Frontiers in Business, Economics and Management 
ISSN: 2766-824X | Vol. 13, No. 2, 2024 

 

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Analysis	of	Marketing	Competition	in	Traditional	
Chinese	Medicine	Industry	Based	on	Boston	Matrix	
-- Take a Well-known Chinese medicine company A as an example 

Nianzhang Li, Yuchen Jiang, Mengran Zhang, Mingjie Zhu, Zheng Liu 

Shandong University of Science and Technology, Jinan, Shandong 250000, China 

 

Abstract: As the original medical science of the Chinese nation, traditional Chinese medicine is facing new challenges and 
opportunities in the development of the ever-changing times. This paper takes a well-known Chinese medicine company as an 
example, and uses the Boston matrix to analyze the marketing competition of the Chinese medicine company, in order to have a 
more eye-catching development in the new market environment. 

Keywords: Chinese medicine enterprises, Boston matrix, Business operations. 
 

1. Introduction 
The Boston Matrix was created in 1970 by Bruce 

Henderson, a famous American management scientist and 
founder of the Boston Consulting Group. The Boston Matrix 
believes that there are two fundamental factors that generally 
determine the product structure: market gravity and firm 
strength. Market gravity includes the growth rate of sales 
volume (value) of the whole market, the strength of 
competitors and the level of profits. The most important of 
them is a comprehensive indicator that reflects the 
gravitational pull of the market - the sales growth rate, which 
is an external factor that determines whether the product 
structure of the enterprise is reasonable. Enterprise strength 
includes market share, technology, equipment, capital 
utilization capacity, etc., of which market share is the internal 
factor that determines the product structure of the enterprise, 
which directly shows the competitive strength of the 
enterprise. Sales growth rate and market share both affect 
each other, and each other is conditional: market gravity is 
large, market share is high, can show a good prospect of 
product development, enterprises also have the corresponding 
adaptability, strength is strong; if only the market gravity is 
large, and there is no corresponding high market share, it 
means that the enterprise does not have enough strength, then 
the product can not develop smoothly. On the contrary, a 
product with strong corporate strength and low market gravity 
also indicates a poor market prospect for that product. 
Through the interaction of the above two factors, there will be 
four different product types with different properties, forming 
different product development prospects: product groups with 
"double high" sales growth rate and market share (star 
products), product groups with "double low" sales growth rate 
and market share (lean dog products), product groups with 
high sales growth rate and low market share (problem 
products), and product groups with low sales growth rate and 
high market share (Taurus products). This paper further 
analyzes the problems existing in the marketing and 
competition process of traditional Chinese medicine 
enterprises through four different product types. 

2. Boston Matrix Analysis 
After a hundred years of development, Company A has a 

variety of products, and according to its profit and sales 
volume, it can be clearly classified according to the Boston 
matrix. Among them, most of the secret recipe products with 
high market share belong to star products, most of the 
products with higher sales volume and high product 
innovation belong to Taurus products, and most of the 
products with quality problems and high homogeneity belong 
to problem products and thin dog products. 

2.1. Star products 
Most of the first-line products of enterprise A are the 

company's century-old secret recipe products, such as 
Angong Niuhuang Pill, Niuhuang Qingxin Pill and other 
products with a high market share and a relatively stable 
growth rate, and most of them are Taurus products. In 
particular, Angong Niuhuang Pill, as one of the "Three 
Treasures" of Enterprise A, has strong competitiveness in the 
same category and has been in a growth trend, especially after 
increasing publicity, sales revenue increased by 36%, 
becoming the seventh product of over 100 million. This type 
of product is less difficult to market, these high-quality 
products can attract consumers well, and their good medical 
effects can maximize customer retention. 

