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Tows Matrix On Hai O Enterprise Berhad Marketing Essay

Paper Type: Free Essay Subject: Marketing
Wordcount: 884 words Published: 1st Jan 2015

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Strategy formulation is the second phase in the process of strategic management. It produces a comprehensive set of recommendations with supporting rationales that improve the mission and objectives of an organization and help deliver the strategies to accomplish them. In formulation, the current objectives and strategies are being improvised in ways to make the organization more prosperous. A good recommendation should be effective in resolving the identified problem, feasible within a reasonable period of time, practical, cost-effective and acceptable to key stakeholders in the organization.

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The following chapter will discuss on the strategy formulation of Hai-O’s business using TOWS Matrix technique which is based on the intersection of SWOT analysis elements. Both internal and external factors are combined in the TOWS Matrix to create the strategic action plans that should be taken by the Group. This will give a clear suggestion on the type of strategies that should be used and analyze whether Hai-O is currently employing these strategies.

From the TOWS Matrix analysis it is identified that product development is the most common strategy to be employed by Hai-O in its business. Product development is needed in most of the TOWS matrix confirming that products are one of the key elements of Hai-O business. Because of its TCM niche, Hai-O needs to strive to be creative on the product offerings in order to overcome threats that are coming its way.

The second most common strategies are market development and market penetration, due to the fact that TCM is still maturing as an industry although it has started being consumed more than hundreds of years ago. Hai-O’s success in tapping into the Bumiputra market has proven that TCM are also accepted by non-Chinese consumers. The fact that it is becoming more accepted in the Western countries too, gives Hai-O an opportunity to develop the market more and join other TCM corporations to penetrate the market on an international level. Yet in order to penetrate market in this competitive environment, Hai-O needs to have an extensive product offering that is both distinctive and intriguing. Hence, product development strategy is identified to be the prime strategy for Hai-O business.

Market penetration is mostly needed in weakness – opportunities matrix because Hai-O needs to balance its current issues or weaknesses with the opportunities provided in the business environment. These opportunities occur mainly on the market level where traditional medicine is emerging as a very high growing market and is supported by the government. It is only essential that both market development and market penetration have the same numbers of frequency in the analysis because being the market leader in the country, Hai-O does need to employ rigorous intensive strategies in order to promote TCM.

Next in line is the focus strategy. Hai-O needs to focus on its key strengths, for example, its MLM structure. MLM has brought a huge impact on Hai-O’s name, making TCM became more accepted in the Bumiputra market. Therefore Hai-O should leverage in this division and create more business activities through MLM. The Group should also focus in terms of its key weaknesses. By focusing on one business segment than the other may help Hai-O in facing some of the threats that are outside of its control.

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The next most important strategy for Hai-O business is joint venture strategy. This is due to its nature of business that is dealing with traditional Chinese medicinal. Therefore to associate with some of the TCM principals in China will help the Group to reduce some of its business risks and overcome its challenges. However, since there are outrageously high numbers of suppliers from China that may create new market entrance, Hai-O needs to keep employing differentiation strategy for its business as well as products. Therefore differentiation strategy is the next common strategy after joint venture. Hai-O needs to appear as distinctive brand in order to dismiss itself from the typical TCM providers and for the brand to gain a respectful image.

The next important strategies after joint venture are the integration strategies where Hai-O should utilize its strong presence in the market to integrate with suppliers as well as competitors in order to dominate the market. However, Hai-O’s current state of being too dependent on imported products from China especially raw material will impact earnings in the unpredictable economic conditions. Thus, to reduce much dependency on its China’s principals, Hai-O may need to diversify its business at some points. It is potential for Hai-O to diversify into other extensions in the traditional healthcare business for example opening of spa or health centres that offer more services over products.

The rest of the strategies are also potentially effective especially cost and price leadership as Hai-O also ventures into manufacturing business. Although they appear relatively small in number in the strategy distribution analysis, but if they are treated as important as the prime strategy, it will help Hai-O’s business to witness higher earnings in years to come.


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