Qizheng Tibetan Medicine: Sustainable Business Model and Governance Practices | Guanghua Case Study

How does AI Qizheng Tibetan Medicine balance high-altitude ecology with sustainable use of medicinal materials?

Guanghua Case Study

Abstract

Qizheng Tibetan Medicine, as a representative enterprise in China’s Tibetan medicine industry, upholds the core values of “doing good and benefiting others, following the right path, respecting heaven and loving people.” Having rooted and developed in Nyingchi, Tibet for thirty years, it has established a unique sustainable development strategy system. The company employs a closed-loop model of “resource protection—artificial cultivation—industry application,” achieving sustainable use of Tibetan medicinal materials in ecologically fragile high-altitude areas, and exploring and promoting wild nurturing techniques. Its institutional governance system ensures long-term coordination between product development and resource deployment. The company maintains a non-family management path in organizational inheritance, promotes ethnic integration and multi-skilled talent cultivation, and continuously advances employee welfare, Tibetan medical education, and public welfare, building a sustainable business ecosystem. Additionally, through evidence-based medical research, it enhances the global recognition of Tibetan medicine, demonstrating deep participation and innovative practice of Chinese local enterprises in the global sustainable development agenda.

Developed by Zhang Yanlong of Peking University Guanghua School of Management, the case “Qizheng Tibetan Medicine: Sustainable Business Model and Governance Practice” received the Harvard Business Review China 2025 “Ram Charan Award” — Outstanding Award. This article is a refined version based on the case text for readers’ enjoyment.

Professor’s Introduction

Zhang Yanlong

Associate Professor, Department of Organization and Strategy Management, Peking University Guanghua School of Management

Qizheng Tibetan Medicine’s practice demonstrates a deep integration of traditional wisdom and modern business: not only has the enterprise built a sustainable closed loop of “resource protection—artificial cultivation—industry application,” establishing large-scale planting bases in the Qinghai-Tibet Plateau to increase farmers’ income; it also revitalizes millennia-old Tibetan medical wisdom through donations to Tibetan medical schools and innovative cultural dissemination. This case reveals that the root of sustainable development lies in reverence for ecology and safeguarding culture. Qizheng Tibetan Medicine sets an exemplary model balancing commercial benefits, ecological balance, and cultural heritage, offering valuable insights for exploring business paths with humanistic care and long-term competitiveness.

Selected Excerpts from the Case Text

1. Rooted in Nyingchi

Gansu Qizheng Industrial Group Co., Ltd. (Qizheng Group) was founded in 1993. From initial recognition of Tibetan medicine, to improving and inheriting Tibetan medical culture, founder Lei Jufang firmly believes that developing Tibetan medicine can not only alleviate suffering for a broader population but also promote economic and social development in Tibetan areas through sustainable business ecology.

Figure 1: Qizheng Tibetan Medicine’s ESG performance and key operational indicators over the past three years

Source: “Qizheng Tibetan Medicine Environmental, Social, and Corporate Governance Report (2024)”

In 1994, the State Council issued the “Eighth Seven Poverty Alleviation Plan,” proposing to promote development in impoverished areas through “hematopoietic” poverty alleviation. The United Front Work Department of the Central Committee launched the “China Guangcai Program,” encouraging enterprises to invest in old, young, border, and poor areas, driving local economic growth through industrial development. This “teaching a man to fish” philosophy deeply moved Lei Jufang.

In July 1995, Lei Jufang visited Nyingchi, Tibet with an inspection team. She observed that the local economy was underdeveloped, infrastructure was weak, transportation was difficult, and geological disasters were frequent, but natural resources were abundant, including large quantities of wild Tibetan medicinal materials. She believed this “garden of gods” had great potential for Tibetan medicine development and immediately decided to establish a 3,000-mu wild medicinal plant protection base in Zagonggou. That same year, she registered and established the first enterprise in Tibet under Guangcai Program—Tibet Qizheng Tibetan Medicine Co., Ltd., focusing on Tibetan medicine R&D, production, and sales.

Figure 2: Tibet Qizheng Tibetan Medicine Co., Ltd. Nyingchi production base

Gandulong Cave Conference

Tibetan medicine has an independent theoretical system, and its promotion can benefit patients and has industry potential. However, the efficacy of Tibetan medicine relies on rare high-altitude plant resources. Unrestrained industrialization could threaten ecological foundations.

