Aes Corporation Expansion Plan In Brazil Case Study Solution and Analysis
Introduction
Aes Corporation Expansion Plan In Brazil Case Study Analysis is the largest publishing business with a highest market share in the China's book retail market. CMP has ended up being a specialized info company and a large detailed Science and Technology publishing business through the integration of print media, audio-visual media and the network media.
Crucial Issues
CMP has invested its 60 years journey efficiently, being an effective publishing home, nevertheless, the altering macro market trends and forces bring specific difficulties to the publishing industry in general and Aes Corporation Expansion Plan In Brazil Case Study Help in particular. These elements include;
• Entryway of the new publishing firms in the industry.
• Declining development of the publishing market.
• Market saturation.
• Intro of digital publishing methods
• Enhancement of science and technology.
The transformation of the macro markets have raised a number of questions to the management at CPM that what could be the future of CMP in this situation? Do the long important experience, technical resources and the capabilities of the business could be utilized to strive for the future advancement unceasingly? How could the company sustain its long term competitive position in future?
Situational Analysis
Internal Analysis
SWOT Analysis
Strengths
Aes Corporation Expansion Plan In Brazil Case Study Solution has certain strengths that can be utilized to decrease the dangers, overcome the weak point and obtain the opportunities. Strengths of CMP are offered as follows;
• The long term experience of Aes Corporation Expansion Plan In Brazil Case Study Solution in the publishing market i.e. 60 years permits the company to supply high quality products at a lower cost utilizing its prior experiences.
• The technical resources and capabilities created by its successful journey offer a competitive advantage to CMP.
• Vast product portfolioof CMP helps it to diversify its risk and offer high worth to its clients.
• Strong financial position permits the company to consider several advancement chances with no worry of raising fund externally.
Weaknesses
Along with the strengths, the company has certain weak points which might increase restraints for the company in implementing its advancement program. The weaknesses of Aes Corporation Expansion Plan In Brazil Case Study Solution are given as follows;
• Despite of being a science and innovation publishing company, the business still has standard ways ofpublishing which are not compatible with the growing technological shift.
• CMP highly relies over the Chinese markets for its development. It ought to propose particular expansion plans to prevent its dependence over the Chinese markets to attain long term growth.
Opportunities
Although, the development of the publishing industry is declining considering that 2008, affecting Aes Corporation Expansion Plan In Brazil Case Study Help also, but the growth might be restored by availing particular opportunities provided in the market. The marketplace opportunities for CMP consist of;
• The company might likewise introduce Digital Publishing by utilizing its long term technical experience and a strong client recognition in the market.
• CMP might think about a development program through the growth towards foreign markets in order to reduce its dependence over Chinese markets by utilizing its vast financial resources.
Hazards
The altering macro trends in the market and increasing competitors in the publishing market has actually posed specific hazards to Aes Corporation Expansion Plan In Brazil Case Study Analysis consisting of;( Gurel, 2017).
• Intro of digital publishing i.e. digital libraries might lead to decreasing market share of Aes Corporation Expansion Plan In Brazil Case Study Help due to the consumer shift towards digital libraries.
• The existence of a great deal of rivals in the publishing industry increase the risk for CMP to lose its competitive position in the market, as rivals can get a strong consumer base by using specific techniques like aggressive promo, quality products, and so on
• Entrance of new publishing companies in the market along with existence of high competition increases the threat of losing the client base.
Financial Analysis.
Due to lack of information, the financial ratios of CMP could not be computed. It might be analyzed from the Appendix III that the annual total incomes of Aes Corporation Expansion Plan In Brazil Case Study Help during the period 2000-2012 are growing at a high development rate, revealing that the yearly need of the products of CMP is growing and the company is rather effective in attracting a big number of consumers at a potential price.
Along with it, the 2nd chart which reveals the yearly growth in the Aes Corporation Expansion Plan In Brazil Case Study Analysis total properties, shows that the business is quite efficient in adding value to its assets through its incomes. The development in possessions shows that the total value of the company is likewise increasing with increasing the total earnings. (Unknown, 2013).
Another financial analysis of the company using the offered data could be the analysis concerning the distribution of overall earnings of the company. Major part of the profits of CMP comes from the sales of its released books i.e. 64% as shown in the Case Appendix V. The company might move towards other business segments with a potential development to achieve its future advancement objective.
PESTEL Analysis
PESTEL analysis could be performed to discover the various external forces impacting the efficiency of the company and the current patterns in the external environment of the company. A brief PESTEL analysis of the business is offered as follows; (Alanzi, 2018).
Political.
As the publishing sector could have a significant influence on the state of mind of the people about the communist ideology of the federal government, for that reason, the publishing sector is highly monitored and directed by the Promotion Department of the Communist Celebration of China. It might be said that the total political forces affecting CMP organisation are high. The government policies concerning the publishing sector are also increasing with the passage of time.
Affordable.
Financial forces impacting the publishing sector in basic and the CMP in specific includesthe costs of paper, the earnings level of consumers, the inflation rate, and the total GDP growth of the country. All these forces combine impact the need for the publishing market.
