Research On Profitability Evaluation Of Tong Ren Tang Based On Factor Analysis

The current development of traditional Chinese medicine ushered in a historic opportunity.The party and the government attach great importance to the work of traditional Chinese medicine.The report of the19 th National Congress of the Communist Party of China clearly stated that ’ we must adhere to the equal emphasis on Chinese and Western medicine,inherit and develop the cause of traditional Chinese medicine ’,and incorporate the development of traditional Chinese medicine into the’ healthy China ’ strategy.However,at the same time,in recent years,China ’s pharmaceutical manufacturing industry has been affected by a series of external environment and related policies,such as the renewal of medical insurance catalogue,the negotiation of national drug prices,and so on.Therefore,having enough excellent profitability has become an important guarantee for the survival of enterprises.This paper takes Tongrentang as the research object,aiming at improving the profitability of enterprises,evaluates the profitability of Tongrentang and puts forward relevant countermeasures for its existing problems.First of all,this paper briefly introduces Tongrentang and its industry background.Secondly,this paper has a deeper understanding of the enterprise situation through a brief analysis of the three major reports of Tongrentang in the past five years.Thirdly,this paper constructs a profitability evaluation index system,and uses factor analysis and comparative analysis to conduct vertical comparative analysis and evaluation of Tongrentang ’s profitability,and obtains the ranking of Tongrentang ’s profitability in 60 enterprises in the same industry.It is found that Tongrentang has many deficiencies in improving profitability,such as the decline of core product competitiveness,blind diversification,and high sales costs.Finally,it puts forward some countermeasures and suggestions,such as increasing R&D expenditure,improving product competitiveness,finding out the direction of diversification and optimizing marketing strategy.