In 1998, to coordinate industry development and ecological protection, Qizheng Tibetan Medicine initiated a traditional Tibetan medical seminar supported by the Tibet Autonomous Region Health Department. The seminar was held at Gandulong Cave in Zagonggou, Nyingchi, inviting authoritative Tibetan medical experts and scholars from five provinces and regions.

Based on the strategic directions agreed upon at the seminar, Qizheng Tibetan Medicine began systematic research on medicinal plant cultivation techniques, integrating ecological protection with sustainable industry development, creating a closed-loop model of “resource protection—artificial cultivation—industry application.”

2. Building a Sustainable Tibetan Medicine Industry Ecosystem

The development of Tibetan medicine enterprises is deeply rooted in ancient Tibetan medical culture and highly dependent on pure, authentic medicinal materials from the Qinghai-Tibet Plateau. Over the years, Qizheng Tibetan Medicine has committed to balancing medicinal quality and ecological protection, aiming to build a sustainable business ecosystem that harmonizes ecological development and local community progress.

Resource Survey of Tibetan Medicinal Materials

Promoting sustainable development first requires accurate resource data support. Qizheng Tibetan Medicine proactively conducted resource surveys of strategic and endangered, rare Tibetan medicinal materials. During the fourth national Chinese medicinal resource survey, Qizheng was the only enterprise representing the country, conducting sampling and surveys in the highest-altitude areas of the Ali region.

From 2018 to 2020, the survey team overcame various difficulties, completing resource investigations of over 30 Tibetan medicinal plant varieties, establishing standards for Tibetan rhubarb and Kuanjin vine, which significantly improved the quality of related medicines.

Figure 3: Experts from Qizheng Tibetan Medicine participating in the fourth national Chinese medicinal resource survey

Subsequently, the company annually selected certain raw medicinal materials, conducted field visits to their main producing areas, and gradually built a resource database, providing data support for standardized management of Tibetan medicinal materials and enhancing scientific and precise resource strategic decisions.

Research on Cultivation Techniques of Tibetan Medicinal Plants

Currently, most ethnic medicinal resources still depend on wild harvesting, with only a few large enterprises establishing their own cultivation bases. This could lead to the near extinction of many medicinal plant species, undermining breeding and genetic research, and hindering industry sustainability.

To protect Tibetan medicinal resources, Qizheng Tibetan Medicine has undertaken systematic technological innovations in resource sustainability. Since 1996, the company has focused on protecting Tibetan medicinal plants, researching cultivation techniques, and wild nurturing, building a comprehensive protection system. It actively explores domestication practices and establishes artificial cultivation and breeding bases.

Sustainable Supply Chain Management

Developing Tibetan medicine is a long-cycle process requiring early resource planning. Qizheng Tibetan Medicine has established a supply chain primarily based on self-built bases, supplemented by bulk market procurement, aiming to balance medicinal quality and ecological protection, and systematically implement sustainable resource management at the source.

Figure 4: Research on base cultivation and wild nurturing by Qizheng Tibetan Medicine

Currently, the total area of protective bases, cultivation research bases, wild nurturing, and artificial cultivation bases exceeds 500,000 mu, distributed across different ecological zones of the Qinghai-Tibet Plateau.

Building a Sustainable Production System

Compared to chemical medicines, Tibetan medicine generally uses whole powder formulations, producing less waste and causing less environmental pollution, with natural green attributes. Nonetheless, Qizheng Tibetan Medicine continuously improves medicinal material utilization rates to minimize waste.

The company has established comprehensive environmental management systems at all production and operation points and uses digital tools to improve resource efficiency, striving for higher standards of sustainable development based on environmental compliance. It also actively participates in formulating and optimizing medicinal standards.

Figure 5: Qizheng Tibetan Medicine’s GMP-compliant clean production workshop

Cultural Heritage of Tibetan Medicine

Folk Tibetan medical education is vital for inheriting core values of Tibetan medicine, maintaining discipline, and meeting healthcare needs in remote ethnic areas. Qizheng Tibetan Medicine has always supported Tibetan medical education through systematic initiatives.

In 2004, Qizheng Tibetan Medicine fully funded the construction of Gongbu Manlongyu Tibetan Medical School in Nyingchi. The school has trained nearly a thousand qualified Tibetan medical practitioners, most of whom return to their hometowns to serve grassroots communities, significantly improving healthcare access in remote areas.

As a complementary measure, Qizheng Tibetan Medicine launched the “Hundred Clinics” public welfare program, providing clinic construction support to graduates committed to returning home and meeting qualification standards. To enable these vocational graduates to further their studies and obtain nationally recognized medical licenses, the company continues to explore pathways for Tibetan medical higher vocational education.