Social and Demographical.
The consumer choices are shifting towards digital publishing rather than the conventional was of publishing. In this regard, CMP ought to focus on digital publishing to fulfill the altering customer preferences.
Technological.
Technological forces affecting the CMP consist of the technological improvement in the reading methods and so on. Improvement of science and innovation in addition to the rise of digital publishing could decrease the need for the CMP products, if particular actions would not be taken soon.
Environmental.
Ecological forces affecting Aes Corporation Expansion Plan In Brazil Case Study Analysis consists of the concerns of ecological neighborhoods over the usage of paper in publishing books. The paper utilized in the books while publishing is needed to be disposable and the ink used while publishing should not be hazardous for the environment.
Legal.
Legal policies for the publishing sector at whole are high. Publishing Ordinance 1997 needs the publishers to be authorized initially by the Government to be gone into in the publishing market.
Market Analysis (Porter's Five Forces Model).
Porter's 5 Forces Design could be utilized to evaluate the attractiveness of the publishing market China. A short analysis of the Porter's 5 Forces is provided as follows;.
Danger of New Entrants.
Dangers of new entrants in the Chinese Publishing Market is moderate. The potential growth in the market tends to attract new entrants to the publishing industry. Nevertheless, the existence of intense competitors and the requirement of huge capital tends to demotivate new entrants to go into in the market.
Danger of Replacement.
Risk of Replacement is high for the Chinese Publishing Market. The alternative items for the released files is the documents presented in the digital libraries on particular websites. The changing consumer preferences towards digital knowing increase the danger of substitution for the industry.
Competitive Rivalry.
Competitive rivalry in the publishing market is high. The existence of a great deal of customers in the Chinese Publishing Market like CIP, PTP etc. tends to produce high competitive rivalry for CMP. Along with it, new entrants are likewise participating in the market increasing the competition for CMP.
Bargaining Power of Supplier.
The significant providers of the Aes Corporation Expansion Plan In Brazil Case Study Help consist of the suppliers of the paper for releasing documents. As CMP is the largest publisher in the Chinese Publishing Market, for that reason the general bargaining power of supplier for CMP is low.
Bargaining Power of Purchaser.
Haggling power of buyer in the publishing market is high. Due to the presence of a a great deal of publishers in the Chinese market and the marketplace saturation, the purchasers needs high quality documents at competitive rates.
Rivals Analysis.
CMP operates in an extremely competitive industry with the presence of large number of competitors. The business has a competitive position in the market with the greatest market share in the Chinese publishing market. Significant competitors of Aes Corporation Expansion Plan In Brazil Case Study Solution include;.
• Chemical Industry Press (CIP).
• Posts and telecommunication Press (PTP).
Chemical Market Press (CIP).
CIP acts as a threat for CMP as it might wean its market share due to its long term competitive background. CIP is focused on digital publishing and could wean the market share of CMP quickly in the present market scenario.
Posts and telecommunication Press (PTP).
Another close rival of CMP is PTP. It was likewise founded in the very same period as CMP and CIP. It ranks sixth in the state-owned publishers in regards to business scale. It is also among the prominent players in the publishing market with a yearly total profits of RMB 550 million in 2010.
Alternatives
Alternative-1: Broaden towards New Markets
Pros
• Decreasing reliance over the Chinese markets.
• Increasing number of Consumers
• Growth chances.
• Avoiding the impact of market saturation in the Chinese publishing industry.
Cons
• Usage of possible resources in growth.
• Threat of failure in new markets.
• Time consuming.
Alernative-2: Present Digital Publishing
Pros
• Sustaining consumer base.
• Approaching brand-new markets.
• Easy to introduce using existing abilities.
• Low risk of Failure.
• Low requirement for funds.
• Increased product portfolio supplies high worth to consumers.
Cons
• Competition in the market by CIP, who has prior concentrate on the digital publishing.
• Shift of focus from the core organisation sectors to the new one can lead the business to lose demand of its products in the market.
Recommendations
With the deep analysis of the internal and external environment of the company in addition to the market analysis and the rival analysis, Alternative 2 is suggested to CMP to attain its future advancement. As the preferences are moving towards digital publishing and the company need an immediate option to prevent the decreasing market development. For that reason, introduction of digital publishing might show to be an immediate service with low quantity of risk for the company. The company could also consider the expansion program after the success of its digital publishing program.
Application
In order to introduce digital publishing in its item portfolio, the company needs to first collects the data related to the consumer demand, the possible markets, the federal government regulations and the data related to the competitors presented in the market. If the preliminary offering proves a success, the business ought to go for the other markets. In this way the business would be able to implement its digital publishing program.
Conclusion
The growth of the publishing industry is decreasing given that 2008, revealing a threat to the company's long term existence, but the scenario can be controlled by considering an advancement plan in the future. The business might consider presenting digital publishingin its existing market to execute its advancement program at instant basis and to prevent the threat of failure for entrance in the brand-new markets.
