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Wai Yuen Tong: A Chinese Medicine Brand Goes International

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Introduction

Wai Yuen Tong: A Chinese Medicine Brand Goes International MGNT2510C Introduction to International Business Project Table of Contents Corporate Profile 3 Location choice 5 Porter's Diamond Model 8 USA: A Strategic Location Choice 8 Government 8 Firm Strategy, Structure and Rivalry 9 Demand Conditions 10 Factor Conditions 11 Related and Supporting Industries 11 International business strategy 13 Mode of entry 14 Implementation 17 Human resources 17 Marketing-4P 17 Corporate Profile Wai Yuen Tong is the first pharmaceutical company in Hong Kong to provide affiliate Chinese medical healthcare services. Its business is mainly in producing and selling of dietary health supplements (herbal supplements) and health products. The Company moved from Guangzhou to Hong Kong in the 1950s, while in 1979, Wai Yuen Tong was formally registered as a trademark in Hong Kong. The Company abides by its corporate values while keeping pace with the fast-changing marketplace. As a result, Wai Yuen Tong has successfully secured its leading position in the Chinese medicine industry. In order to know Wai Yuen Tong more, we need to first know about the characteristics of the Chinese medicine industry. The industry has a tight relationship with regulations and ordinances. In Hong Kong, those generally sold in "health food" products's ingredients will be regulated by "the Chinese Medicine Ordinance" (p. 549) definition of proprietary products, that is purely of Chinese medicines as active ingredients and products for treatment and health purposes. "Wai Yuen Tong" is positioned to meet the needs of different people nowadays, so they have introduced a wide range of products, so that the public can feel the brand new look. Those products including Classic Series, Prophylactic Series, Bird's Nest Series, Beauty & Slim Series, Metro Series and Men's Series. Young Yum Pill of the Class series is one of the exclusive formulas that earn the words of mouth for over a century. Wai Yuen Tong's vision is to develop a local brand with a global presence. ...read more.

Middle

It is forecasted that the number will continuously increase to about 311,800,000 in mid-2011, and to stay third in the world population ranking, following China and India. The U.S. Census Bureau also expects the number of U.S. population will keep growing in the following 40 years and reach 420,080,587 until 2050. Chinese-American is the largest Asian group in the United States. Until 2009, the number of Chinese descent in the U.S. has reached nearly 3.8 million, while the percentage growth of the Asian population equals 2.6%, which is the second fastest-growing minority group in the country. With the population growth, aging population becomes a serious issue for the U.S. The age group 60 or above is predicted to growth by 7.1% from 56,986,401 in 2010 to 112,036,396 in 2050. This issue is additionally expected to offer an advantageous business case for herbal supplements. The growing popularity of natural herbs Also, according to New Report by Global Industry Analysts, Inc, driven by the growing popularity of preventive healthcare and consumers increasing preferences towards natural herbs, the world herbal supplements and remedies market is expected to reach US$22.9 billion8 by the 2010. It is believed that the main factor that triggers the acceptance of herbal supplements to grow is the growing public awareness of health and dietary issues. Increasing availability of information from media sources has enhanced peoples' knowledge about curative properties of different herbs, together with factors such as scientific research, clinical trials backed claims of product safety and efficacy of products, peoples' confidence in herbal supplements has significantly and effectively increased. Factor Conditions The most important advanced factor that we may choose USA is the management staff. It mainly consists of two segments including overseas Chinese and American mangers. American mangers According to Occupational employment and wages by major occupational group, United States 2010, there are 4.7%9 of the overall workforces working in the management occupation group. ...read more.

Conclusion

We believe a higher price will not stop our customers from buying the products since our target market is high income group whose sensitivity to price is low. Promotion We will seek strategic alliance with P&G. The alliance is beneficial to both WYT and P&G. P&G can make use of WYT's technology in Chinese medicine to develop new products in order to differentiate from its counterpart such as Uniliver while WYT can make use of P&G's sales network in US and market knowledge in entering US market. Moreover, WYT has cooperated with P&G before. Strategic alliance is possible. To reach our target customer, we will advertise in magazines that concern about health issues (e.g. Reader's Digest, Cosmopolitan). We will also put our advertisement on various websites. Since the coverage of websites is very large, we can raise public's awareness of our brand. Place We will open a flagship store near China Town in New York. The flagship store can help to build reputation. We choose a location near China Town because we can secure sales from overseas Chinese market to sustain daily operation and collect information of US market at the same time. We will also make use of direct selling and online shopping as they are popular distribution channel in US. When we have built up reputation in US, we will look for franchisee to further expand our market share in US. 1 "Overview of Dietary Supplements", US Food and Drug Administration, http://www.fda.gov/Food/DietarySupplements/ConsumerInformation/ucm110417.htm#what . 2 "FDA Issues Dietary Supplements Final Rule", US Food and Drug Administration, http://www.fda.gov/NewsEvents/Newsroom/PressAnnouncements/2007/ucm108938.htm . 3 "Company Introduction", Wai Yuen Tong's Offical Website, http://www.waiyuentong.com/en_about1.php . 4 "About the Office of Dietary Supplements at the National Institutes of Health", Office of Dietary Supplements, http://ods.od.nih.gov/About/ODS_Overview.aspx . 5 Journal Articles: Alexander Kasterine and Kerry Hughes(2011), " The North American Market For Natural Products" International Trade Centre, 13. 6 Mary K. Muth, Donald W. Anderson, Jean L. Domanico, Jennifer B. Smith and Brett Wendling, "Economic Characterization of the Dietary Supplement Industry", Research Triangle Institute, 5.14-5.16. 7 (1/5/2007),?????????????????,?????? http://www.hketa.com.hk/art_detail.asp?tp=234 8 http://www.prweb.com/releases/herbal_supplements/herbal_remedies/prweb707734.htm 9 http://www.bls.gov/ro6/fax/oes_dfw.htm 10 www.census.gov/prod/2010pubs/acsbr09-15.pdf ?? ?? ?? ?? 18 ...read more.

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