for ladies. In Chinese society, it is a common believe that Bird Nest still act as the traditional beauty food that to stay youthfulness and skin whitening.

• Eu Yan Sang in Malaysia tend to gain more Muslim customers because they have most of the products register with Halal. For instance, they aware about the social factors that, as a TCM products company that original from Chinese society need to target Muslim Sales in Malaysia, an Islam country which 70-80% of the population are Muslim, they must ensure most of their products are compliance with Halal regulation, in order to gain confident from Muslim consumers.

• During festival like Chinese New Year, Chinese society are concern about dedicate gift to their friends and relatives. Other than that, Organisation operates by Chinese use to sponsor hampers to Customers’ annual dinner. Therefore, it is easy to notice that Eu Yan Sang will take opportunity to generate sales with advertise their hampers sales promotion before Chinese New Year. That is why it is common to seeing Eu Yan Sang hampers appear on some Companies’ annual dinner lucky draw.

Technology Factors
Eu Yan Sang bring in Herbs Fingerprinting Technology to enhance their TCM business. The application of fingerprinting innovations is discriminating to the expanded scattering of TCM makers in the global commercial center. It is additionally imperative in the overall distinguishment of TCM item and their far reaching common profits. Herb Fingerprint enables user to tag each of the herbals with a "chemical barcode" and thusly makes a special kind of quality control framework for the Chinese herbals and Chinese Proprietary Drugs. (Eu Yan Sang International Ltd, n.d.)

Environmental Factors
In world of TCM, there’s a lot animals’ part were used in making of Chinese Drugs. From the research of Traffic.org, the price of some endangered species’ part is more expensive than price of Gold and Cocaine. Example, the price of rhino horn per kilo can be up to USD60, 000; In Japan, Bear-bile powder can sell more than the price of Cocaine. Elephant ivory is esteemed for the reasons of aesthetic. Interest for rhinoceros horns, the paws or bile of Asiatic dark bears or sun bears, tiger bones/penises, and musk deer, is invigorated by the healing forces attributed to them in Chinese drug. (“Bitter pills”, 2014)

For Musk Deer, the records of the utilization of musk in TCM go over to the ancient of China’s, Dynasty of Han (200BC to 200AD). Musk has an extensive variety of employments, including incitement of course of qi ('life power') furthermore blood and additionally being an impetus for other drugs materials. Notwithstanding, national laws in mostly all extent States securing musk deer and global exchange managed by CITES, populaces of musk deer keep on declining all through their reach. Unlawful chasing and exchange of musk for utilization in TCM represents the greatest danger to musk deer, despite the fact that environment obliteration is additionally genuine concern. (Rob Parry-Jones, n.d.)

Eu Yan Sang’s core mission included natural sustainability; they believe environment sustainability can lead to extension of TCM business, which is about seeking for wellbeing and balance. Eu Yan Sang were bringing in the best practices in environmental sustainability with done a big effort to liaise with China Exploration and Research Society (CERS) with study of protection for Musk Deer.

They engaged researchers from CERS to conduct study on Musk Deer, to better comprehend its dispersion, populace, movement pattern, environment and habitat. Likewise, they also supported the marking plan launched by Animal Concerns Research and Education Society (ACRES) and Singapore TCM Organisations Committee (STOC) to demonstrate our dedication not to offer or use parts in endangered animal in their products and prescriptions. (Eu Yan Sang International Ltd, 2012)

Legal Factors
Eu Yan Sang have factories in Malaysia and Hong Kong that already recognized in GMP Standard (Good Manufacturing Practices). But recently, Eu Yan Sang still face problem in legal threat from US that because of different regulation in measurement of specification in content of drugs between different nations. The US Food and Drug Administration (FDA) announced and advised consumers not to buy “Bo Ying Compound” from Eu Yan Sang (Hong Kong) Ltd due to the drugs found contain risk of high lead poisoning which might cause damage on infants’ immune systems and kidney and etc. (United State. FDA, 2014)

