International Business: External Environment Analysis, Competitive Environment, Value Chain Analysis, and International Business Strategy

This report analyzes the external environment and competitive landscape of Eu Yan Sang, a traditional Chinese product manufacturing company. It discusses the political, economic, social, technological, legal, and environmental factors that influence the company's business in Singapore. The report also examines the competitive rivalry, power of suppliers and buyers, threat of substitution, and threat of new entry in the pharmaceutical industry. Additionally, it provides a value chain analysis of Eu Yan Sang's operations and discusses the company's international business strategy. Recommendations for marketing strategies and product diversification are provided.

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Table of Contents
Introduction......................................................................................................................................2
Discussion........................................................................................................................................2
External environment analysis.....................................................................................................2
Competitive environment............................................................................................................4
Value chain analysis....................................................................................................................6
International business strategy of the organisation......................................................................8
Recommendation.............................................................................................................................8
Implementation framework.........................................................................................................9
Conclusion.....................................................................................................................................10
Reference.......................................................................................................................................11
Appendices....................................................................................................................................13
Appendix 1.................................................................................................................................13
Appendix 2.................................................................................................................................14
Appendix 3.................................................................................................................................14
Appendix 4.................................................................................................................................15
Appendix 5.................................................................................................................................16
Appendix 6.................................................................................................................................17
Appendix 7.................................................................................................................................18
Appendix 8.................................................................................................................................19

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Introduction
Eu Yan Sang is a traditional Chinese product manufacturing company originated from
China in 1879. The company is fully focused on providing medicinal facilities to mankind and
during the Opium War in China served a great for eradicating the addiction (Weeks 2015). This
Chinese clinical service organisation is presently operated its business from Singapore and has
more than 230 retail outlets in most of the South-East Asian market along with China and
Australia (Yew and Gomez 2014). Based on this background, this report aims to explain the
external and competitive environment that influence Eu Yan Sang to run its business in
Singapore and also emphasising on the international business strategy of the organisation and
suggests recommendations.
Discussion
External environment analysis
Elements Analysis
Political  Singapore witnesses high stability in politics with an
average point of 1.22. It confirms the country is suitable
to do business effectively (Appendix 1).
 As per the government effectiveness, it can be seen that
in Singapore there is a gradual change in the power of the
government and the recent report shows that the average
value hits 2.15 points that points out strong government

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effectiveness within the country (Appendix 2).
Economic  Economic growth of the country is highly dependent on
its business and industries. Since 2010 a sharp and
continuous growth is existed within the country with an
average value of 6.6% that identifies the positive
situation for business (Appendix 3).
 Sky rising growth in the GDP refers to the better business
environment and opportunities in Singapore. The average
GDP growth value is 41.96 billion Singapore dollars
(Appendix 4).
 Control on the rate of inflation also helps the country to
set up a business friendly atmosphere in Singapore where
the average value of inflation rate is 2.58% (Appendix 5).
Social  Putting emphasis on the employment, medical facilities
and education create better social structure in Singapore
focusing on best human resource development program.
 Low unemployment rate with an average of 2.34%
proves the possible skilled workforce in Singapore that
can be beneficial for the business (Appendix 6).
 Moreover, the life expectancy ration also proves the
development in social life that is another major factor for
good human work force.
 Growth in the percentage of literacy rate is also a

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contributing factor for making healthy business
environment in Singapore (Appendix 7).
Technology  One of the main reasons for development in the socio-
economic aspect in Singapore is the incorporation of
advanced technology.
 Smooth communication and connectivity help to ease the
situation that is further boosted by the social networking.
 Household broadband user penetration rate is over 70%
which is also beneficial for e-commerce and B2B
business facilities (Yang et al. 2015).
Legal  The government interference in business is less and a
flexible business environment has been prevailed for the
corporate organisations.
 Due to the advent of technological advancement, the
government also implements some e-commerce
regulations besides the regular business acts.
 Electronic Transaction Act, Intellectual Property Rights
and Content Regulation are the primary e-commerce
regulations (Bali et al. 2016).
Environmental  Immense concern for preserving and safeguarding the
environment is considered to be one of the major aspects
for doing business in Singapore.
 Besides this, the Ministry of the Environment and Anti-

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Pollution Unit focuses on the quality of environment
intensely.
Competitive environment
Elements Explanation
Competitive rivalry  Dynamic and huge exposure in the Singaporean health
care and pharmaceutical industry paves the way for intense
competitiveness in the market.
 A number of giant pharmaceutical agencies are existed in
the Singaporean market such as Tessa, Viiv which is a
subsidiary of GSK and Ipsen (Gomez and Tuan 2014).
Power of suppliers  Due to the magnitude of the pharmaceutical and helath
care industry, the suppliers also enjoy immense power in
terms of switching their business partners effectively.
 In case of the Chinese medicine industry also there are
numerous pharmaceutical companies doing business in
Singapore. As a result of that the power of the suppliers is
bigger than the pharmaceutical companies.
Power of buyers  Changing in the behaviour of the Singaporean customers is
always posing great threat for the pharmaceutical
companies especially who are belonged to the traditional
medical services.

