Founded in 1879, the mission of Eu Yan Sang (EYS) is ‘caring for mankind’. The Traditional Chinese Medicine (TCM) company believes in empowering individuals to live their best quality of life through accessible healthcare. EYS has been a household name for customers of across generations for its high quality and standards. As Asia’s leading TCM health and wellness company, their products combines the art of TCM and the science of medicine. (Euyansang.com.sg, 2019)

1.2 Key Milestones

(Euyansang.com.sg, 2019)

The above figure depicts the key milestones of EYS since its birth till present day operations.

1.3 Current Situation

Since October 2018, EYS has been distributing across 231 retail outlets in China, Hong Kong, Macau, Malaysia, Singapore and Australia. It also runs a chain of 33 TCM clinics in Singapore, Malaysia, Hong Kong and China as well as three food and beverage outlets in Malaysia.

Besides retail outlets and online stores, EYS has made their products available worldwide at drugstores, pharmacies, medical halls, supermarkets, convenience stores, hospitals, health clubs, spas and major online marketplaces. Healthy Life Group Pty Ltd is an associate company which operates in Australia, over a chain of more than 40 Healthy Life stores and a distribution business.

Today, the core strength of EYS lies within its brand name, its product line as well as its diversified distribution network. On top of advertising and promotion in print media, the company is repackaging products and refurbishing older stores to broaden the consumer base by appealing to a wider group of potential customers.