However, Singapore regulations permit somewhat higher lead levels in drugs and health supplements than those of some different nations. Health and Safety Authority (HSA) in Singapore says “Although different jurisdictions have limits that vary relative to each other, the absolute difference between these limits is actually minimal, due to the scale of measurement in parts per million”. Beside, Eu Yan Sang also stand out and clarify that FDA wrongly tested “Bo Ying Compound” as a food additive rather a health supplement. (David, 2014)

Portal’s Five Forces Analysis

1. Threat of New Entrants (Low) The Barriers to entry are high, because fresh entrants need to obey laws like Sale of Drugs Act, Medicine Act and so forth. Government can raise the gauges by forcing overwhelming punishments for any individual who ignore the law or backing the wrongdoers. For instance, in Singapore, it is additionally an unquestionable requirement to be enlisted and confirmed before any wellbeing organizations or items is dispatch. Potential contenders might subsequently think that it hard to enter on account of the various laws they need to comply with.

2. Threat of substitute products (High) In world of medical products and health supplements, it is common to seeing that a similar formula on a TCM product content but different brand name existing on TCM market. Example: A simple cough syrups extract by similar herbs and formula (but different taste and strength) can easily get on certain TCM medical halls. In such, TCM business likes Eu Yan Sang will always facing a big threat in products competition. For instance, major of the products selling by Eu Yan Sang can also easily purchase from others TCM businesses, example: Bird Nest and Ling Zhi Cracked Spores Powder are common type of products in TCM and health care business. Consumer can choose to buy Bird Nest or Ling Zhi Powder in Hai-O in Malaysia market or ZTP in Singapore market instead of Eu Yan Sang.

3. Threat from bargaining power of supplier (Low) Eu Yan Sang only purchase from suppliers who are guaranteed with Goods Agriculture Practices. Thus, the trusted suppliers with not simply manipulate their agreement on offers of the herbs and materials. Eu Yan Sang also have own brand of products, therefore, with the capability to oversee and control its stock level and supply, Eu Yan Sang does not need to stress regardless of the possibility that a supplier chooses to raise the cost because of shortage or awful climate conditions.

4. Threat from bargaining power of Customer (High) Similar with threat of substitute products, Eu Yan Sang is not by any means the only TCM retailer. Take Singapore market as example, there are others like ZTP and Hockhua which can be effectively discovered anyplace. Customers can spare the bother to travel downtown or any shopping malls just to buy herbals with Eu Yan Sang when there is one found close them. Additionally, Eu Yan Sang, ZTP and Hockhua can be either close to or close to one another; offering comparative things at comparable costs. Clients can pick whoever to purchase from.

Besides from TCM, western medication is accessible anywhere. This urges individuals to buy them because of the simplicity of consumption rather than TCM ones. Additionally, western pharmacies exist for individuals to self-medicate.

5. Competitive Rivalry (High) Eu Yan Sang is confronting a strong rivalry from worldwide claim to fame retailers of nutritious products, for example, GNC and Nature's Farm. Besides, they also facing strong competitors from local TCM Stores operates in each country, which include of ZTP and Hockhua in Singapore, Hai-O in Malaysia; In Hong Kong,there is a road named Ko-Shing Street well known for wholesales of herbals and Chinese drug.

Conclusion
Eu Yan Sang is a well-known benchmarks with several stores over the world. So as to enhance execution, it must survey its outside and nature's domain. This will uncover the key open doors it can exploit and the dangers it must manage. Eu Yan Sang reacts to both inner and outer issues in a proactive and element way by utilizing its qualities and lessening its shortcomings. Through this, Eu Yan Sang has the capacity create the solid development it needs to hold a solid personality in the business sector.

While accentuating the trademark common preventive methodology of TCM with traditional remedial services, they also reestablish age-old intelligence throughout today's lifestyle with their wellbeing and way of life focus in Malaysia and also 2 Medical Centers at Hong Kong. Fusing everything to convey extraordinary items and services for positively all encompassing health awareness.

With a specific end goal to turn into a genuinely worldwide TCM health awareness organization, Eu Yan Sang has to make its TCM Products applicable to non-Chinese showcases as well as the more youthful era of Chinese buyers. The organization has accomplished this wonderfully by upgrading its items, its conveyance and retailing, or more all its picture through patches up in store plan, frontline crew dressing and correspondence, packaging of products, and keep marketing attention.

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