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 Despite of that, Eu Yan Sang has a strong customer base
that helps the company to settle down more extensively.
Threat of substitution  Threat of substitution is always considered to be a great
threat in Singaporean pharmaceutical industry.
 For Eu Yan Sang, thereat from the traditional Chinese
medicine companies or other pharmaceutical companies
has always been a serious concern.
Threat of new entry  Singapore has become a hub for traditional Chinese
medical facilities. Therefore, not only the locals but
international visitors are also seeking for better treatment
facilities. As a result of that it creates enough exposure for
the global pharmaceutical companies to enter in
Singaporean market directly or in joint venture (Chong et
al. 2014).
Value chain analysis
Elements Activities
Inbound logistics Eu Yan Sang maintains a high quality of
relationship with the suppliers and puts emphasis
on the Good Agricultural Practices (GAP)
especially the factories of Hong Kong and
Malaysia (Euyansang.com 2015). In this regard,
the manufacturing plant in Hong Kong is certified

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by the Therapeutic Goods Administration (TGA) of
Australia and the Malaysian plant gets Malaysia
Ministry of Health certificate.
Operations The manufacturing products are mainly supplied
from the plants of Hong Kong and Malaysia. Those
manufacturing facilities are the primary operational
warehouse for Eu Yan Sang.
Outbound logistics As far as the outbound logistic is concerned, Eu
Yan Sang has both the wholesale and clinical
facilities where the customers can get prescribed
medicines. However, the Australian wholesale
system is facing problem in recent times. On the
other hand, there are total 30 clinics in Singapore
and Malaysia in addition with 2 premier clinics in
Singapore (Euyansang.com 2015).
Marketing and sales Blending the traditional Chinese medicine practices
with the western medical sense is considered to be
a major factor for the reviving the market for Eu
Yan Sang. Moreover, putting emphasis on the
package design is also an important facet for Eu
Yan Sang.
Service Generally Eu Yan Sang tries to provide best
service to the patients and customers with their
quality medical products and therapy. The western
medical practices help the company to elevate the

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business into international level.
Human resource management Recruiting good quality medical practitioners with
proper knowledge and certificate in traditional
Chinese medicine is the top priority for Eu Yan
Sang. Besides this, for marketing and in-house
activities there are also screening and training
facilities for the aspirants.
Technological development For technological development Eu Yan Sang has a
Scientific Advisory Board (SAB) with members
from domestic and international institutions,
universities and clinical practices
(Euyansang.com 2015).
Firm infrastructure There is a thorough chain of command in Eu Yan
Sang where Tonya Tan is the GM of Corporate
Business Development, Lelaina Lim is the CFO
and Nicholas Loh holds the office of Legal and
Corporate Secretariat (Euyansang.com 2019).
International business strategy of the organisation
As far as the international business strategy of Eu Yan Sang is concerned, it can be stated
that the company is moving towards establishing internalisation of its business. Therefore, the
company follows transnational international business strategy where the services are originated
from China but Eu Yan Sang is able to adjust its business with the local market needs.
Therefore, intertwined the traditional herb manufacturing techniques with western technologies

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is the most effective measure for Eu Yan Sang. Besides this, the company also emphasises on
the packaging so that it will be more attractive and appealing.
Recommendation
 In this regard, the most important recommendation is related to the marketing strategies
of Eu Yan Sang. As per the report, the Australian business of the company is facing
severe threats due to the immense competitiveness. It requires further introspection into
the matter. Therefore, the social media marketing is considered to be the best shot for Eu
Yan Sang to retain its market and expands it further.
 Moreover, product diversification is also referred as a significant approach for the
organisations to sustain business activities internationally (Bowen, Baker and Powell
2015). Henceforth, enlisting creative products or redefining the existing service will
contribute a lot to the business opportunities of Eu Yan Sang.
Implementation framework
Aims Action Responsible
person
Expected
outcome
Timeframe
Maximising
customers
Analyse the target
customers and re-
fix it.
CEO
Marketing team
Increase the
number of
customers up to
10%.
1 months
Analysing the
competitors
Market analysis Marketing team Find out the flaws
within the existing
business
3 months

