OSIM International Ltd.

Introduction

OSIM International Ltd is a Singapore based company that started their business by manufacturing electrical and household appliance; however, in recent times, they produce massager chairs so that every individual can enjoy the luxury at an affordable price. In the year 2014, they have incurred a profit of $691 million, which was $648 million in the year 2013 and presently they have 850 stores in Singapore and have more than 4,000 employees ("OSIM International", 2016).

Figure 1: Turnover and profit after Tax of OSIM International Ltd. in million

(Source: "OSIM International ", 2016)

They continuously invest in their research and development for innovative ideas and formulated uShape and uInfinity Luxe and takes initiative for implementation of new technology for enhancing their sales and hence 11online stores across the world. However, this organization is well-known in Asia, 93% of the sales are from these Asian regions, and they are taking effective measures to expand their business all over the world for maximum profitability through their productivity ("OSIM International", 2016).

Figure 2: Turnover by region of OSIM International Ltd.

(Source: "OSIM International ", 2016)

In this report, the business environment of OSIM International Ltd will be discussed that comprises of PESTLE and SWOT analysis along with the marketing strategy that contains the detailed description of the objectives, target market and positioning and market mix. In addition to that, the implementation and control strategies will be highlighted which is followed by the recommendations and conclusion of the entire business report.

Discussion

Product category and their key attributes Foot Massagers and Pregnancy Massage Body Positioning System

OSIM uSqueez Air, OSIM uFootsie and OSIM uSqueez are products that fall in the range of Foot MassagersWei (2016). These products provide reflexology foot massage, soothing warm vibration massage which reliefs the leg pains, joint pains. OSIM International can think about the expecting mothers by introducing a massager helps maintain complete muscular-skeletal alignment of their entire body. They can also design the product in such a way so that that massager can be easily carried by the mothers in house as well in professional workplace.

Back Massagers and other oil massagers

OSIM International Ltd has developed back massagers like OSIM uPapa is used for customizing the massage, which penetrates deep into the muscles and gives relief to their patients from their back pains (Alon & Eugene, 2012). In addition to that, oil massage can be the newly introduce massage products that is not based on the some equipment. () depicts that introduction of magnesium massage will be beneficial for the cancer patients as massaging enhances 11% increase in the number of natural killer cells that destroy cancer cellsand helps in fighting against cancer (Lev & Tsang, 2015).

Neck and Shoulder Massager and massage chairs

Ding and Ding (2012) mentions that to relieve the pain, stiffness and spinal deformity of a spondylitis patient, regular massage have to be provided for recovering from the disease. Furthermore, Hashemi (2016) mentions that OSIM International Ltd took an initiative for designing neck and shoulder massager like OSIM uHug that is also known as OSIM's signature Power Drum-Massage that provides deep tissue relief that they can sell in US.

Handheld Massagers

Slim Belts- Patients, who are suffering from obesity and hence OSIM International introduces OSIM uKimono and OSIM uCorset that breaks down fatty tissue in the tummy and tightens muscles and helps patients to lose weight (Lev& Tsang, 2015). US people eat junk foods at higher rate than any other nation’s people and thus they are more likely to be affected by the obesity and OSIM’s International products can get popularity in US market as well. The concerned organization has to implement innovative BodySculpt Technology so that a firmer and trimmer silhouette body can be obtained.

Others

Norris et al. (2016) illustrate that the blood pressure monitors OSIM manufacturers names OSIM iCheck monitors the blood pressure accurately and body fat percentage conveniently. Air sound and light purifiers like OSIMuAlpine and OSIM uMistDream have Ioncluster technology, Ultrasonic technology through Tru-air purification process that is good for respiration of people. Moreover, they can also introduce hydrotherapy as new products that provide relaxing, deep-tissue massage that will attract customers to purchase this product with sever body ache.

