An Analysis on the International Competitiveness of China’s Traditional Medicine Industry Based on the SWOT Model

Abstract

Traditional Chinese medicine is a rarity contributed by Chinese people to the whole human world as well as a crystallization of Chinese people's wisdom accumulated over thousands of years. Since the seventh five-year plan, China's traditional medicine industry has kept fast development, forming its special industrial system and groups. Based on the SWOT model, this paper analyzes the international competitiveness of China's traditional medicine industry in the aspects of strengths, weaknesses, opportunities and threats. As a common analysis tool for corporate strategy research, the SWOT model combines enterprises' strengths, weaknesses, opportunities and threats formed in their internal and external environments to have relevant analysis in order to establish operation strategies conforming to their reality. Nowadays, this model has been widely employed in corporate strategic management, market research and analysis on competitiveness. This paper plans to introduce the SWOT model into the analysis on industrial competitiveness and to have empirical analysis on China's traditional medicine industry. The analysis on strengths and weaknesses are mainly focused on the strength of China's traditional medicine industry and a comparison with other rivals, while that on opportunities and threats is devoted to the changes in the external environment and their potential impact on this industry as well as the establishment of proper industrial strategies based on it (Zou, 2005). 1. The SWOT Model SWOT analysis means analyzing the factors closely related to the subject investigated and setting out them in matrix form in a certain order, then matching these factors with the systematic analysis method for analysis and drawing a series of corresponding conclusions finally. Actually, SWOT analysis is a method to sum up all the internal and external conditions of the object investigated and then to analyze corresponding strengths, weaknesses, opportunities and threats. With the analysis on strengths and weaknesses focused on enterprises' power when compared with their rivals, that on opportunities and threats is contributed to the changes in the external environment and their possible impact on enterprises. However, the same change may bring about totally different opportunities and threats to enterprises with different resources and abilities. Therefore, they have close relations (Song, 2007).