Altoona State Investment Board July 2012 2 Case Study Solution and Analysis
Introduction
Altoona State Investment Board July 2012 2 Case Study Help is the largest publishing company with a highest market share in the China's book retail market. CMP has actually ended up being a specialized details company and a big detailed Science and Technology publishing company through the combination of print media, audio-visual media and the network media.
Vital Problems
CMP has actually spent its 60 years journey smoothly, being a successful publishing house, however, the changing macro market patterns and forces bring specific obstacles to the publishing market in general and Altoona State Investment Board July 2012 2 Case Study Solution in particular. These aspects consist of;
• Entrance of the brand-new publishing companies in the market.
• Decreasing development of the publishing market.
• Market saturation.
• Intro of digital publishing methods
• Improvement of science and innovation.
The change of the macro markets have raised several concerns to the management at CPM that what could be the future of CMP in this circumstance? Do the long important experience, technical resources and the abilities of the business could be used to pursue the future development unceasingly? How could the business sustain its long term competitive position in future?
Situational Analysis
Internal Analysis
SWOT Analysis
Strengths
Altoona State Investment Board July 2012 2 Case Study Analysis has particular strengths that can be made use of to decrease the threats, get rid of the weakness and avail the opportunities. Strengths of CMP are given as follows;
• The long term experience of Altoona State Investment Board July 2012 2 Case Study Analysis in the publishing market i.e. 60 years permits the company to supply high quality items at a lower expense utilizing its previous experiences.
• The technical resources and capabilities created by its successful journey supply a competitive advantage to CMP.
• Large product portfolioof CMP assists it to diversify its danger and provide high worth to its customers.
• Strong financial position permits the company to think about a number of advancement opportunities without any worry of raising fund externally.
Weaknesses
In addition to the strengths, the business has specific weak points which could increase restraints for the company in implementing its development program. The weaknesses of Altoona State Investment Board July 2012 2 Case Study Analysis are given as follows;
• Despite of being a science and technology publishing company, the company still has conventional ways ofpublishing which are not suitable with the growing technological shift.
• CMP highly relies over the Chinese markets for its growth. It should propose particular expansion plans to prevent its dependence over the Chinese markets to achieve long term growth.
Opportunities
Although, the development of the publishing market is decreasing considering that 2008, impacting Altoona State Investment Board July 2012 2 Case Study Help too, however the growth could be restored by availing particular opportunities presented in the market. The market opportunities for CMP include;
• The company might also present Digital Publishing by utilizing its long term technical experience and a strong consumer acknowledgment in the market.
• CMP might consider a development program through the expansion towards foreign markets in order to reduce its dependence over Chinese markets by utilizing its large funds.
Threats
The changing macro trends in the market and increasing competition in the publishing industry has actually postured certain threats to Altoona State Investment Board July 2012 2 Case Study Help including;( Gurel, 2017).
• Introduction of digital publishing i.e. digital libraries might lead to declining market share of Altoona State Investment Board July 2012 2 Case Study Help due to the consumer shift towards digital libraries.
• The presence of a great deal of rivals in the publishing industry increase the danger for CMP to lose its competitive position in the market, as rivals can get a strong customer base by utilizing specific strategies like aggressive promotion, quality products, and so on
• Entryway of new publishing companies in the market together with presence of high competitors increases the hazard of losing the consumer base.
Monetary Analysis.
The company has a quite competitive monetary efficiency. Due to lack of data, the monetary ratios of CMP could not be computed. Nevertheless, the total financial efficiency of the business might be analyzed by using the charts given up the case Appendices. It could be analyzed from the Appendix III that the annual total incomes of CMP during the duration 2000-2012 are growing at a high development rate, revealing that the annual need of the products of Altoona State Investment Board July 2012 2 Case Study Solution is growing and the company is quite effective in bring in a a great deal of customers at a possible cost.
Along with it, the 2nd graph which reveals the annual development in the Altoona State Investment Board July 2012 2 Case Study Help total properties, shows that the company is quite efficient in including worth to its possessions through its revenues. The growth in possessions reveals that the overall worth of the firm is also increasing with increasing the total revenues. (Unidentified, 2013).
Another monetary analysis of the business utilizing the given information might be the analysis concerning the circulation of overall incomes of the company. Major part of the incomes of CMP originates from the sales of its published books i.e. 64% as displayed in the Case Appendix V. The business could move towards other company segments with a prospective growth to accomplish its future development goal.
PESTEL Analysis
PESTEL analysis might be conducted to discover the numerous external forces impacting the efficiency of the business and the current trends in the external environment of the company. A short PESTEL analysis of the company is offered as follows; (Alanzi, 2018).
Political.
As the publishing sector could have a considerable impact on the frame of mind of the people about the communist ideology of the government, for that reason, the publishing sector is extremely supervised and assisted by the Promotion Department of the Communist Party of China. Therefore, it could be stated that the overall political forces affecting Altoona State Investment Board July 2012 2 Case Study Help company are high. The government policies regarding the publishing sector are likewise increasing with the passage of time.
Affordable.
Financial forces impacting the publishing sector in basic and the Altoona State Investment Board July 2012 2 Case Study Solution in specific includesthe rates of paper, the earnings level of consumers, the inflation rate, and the general GDP development of the nation. All these forces combine impact the demand for the publishing market. In addition to it, the financial policies associated with the import of books impact the overall company at CPM. However, China's financial conditions are rather beneficial for CMP with high GDP growth and customer earnings level.
