Avon Product Inc Case Study Solution and Analysis
Avon Product Inc Case Study Help is the largest publishing company with a highest market share in the China's book retail market. CMP provides a number of services including; gathering information, processing information and communication services. Major organisation segments of the company include; books, periodicals, consultancy and distribution. The company has a large product portfolio and its major items consist of books, periodicals, online media, exhibitions, research reports and so on. Avon Product Inc Case Study Help has ended up being a specialized info provider and a large detailed Science and Technology publishing business through the integration of print media, audio-visual media and the network media.
Although, Avon Product Inc Case Study Analysis has actually spent its 60 years journey efficiently, being an effective publishing home, nevertheless, the altering macro market patterns and forces bring specific obstacles to the publishing industry in general and CMP in specific. These aspects include;
• Entrance of the new publishing firms in the market.
• Decreasing development of the publishing market.
• Market saturation.
• Intro of digital publishing strategies
• Enhancement of science and innovation.
The transformation of the macro markets have raised a number of concerns to the management at CPM that what could be the future of CMP in this scenario? Do the long important experience, technical resources and the abilities of the company could be utilized to pursue the future development unceasingly? How could the business sustain its long term competitive position in future?
Avon Product Inc Case Study Analysis has specific strengths that can be utilized to minimize the threats, conquer the weak point and avail the opportunities. Strengths of CMP are given as follows;
• The long term experience of Avon Product Inc Case Study Help in the publishing industry i.e. 60 years enables the company to offer high quality products at a lower cost utilizing its prior experiences.
• The technical resources and abilities created by its successful journey supply a competitive benefit to CMP.
• Vast item portfolioof CMP helps it to diversify its threat and offer high worth to its consumers.
• Strong monetary position allows the business to consider numerous advancement chances with no worry of raising fund externally.
Along with the strengths, the business has particular weaknesses which could increase restraints for the business in executing its advancement program. The weaknesses of Avon Product Inc Case Study Analysis are offered as follows;
• Despite of being a science and innovation publishing company, the company still has conventional methods ofpublishing which are not suitable with the growing technological shift.
• CMP extremely relies over the Chinese markets for its development. It must propose particular growth strategies to prevent its reliance over the Chinese markets to achieve long term development.
Although, the development of the publishing industry is decreasing since 2008, affecting Avon Product Inc Case Study Solution as well, but the development might be revived by availing particular opportunities presented in the market. The marketplace chances for CMP include;
• The company might also introduce Digital Publishing by utilizing its long term technical experience and a strong client acknowledgment in the market.
• CMP might think about an advancement program through the growth towards foreign markets in order to lower its reliance over Chinese markets by using its vast financial resources.
The altering macro patterns in the market and increasing competitors in the publishing market has postured specific hazards to Avon Product Inc Case Study Help consisting of;( Gurel, 2017).
• Introduction of digital publishing i.e. virtual libraries might cause declining market share of Avon Product Inc Case Study Analysis due to the customer shift towards virtual libraries.
• The existence of a great deal of competitors in the publishing industry increase the risk for CMP to lose its competitive position in the market, as rivals can acquire a strong consumer base by using certain strategies like aggressive promo, quality items, and so on
• Entryway of brand-new publishing companies in the industry along with presence of high competitors increases the hazard of losing the consumer base.
The business has a rather competitive monetary performance. Due to absence of information, the monetary ratios of CMP might not be determined. Nevertheless, the overall monetary performance of the company might be evaluated by utilizing the graphs given up the case Appendices. It could be evaluated from the Appendix III that the yearly overall profits of CMP during the period 2000-2012 are growing at a high development rate, showing that the yearly demand of the items of Avon Product Inc Case Study Solution is growing and the business is rather effective in bring in a large number of customers at a prospective rate.
Along with it, the second graph which shows the yearly growth in the Avon Product Inc Case Study Solution total possessions, reveals that the business is rather effective in including worth to its assets through its incomes. The development in properties reveals that the total value of the firm is likewise increasing with increasing the overall revenues. (Unidentified, 2013).
Another financial analysis of the company utilizing the given data might be the analysis concerning the circulation of total earnings of the business. Major part of the incomes of CMP originates from the sales of its published books i.e. 64% as shown in the Case Appendix V. The company could move towards other company sections with a potential development to attain its future advancement objective.
PESTEL analysis could be conducted to find out the numerous external forces impacting the efficiency of the business and the current trends in the external environment of the business. A short PESTEL analysis of the business is provided as follows; (Alanzi, 2018).
As the publishing sector could have a significant effect on the frame of mind of individuals about the communist ideology of the federal government, therefore, the publishing sector is extremely monitored and directed by the Publicity Department of the Communist Party of China. Therefore, it might be said that the overall political forces affecting Avon Product Inc Case Study Solution company are high. The federal government policies relating to the publishing sector are also increasing with the passage of time.
Economic forces impacting the publishing sector in basic and the Avon Product Inc Case Study Solution in particular includesthe rates of paper, the earnings level of consumers, the inflation rate, and the total GDP growth of the country. All these forces integrate effect the demand for the publishing market. Along with it, the financial policies related to the import of books impact the overall business at CPM. China's economic conditions are rather beneficial for CMP with high GDP development and customer earnings level.
