Eu Yan Sang

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Internationalization Strategy – Eu Yan Sang International Ltd

Integrated Project

Internationalization Strategy

Table of Contents
Content 1. 2. 3. 4. Executive Summary Introduction Financial Analysis Environmental Analysis 4.1 PEST Analysis 4.2 SWOT Analysis 4.3 Industry Analysis: The 5 Forces Internationalization Strategy 5.1 Leadership Challenges for Different Modes Of Entry 5.2 Retail Marketing Mix & Merchandising Strategy 5.3 Internationalization & Ethics 5.4 Organizational Management Conclusion Recommendations Page No. 3 4 5–6& Appendix B 7–8 8 9 10 – 11 11 – 12 12 – 18 18 – 20 20 – 22 23 24 25 – 36

5.

6. 7.

References / Appendices / Supervision Contact Form

Integrated Project

Internationalization Strategy

1. EXECUTIVE SUMMARY
This report would give an overview of the internationalization strategy of Eu Yan Sang International Limited (EYS), a company that specializes in Traditional Chinese Medicine (TCM) that has expanded internationally over the years. Its success in branding, through collaboration with global market players and acquisition of established brand has allowed growth in its market share globally.

EYS has maintained consistent effort in introducing new products and ensuring quality standards of its products through liaison with reputable educational and research centers internationally. This definitely adds value to its brand equity.

EYS has been proactive in enhancing its public relations and performed exceptionally well in its associations with the relevant authorities and thus successfully built its brand recognition during disturbance period like the SARs outbreak in Hong Kong (HK).

It is concluded that Eu Yan Sang would continue to do well in the revolutionary international stage considering its prevailing success factors and abilities in handling future challenges.

Integrated Project

Internationalization Strategy

2. INTRODUCTION
According to Dawson et al, 1998, internationalization of retailing was defined as “the operation, by a firm or alliance, of shops or other forms of retail distribution, in more than one country”. This report was written for the

purpose of discussing the internationalization strategy of EYS, a progressive, global healthcare company with a focus in TCM and Integrative Healthcare (Appendix A: Vision & Mission of EYS).

This report covers a careful analysis of the financial performance of the company 1

over the last 5 years, a methodical examination of the

environments in which EYS operates in and the internationalization strategy of EYS which includes the company’s:   Retail Marketing Mix (incorporating Merchandising Strategy); Ethical Issues involved when operating in the six countries, namely China (i.e., Guangzhou, Hong Kong & Macau), Taiwan, USA, Australia, Singapore and Malaysia; and  Challenges faced in and values derived from management of staff in different cultures. In conclusion, an overall assessment of the company’s key success factors would be given.

1

Company here refers to Eu Yan Sang International Limited and its subsidiaries.

Integrated Project

Internationalization Strategy

3. FINANCIAL ANALYSIS
From the figures shown in Appendix B (calculations, Financial Reports over the last 5 years + graphs), EYS had experienced increasing turnover, gross margin and net profit since 2003.

Turnover Its turnover had increased steadily from S$110.8 m in FY2003 to S$191.5 m in FY2007. This was due to the continual expansion of its network of retail stores and TCM clinics, the introduction of new products and successful implementation of its advertising and marketing strategies.

Liquidity Although there were fluctuations in the current ratio from FY2003 to FY2007, the ratio of 1.52 in FY2007 was still higher than that of FY2003. This meant that the company was in a better position to pay its current liabilities with its current assets as compared with FY2003.

Activity The lower inventory...
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