Social and Demographical.
Social and demographical forces consist of the population growth, the customer's choices towards checking out useful products and so on. China has the highest population in the world with a high population growth, revealing the increasing number of customers of the Altoona State Investment Board July 2012 2 Case Study Solution. Nevertheless, the customer choices are shifting towards digital publishing instead of the standard was of publishing. In this regard, CMP must focus on digital publishing to satisfy the altering consumer choices.
Technological.
Technological forces impacting the CMP consist of the technological improvement in the reading strategies etc. Improvement of science and innovation together with the rise of digital publishing might reduce the need for the CMP items, if certain actions would not be taken quickly.
Environmental.
Environmental forces impacting Altoona State Investment Board July 2012 2 Case Study Solution consists of the issues of environmental communities over the usage of paper in publishing books. The paper used in the books while publishing is required to be disposable and the ink utilized while publishing ought to not be damaging for the environment.
Legal.
Legal regulations for the publishing sector at whole are high. The legal guidelines regarding the publishing sector is managed by the General Administration of Press and Publication. Publishing Ordinance 1997 needs the publishers to be approved initially by the Government to be entered in the publishing market. The regulation forbids direct involvement of foreign entities and individuals in the publishing sector.
Market Analysis (Porter's 5 Forces Design).
Porter's 5 Forces Model could be used to examine the appearance of the publishing industry China. A quick analysis of the Porter's Five Forces is provided as follows;.
Threat of New Entrants.
Hazards of new entrants in the Chinese Publishing Market is moderate. The prospective development in the market tends to bring in brand-new entrants to the publishing market. However, the presence of intense competitors and the requirement of huge capital tends to demotivate brand-new entrants to go into in the market.
Threat of Replacement.
Risk of Alternative is high for the Chinese Publishing Market. The substitute items for the published documents is the documents provided in the virtual libraries on specific sites. The changing consumer preferences towards digital knowing increase the hazard of replacement for the industry.
Competitive Competition.
Competitive rivalry in the publishing market is high. The existence of a great deal of consumers in the Chinese Publishing Market like CIP, PTP and so on tends to produce high competitive rivalry for CMP. In addition to it, new entrants are also entering into the marketplace increasing the competition for CMP.
Bargaining Power of Supplier.
The major suppliers of the Altoona State Investment Board July 2012 2 Case Study Analysis include the suppliers of the paper for releasing documents. As CMP is the biggest publisher in the Chinese Publishing Market, therefore the total bargaining power of supplier for CMP is low.
Bargaining Power of Buyer.
Bargaining power of purchaser in the publishing market is high. Due to the presence of a a great deal of publishers in the Chinese market and the market saturation, the buyers requires high quality documents at competitive rates.
Competitors Analysis.
CMP operates in an extremely competitive market with the presence of a great deal of rivals. Nevertheless, the company has a competitive position in the market with the greatest market share in the Chinese publishing market. Major competitors of Altoona State Investment Board July 2012 2 Case Study Analysis include;.
• Chemical Industry Press (CIP).
• Posts and telecommunication Press (PTP).
Chemical Market Press (CIP).
CIPis among the close competitors of CMP. Established in the exact same period, CIP publishes similar kind of books. For a large period, CIP held the largest market share, and still ranks 3rd and second in numerous market segments, with a significant focus on educational publications. CIP serves as a risk for CMP as it could wean its market share due to its long term competitive background. CIP is concentrated on digital publishing and could wean the market share of Altoona State Investment Board July 2012 2 Case Study Analysis quickly in the current market circumstance.
Posts and telecommunication Press (PTP).
Another close competitor of CMP is PTP. It was also established in the exact same period as CMP and CIP. It ranks 6th in the state-owned publishers in regards to company scale. It is also one of the popular players in the publishing industry with a yearly total earnings of RMB 550 million in 2010.
Alternatives
Alternative-1: Broaden towards New Markets
Pros
• Minimizing reliance over the Chinese markets.
• Increasing variety of Clients
• Development chances.
• Preventing the effect of market saturation in the Chinese publishing market.
Cons
• Use of prospective resources in expansion.
• Threat of failure in new markets.
• Time consuming.
Alernative-2: Present Digital Publishing
Pros
• Sustaining consumer base.
• Approaching new markets.
• Easy to introduce using existing capabilities.
• Low threat of Failure.
• Low requirement for funds.
• Increased product portfolio provides high value to clients.
Cons
• Competition in the market by CIP, who has prior concentrate on the digital publishing.
• Shift of focus from the core service sections to the brand-new one can lead the business to lose demand of its products in the market.
Recommendations
As the preferences are moving towards digital publishing and the company need an immediate service to avoid the declining industry growth. The company could also consider the growth program after the success of its digital publishing program.
Application
In order to introduce digital publishing in its item portfolio, the business needs to first collects the data related to the customer need, the prospective markets, the federal government policies and the information related to the competitors presented in the market. If the preliminary offering proves a success, the company ought to go for the other markets. In this way the business would be able to execute its digital publishing program.
Conclusion
Although, the growth of the publishing market is declining since 2008, revealing a danger to the business's long term presence, however the scenario can be controlled by thinking about an advancement plan in the future. The business could think about presenting digital publishingin its existing market to implement its development program at instant basis and to prevent the risk of failure for entryway in the new markets.