2 External Environment Analysis (Reina & Phyllis)

2.1 PESTLE Analysis - Reina

Political	Goods and Services Tax (GST) GST is a tax imposed on domestic consumption and the current GST rate is 7%. GST will be imposed on goods and services supplied in Singapore, as well as imported goods. Corporate Income Tax (CIT) The corporate income tax rate is capped at 17%. The tax paid by the company on its profits is not regarded to the shareholders, which is referred to as the single-tier corporate income tax system. Since 2018, the Singapore government decided to enhance and extend CIT rebate at a rate of 20% of that tax payable that is capped at $10,000.
Economic	Singapore’s economy has grown by 3.2% in 2018 and the GDP is expected to continue growing to “slightly below the midpoint of the forecast range” (Ministry of Trade and Industry 2019, para. 1), specifically with business services growing by 2.8% and other services such as education, health and social services growing by 1.6%. On the other hand, as of 26 February 2019 (Appendix A), the Singapore Dollar (SGD) rate has decreased from 1.3495 to 1.3481 despite the central bank’s effort to strengthen the SGD. There is also a drop in Singapore’s annual inflation rate from 0.5% in December 2018 to 0.4% in January 2019, mainly due to slowed prices for electricity and gas (Trading Economics 2019), which does not affect the TCM sector. Despite the exchange rate fluctuation, the TCM industry has been growing steadily so much so that the Ministry of Health (MOH) has decided to ‘provide additional funding for TCM research and to support skills development and capability building for TCM professionals’ (Singapore Business Review 2017, para. 1). With the increased funding of S$5 million TCM Development Grant (TCMDG) and S$5 million TCM Research Grant (TCMRG), TCM practitioners will be able to enhance operational efficiency by adopting new IT solutions and R&D activities. The applications for the grants have already been opened since January 2018. The funding is set to contribute to the growth of Singapore’s economy as it will be of expectancy that the TCM sector is to perform better since January 2018.
Socio-Cultural	TCM practitioners mainly use herbal medicines and several mind and body practices such as acupuncture, to either treat or prevent health problems. TCM practitioners have always believed that there must be a balance and harmony in the physical, emotional and psychological wellbeing, which affect the body’s internal balance. With the long history of treating injuries, TCM practitioners managed to treat more sports-related injuries as TCM has been growing steadily throughout the years. And since TCM treats people of all ages regardless you’re young, middle-aged or old, the TCM sector can tap into the increased pool of consumers as the population of Singapore has grown from 5,612,253 in the year 2017 to 5,638,676 in the year 2018 (Singapore Department of Statistic 2018). Since health is one of the most essential things in life, most households have spent around 8-10% of their household budget on medical services (ValueChampion, 2019). On top of that, many people in Singapore suffer from neck and shoulder problems as they have spent more than 8 hours a day in the office working endlessly. These workplace injuries can worsen if not treated properly and effectively. World Health Organisation (WHO) has recognised acupuncture to be an effective treatment for pain management and TCM accounts for 88% out of the 76% population in Singapore that used complementary alternative medicine (AsiaOne n.d.).
Technology	Living in a digital age, consumers are becoming more comfortable with purchasing items online. Statistics have shown that the number of e-commerce users are steadily on the rise (Statista, 2019). 16.67% of the e-commerce users are of age 25-34, while shoppers from age 35-44 make up 28.14% and 45-54 years old has a percentage of 32.33%. This suggests that most of the online shoppers are the people of Generation X. Online shopping is an accessible option for the benefit of convenience, especially for working adults who have a hectic schedule. E-commerce platform may provide services such as live chat for consumers who have queries on the product selection or the shop’s opening hours and outlets. To add on, more and more people possess at least 1 smartphone and this could act as an opportunity for the TCM sector to tap into by creating apps to enhance customer service experience. And to better the relationship between companies and consumers, social media platforms could be created to act as linkages for companies to reach out and understand the consumers’ demands better.
Legal	Traditional Chinese Medicine Practitioners Act According to the Singapore Statutes Online (SSO), all TCM practitioners in Singapore have to abide by the Traditional Chinese Medicine Practitioners Act under Chapter 333A. The Traditional Chinese Medicine Practitioners Act talks about the details of the registration process as TCM practitioners. Section 12(4) of Traditional Chinese Medicine Practitioners Act states that anybody who fails to inform the Registrar in the change of name, working address, residential address, or other personal particulars within 28 days of the change will be charged a fine of not over $1,000. And referring to Section 19(2), it states that the Board may impose a penalty not exceeding $10,000 or suspend the registration license for a period not exceeding 3 years if a person is liable of having his registration cancelled on any grounds referred to in Subsection 1(e) to (k) of Section 19. Traditional Chinese Medicine Practitioners (Registration of Acupuncturists) Regulations Specifically, according to SSO, the Traditional Chinese Medicine Practitioners (Registration of Acupuncturists) Regulations have to be abided by acupuncturists who wish to practice in Singapore. There are 3 types of registration that one could follow, namely: full registration, conditional registration and provisional registration. Full registration is granted when one has either an approved local qualification in TCM or foreign qualification while having practical experience that is acceptable to the Board. Second, conditional registration is granted when (1) one shows he has the knowledge and skill while having acquired the experience that is necessary as an acupuncturist, or (2) he has been selected for employment in Singapore as an acupuncturist in a TCM organization/institution that is acceptable to the Board. Lastly, provisional registration is granted when (1) one has practised in Singapore continuously since and between 1st July 1985 and 2nd July 1990 while holding a Category B local diploma, or (2) practised since between 1st July 1990 and 2nd July 1995 while holding a Category A local diploma. Provisional registration is only granted for not more than 3 years.
Environmental	The use of animal products in TCM is not new information to all, and this has been a major environmental issue for TCM in the past 2000 years and counting. Asian cultures have long been associating the different tiger parts as a cure for many ailments, especially tiger bones. Bear gallbladder, rhino horn, antelope horn, cattle and goats, are just some animal parts being used as a part of medical treatment in TCM. Most of the animal hunting and trading is illegal and many animals have been hunted and killed to feed the needs of the fast-growing trade of TCM. Many of the animal species used in TCM are listed by Convention on International Trade in Endangered Species (CITES) of Wild Animals and Plants, which makes it illegal for member countries to trade these animals, and thankfully Singapore is one of the member countries. However, it is saddening to learn that several CITES members are still trading rhino products and CITES has not taken any legal actions against them.

Overall, the external environment of TCM is relatively opportunistic for EYS. Specifically, the technological advancements which focus on the convenience and rise of e-commerce, which are advantageous for EYS.

2.2 Porter’s 5 Forces Analysis - Reina & Phyllis

Competitive Forces

Competitive Pressures in the industry

Strength of Competitive Forces and Implications

Rivalry Among Competitors

Large number of existing competitors

Direct Competitors

(Traditional Chinese Medicine)

· Hockhua Tonic

· ZTP Ginseng Birdnest Pte Ltd

Indirect Competitors (Traditional Chinese Medicine)

· Fook San Tong

· Sun Kee Ltd

· Kim Hing Food Industries

· Ma Guang

· Yan Chai Tong

· Tong Xin Tang

Low Switching cost

· A consumer is able to switch between different brands without requiring a large investment

Products of Rival Sellers are not strongly Differentiated

· Products are similar and made with almost exactly the same ingredients as such all products in the traditional chinese medicine industry are not differentiated including the products of Eu Yan Sang

Size of Companies

· Majority of the companies are large in scale and often multinational

HIGH

· Many rivals currently exist in the market and many other competitors appear from other markets due to them solving a the same need.

· There is also a lack of differentiation between products as they are all fundamentally made of the same ingredients.

· As such it boils down to marketing and quality of the product in order to gain a competitive advantage in the industry.

