Financial Analysis And Product Strategy Comparison Research Of Mengfali And OSIM

Mengfali,a famous massage product manufacturer,being listed at the top1massager exporter in China in the past many years,successfully became a public company in2011.With the new changes in the macroscopic environment after2008,the foreign exchange rate and raw material cost increased quickly.Therefore,all profitability index of Mengfali kept going down,the company’s net profit rate in2012was less than2%,far behind the20%of the Singapore public company OSIM international, who also manufactures and markets the similar massage products in Asia.What’s the reason for this big difference?The paper wants to identify the difference and gaps between the two companies and puts forward some suggestions for Mengfali in product strategy and financial strategy.The data mainly comes from the annual reports from2008to2012of the two companies. Some data comes from the Chinese Customs export statistics.The ways and means for macroscopic research are PEST analysis,for Industrial environment research is the Five-strength model analysis,for financial policies and performance research are the financial index system ratio analysis and3D analysis to the financial statements,also the financial strategy matrix analysis.Last,the paper also uses the competence advantage analysis measure to research the basic information between the two companies.Based on above analysis,the paper comes out below conclusions:firstly,in view of product strategy,OSIM has more richful product lines,enjoys more added value due to famous brands.Mengfali has less product lines,mainly the small size massage products sold at low price.Secondly,in view of financial performance,Mengfali has worse performance than OSIM in profitablility,assets operation efficiency,debts management ability and cash creation ability etc.Mengfali need to learn from her competitor OSIM.Thirdly,in view of financial strategy matrix,4years EVA of OSIM are positive numbers while most of those for Mengfali are negative.OSIM shows better OPM strategy than Mengfali.Judging from the five aspects of the profitability,cash creating ability,risk,value creativity and growing capability,Mengfali is not as good as OSIM.Finally,considering the macroeconomic environment and industry environment of Mengfali,the paper provides some suggestions:Firstly,in the financial aspect,Mengfali shall take use of the IPO capital for reasonable investment,in order to increase the ROE.Mengfali shall expedite the capital turnover ratio and brand building speed to increase the profitability.Mengfali shall also enhance her OPM strategy,shall reduce the financial risk level,enhance the cost control ability to lower the cost,thus to create more cash flow.Secondly,in the product aspect,Mengfali shall change her product structure,expand the production capability for high value massage chairs to occupy more markets. At the same time, Mengfali shall expedite the R&D of new products to gain more added value, thus to increase the sales profit and enhance her value creativity.Last, Mengfali shall enrich her product lines, to develop the core products in the "big-health industry", thus to catch hold of the new opportunity of air pollution treatment, long-distance diagnosis and treat etc to develop the healthcare exercising products, air purifiers and intelligent furniture and so on.