American Greetings 9 Case Study Solution and Analysis
Introduction
American Greetings 9 Case Study Solution is the largest publishing business with a greatest market share in the China's book retail market. CMP has become a specialized information supplier and a large comprehensive Science and Technology publishing business through the integration of print media, audio-visual media and the network media.
Crucial Problems
CMP has actually spent its 60 years journey efficiently, being a successful publishing home, however, the changing macro market trends and forces bring specific difficulties to the publishing market in general and American Greetings 9 Case Study Analysis in specific. These aspects consist of;
• Entrance of the brand-new publishing firms in the market.
• Declining growth of the publishing market.
• Market saturation.
• Introduction of digital publishing strategies
• Improvement of science and innovation.
The improvement 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 valuable experience, technical resources and the capabilities of the company could be made use of to strive for the future development unceasingly? How could the company sustain its long term competitive position in future?
Situational Analysis
Internal Analysis
SWOT Analysis
Strengths
American Greetings 9 Case Study Analysis has particular strengths that can be made use of to decrease the risks, overcome the weak point and obtain the chances. Strengths of CMP are provided as follows;
• The long term experience of American Greetings 9 Case Study Solution in the publishing industry i.e. 60 years enables the business to supply high quality items at a lower expense utilizing its prior experiences.
• The technical resources and capabilities generated by its effective journey provide a competitive advantage to CMP.
• Large product portfolioof CMP assists it to diversify its threat and provide high value to its clients.
• Strong financial position enables the company to think about a number of development opportunities with no fear of raising fund externally.
Weak points
Along with the strengths, the business has particular weaknesses which could increase constraints for the business in executing its advancement program. The weaknesses of American Greetings 9 Case Study Solution are offered as follows;
• Despite of being a science and innovation publishing firm, the business still has standard methods ofpublishing which are not compatible with the growing technological shift.
• CMP extremely relies over the Chinese markets for its growth. It must propose specific expansion plans to prevent its dependence over the Chinese markets to attain long term growth.
Opportunities
Although, the development of the publishing market is decreasing considering that 2008, affecting American Greetings 9 Case Study Solution as well, however the development could be restored by availing certain opportunities provided in the market. The marketplace opportunities for CMP consist of;
• The company might likewise present Digital Publishing by using its long term technical experience and a strong customer acknowledgment in the market.
• CMP could consider a development program through the growth towards foreign markets in order to lower its reliance over Chinese markets by using its vast financial resources.
Hazards
The changing macro trends in the market and increasing competitors in the publishing market has actually positioned specific threats to American Greetings 9 Case Study Help including;( Gurel, 2017).
• Intro of digital publishing i.e. digital libraries could result in decreasing market share of American Greetings 9 Case Study Solution due to the customer shift towards virtual libraries.
• The existence of a great deal of competitors in the publishing market increase the risk for CMP to lose its competitive position in the market, as competitors can get a strong consumer base by using particular methods like aggressive promo, quality items, etc.
• Entrance of brand-new publishing companies in the industry together with presence of high competition increases the hazard of losing the client base.
Monetary Analysis.
The company has a rather competitive monetary performance. Due to lack of data, the financial ratios of CMP might not be computed. The general monetary efficiency of the business could be examined by utilizing the charts given in the case Appendices. It might be evaluated from the Appendix III that the annual overall revenues of CMP throughout the duration 2000-2012 are growing at a high development rate, showing that the yearly demand of the products of American Greetings 9 Case Study Solution is growing and the business is quite effective in drawing in a a great deal of clients at a possible price.
Along with it, the 2nd chart which reveals the yearly development in the American Greetings 9 Case Study Analysis total properties, reveals that the business is quite efficient in adding value to its possessions through its earnings. The growth in assets shows that the total worth of the company is likewise increasing with increasing the total revenues. (Unknown, 2013).
Another financial analysis of the company utilizing the offered information could be the analysis regarding the distribution of total incomes of the company. Huge 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 company might move towards other business sectors with a prospective development to attain its future advancement objective.
PESTEL Analysis
PESTEL analysis might be carried out to learn the different external forces impacting the performance of the business and the current patterns in the external environment of the company. A quick PESTEL analysis of the company is provided as follows; (Alanzi, 2018).
Political.
As the publishing sector could have a considerable influence on the state of mind of individuals about the communist ideology of the federal government, therefore, the publishing sector is extremely supervised and assisted by the Publicity Department of the Communist Celebration of China. It could be said that the total political forces affecting CMP company are high. The federal government policies concerning the publishing sector are also increasing with the passage of time.
Cost-effective.
Economic forces affecting the publishing sector in general and the CMP 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 effect the need for the publishing market.
Social and Demographical.
Social and demographical forces include the population development, the consumer's preferences towards reading informative materials and so on. China has the highest population on the planet with a high population growth, revealing the increasing number of consumers of the American Greetings 9 Case Study Analysis. However, the customer choices are moving towards digital publishing rather than the standard was of publishing. In this regard, CMP should focus on digital publishing to satisfy the changing consumer choices.