Threat of New Entrants

Cost Advantages

· Existing companies have advantage in cost due to economies of scale and relationships with existing suppliers

High Capital requirements

· Large amount of capital is required in order to establish a global presence and to build branding, as well as set up the supply chain routes to procure ingredients

Strict Regulations

· As these products are made for consumption they have to uphold standards and regulations set by Singapore

Specialised knowledge

· Extensive knowledge is needed on traditional medicine in order to produce the products in the industry

Brand Loyalty

· There is only a medium level of Brand loyalty, due to the ease of switching and the similarity between the different products in the industry there often isn’t much brand loyalty

LOW

· The cost required to enter the market and the large scale of current competitors pose a threat to newer entrants as such it highly unlikely that there will be newer entrants due to the competitive disadvantage they will be at

Threat of Substitutes

Change in customer’s taste and perspective

· In current day and age and in the future, the newer generations have different views on the effectiveness of Traditional Chinese medicine, moreover, they prefer using Western Medicine

Newer products

· There are newer products created due to scientific and technological developments, which can also be more effective.

HIGH

· There are many substitutes for the products in this industry that are often easier to manufacture and are more effective, things such as supplements pills, Western Medicine and Vitamin Pills solve a similar need.

· As time goes by people start trusting and using things such as supplements or modern medicine as such their taste change and their perspective of the product in this industry change as such they are less likely to go for traditional chinese medicine

Bargaining Power of Suppliers

High supply of TCM products in the market

· Hockhua Tonic

· Yan Chai Tong

· Ma Kuang

· Tong Xin Tang

· ZTP Ginseng

· Fook Sang Tong

LOW

· Many competitors in the same market claiming to provide high quality products and to compete against prices

· Customers in Singapore are well-educated and since the cost of switching is also low, then the suppliers will have a difficult time to gain the bargaining power

Bargaining Power of Buyers

Extensive research before purchasing

· Due to the ease of accessibility and high exposure to information online, and especially when it comes to purchasing health products, customers will often do extensive research before purchase then shortlist a few brands that meet their buying criteria and evaluate before coming to a decision

Highly educated customers

· Singapore customers are generally well-educated so they will be very well-informed about the quality, price and costs

HIGH

· Buyers tend to be very well-informed about the quality, prices and costs with the research that they do before the purchase

· All TCM’s products are undifferentiated as they are all the same

To conclude the analysis, the overall profitability will be low due to the intensity of competition, high bargaining power of buyers and high level of substitutes.

2.3 Industry Life Cycle - Phyllis

EYS is currently in the maturity stage of the industry life cycle model as it has established a high level of equity and brand awareness. EYS is currently growing at a slower growth rate compared to when the industry was at its introduction stage 140 years ago. 2 years ago, EYS made its entry into the Australian mainstream health, beauty and natural health products market. Not only that, EYS entered into a joint venture with a mainland Chinese firm to process and export herbs. One of EYS critical success factor is to prioritize China because it is the biggest market for TCM. It is also important for EYS to constantly adapt to innovative marketing strategies such as strengthen its online presences to ensure sustainable profitability.

3 Competitors Analysis (Denise)

Company	Eu Yan Sang	Hockhua Tonic	ZTP Ginseng Birdnest Pte Ltd	Kim Hing Food Industries	Sun Kee Ltd	Yan Chai Tong	Ma Kuang	Tong Xin Tang	Fook Sang Tong
Market	TCM	TCM	TCM	TCM	TCM	TCM	TCM	TCM	TCM
Types of Services	Clinic, Retail, Manufacturing	Retail, Manufacturing	Retail, Manufacturing	Manufacturing	Distribution	Clinic	Clinic	Clinic	Clinic
Distribution Channel	Multiple	Retail, Internet	Retail, Internet	Wholesale	Wholesale	Retail, Internet	Retail	Retail	NIL
Degree of Services Provided	Full	No frills	No frills	No frills	No frills	No frills	No frills	No frills	Limited
Geographic Location	International	Many SG locations	Many SG locations	Few SG locations	Few SG locations	Few SG locations	Many SG locations	Few SG locations	Few SG locations
Focal Products	Bottled birdnest, Lingzhi capsules, Chicken Essence	Bird's nest, Herbal products, Ginseng, Dried seafood	Bottled birdnest	Bottled birdnest and abalone	Canned seafood	Bak Foong pills, Mushroom powder	NIL	NIL	NIL

For the strategic group mapping, the variables are diversification of target market (vertical axis) and distribution channel (horizontal axis). In doing so, the distribution channels in which the different generations of target market utilize can be observed, allowing for the focal company, EYS to understand which distribution channel is best to target customers of a certain generation, in this case, the millennials to make repeat purchases and in turn, boost sales for the company.

