OSIM Company Essay
OSIM the well establish Asia healthy life style brand, originated from Singapore. OSIM was founded by Dr Ron Sim Chye Hock in November 1980. Initially derive from R Sim Trading which deal mainly with household appliance. Dr Ron Sim Chye Hock later founded OSIM and eventually changes his focus to creating healthy life style products since he felt a great market potential in home care products in Asia. Dr Ron Sim Chye Hock brought together different equipment manufacturers and introduces OSIM which then receives significant growth to the extent of establishing multiple outlets Asia (straitstime). Having the motto “Inspiring Life” OSIM company has a significant numbers of outlets all over the world (osim)
Situational Analysis on Micro and Macro Factors
In the IT and Health conscious era, companies are trying to find opportunities to stay ahead of other rival companies. Companies have to examine and evaluate their environmental forces and take necessary approaches in order to stay competitive. Micro Factors
Microenvironments are factors closely related to company operations and directly impact the customer experience. OSIM has several factors that affect her greatly. A way to show case these factors are by Michael Porter Five Force Model which is: Competitor, Threat of New Entry, Supplier Power, Threat of substitutes and Customers.
Direct competitors are competitors who have similar products, technology and same target audience. The major direct competitors of OSIM are Ogawa and OTO. Both have a decent market share in the health related appliances. Technologies in their products enable them to remain competitive against OSIM. Their products are much cheaper compared to OSIM, therefore a number of people purchase their products. However by having great marketing senses, consistently earning prestigious award and manufacturing quality products. OSIM is the leading brand of health care appliances. (P)
OSIM also face indirect competitors such Holistic, Chiropractic, self treatments, Traditional Chinese Medicine and western practices. Indirect competitors offer not just the external but also internal treatments like pills and supplements. However these treatments require an appointment, evaluations and importantly time from your busy schedule which you cannot commit to. OSIM products are made portable and simple enough as not to abrupt our daily lifestyle. Threat of New Entry: The threat of new entry is at a minimal since the market is mainly dominated by OSIM, OGAWA and OTO. For a new brand to enter this market they will have to have significant capital, the tenacity to face reputable brand that have a foot holding in Singapore and technologies that surpasses OSIM. Supplier Power – OSIM has several suppliers that are located main in Asia. They are mainly situated in India, China and Vietnam. The Supplier power here has a moderate control on OSIM as they have been supplying OSIM with her products for the past few years.
However by being situated in these developing countries, OSIM is able to reduce cost on labor works on building and manufacturing of their products while still maintaining their high standard of quality products Threat of substitutes – Technological advancement and new discoveries may pose a threat to OSIM. Since the other two major substitutes are OGAWA and OTO, consumer tends to purchase products that are cheaper with a reputable brand name. However, with OSIM high product quality, achievements and awards the threat of substitute is moderately low as consumers are well aware of what OSIM are known for. OSIM can reduce the threat of substitute by improving her customer loyalty. (osim, http://blog.osim.com/) Customers – OSIM originated from Singapore, a first world country strategically place in South-East Asia, OSIM can use it to their advantage.
From word of mouth by someone we know. We are reminded that OSIM offers quality products that had helped people. Having its headquarters in Singapore, OSIM uses this opportunity to exploit Singapore high standards of living and also its world class airport. These customers are the most important resources that significantly affect any company. The issue OSIM is facing is that not every individual need to purchase OSIM products as it can be shared. Most of OSIM massaging chairs are purchased and shared within a household. This causes OSIM some problems as these limits the sales of OSIM products.
Political Factors – The political factor that will benefits OSIM is the government intention to increase Singapore population to 6.9 million by 2030 will widen the market and adversely increase OSIM sales (straitstimes). Economic Factors – A growing inflation or recession can all affect the way consumer thinks and hence affect OSIM ability to get a stable profit. Economic factors are usually unforeseen since forecasts and analyses are affected by global changes and natural disasters. Unemployment levels, money value exchange rates, and the state of the global economy can all help or hurt OSIM. (tradingeconomics)
Social Factors -As the population is getting more educated, we are more aware of our health and well being of ourselves and those of our family members. Singapore is known for its materialistic culture and Singaporeans push themselves in pursuit wealth and happiness (Janus corp). To do so, we tend to work long hours and disregarding our own health to achieve wealth. OSIM may benefit from the health issues that arise from this as the appliances will not hinder the hectic and busy work life of Singaporeans. Technological Factors – Can influence how OSIM maintain and improve her business. A new type of machinery or product created can help OSIM stay ahead of the competitions. Other technological trends may include online transaction, ability to give feedback/complaint, purchase online and monitor the shipment. Demographic Factors – Singapore has an ageing population with low birth rate but more elderly. This target audience, the elderlys benefited most from OSIM products as they often requires health care. The standard of living and health care advances contribute to demographic factors too. (sgplan)
Legal Factors – Singapore have a new policy of Levies and quotas for hiring Foreign Workers. These changes may have an effect on OSIM since Singapore is a multicultural country with a big diversity of foreigners working here. The new policy requires a company to pay a certain amount of cash to have the work pass holder to work for them (mom.gov.sg). Lemon law was implemented to Singapore, the idea of lemon law is to protects customers for not up to standards or defectives goods. However it does not affects OSIM products much as OSIM produces high quality products. (Rikvin)
After gathering the internal and external factors that can affect OSIM greatly, the next step is to do a SWOT analysis. It provides helpful information to make changes in marketing and strategic planning to avoid issues OSIM may face and to exploit the opportunities that may arise. The best way to do so is by reducing the threats and weakness but increasing the strengths and opportunities.