2.2. Taurus products 
Many of the second-tier products of company A have a high 

market share and rapid market growth, and most of them are 
star products. Since 2014, there have been 26 products with 
annual sales of 10 million yuan, and the annual growth rate of 
Chinese and Western yellow pills and other products has 
exceeded 20%, and the cluster effect of large-scale products 
has been further reflected. In the Taurus products, although 
the contribution of a single breed to the overall sales is small 
and the market share is limited, its sales growth rate is faster 
than that of the first-tier products. Around 1999, the sales 
volume of Liuwei Dihuang Pill did not exceed 100 million, 
but after 2001, it has become an important pillar product of 
the company, and these second-class products may have 
potential pillar products like Liuwei Dihuang Pill. The 



 

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marketing difficulty of Taurus products is also relatively 
small, and its high popularity can form a publicity effect, and 

the scale effect of the product can help enterprise A reduce 
marketing costs to a certain extent.  

 
 

 
2019 Angong Niuhuang Pill sales market share 

 

2.3. Skinny Dog Products 
Most of the first-line products of enterprise A are in the thin 

dog quadrant due to serious product homogenization and 
fierce market competition. Although the growth of Bezoar 
Detoxification Pill has been rapid in the past three years, due 
to the serious homogenization of products, its market share is 
not dominant, and it is between the problem quadrant and the 
skinny dog quadrant. Therefore, the marketing cost of thin 
dog products is higher, and the degree of innovation of 
enterprise products is higher, and if enterprise A wants to 
achieve successful marketing of such products, it should 
increase innovation, develop new products, and improve the 
use of products at the same time, and continuously improve 
competitiveness, so as to attract consumers. 

2.4. Problematic Products 
In January 2012, Company A's fire-clearing tablets were 

found to be unqualified, and in April 2014, the production of 
Rehmannia by a subsidiary of Company A was unqualified, 
which caused damage to the company's reputation to a certain 
extent. In 2016, Company A was named 6 times for quality 
problems, involving many varieties such as white grass. In 
2017, the State Food and Drug Administration of China 
announced a list of 22 unqualified TCM decoction pieces, and 
Company A was also among them. In 2018, due to the 
exposure of the "expired honey" incident, the State 
Administration for Market Regulation of China directly 
withdrew the title of "China Quality Award" of Enterprise A 
and imposed a fine of nearly 14.09 million yuan. Therefore, it 
is very difficult to market the problematic products, and 
Company A needs to ensure the quality of the products in the 
future production, restore the image in the hearts of 
consumers through marketing activities, reshape the 
corporate values, and no longer consume the signboard of the 
century-old brand to maintain the brand image.  

 

3. Summary 
There is a lack of star products in the first-line products of 

enterprise A. In the past six years, the main products have not 
changed, and most of the new drugs developed by the 

company are in the second line, and the single variety has 
little contribution to the company's performance, which 
shows that the company lacks corresponding efforts in 
promoting the second-line products. At the same time, it also 
reflects that the R&D of company A only stays at the 
superficial level such as changing the dosage form, and does 
not develop drugs such as Japan's Tsumura's "Xingxin Pill", 
which can quickly occupy the market. To a certain extent, the 
defects in the product structure reflect the failure of enterprise 
A at the level of business strategy. Too much reliance on the 
original products, negligence in product brand building, lack 
of depth of new product research and development or 
inconsistent with market demand, insufficient promotion of 
second-tier products and intensified competition in the 
industry are all reasons for the decline in the performance of 
enterprise A. In particular, the lack of star products fully 
shows that enterprise A is not enough to invest in problem 
products, and the construction of product brands needs to be 
improved. At the same time, cash cattle products are also 
tending to change to thin dog products, and there is no 
corresponding product in a short period of time to enter this 
area, once the market environment changes, the performance 
of enterprise A will still be likely to decline. In order to 
achieve a stable and effective product portfolio, enterprise A 
should selectively invest resources in problem products, and 
strive to transform some second-tier products into star 
products by increasing R&D efforts, strengthening brand 
building and market cultivation. For lean dog products, 
company A can reduce investment to a certain extent, reduce 
production of these products with very low sales growth rate 
and market share, gradually withdraw or outsource some 
functions, and transfer resources to other products. At the 
same time, enterprises should also appropriately invest in 
Taurus products, such as Liuwei Dihuang pills and other 
products, by seeking differentiation in packaging and appeal 
points, and at the same time increase the distribution of goods, 
extend their life cycle, and provide cash flow for enterprises. 

 

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