The direct competitors of EYS are Hockhua Tonic and ZTP Ginseng Birdnest Ltd. Similar to EYS, both Hockhua Tonic and ZTP Ginseng Birdnest focuses on selling TCM products, with bottled birdnest being a common best-seller for both brands.

The indirect competitors of EYS are Fook San Tong, Sun Kee Ltd and Kim Hing Food Industries and Ma Guang. These companies are considered competitors due to the fact that they all provide either goods or services in the TCM industry, yet are not direct consumers because they do not offer the same services that EYS provides. Yan Chai Tong, Tong Xin Tang and Fook Sang Tong only provide clinical services where patients are able to do consultation with a registered TCM physician. Ma Kuang provide clinical services as well as “tuina” services, where customers are able to receive treatment by “tuina” therapist, a form of TCM practice which involves acupuncture, moxibustion, fire cupping and Chinese herbalism. Sun Kee Ltd does distribution of dried goods and TCM products, whereas Kim Hing Food Industries manufactures TCM products, involving packaging and bottling.

Therefore, EYS can gain a competitive edge against its competitors by targeting marketing efforts towards the Gen-Y, where most individuals have increasing purchase power as they reached senior positions in their professional careers. In addition to possessing the purchasing power to make high-priced products such as TCM products, they are well-aware of the benefits of Chinese herbs and their effects, having been brought up by their parents of the Baby Boomers generation.

While the Baby Boomers are the ones that typically visits TCM centres to purchase dried goods and herbal products, a large majority of them have reached retirement and are becoming less active in the workforce. These individuals, however, are empty-nesters with children that are well-established in their careers and are rely on them as a source of income. As such, these empty-nesters will have the financial ability to purchase TCM products for the physical well-being and enjoyment of themselves, their children and grandchildren.

By focusing on Gen-Y as the target market, they could become strong advocates of TCM as well, thus encouraging their Baby Boomer parents to patronize TCM centres to make purchases in bigger quantities or repeat purchases of TCM products that the family has previously not been exposed to.

4 Customer Analysis (Kendra & Rachel)

4.1 Market Size

The TCM industry has seen major growth in recent years due to an increasing demand for natural alternative medicines and changes in people’s lifestyle. According to World Health Organization (WHO), the size of the TCM global market is estimated to reach at US$5 trillion by the year of 2050 (Asiabiotech n.d). In addition, the Asia-Pacific market is the fastest growing region, with a compounded annual growth rate of 10.5 percent through 2015 (EnterpriseSG, 2013). As a result, EYS has the potential to continue maximising and strengthening its position among their competitors.

4.2 Market Segmentation

Taking analysis from Appendix _, EYS market segments are evaluated by age. They are segmented under:

· Generation Z (4 - 24 Years Old)

· Generation Y (25- 39 Years Old)

· Generation X (40 - 54 Years Old)

· Baby Boomers (55 - 75 Years Old)

Market Size and Segment Growth

According to Singstat, the segment sizes of Generation Z, Y, X and Baby Boomers are 590, 875, 918 and 710 thousands respectively in 2018. Among the total population of Singapore residents, Chinese made up 74.3 percent, followed by Malays and Indians at 13.4 percent and 9.0 percent respectively.

Market Segments Purchasing Power

Generation Z, mainly consists of students studying in tertiary institutions and some of them having part-time jobs. Therefore, they have low purchasing power. Generation Y, commonly known as millennials includes working professionals with middle income and moderate purchasing power. However, their purchasing power are increasing. Generation X consists of working professionals that are in senior positions with high purchasing power. Baby boomers, though most of them are or reaching retirement, have accumulated assets and retirement savings, thus they wield moderate purchasing powers.

Market Segment Profit Potential

Generation Z have the lowest profit potential as they have low purchasing power and a small market size. Millennials have moderate profit potential due to their middle income and being a tech-savvy generation in this digitalized world. Generation X has the highest profit potential due to its large market size and high purchasing power. According to their brand persona (Appendix _), their psychographics and behavioural attributes correlates to consuming TCM products and services. Due to their aging lifestyle, Baby Boomers are the second highest profit potential. Though they have moderate purchasing powers, the benefits that they sought for are aligned with what TCM provides.

4.3 Competitors

Hockhua Tonic and ZTP Ginseng Birdnest PTE LTD are the two main key competitors as they provide similar service to the consumers. However, the difference lies on how each competitors further segment their TCM products based on fulfilling each consumers’ psychology needs. EYS and their competitors all fulfilled the safety needs of providing health and wellness benefits in the ingredients of their TCM products. All three organisations also fulfill the belongingness and love needs when they offer their products as gift hampers for consumers to give to their loved ones. What sets EYS apart from their competitors is that EYS focuses on satisfying the esteem needs as their TCM products and overall packaging represents a sense of prestige and status due to them being a highly recognizable brand in the TCM industry..

