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Key Decision: The key decision that the case presents is for Yunnan Baiyao to either enter in to

a partnership with 3M or develop their product portfolio to include new products such as
Key Strengths: The Company has the following core competencies or strengths:
Strong local brand recognition and association as a apply on medicine in case of injury
An established 5Usand One Core and Four Growth Areas strategy by the existing
management is a clear strategy document guiding the organization.
Towards the early 2000s the company was able to establish its retail footprint and its
sales teams, also they have developed their own drug store chain.
Single product focus, expertise in core product and unparalleled almost monopoly
Issues Faced: The organization is facing a set of challenges as the macro environment of china
changes as well as the integration of the Chinese economy with the global economy gives a
level playing field to global competitors.
Maintaining Quality: Lacking quality standards, and facing a depleting resource for its
key product were challenges for maintaining quality of products.
Low R&D and product diversification and also lacking the capability in this field.
Changing land scape of the Chinese pharmaceutical industry and the opening up of the
economy to world trade enabling global giants entry in to the local Chinese markets.
Weak international presence, even in geographically adjacent regions.
Recommendations: In summary recommendations for the organization, the following would be
appropriate course of actions:
The strategy outlined by the One Core and Four Growth Areas is perfect for the
organization and they only need to continue this strategy. Their focus has to be on their
core products and area, and along with that they need to work on other areas as well
They need to invest into ensuring their bioactivity fingerprint standards are in place, and
the depletion of their core resources material is stopped.
In the internationalization aspect of the said strategy, they need to capitalize on the
opportunity they have of entering the European and North American markets along
with the global company 3M.
Lastly they need to have product development, and toothpastes may just be the right
place to start, but yes, like Johnson and Johnson they need to develop a category of
Health Care products. This will be a slow and resource intensive process, therefore they
need to take a one product at a time approach.
Case Analysis: Yunnan Baiyao
Submitted by: Khawar Ali Sher