OSIM an extremely strong and recognize brand name.
Reputable brand compared to competitors, customers has a strong trust and confidence in OSIM OSIM has a good history originating from Singapore, has four outlets in Singapore to reach the target audience efficiently. Regular marketing strategy and involvement with the public and community has strengthen the bonds and trust to OSIM
OSIM products are costly compare to her competitors.
Target audience, may shared OSIM products with one another hence lesser sales for OSIM
Competitors may come up with products and marketing strategies that could change the customers brand selection.
A letdown from OSIM may cause customer have enormous discredit ability of OSIM due to her high reputation and achievements.
People are getting more health conscious about themselves could be a opportunity for OSIM to increase her profits. Better technology may entice customer to purchase OSIM products online for its mode of convenience. Due
to the aging population the target audience for OSIM will be wider as this target audience tends to be in need of health appliance. Government intention of having a population of 6.9 million by 2030, currently Singapore population is at 5.3million. Will significantly broaden target audience.
New changes in the policy and regulations may affects OSIM sales. The rising inflation will limit the spending power of the customers; they will in avertedly reduce OSIM sales of products hence less income for OSIM. New technologies and discoveries can cause OSIM products and machineries to be obsolete Shifts in customers selection away from the OSIM’s products
The issue that I would like to point out is that competitors may come up with products and marketing strategies that could change the brand selection away from OSIM. This can lead to a bad long run effect to OSIM. If the competitors can do so and improves their reputation, OSIM will lose their high market share, target audiences and profitability.
My recommendations to avoid the issue at hand is by aggressively and regularly market themselves to the public and dominate the advertisement of home health care appliances. OSIM can also promote health related events like marathons to support and ensure the public their commitment of health care of the consumers. By doing so, they will retain their market share and status; eventually with the increase populations in the years come OSIM will have much better sales due to strong solid foot holding in Singapore. OSIM can also achieve this by constantly receiving and retaining their awards this will ensure the public that the quality standards of OSIM are higher tier compared to their competitors.
I personally consider OSIM to have been a very successful company in establishing themselves in the healthy life style industry. However there are many factors that could positively or negatively affect OSIM, technology
in the hand of OSIM may be advantages whereas in the hand of competitor is disadvantages to OSIM. Even so there are certain approaches and ways to ensure OSIM to be ahead of her competitors. Receiving and achieving multiples awards, milestone and expending globally has proven my theory of OSIM being a successful company.
1. Janus Corporation, Quality of Life in Singapore. http://www.guidemesingapore.com/relocation/introduction/quality-of-life-in-singapore 2. Melissa Tan, Straits Times, 2013 May, OSIM International’s Q1 net profit jumps 13% to $25.1 million. http://www.straitstimes.com/breaking-news/money/story/osim-internationals-q1-net-profit-jumps-13-251-million-20130507 3. Michael E. Porter (1998) Competitive Strategy: Techniques for Analyzing Industries and Competitors 4. Ministry of Manpower, foreign manpower, Levies & quotas for hiring Foreign Workers. http://www.mom.gov.sg/foreign-manpower/foreign-worker-levies/Pages/levies-quotas-for-hiring-foreign-workers.aspx 5. Rikvin Pte Ltd, Singapore (PRWEB) March 13, 2012. http://www.prweb.com/releases/singapore/lemon-law-news/prweb9273922.htm 6. Sudhan P Osim Records Record Profits. http://www.fool.sg/2013/07/31/osim-records-record-profits/ 7. UK Essays, http://www.ukessays.com/dissertations/business/about-osim.php