4.4 Underserved Segments

Millennials and Non-Chinese

· Unknowledgeable about TCM

· Inapplicable to their way of life

· Western medicine dominates (TCM is only an alternative)

· Preparation of TCM is inconvenient

The Millennials are an important segment for the TCM business and educating them at a young age will allow EYS to grow with them through various life stages. However, Millennials tend to view EYS and TCM as being too traditional, tough to understand and inapplicable to their way of life. It will take time to reposition EYS but they will need a quick win to start the engagement journey. Targeting the Millennials will benefit EYS as their spending power are increasing. Soon, the Millennials will overtake Generation X in terms of spending power. On top of that, Millennials are tech-savvy. With technology advancements, it is important to capture the Millennials’ attention to ensure marketing and operational efficiency in EYS.

EYS is making marketing efforts to target the Millennials now. For example, EYS forged an unconventional collaboration with an unexpected partner -- a popular speakeasy -- The Library, to create a six-month herbmixology pop-up space campaign. It combined the age-old tradition of TCM and the art of mixology to provide a fresh experience for the millennials.

It is important to serve the Non-Chinese segment in Singapore as maintaining racial cohesiveness and harmony go beyond understanding the cultures and customs. It will go deeper and stronger if one group shows compassion and provides assistance. Introducing TCM to Non-Chinese is a great way of encouraging this.

Despite being halal certified, EYS does not focus much on the Non-Chinese segment; making them the underserved segment.

4.5 Factors Influencing Purchase Decisions

Internal factors

External factors

· Consumer’s purchasing power leads to different purchase decisions.

· Consumer’s personal beliefs (eg. religion or family beliefs) influences purchase decisions.

· Consumer has either a positive/negative perception of product.

· The way that the consumers want to be perceived (eg. relying on TCM will mean that the consumer is traditional etc).

· Convenience (eg. consumers do not have the luxury of time)

· Accessibility (eg. less time on looking for TCM products)

4.6 Opportunities and Threats

Opportunities

Threats

· Convenience

· Accessibility

· Reliability

· Affordability

· Strong direct competitors with huge distribution channel

· Society influences (eg. TCM may be deemed as too traditional )

· Similar target consumers from direct competitors

· Little product differentiation

5 Company Internal Analysis (Reina & Phyllis)

5.1 Porter’s Value Chain - Reina

5.1.1 Primary Activities and Costs

Supply Chain Management	- EYS has an associate company in Australia namely Healthy Life Group Pte Ltd, which operates a chain of over 40 Healthy Life stores - Healthy Life Group (Australia) supplies over 3,500 products to 600 independent retailers in the health food, pharmacy, and grocery retail segments - EYS has a chain of TCM centres, integrative medical centre, general clinics, sessional clinics, and lifestyle clinics rounding up to 33 TCM clinics in Singapore, Hong Kong, Shanghai and Malaysia
Operations	- Product sourcing comes from suppliers with Good Agricultural Practices (GAP) certification to ensure authenticity and quality of raw herb - Herbs will go through scientific tests before being processed in EYS’ Good Manufacturing Practice (GMP) certified factories in Hong Kong and Malaysia - Manufacturing and packaging are done in Hong Kong and Malaysia
Distribution	- EYS has an extensive distribution network encompassing 231 retail outlets in all 6 countries - EYS products are also available worldwide at drugstores, pharmacies, medical halls, supermarkets, convenience stores, hospitals, health clubs, spas, and major online marketplaces
Sales and Marketing	- An online website that provides information on products, FAQs, contact details - Live chat on EYS official website to address any queries that consumers have - Online email subscription for updates - Consumers are able to purchase EYS on the website and there is free delivery for orders that are above $120 - Strong social media presence with frequent updates and product bundles posted on Facebook and Instagram - Strong PR through traditional media (e.g. newspaper, magazine, interviews and articles)
Service	Delivery and Shipping - Free delivery for orders over $120 - Local shipping fee: $13.00 - Able to collect the order on preferred collection date from any desired EYS store Return Policy (online purchase) & Exchanges - May request through email to return any products within 7 business days after receiving the product at your delivery address - Only able to return/exchange when product delivered is not what you ordered or product delivered is expired/damaged - Only able to return products that are unconsumed, unused, unworn, undamaged and unwashed - Return in original packaging; unopened and unmarked, and not broken into parts - EYS will either replace the product with a new item, give a full refund for the product, credit your account with the value of the product - Delivery and/or collection fee will still be incurred during the process of returning/exchanging Clinic Consultation Fees - First consultation: $18 (physician), $22 (associate senior physician), $28 (senior physician) - Subsequent consultation: $14, $18, $22 - First consultation (long): $28, $34, $45 - Subsequent consultation (long): $22, $28, $36 - Dispensing fee: $6 Treatment Fees - Acupuncture/Scraping: $30 - $80 - Tui Na: $40 - $130 - Cupping: $20 - $60 - Auriculotherapy (plaster): $12 - $24 - Heating lamp: $5 - Acupuncture stimulator: $5 Point of Care Test Fees - Pregnancy screening test: $10 Herbal Medication Fees - According to type and weight of prescription, generally from $10 per day onwards