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framework
Engaging more
customers
internationally
Introducing social
media marketing
Marketing team
IT department
Finance team
Expand the
business up to 5%
within 1 year
3 months
Offering new
products and
services
Product
diversification
strategies
R&D team
Operation and
manufacturing
department
Marketing team
CEO
Introduce three
brand new
products based on
the customer
behaviour
1 year
Conclusion
From the above point of view, it can be argued that the external environment and existing
market facilitates heavy challenges for the healthy business initiatives for Eu Yan Sang. The
organisation has a good number of dedicated customers but the numbers must be increased so
that it will help to expand the business further. Therefore, it can be concluded that the report
rightly points out the issues that the organisation is facing and provides recommendation that can
revamp the market capitalisation for Eu Yan Sang effectively.

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Reference
Bali, A.S., McKiernan, P., Vas, C. and Waring, P., 2016. Competition law, regulation, and trade
implications for productivity and innovation in Singaporean manufacturing SMES. Competition
law, regulation and SMEs in the Asia-Pacific: Understanding the small business perspective,
pp.211-229.
Bowen, H.P., Baker, H.K. and Powell, G.E., 2015. Globalization and diversification strategy: A
managerial perspective. Scandinavian Journal of Management, 31(1), pp.25-39.
Chong, J., Smit, W., Menkhoff, T., Clayman, C. and Eu, R., 2014. Building a Successful Brand:
The Story of Eu Yan Sang. In Catalyst for Change: Chinese Business in Asia, pp. 213-229.
Euyansang.com, 2015. Annual report-2015. [online] Euyansang.com. Available at:
https://www.euyansang.com/on/demandware.static/-/Sites-EYSI_International-Library/default/
dwdb7e27bc/pdf/20151015-eysi-annual-report-and-related-documents.pdf?
version=1,446,779,894,000 [Accessed 21 Mar. 2019].
Euyansang.com, 2019. Eu Yan Sang Board & Leadership. [online] Euyansang.com. Available at:
https://www.euyansang.com/en_US/board-%26-leadership/eyscorporate15.html [Accessed 21
Mar. 2019].
Gomez, E.T. and Tuan, W.Y., 2014. Family Firms and Brand Products in Malaysia: Originality,
Productivity and Sustainability. The Copenhagen Journal of Asian Studies, 32(1), pp.76-98.

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TheGlobalEconomy.com, 2019. Singapore Literacy rate. [online] TheGlobalEconomy.com.
Available at: https://www.theglobaleconomy.com/Singapore/Literacy_rate/ [Accessed 21 Mar.
2019].
Weeks, J., 2015. In name and concept: The global uptake of the movement for integrative
medicine and health. Global advances in health and medicine, 4(5), pp.7-9.
Yang, K.C., Chye, G.N.S., Fern, J.C.S. and Kang, Y., 2015. Understanding the adoption of
mobile commerce in Singapore with the Technology Acceptance Model (TAM). In Assessing the
Different Roles of Marketing Theory and Practice in the Jaws of Economic Uncertainty (pp. 211-
215). Springer, Cham.
Yew, J.L.K. and Gomez, E.T., 2014. Advancing tacit knowledge: Malaysian family SMEs in
manufacturing. Asian Economic Papers, 13(2), pp.1-24.

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Appendices
Appendix 1
Figure 1: Political stability in Singapore
(TheGlobalEconomy.com 2019)

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Appendix 2
Figure 2: Government effectiveness in Singapore
(TheGlobalEconomy.com 2019)
Appendix 3
Figure 3: Economic growth in Singapore
(TheGlobalEconomy.com 2019)

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Appendix 4
Figure 4: GDP growth in Singapore
(TheGlobalEconomy.com 2019)

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Appendix 5
Figure 5: Inflation rate in Singapore
(TheGlobalEconomy.com 2019)

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Appendix 6
Figure 6: Unemployment rate in Singapore
(TheGlobalEconomy.com 2019)

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Appendix 7
Figure 7: life expectancy in Singapore
(TheGlobalEconomy.com 2019)

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Appendix 8
Figure 8: Literacy rate in Singapore
(TheGlobalEconomy.com 2019)