Amazons European Distribution Strategy 2 Case Study Solution and Analysis
Introduction
Amazons European Distribution Strategy 2 Case Study Help is the biggest publishing company with a greatest market share in the China's book retail market. CMP has become a specialized information company and a big comprehensive Science and Technology publishing company through the combination of print media, audio-visual media and the network media.
Vital Concerns
Although, Amazons European Distribution Strategy 2 Case Study Solution has actually invested its 60 years journey smoothly, being an effective publishing home, nevertheless, the changing macro market trends and forces bring certain challenges to the publishing industry in basic and CMP in specific. These factors include;
• Entrance of the brand-new publishing firms in the industry.
• Decreasing development of the publishing market.
• Market saturation.
• Introduction of digital publishing methods
• Enhancement of science and innovation.
The improvement of the macro markets have raised several concerns to the management at CPM that what could be the future of CMP in this scenario? Do the long valuable experience, technical resources and the abilities of the company could be utilized to strive for the future development unceasingly? How could the business sustain its long term competitive position in future?
Situational Analysis
Internal Analysis
SWOT Analysis
Strengths
Amazons European Distribution Strategy 2 Case Study Solution has particular strengths that can be used to reduce the risks, conquer the weak point and obtain the chances. Strengths of CMP are offered as follows;
• The long term experience of Amazons European Distribution Strategy 2 Case Study Help in the publishing industry i.e. 60 years permits the business to offer high quality products at a lower cost using its prior experiences.
• The technical resources and capabilities generated by its effective journey offer a competitive benefit to CMP.
• Huge product portfolioof CMP assists it to diversify its risk and supply high value to its clients.
• Strong financial position permits the company to think about several advancement chances with no worry of raising fund externally.
Weaknesses
Together with the strengths, the company has particular weak points which could increase restrictions for the business in executing its advancement program. The weaknesses of Amazons European Distribution Strategy 2 Case Study Analysis are provided as follows;
• Despite of being a science and technology publishing firm, the company still has traditional methods ofpublishing which are not suitable with the growing technological shift.
• CMP highly relies over the Chinese markets for its development. It must propose particular growth plans to prevent its dependence over the Chinese markets to achieve long term development.
Opportunities
Although, the growth of the publishing market is decreasing given that 2008, impacting Amazons European Distribution Strategy 2 Case Study Solution too, however the growth could be revived by availing specific chances presented in the market. The marketplace opportunities for CMP include;
• The business could also present Digital Publishing by utilizing its long term technical experience and a strong customer acknowledgment in the market.
• CMP could consider a development program through the expansion towards foreign markets in order to decrease its reliance over Chinese markets by using its large financial resources.
Threats
The changing macro trends in the market and increasing competition in the publishing industry has postured specific risks to Amazons European Distribution Strategy 2 Case Study Help consisting of;( Gurel, 2017).
• Introduction of digital publishing i.e. digital libraries might cause declining market share of Amazons European Distribution Strategy 2 Case Study Help due to the customer shift towards digital libraries.
• The presence of a great deal of rivals in the publishing industry increase the hazard for CMP to lose its competitive position in the market, as competitors can gain a strong customer base by using certain strategies like aggressive promotion, quality products, etc.
• Entryway of new publishing firms in the market along with presence of high competition increases the hazard of losing the client base.
Monetary Analysis.
The business has a quite competitive financial efficiency. Due to lack of data, the financial ratios of CMP could not be determined. However, the general financial efficiency of the company could be analyzed by using the charts given up the case Appendices. It could be examined from the Appendix III that the annual total earnings of CMP during the period 2000-2012 are growing at a high development rate, showing that the annual demand of the items of Amazons European Distribution Strategy 2 Case Study Analysis is growing and the company is quite efficient in bring in a large number of clients at a possible rate.
Along with it, the 2nd graph which shows the yearly development in the Amazons European Distribution Strategy 2 Case Study Help total possessions, shows that the company is rather efficient in adding worth to its properties through its profits. The growth in properties reveals that the total worth of the company is likewise increasing with increasing the overall profits. (Unidentified, 2013).
Another financial analysis of the business utilizing the provided data might be the analysis regarding the distribution of total profits of the company. Huge part of the profits of CMP originates from the sales of its published books i.e. 64% as displayed in the Case Appendix V. The company might move towards other organisation segments with a potential development to achieve its future development objective.
PESTEL Analysis
PESTEL analysis might be conducted to find out the different external forces affecting the performance of the business and the recent trends in the external environment of the business. A brief PESTEL analysis of the business is given as follows; (Alanzi, 2018).
Political.
As the publishing sector could have a substantial effect on the mindset of individuals about the communist ideology of the federal government, therefore, the publishing sector is highly monitored and guided by the Promotion Department of the Communist Celebration of China. It might be said that the overall political forces affecting CMP company are high. The government policies relating to the publishing sector are also increasing with the passage of time.
Cost-effective.