5.1.2 Support Activities and Costs

Product R&D, Technology and Systems Development

- Integrative Medicine (IM) centres are places where EYS conduct their R&D to make sure products are acceptable to the market

- EYSI Scientific Advisory Board (SAB) manages the matters of science, medicine and emerging technologies for the growth of EYS

- Members of SAB are active in research institutions, universities, clinical practice and industry based on their expertise in particular medical and scientific fields relevant to EYS’ goals to develop scientific advancement of TCM

Human Resource Management

- All TCM practitioners and acupuncturists are licensed by the local regulatory bodies to offer maximum benefits to EYS customers

- All EYS physicians have undergone at least 1 year of Residency Programme that includes mentoring by Senior Physicians

- All EYS physicians have to go through regular reviews, assessments and exit examination have to be qualified for clinical practice in EYS clinics

- Associate physicians have at least 5 years of clinical experience and/or promoted from Physician Grade after assessment by the Internal Medical Board with an examination

- Senior Physicians have at least 10 years of clinical experience and/or promoted from Associate Physician Grade after assessment by the Internal Medical Board with examination and thesis

General Administration

- Legal documentation takes place in the forms of receipts and medical certifications

- Financial accounting is essential to keep track of the company’s financial status

- Logistics department will manage all courier services and other necessary logistics required for EYS

5.2 Collaborators - Phyllis

EYS has collaborations with many different reputable institutions in order to advance the studies of traditional chinese medicine, some examples are Nanyang Polytechnic, National Cancer Centre and many more (Eu Yan Sang, n.d.) They have also formed a partnership with chinese university - Shanghai University of Traditional Chinese Medicine - to offer more learning opportunities in traditional chinese medicine (Eu Yan Sang, 2015). The Ginseng Board of Wisconsin, USA also worked with Eu Yan Sang to distribute its ginseng in 2006.

They also Collaborated with Companies such as Nestle in order to create newer products and merge the two different industry together to come up with innovative products. But mainly it has spent most of its collaborations with subsidiaries and arms or firms in which they acquired through acquisition such as Healthzone Ltd or Weng Li Sdn Bhd (Eu Yan Sang, n.d.).

5.3 VRIN Framework - Phyllis

Description of Resources and Capabilities	Test 1: Valuable	Test 2: Rare	Test 3: Inimitable	Test 4: Non-Substitutable
Brand Strength	✓	X	✓	X
Collaboration with Institutions	✓	✓	X	✓
Collaboration with other Companies such as nestle	✓	X	X	✓
Having multiple arms	✓	X	X	X
Physical resources: Factories	✓	X	X	✓
Multinational Presence	✓	✓	✓	X
Certifications	✓	✓	✓	X

As seen from the VRIN Framework, EYS has decent resources and capabilities that are competitively superior, moreover, their many certifications supports them and proves that they are of a high standard and differentiates themselves from their competitors which gives them a competitive advantage

6 SWOT / TOWS (Kendra & Rachel)

6.1 SWOT

Strength	Weakness
· Brand leader due to its strong brand equity · Extensive distribution channel · Strong brand loyalist · Quality and safety of products are promised · Positive response from expansion · Strong Global Presence due to expansion into Malaysia, Australia, China, Macau and Hong Kong market. · Established positive relationships with reputable institutions · Strong brand reputation	· Lack of differentiation compared to competitors as TCM products are usually made out of similar ingredients. · Low switching cost as competitors offer similar substitutes at attractive prices. · Difficulty in communicating and changing perception of niche/underserved target market whom are not familiarised with TCM. · Absenteeism of cost leadership strategy in the organizational strategies
Opportunities	Threats
· High brand recognition= able to target a wider reach · Modernization of TCM as MOH is providing additional funds · New innovation of TCM medicines through research and development · Diversification into the healthcare and wellness industry, not just focusing on TCM products and services. · Growing Market as TCM is having a growth in consumers thus, gaining acceptance and recognition.	· Luxury of options with TCM products = high threat of substitution · Changes of customers’ preferences and tastes as western medication is an alternative · Threat of new entrants → TCM has been expected to boost Singapore’s economy thus, having additional fundings from MOH in the TCM industry will be attractive to potential new entrants that are considering to enter the market. · Difficulty in importing endangered species used in TCM.