Analysis of Business Environment

SWOT Analysis

Figure 3: SWOT Analysis

(Source:Bull et al.2016)

Strength

Muhamad et al. (2012) depicts that in USA, which is the largest market in the world. USA government also provides high investments on R&D so that OSIM International can innovate new products. In addition to that, Bull et al. (2016) illustrates that their service excellence, brand image and in-depth knowledge of holistic health. Moreover, World Bank declared USA as a high-income OECD economy and the concerned organization can utilize the US government’s fiscal and monetary policy for manufacturing of massaging chairs and products and introduce their brand. 

Weakness

Yuan (2013) depicts that the products OSIM International Ltd manufactures are made up of eco-friendly products and hence is expensive. Niederwieser et al. (2016) depicts that there are several people, who are below poverty line and cannot afford the expensive products of OSIM International even though they have physical problems. Fortuny and Fayos-Sola (2015) also portrays that due to two-tier labor market the bottom line person lacks in education, thus getting skilled people for a new company in US is a challenge.

Opportunity

Nourbakhsh et al. (2013)states that it is an opportunity for OSIM International Ltd to produce their quality products in lower cost so that they can target moderate-income people. Moreover, US can support the new industry during money crisis with the strong national saving. Commodity prices can be reduced for decreasing the inflation rate by the US governing bodies so that the merchandise trade can be enhanced.

Threats

There are some substitutes in the markets like Brookstone, who provide massaging instrument at a low rate compared to OSIM. Wei (2016) also affirms that it is difficult for the OSIM International Ltd to initiate their business as in US there is a problem of flat wage rates, which lead to unemployment and job losses. Therefore, OSIM International not only has to introduce products but they also have to retain their employees.

PESTLE Analysis

Figure 4: PESTLE Analysis

(Source: Taylor et al. 2015)

Political

According to the report of Political and Economic Risk Consultancy (PERC), USA has a strong democratic setupwhere there are small risks of any political factorsand everyone follow general legislations (Zalengera et al. 2014). Jelavic (2016) on the contrast mentions that USA is recognized as the leading superpower in the world and has the potential to safeguard their nation from interventionist policies. As a result, the government allows the OSIM International to expand their business across US.

Economic

The US is considered as largest economy with a GDP of over $16.760 trillion (Huat 2014). Swee (2013) mention that developing healthy lifestyle products will be an opportunity for the OSIM International Ltd in USfree-market economy. US had to face a huge loss in their economy during 2009 recession and hence welcome every organization to expand their business so that they never felt the same experience of lower economy; thus, OSIM International has a golden chance to introduce their business in US. (Huat2014) also depicts that OSIM International owns substantial productive assets and can products their products and the labor cost is less compared to other nations.

Social

Klinenberg (2015) depicts that one of the advantageous social factor in US market for OSIM International is US faces the problem of an aging population.OSIM International thus targeted education and healthcare system where they can sell their products so that aged people can get relief. As a result, they have manufactures a range of massage chairs so that people can resolve their fitness ailments through their products- Massage chairs, Back massager, foot massager, handheld massagers and neck and shoulder massagerscan be great opportunity for OSIM.

Technological

OSIM International Ltd has 100 plus engineers and professionals for developing the innovative products so that more customers can be attracted towards their products. Ma et al. (2016) also depicts that they have over 1000 innovative products like sleep Well Travel pillow OSIM uSnooz Neck Pillow and OSIM Sona Pillow, OSIM ulnfinity, uDivine S are designed according to the human body contours that reflect most advanced technology. Ma (2015) mentions that innovation and technology are the cornerstones of the US and OSIM International can utilize this aspect by presenting their innovative massage equipment.

Legal

Tsai (2014) illustrates that the government in US supports transparency and fulfills favorable legislations and regulationsin a business. E-commerce business gains a huge popularity among the individuals and hence so, OSIM International can sell their product through online to every customer who cannot visit the shop physically. Ding and Ding (2012) depicts that Evidence Act, Content Regulation, Tax Issues are some of the supported legal laws that OSIM International taken into consideration for Import and Export Procedures. Moreover, Electronic Transactions Act, for safe and secures money payments, federal taxation legislation for fulfillment of tax are some of the legal perspective that ISIM International has to follow.