Technological.
Technological forces impacting the CMP include the technological advancement in the reading techniques and so on. Enhancement of science and technology in addition to the rise of digital publishing could lower the need for the CMP products, if particular actions would not be taken soon.
Environmental.
Environmental forces impacting American Greetings 9 Case Study Help includes the concerns of ecological communities over the usage of paper in publishing books. The paper used in the books while publishing is needed to be disposable and the ink used while publishing needs to not be hazardous for the environment.
Legal.
Legal regulations for the publishing sector at whole are high. The legal policies regarding the publishing sector is managed by the General Administration of Press and Publication. Publishing Ordinance 1997 needs the publishers to be approved first by the Government to be gone into in the publishing market. The regulation prohibits direct participation of foreign entities and individuals in the publishing sector.
Market Analysis (Porter's 5 Forces Model).
Porter's 5 Forces Model could be used to examine the beauty of the publishing industry China. A quick analysis of the Porter's 5 Forces is provided as follows;.
Risk of New Entrants.
Hazards of brand-new entrants in the Chinese Publishing Industry is moderate. The potential growth in the market tends to draw in new entrants to the publishing industry. However, the presence of extreme competitors and the requirement of big capital tends to demotivate brand-new entrants to enter in the market.
Risk of Alternative.
Threat of Replacement is high for the Chinese Publishing Market. The alternative products for the published documents is the files presented in the digital libraries on specific sites. The changing customer preferences towards digital knowing increase the hazard of alternative for the industry.
Competitive Rivalry.
Competitive competition 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, brand-new entrants are also entering into the marketplace increasing the competitors for CMP.
Bargaining Power of Provider.
The significant suppliers of the American Greetings 9 Case Study Help include the providers of the paper for publishing files. As CMP is the biggest publisher in the Chinese Publishing Market, therefore the overall bargaining power of supplier for CMP is low.
Bargaining Power of Buyer.
Bargaining power of purchaser in the publishing industry 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 costs.
Rivals Analysis.
CMP operates in a highly competitive market with the presence 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 American Greetings 9 Case Study Analysis include;.
• Chemical Market Press (CIP).
• Posts and telecommunication Press (PTP).
Chemical Market Press (CIP).
CIPis among the close competitors of CMP. Established in the same duration, CIP publishes comparable type of books. For a large period, CIP held the largest market share, and still ranks third and 2nd in different market sections, with a significant focus on instructional publications. CIP acts as a risk for CMP as it could wean its market share due to its long term competitive background. CIP is focused on digital publishing and could wean the market share of American Greetings 9 Case Study Help easily in the current market situation.
Posts and telecommunication Press (PTP).
Another close competitor of CMP is PTP. It was likewise established in the exact same period as CMP and CIP. It ranks 6th in the state-owned publishers in terms of organisation scale. It is likewise one of the prominent players in the publishing industry with a yearly total profits of RMB 550 million in 2010.
Alternatives
Alternative-1: Broaden towards New Markets
Pros
• Lowering dependence over the Chinese markets.
• Increasing number of Clients
• Development chances.
• Preventing the effect of market saturation in the Chinese publishing industry.
Cons
• Use of prospective resources in growth.
• Risk of failure in new markets.
• Time consuming.
Alernative-2: Present Digital Publishing
Pros
• Sustaining consumer base.
• Approaching brand-new markets.
• Easy to introduce using current abilities.
• Low danger of Failure.
• Low requirement for funds.
• Increased item portfolio provides high value to customers.
Cons
• Competitors in the market by CIP, who has prior focus on the digital publishing.
• Shift of focus from the core service sections to the brand-new one can lead the business to lose need of its items in the market.
Suggestions
With the deep analysis of the external and internal environment of the company in addition to the industry analysis and the rival analysis, Alternative 2 is suggested to CMP to accomplish its future development. As the preferences are shifting towards digital publishing and the company need an instant solution to prevent the decreasing industry growth. For that reason, introduction of digital publishing might prove to be an instant solution with low quantity of danger for the company. However, the company could likewise think about the expansion program after the success of its digital publishing program.
Implementation
In order to introduce digital publishing in its item portfolio, the business needs to first gathers the data associated with the customer demand, the possible markets, the federal government policies and the information connected to the rivals presented in the market. After that, the business ought to decide one potential sector for its initial offering. It must collect research that how it could differentiate its digital publishing from the existing competitors' products. After all the actions above the business should opt for the initial offering. The business ought to go for the other markets if the initial offering shows a success. In this method the business would have the ability to implement its digital publishing program.
Conclusion
The development of the publishing market is decreasing considering that 2008, revealing a hazard to the company's long term existence, but the circumstance can be managed by considering a development strategy in the future. The business might think about presenting digital publishingin its existing market to implement its advancement program at immediate basis and to avoid the risk of failure for entrance in the new markets.