6.2 TOWS

	Strength	Weakness
Opportunities	EYS can capitalize on their marketing team to efficiently spread brand awareness in the tech savvy Singapore’s market. They can also seek to use their wide business networks to establish a favourable position when collaborating with other businesses to gain a competitive advantage.	One of the main concerns of EYS is the low switching cost amongst customers as the industry lacks of differentiation. Despite being the brand leader, ensuring that the rival companies do not lure over loyal customers is important. Prices are competitive in this industry thus, EYS has to implement strategies to attract and retain these customers.
Threat	The industry is highly competitive with undifferentiated product offerings thus, it is important for EYS to invest heavily on research and development to seek new ways to improve their products and services; gaining competitive advantage that their rivals lack. This gives EYS the upper hand and reduces the threat of falling behind. Another threat EYS faces is when competitors enhance their operational efficiency. With MOH providing additional funds, competitors can take advantage of this situation to enhance their technologies to increase efficiency.	EYS should adopt strategies to minimise their weakness to avoid potential arising threats. This can include educating the underserved segments on TCM and introduce EYS to them to gain competitive advantage. This can include hosting roadshows to offer the underserved segments a trial of TCM with EYS can help to tackle this issue. Not only will this enhance the interaction with the underserved segments, it will also reduce the substitutability of EYS to prevent the threat of rivals of having better service offerings.

7 Current Company Strategy (everyone)

7.1 Analysis of Corporate-Level Strategy

EYS’s corporate-level strategy involves many different strategies such as a growth strategy through backward vertical integration, where they started out by being a retailer of Chinese Traditional Medicines and slowly started setting up and acquiring business operations earlier on in the supply chain such as Weng Li Sdn Bhd, a manufacturing arm of EYS (Eu Yan Sang, n.d.). They also focus on new product development through research in their current market seen in the “Launch of new innovative product offering - American Ginseng Tea” (Eu Yan Sang n.d.) as well as their efforts made by collaborating with many different educational institutes for research and development.

However, later on in the life of the company and in the previous few years, they have applied a Global Strategy where they diversified to other markets through market expansion seen in the “Approval of our flagship products Bak Foong Pills (women’s wellness product) and Bo Ying Compound (infants’ wellness product) for sale in China” (Eu Yan Sang n.d.). And how “Eu Yan Sang enters Thailand in November through a distribution partnership” (Eu Yan Sang n.d.) as well as how “Eu Yan Sang entered the Australian market with integrative health clinic services under the "YourHealth" brand of Integrative Medicine Centres” (Eu Yan Sang n.d.).

EYS states that its mission is “Caring for Mankind” and dedicates itself to it by offering quality healthcare and natural products to its customers, we believe that its actions are aligned with their mission as they can be seen focusing on development of newer products and methods through research and development done by collaborating with educational institutes such as Nanyang Polytechnic.

7.2 Analysis of Business-Level Strategy

Presently, EYS’ business-level strategy is a prospector (Miles & Snow 1978). With multiple distribution channels such as clinics, retail and online stores, the company has a broad product-market domain. In addition, EYS has focused marketing efforts on targeting the Millennials through pop-up events which in turn translates into new market opportunities for the brand. Unlike competitors, EYS provides a full range of services thus enhancing customers’ experience. On top of that, EYS is constantly innovating new products to increase sales (Tan, 2015).

Referring to the SWOT analysis, EYS lacks efficiency and has high production costs. Since EYS has high volume of suppliers, they will be able to achieve economies of scale with ease. Therefore in the near future, EYS should adopt the low-cost defender strategy where they focus on improving efficiency in their business programs relative to resources used in implementing them. Being mature on in the PLC, EYS has the financial capabilities and resources to support the investment of this hefty investment which can improve and enhance the shopping experience, as well as allowing EYS to focus on providing their products to consumers at a lower cost.

