2. Table of Contents
No. Title Page Number
1. Cover Page 1
2. Table of Contents 2
3. Summary 3
4. Research Report
A. Brief Bio Of The Businesses
B. Comparative Analysis
4 14
5. Conclusion 15 16
6. Recommendations 17 21
7. Appendices 22 37
8. References 38 39
2
3. SUMMARY
This report is a comparative analysis of two Chinese medical herb businesses in
different geographical locations. The chosen industry is known to have an
uninterrupted history of development dating back to thousands of years, in China
and other parts of the Far East. The selected Chinese medical halls are Poh Aun
Tong Medical Hall in Georgetown, Penang and Huah Shan Medical Hall in
Klang Valley, Selangor. Interviews have been conducted in each of the respective
medical halls in order to obtain further information from both businesses. The
collected information has been analyzed, and the analyses have been justified
through research carried out with reliable sources in reference. It is concluded
that Huah Shan Medical Hall is more commercially successful than Poh Aun
Tong Medical Hall due to a greater annual revenue, a higher number of
customers and also, a wider variety of goods provided.
3
4. BRIEF BIO OF BUSINESSES
A) Poh Aun Tong Medical Hall
Poh Aun Tong Medical Hall is located at 125, Campbell Street, 10100,
Georgetown, Pulau Pinang, and is a smallscale family business. They are a
traditional chinese pharmacy selling traditional chinese herbs besides providing
healthcare consultation services. The pharmacy was founded in 1945 by Mr.
Chan Swee Foo and was operated singlehandedly by himself. Ms. Chan Soo
Sum, his only daughter, started helping him at the age of 19 and managed to learn
most of the herbologybased knowledge from him. Ms. Chan officially took over
the business in 1990 and has been running the shop since then. She does not have
any employees to help her as she’s able to cope with the workload, and because
employees would need certain traditional Chinese medicine (TCM) licenses in
order to work in the hall.
Poh Aun Tong provides services that most of the pharmacies seem to be lacking
in which chinese herbs could be predecocted or decocted by Ms. Chan so that
customers are able to get the most out of the herbs as she understands that her
customers might be very busy or lacking in knowledge on the decocting of herbs.
The majority of her customer are customers who have patronised this business for
many years. According to Ms. Chan, there will be no more than 10 customers
visiting her shop daily and that most of her customers are adults and senior
citizens. She believes that sooner or later, TCM will be substituted by Western
medicine. Furthermore, there has been no changes or developments in her family
business as she thinks that she will have to retire in few years time and her only
intention is to provide her services to the residents of Georgetown.
4
5. B) Huah Shan Medical Hall
Huah Shan is currently located at No.33, Jalan USJ 10/1E, 47620 Subang Jaya,
Selangor Darul Ehsan. They are a modern chinese pharmacy which provides
healthcare consultation services and also sells traditional chinese herbs. Huah
Shan’s main branch is located in Taman Megah, SS 2 where Mr. Lee worked at
for 8 years. The main branch was founded in year 1985 by Mr. Lee Lap Man and
was operated single handedly by himself. Since young, Mr. Lee desired to
become a chinese physician mainly due to his strong TCM background and his
father’s influence, who was also a Chinese physician. Today, there are a total of
ten employees being employed to help him manage two of the shops. He runs his
business in such a way that he will diagnose patients and delegate that his
employees prepare the medicines or herbs to the patients based on the
prescriptions issued by him.
Moreover, Huah Shan provides services such as acupuncture and cupping
therapy. Unlike the other modern chinese pharmacies whose business models are
moneydriven as they are more focused on processed and packaged products.
Surprisingly, their best selling products are herbal soup packs and dry herbs such
as Bai Qu Cai. Besides that, utensils meant for decocting chinese medicine are
being sold here. The price range of their products is as low as RM 1 up till RM
3000. According to Mr. Lee, the minimum capital needed to start this TCM
business amounts to RM 200,000. An average of 20 customers are expected daily
and 30 customers during peak seasons such as durian harvest seasons. Most of his
customers are adults and senior citizens. Mr. Lee believes that TCM will not be
substituted by Western medicine in the future as TCM has centuries of historic
culture and believes that every genre of medicine has its own benefits.
Similarities & Differences Of Both Business
5
6.
Poh Aun Tong Medical
Hall
Similarities Huah Shan Medical Hall
Shortsighted Future Plan Shortsighted
Local Customer
Senior Citizens
Targeted Market Local Customer
Senior Citizens
Poh Aun Tong Medical
Hall
Differences Huah Shan Medical Hall
Founder
Mr. Chan Swee
Foo
History
Emigrant from
China
Took over by Ms.