Social and Demographical.
Social and demographical forces consist of the population development, the consumer's preferences towards checking out informative materials etc. China has the greatest population worldwide with a high population development, revealing the increasing variety of consumers of the Avon Product Inc Case Study Solution. The customer preferences are shifting towards digital publishing rather than the traditional was of publishing. In this regard, CMP must concentrate on digital publishing to fulfill the changing customer preferences.
Technological forces affecting the CMP consist of the technological improvement in the reading strategies and so on. Enhancement of science and technology along with the rise of digital publishing could reduce the demand for the CMP items, if certain actions would not be taken quickly.
Ecological forces affecting Avon Product Inc Case Study Help includes the issues of environmental neighborhoods over the use of paper in publishing books. The paper used in the books while publishing is needed to be disposable and the ink utilized while publishing needs to not be harmful for the environment.
Legal policies for the publishing sector at whole are high. Publishing Ordinance 1997 needs the publishers to be approved first by the Government to be entered in the publishing market.
Industry Analysis (Porter's 5 Forces Model).
Porter's Five Forces Model might be used to evaluate the appearance of the publishing industry China. A brief analysis of the Porter's 5 Forces is offered as follows;.
Danger of New Entrants.
Hazards of brand-new entrants in the Chinese Publishing Industry is moderate. The possible development in the market tends to bring in new entrants to the publishing market. Nevertheless, the existence of extreme competitors and the requirement of big capital tends to demotivate brand-new entrants to enter in the marketplace.
Danger of Alternative.
Hazard of Replacement is high for the Chinese Publishing Industry. The substitute items for the published files is the documents presented in the digital libraries on certain sites. The altering consumer choices towards digital knowing increase the danger of replacement for the industry.
Competitive rivalry in the publishing industry 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 likewise participating in the marketplace increasing the competitors for CMP.
Bargaining Power of Supplier.
The major providers of the Avon Product Inc Case Study Analysis consist of the suppliers of the paper for releasing documents. As CMP is the biggest publisher in the Chinese Publishing Market, therefore the general bargaining power of supplier for CMP is low.
Bargaining Power of Buyer.
Negotiating 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 requires high quality files at competitive rates.
CMP operates in a highly competitive industry with the existence of a great deal of rivals. Nevertheless, the business has a competitive position in the market with the highest market share in the Chinese publishing market. Significant rivals of Avon Product Inc Case Study Solution consist of;.
• Chemical Market Press (CIP).
• Posts and telecommunication Press (PTP).
Chemical Market Press (CIP).
CIPis among the close rivals of CMP. Established in the exact same duration, CIP releases comparable kind of books. For a large time period, CIP held the biggest market share, and still ranks 2nd and third in numerous market sectors, with a significant focus on academic publications. CIP serves as a risk for CMP as it might wean its market share due to its long term competitive background. CIP is focused on digital publishing and might wean the market share of Avon Product Inc Case Study Analysis quickly in the existing market situation.
Posts and telecommunication Press (PTP).
Another close rival of CMP is PTP. It was also founded in the exact same duration as CMP and CIP. It ranks sixth in the state-owned publishers in regards to service scale. It is also one of the prominent players in the publishing market with an annual total incomes of RMB 550 million in 2010.
Alternative-1: Broaden towards New Markets
• Reducing dependence over the Chinese markets.
• Increasing number of Clients
• Growth chances.
• Avoiding the impact of market saturation in the Chinese publishing industry.
• Usage of potential resources in growth.
• Risk of failure in brand-new markets.
• Time consuming.
Alernative-2: Introduce Digital Publishing
• Sustaining consumer base.
• Approaching brand-new markets.
• Easy to present utilizing existing capabilities.
• Low threat of Failure.
• Low requirement for funds.
• Increased product portfolio offers high value to consumers.
• 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.
With the deep analysis of the external and internal environment of the business along with the industry analysis and the competitor analysis, Alternative 2 is recommended to CMP to achieve its future development. As the preferences are shifting towards digital publishing and the business require an instant service to prevent the declining industry growth. Intro of digital publishing could prove to be an immediate solution with low amount of risk for the company. Nevertheless, the business could likewise think about the growth program after the success of its digital publishing program.
In order to introduce digital publishing in its item portfolio, the company should initially collects the information related to the customer need, the prospective markets, the federal government regulations and the information associated with the rivals presented in the market. After that, the business ought to decide one possible sector for its preliminary offering. It must collect research study that how it might differentiate its digital publishing from the existing rivals' items. The steps above the business should go for the preliminary offering. The company ought to go for the other markets if the preliminary offering shows a success. In this way the business would be able to execute its digital publishing program.
The growth of the publishing market is decreasing given that 2008, showing a threat to the business's long term presence, but the circumstance can be controlled by thinking about an advancement plan in the future. The company could think about introducing digital publishingin its existing market to implement its development program at instant basis and to prevent the threat of failure for entryway in the brand-new markets.