8. Recommendations & Implementation

Implementation 1: Frontal Attack
Situation Assessment	EYS is currently pricing their products at a market price to compete with their competitors. Currently EYS’s target market is Gen-X but they are looking to expand their market to Gen-Y where they currently have little preference or loyalty to EYS. Online and offline marketing efforts will be implemented to attract new Gen-Y customers.
Target Market	We intend to focus on Millennials customers due to their increasing purchasing power
Marketing Objectives	Aim to attract Millennials to be the new consumer segment of TCM.
Targeting and Positioning Strategies	Have a strong online presence and engage with the Millennials frequently through social media and events.
Incorporating Marketing Mix Components	Product · Engage the Millennials by ensuring that the pictures uploaded are aesthetically pleasing and host online events (e.g. giveaways of EYS products) · Host events and incorporate TCM products with novelty to attract Millennials
	Price · Psychology pricing
	Place · Social media platforms must be updated frequently · Roadshow events to interact with Millennials
	Promotion · Exclusive discounts on EYS products for consumers participating the events · Goodie bags to include small sizes of ready-to-consume TCM products such as bird’s nest · Aggressively advertise on social media to establish a relationship with Millennial customers · Engage in influencers marketing

Implementation 2: Leapfrog Strategy
Situation Assessment	Since EYS is in a mature stage in the PLC, they should put emphasis on defending their position by increasing efficiency based on their high capabilities in obtaining necessary resources. Currently, EYS does not offer much technology-advanced services or products. And since EYS has the necessary marketing and production resources, they will be able to meet the demand for a new generation of services and/or products. Statistics have shown that Gen-Y is more tech-savvy as compared to Baby Boomers, and since EYS target market is Gen-Y, they can leverage on their tech-savvy quality to innovate better services to increase efficiency, as well as marketing campaigns to market new products. We suggested self-checkout stations to be placed in-store, where customers will checkout their own shopping baskets by themselves rather than being reliant on the cashier staff. This frees up the need for multiple personnels in-store that are solely in-charge of cashiering duties.
Target Market	We plan to primarily target Gen-Y customers due to them being more tech-savvy.
Marketing Objectives	Aim to win over customers with our extensive members perks and attract new customers by offering new sign-up perks.
Targeting and Positioning Strategies	Top management should communicate EYS positioning to increase customer satisfaction and provide better customer service experience
Incorporating Marketing Mix Components	Product · EYS to offer better and more convenient paying options at self-checkout stations for customers as compared to competitors (e.g. PayWave, GrabPay) · Additional x1.5 points for members who use self-checkout during off-peak periods
	Price · Price skimming → allow EYS to maximize profits at an early stage before lowering the prices to attract new and price-sensitive customers
	Place · Self-checkout stations to be placed In physical EYS outlets · Pop-up events to increase customer spending during special occasions such as Mother’s Day and Christmas · Vending machines selling ready-to-consume products from EYS (e.g. smaller bottle of bird’s nest so that it will be of a cheaper price)
	Promotion · Have Flash Members Sales that give discounted membership-only prices to different tiers of members (e.g. Bronze-Tier, Silver-Tier, Gold-Tier) to boost customer loyalty and encourage more sign-ups, which will also attract new customers · Using mainly digital marketing and social media to reach out to the younger customers

Appendices

Appendix A: USDSGD Price

	Consumer Segments
	Gen Z	Gen Y (Millennials)	Gen X	Baby Boomers
Demographic	Age	4 - 24 years old	25 - 39 years old	40-54 years old	55-75 years old
	Income and Profession	Students: Low income Part-timers: Low income	Working professionals: middle income	Working Professionals/ New Mothers: High Income	Retired: Middle Income
	Marital Status	- Single - Newlyweds	- Single - Newlyweds - Married with young children	- Single - Married with Children	-Single -Married
	Size of Market Segment (‘000) (SingStat ,2018)	590	875	918	710
Psychographic	Personality Traits	- Active - Creative - Curious - Enthusiastic - Confused - Unconforming - Socially conscious	-Well-educated -Tech Savvy - Task-oriented - Recognition - Confident	- Individualistic - Professional - Time-oriented - Structured - Flexible - Family-oriented	- Resourceful - Self-assured - Disciplined - Relaxed
	Motivations	- Self-discovery	- Self-discovery - Social Status - Achievements - Family	- Social Status - Achievements - Family	- Family - Unfulfilled wishes
	Lifestyle	- Studying - Socialising - Working	- Working - Socialising - Family duties	- Working - Family duties	- Working - Relaxed life
	VALS Framework	- Strivers:	- Experiencer:	- Thinkers:	- Believers:
Behavioural	Benefits Sought	-Energy boost -Improving concentration -Improving hormonal imbalance	-Stress Relief -Energy boost	-Stress Relief -Improving Immunity -Healthy Nutrients for New mothers and infants	-Improving Immunity -Combat pain
	Purchasing power	Low	Medium	High	Medium
	Brand Awareness	Low	Low	High	High
	Brand Loyal	Low	Medium	High	High

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