At the group level, Qizheng Group has established multiple funds to systematically support public welfare in western regions, continuously aiding medical, educational, and rural revitalization efforts in Tibetan areas and western China.

Employee Welfare and Ethnic Integration

Since its inception, Qizheng Tibetan Medicine has paid special attention to employee welfare, especially the long-term well-being of Tibetan and disabled employees. After the Nyingchi factory was built, the company provided employees with standalone villa-style housing, designed considering local culture and customs. Retired employees can convert these into family guesthouses for ongoing income.

In health protection, the company established a major illness relief system covering employees and their immediate family members, creating a long-term risk-sharing mechanism that enhances family resilience.

In terms of ethnic integration, the company mandates that senior management include Tibetan employees; management at all levels in Tibet are primarily Tibetan; and similar employment principles are applied in non-Tibetan branches.

3. Sustainable Development Strategy and Governance System

Guided by the core values of “doing good and benefiting others, following the right path,” Qizheng Tibetan Medicine was among the first private enterprises in China to join the United Nations Global Compact in 2004. In August 2016, it was again listed among “Pioneering Enterprises for Achieving Sustainable Development Goals,” exemplifying its contribution to China’s sustainable development efforts and demonstrating its localized practice of the global agenda.

Building a Sustainable Development Management System

Since 2012, Qizheng Tibetan Medicine has systematically built a sustainable development management system based on its practices. The company aspires to become an “excellent enterprise in the entire Tibetan medicine industry chain for sustainable development.” It actively promotes sustainable management, and by 2025, has further upgraded its ESG top-level planning, institutionalizing its continuous development.

Figure 6: Qizheng Tibetan Medicine’s material issues related to sustainable development

Source: “Qizheng Tibetan Medicine Environmental, Social, and Corporate Governance Report (2023)”

As developing Tibetan medicine is a long-term process, resource planning and early deployment are essential. In strategic formulation, Qizheng Tibetan Medicine proposed the “Five Tree” model. Based on its advantages, it has developed 144 reserve varieties and promoted evidence-based medicine transformation. The core principle in product line selection is the “one-vote veto” at the R&D stage: any variety with market potential relying on endangered or scarce resources without prior resource deployment cannot be promoted as a strategic major product.

Organizational Inheritance and Talent Development

Lei Jufang is committed to building a resilient enterprise with long-term vitality, adhering to long-termism. Since 2024, she has systematically promoted organizational youthfulness at Qizheng Tibetan Medicine.

In governance, she aims to reduce dependence on individual leadership by establishing institutional management foundations, ensuring that professional teams sustain healthy development through modern corporate systems. In 2025, Lei Jufang stepped down as chairwoman, succeeded by Liu Keli, who has worked at Qizheng Tibetan Medicine for sixteen years and is deeply influenced by the company culture.

Beyond leadership succession, attracting and cultivating professionals and multi-skilled talents across fields remains a key challenge to support ongoing innovation and growth.

Opportunities and Challenges of Internationalization

In recent years, global interest in natural therapies and holistic health has created broad markets for Tibetan medicine. Its natural philosophy and historical heritage give it cultural appeal, serving as a bridge between Eastern and Western health concepts.

However, international expansion faces hurdles. High regulatory standards and diverse compliance environments increase costs. Moreover, in Western markets dominated by evidence-based medicine, significant resources are needed for systematic clinical research to verify Tibetan medicine’s safety and efficacy—posing major challenges for products based on traditional medical theories.

To capitalize on opportunities, the company is strengthening evidence-based research and international compliance systems to enhance brand influence, streamline customs clearance, and reduce trade costs and policy risks.

Epilogue

In 2025, Qizheng Tibetan Medicine will celebrate its 30th anniversary. Chairman Liu Keli, who took over from Lei Jufang, faces three ambitious goals: doubling performance in pain relief within five years, building a billion-yuan Tibetan medicine industry chain in ten years, and establishing a globally influential Tibetan medical health industry group in thirty years. The Himalayas’ wind continues to blow: can the ancient wisdom of Tibetan medicine truly break through the barriers of evidence-based systems? How will global expansion balance commercial ambitions with ecological capacity? And how can Qizheng Tibetan Medicine maintain equilibrium amid the tension between “Top 500” and “Top 500 years”?

The answer may lie in every collision between technology and tradition, dialogue between ambition and wisdom, and the integration of inheritance and innovation.

(This article contains 3,534 words; the case body alone has 14,518 words.)

Source | Peking University Case Study Center

Review | Tana