Environmental

Atighechian et al. 2016 portrays that US is facing a challenge of Industrial Sites and Illegal Waste Dumping, poor air and water quality and lesser green space.The Water Pollution Control and Drainage Acthelps them solving the water-related issues and the Ministry of the Environment and Anti-Pollutiontakes initiatives so that the air quality can be engaged and the problem of climate change and global warming can be diminished. In addition Azizi et al. (2014) demonstrates that OSIM International always use eco-friendly products that are good for health. This organization firmly believes in recycling and reusing and as a result, there is less impact on the forest resources. 

Development of Marketing Strategy 

Description of the objectives

Hashemi (2016) mentioned that OSIM is committed to their customers and works for fulfilling the demanding health and safety standards in Singapore and across the world. Lev and Tsang (2015) further analyses that their strategy is to covers all production cycle, product design, research & technology, manufacturing units and customer services. Tabron et al. (2013) stated that the concerned organization not only values the final products but it also values the raw materials that their suppliers have provided to them. Obembe et al. (2014) demonstrates that OSIM International audits throughout the supply chain and illustrate their results to the deign team for the best quality products to their clients.

Target market

Target groups	Products where they get interest
High income group	Their healthcare products like Massage chairs, Sleep Well products, Slim Belt products, Air and Light purifiers are used by the highly income groups.
Aged people 60-85years (especially patients)	Their medical massager products will purchase these products as doctors recommend it for them and they will be beneficial by using these products.
Middle aged people 25-55Years	OSIM International has other two sales platform- TWG Tea and GNC.Low-income group can consume their handcrafted tea blends and supplements products like tea, like Triflex™, Fish Oil and Mega Men® that enhances the health of their consumers.
Healthcare Associations	OSIM International can target the health care association for better profitability as US spends a huge expenditure on the good health of their nation’s people.

Table2: Target Market of OSIM International

(Source: Created by author)

Positioning

The market position of OSIM International is one of the leading brands in the healthcare sector; however, they are looking to gain the same reputation in other continents by improving their business. OSIM International already manufactures a unique product in every price range according to the facilities the product offer. Van der Zanden et al. (2014) enlightens that, in massage chair category, rollers, motors and electrical controls are the new-patented massage mechanisms that further helps in their unique product selling strategy.

Development of Marketing Mix Strategy 

Price

The price of the chairs in OSIM is high that cannot be afforded by some people and hence, they should develop new products that can be affordable for those people. Moreover, Leonidou et al. (2013) also depicts that the cost of the products should be developed by determining product development costs and studying pricing policies and strategies.

Pricing Strategy	Implementation of the strategy	Impact on the pricing strategy
Penetration Pricing	This pricing strategy will be implemented when new products are intended to be launched by the organization.	People will came to know about the company’s product initially and theirfunctionalities so that they will use the products
Competition Pricing	OSIM International Ltd. Implements this pricing strategy for a competitive advantage from Ogawa world and Gintell.	Customers of competitors company can also purchase products from OSIM International and can use their facilities.
Premium Pricing	Products with high quality raw materials and the facility they will provide to people indicate the exclusive quality of the products.	This strategy will attract interested customers to use their premium products like highly quality massage chairs.

Table2: Pricing strategy of OSIM International

(Source: Created by author)

Product

In this context, (Taylor et al. 2015) depicts that OSIM International have to develop new products through their research and development teams. In additional to that, they have Specialty Retail Store, where they have daily sales analysis tea that analyses the maximum old products and trying to develop the sales of the other products. Gordon (2012) also highlights that product-related strategies like branding, packaging, color, weight, labeling and grading are some other components of product marketing mix strategy that the OSIM International must have to be considered. For instance, OSIM uFootsie gives it user an intense traditional foot reflexology massage to revitalize the blood circulation of legs so that their customers will feel better.  