Chan
Operate single
handedly
Founder & History Founder
Mr. Lee Lap Man
History
First shop in SS2
Chinese Physician
Father
Determination to helping
the poor
125, Lbh
Campbell, 10100
Georgetown,
Pulau Pinang
Location No.33, Jalan USJ
10/1E,47620 Subang
Jaya Selangor Darul
Ehsan.
Current Branches 1
6
7. Workers Ten
Chinese Herbs
Types of Products Sold
&
Services
Packaged Herbs
Utensil
PreDecocts Herbs
Services Acupuncture
Cupping Therapy
Everyday
10 am to 7.30 pm
Business Hour Monday Saturday
9 am to 8 pm
Second generation is
currently operating the
business
Business Operation Owner is an experienced
Chinese physician.
Around 10 Number of customers Around 20
Internet blogs
Newspaper
articles
Media None
Old signboard
Antique cabinets
Shop Layout &
Atmosphere
AirCondition
Tempered Glass
Around RM 180,000 Annual Revenue Around RM 400,000
Comparative Analysis Between Poh Aun Tong
Medical Hall & Huah Shan Medical Hall
7
13. Competitive Traits Poh Aun Tong Medical Hall Huah Shan Medical Hall
1. Number of
Competitors
5 to 10 within the immediate
area
10 to 15 within the immediate
area
2. Barrier to Entry Weak Barrier to Entry
Firms easily enter and exit
the market
Legal barriers which are
regulated by the
government, such as
patents
No firm control on
majority of raw materials
needed to produce a
product
Weak Barrier to Entry
Without any strategic
moves because they do
not actively advertise
their product
Not able to produce its
goods at gradually low
costs over the long run
3. Differentiated or
Standardized Products
Differentiated Products
Rare traditional chinese
herbs
Pearl Powder
Differentiated Products
Cooking Utensils
Groceries
Packaged antiaging
supplements
4. Pricing Power Price taker
Weak pricing power
Price taker
Weak pricing power
13
15. Based on the comparative analysis, it has been concluded that Huah Shan
Medical Hall in Klang Valley is more commercially successful as compared to
Poh Aun Tong Medical Hall in Georgetown, Penang. This statement has been
supported by evidences obtained through throrough research and critical analysis
based on economics principles.
Firstly, Huah Shan Medical Hall has two outlets, with their main outlet is located
at Taman Megah, Petaling Jaya and the second outlet being located in Subang
Jaya, Klang Valley. As for Poh Aun Tong Medical Hall, the business has
continued to operate within a single outlet for a period of more than 70 years.
Hence, with 2 outlets with each operating at different locations, the amount of
income and the business’s annual revenue figure of Huah Shan Medical Hall is
reported to be higher as compared to that of Poh Aun Tong Medical Hall. In
addition, the average number of customers who visits the outlet daily for Poh
Aun Tong Medical Hall is estimated to be approximately 10 customers per day,
whereas Huah Shan Medical Hall has twice the amount of customers as
compared to that. Ultimately, a greater number of customers leads to an increase
in the revenues and therefore, the amount of profit generated annually tends to be
higher for Huah Shan Medical Hall, resulting in a more successful
commercialized business within the industry in comparison to Poh Aun Tong
Medical Hall.
Secondly, besides having Chinese herbs as the mainselling products in both
businesses, Huah Shan Medical Hall also provides a wide variety of goods such
as packaged herbal soup recipe, organic food supplement, medical ointment, dry
goods, snacks and more. On the contrary, Poh Aun Tong Medical Hall has shown
a lack in variety of goods and products sold as the business adheres firmly to their
own principles and traditions such that Chinese medical herbs and ointment
remain as their main and only focus in the market. As a result of product
variation in Huah Shan Medical Hall, consumers are provided with a wide range
of choices and are able to purchase according to their preferences instead of being
bounded by limitation with only a single or two options. Hence, it is concluded
that more customers can be drawn to the firm, thereby creating more business
15
16. opportunities to take place in Huah Shan medical store as compared to Poh Aun
Tong Medical Hall.
In conclusion, Huah Shan Medical Store is more commercially successful than
Poh Aun Tong Medical Hall due to the supporting reasons as stated above which
includes a greater amount of income and business’s annual revenue, higher
average number of customers visited daily and last but not least, a wider variety
of goods provided.
RECOMMENDATIONS
After the study was completed, it was determined that the businesses were
lacking in specific areas, which hinders their ability to compete to their full
16
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7. Soo Sum, C. (2015, May 2). History and Background of Poh Aun Tong Medical Hall
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8. Lap Man, L. (2015, May 18). History and Background of Huah Shan Medical Hall
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