Financial forces affecting the publishing sector in basic and the Amazons European Distribution Strategy 2 Case Study Solution in particular includesthe prices of paper, the earnings level of customers, the inflation rate, and the overall GDP development of the nation. All these forces integrate impact the need for the publishing market. Together with it, the economic policies associated with the import of books affect the overall company at CPM. Nevertheless, China's financial conditions are rather favorable for CMP with high GDP growth and consumer earnings level.
Social and Demographical.
The consumer preferences are moving towards digital publishing rather than the conventional was of publishing. In this regard, CMP should focus on digital publishing to meet the altering consumer choices.
Technological.
Technological forces affecting the CMP include the technological improvement in the reading techniques and so on. Improvement of science and technology together with the rise of digital publishing could reduce the demand for the CMP products, if particular actions would not be taken quickly.
Environmental.
Ecological forces affecting Amazons European Distribution Strategy 2 Case Study Solution consists of the concerns of ecological neighborhoods over the usage of paper in publishing books. The paper used in the books while publishing is needed to be non reusable and the ink utilized while publishing ought to not be harmful for the environment.
Legal.
Legal regulations for the publishing sector at whole are high. The legal regulations relating to the publishing sector is managed by the General Administration of Press and Publication. Publishing Regulation 1997 requires the publishers to be approved initially by the Government to be gone into in the publishing market. The ordinance prohibits direct involvement of foreign entities and people in the publishing sector.
Industry Analysis (Porter's 5 Forces Design).
Porter's Five Forces Model might be used to analyze the attractiveness of the publishing market China. A quick analysis of the Porter's 5 Forces is given as follows;.
Danger of New Entrants.
Threats of new entrants in the Chinese Publishing Industry is moderate. The potential development in the industry tends to draw in new entrants to the publishing market. Nevertheless, the presence of intense competitors and the requirement of huge capital tends to demotivate new entrants to enter in the market.
Danger of Substitution.
Risk of Alternative is high for the Chinese Publishing Industry. The replacement products for the released documents is the files presented in the virtual libraries on particular sites. The altering consumer preferences towards digital knowing increase the threat of replacement for the market.
Competitive Competition.
Competitive competition in the publishing market is high. The presence of large number of consumers in the Chinese Publishing Industry like CIP, PTP etc. tends to produce high competitive rivalry for CMP. Together with it, brand-new entrants are also entering into the market increasing the competitors for CMP.
Bargaining Power of Supplier.
The significant providers of the Amazons European Distribution Strategy 2 Case Study Solution consist of the providers of the paper for publishing documents. As CMP is the biggest publisher in the Chinese Publishing Market, for that reason the total bargaining power of supplier for CMP is low.
Bargaining Power of Buyer.
Negotiating power of purchaser in the publishing market is high. Due to the existence 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 industry with the existence of large number of rivals. Nevertheless, the business has a competitive position in the market with the greatest market share in the Chinese publishing market. Major rivals of Amazons European Distribution Strategy 2 Case Study Solution include;.
• Chemical Industry Press (CIP).
• Posts and telecommunication Press (PTP).
Chemical Industry Press (CIP).
CIPis among the close competitors of CMP. Established in the exact same period, CIP releases comparable kind of books. For a big period, CIP held the biggest market share, and still ranks third and second in numerous market sectors, with a significant focus on educational publications. CIP acts as a risk for CMP as it might wean its market share due to its long term competitive background. CIP is concentrated on digital publishing and might wean the marketplace share of Amazons European Distribution Strategy 2 Case Study Solution easily in the present market situation.
Posts and telecommunication Press (PTP).
Another close rival of CMP is PTP. It was likewise established in the very same period as CMP and CIP. It ranks sixth in the state-owned publishers in regards to business scale. It is likewise among the prominent gamers in the publishing industry with an annual overall 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
• Development opportunities.
• Avoiding the effect of market saturation in the Chinese publishing market.
Cons
• Use of potential 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 present using existing capabilities.
• Low threat of Failure.
• Low requirement for funds.
• Increased item portfolio supplies high value to consumers.
Cons
• Competition in the market by CIP, who has prior focus on the digital publishing.
• Shift of focus from the core business segments to the new one can lead the company to lose demand of its products in the market.
Suggestions
As the choices are shifting towards digital publishing and the company need an instant solution to avoid the decreasing industry growth. The business could also think about the growth program after the success of its digital publishing program.
Execution
In order to present digital publishing in its item portfolio, the business needs to initially gathers the data associated with the consumer demand, the possible markets, the federal government guidelines and the information related to the competitors presented in the market. After that, the company must decide one prospective segment for its initial offering. It ought to gather research study that how it could differentiate its digital publishing from the existing rivals' items. The steps above the company should go for the preliminary offering. If the initial offering proves a success, the business ought to opt for the other markets. In this method the business would be able to implement its digital publishing program.
Conclusion
The development of the publishing market is declining given that 2008, revealing a hazard to the company's long term presence, but the scenario can be managed by considering a development strategy in the future. The company might think about presenting digital publishingin its existing market to implement its advancement program at immediate basis and to avoid the danger of failure for entryway in the brand-new markets.