Promotion

They already have 40,000 chair stores in Asia and recently opened 17 tea salons in the same region along with some locations in the Middle East. Menegaki (2012) depicts that promotion can be effectively accomplished through three major aspects- Advertisements, public relations and sales promotions. Bahadir et al. (2015) states that investing through digital and social media and it helps OSIM International Ltd to enhance their sales. As a result, the concerned organization can print their organizational values and achievements and about their product range through television, radio, newspaper for making the local household people gets knowledgeable regarding OSIM’s products. Moreover, Fan et al. (2015) emphasizes more on the public relations and states that effective public relations and helps in helps building a positive public image in the society. Chikweche and Fletcher (2012) affirms that, conducting public health campaigns and other cultural activities related to health will help OSIM International to set a better public relationship in the society. Lastly, free merchandises, canvas bags and discount coupons will also help the organization to promote their products more in their existing as well as in the new places.

Place

In order to enhance their sales in other places too, they must know the cultural beliefs those countries and the customer's medical demand reflects. OSIM International Ltd can easily sell their products in developed countries; however, developing countries like Africa and urban areas of other continents cannot be targeted through their premium products (Usman, et al. (2012). In those circumstances, OSIM International can choose their GMC and TWG Tea in those areas. The concerned organization has to select place such that the distribution channels and channel members can collaborate with OSIM International for the betterment of their organization.

Design of Implementation and Control Strategies

Narejo et al. (2015) illustrates that control strategies comprise of tracking, monitoring and analyzing the effective strategies for the betterment of the organization. Brown andChandrasekaran (2014) also supports that an organization must have some strategy implementation for evaluating goals and the procedure how to achieve those goals. OSIM International Ltd should develop their collaboration with the other nation’s suppliers and institute so that they can start their business overseas. The concerned organization can also use digital technology to improve the existing products and this can be done with the help of the conducting regular meeting with the staff members and survey from the patients and users at a regular interval of time. Cats et al.(2012) illustrates that OSIM International has developed efficient customer services & maintenance accessibility that is supported by the CRM analysis and feedback that shows the contribution to the community. Strategic Surveillance is the last step for implementation and control strategies that emphasizes on the wide range of eventsoutside and inside theorganization.

Financial statement for expanding the business in overseas special in USA

Financial Business Statement
OSIM International			Financial Statement
Income Generated			Amount (in million Dollars)
Inventories
	Raw Materials		$165
	Finished Goods		$658
	Total		$823
Property and Improvements
	Land and building		$349
	Computer equipment		$110
	Production and engineering		$263
	Lease assets		$94
	Total		$816
Other assets
	Deferred tax assets		$1130
	Income tax payments		$690
	Total		$1820
Deferred revenue
	Service		$895
	Product		$331
	Total		$1226
	Grand Total		$4658

Table3: Financial Statement of OSIM International in expansion of business

(Source: Created by Author)

Recommendation

Developing the products range and products quality, OSIM International Ltd should invest more in their research and development departments. Moreover, they can also conduct a survey to native health care centers and can possess knowledge regarding new medical requirements so that they can formulate new products for the patients. They can also conduct regular meetings with their staffs for suggesting new ways for innovative products. Customer social relationship also plays a crucial role in the advancement of an organization with healthcare products; they can participate in campaigns and voluntary works. Customer will be more attractive towards their products if they get attractive discounts and other facilities. Thus, OSIM International Ltd. should introduce customized products design according to individual’s requirements, free of charge home delivery and free maintenance service for attracting more customers. They should also introduce exclusive spa and massage services in US at affordable cost so that more people can have their services.

Conclusion

The report is based on an organization that is established in Singapore and they have decided to expand their business to overseas. One such organization is OSIM International Ltd that intends to make healthcare products like massage chairs, foot massage, neck and shoulder massagers and others. Introducing new products in overseas like in US, it would be beneficial for the concerned organization. The reports firstly illustrate the product category and their key attributes so that it can be evaluated whether the products can be sold in the mentioned places.  In addition to that, the implementation and the control strategies were also illustrated along with the marketing mix strategy. It is thus concluded from the entire report that the organization can marketed their products in those overseas nations.

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