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.
5
6. Similarities & Differences Of Both Business
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.
6
7. Current Branches 1
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
7
14. 4. Pricing Power Price taker
Weak pricing power
Causes the business have
no ability to charge the
price higher than the
market price
unreasonably, lest
customers will turn to
other competitors
Price taker
Weak pricing power
Constrained to follow
the market price
determined by supply
and demand
5. Other
Characteristics
Substitute goods
Modern Medicine
Substitute goods
Modern Medicine
6. Verdict Monopolistic Competition Monopolistic Competition
14
15. CONCLUSION
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
15
16. 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 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.
16
38. Reference
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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
[Personal interview].
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