Avon Product Inc Case Study Solution and Analysis
Avon Product Inc Case Study Analysis is the largest publishing business with a greatest market share in the China's book retail market. CMP supplies a variety of services including; collecting details, processing info and interaction services. Major organisation segments of the company include; books, periodicals, consultancy and circulation. The company has a large item portfolio and its significant products consist of books, periodicals, online media, exhibits, research reports etc. Avon Product Inc Case Study Help has become a specialized details company and a large comprehensive Science and Innovation publishing company through the integration of print media, audio-visual media and the network media.
Although, Avon Product Inc Case Study Solution has invested its 60 years journey efficiently, being a successful publishing house, nevertheless, the changing macro market patterns and forces bring particular obstacles to the publishing industry in general and CMP in specific. These aspects consist of;
• Entrance of the new publishing companies in the market.
• Decreasing growth of the publishing market.
• Market saturation.
• Intro of digital publishing strategies
• Improvement of science and technology.
The transformation of the macro markets have raised several questions 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 advancement unceasingly? How could the business sustain its long term competitive position in future?
Avon Product Inc Case Study Analysis has particular strengths that can be utilized to minimize the risks, get rid of the weakness and get the opportunities. Strengths of CMP are offered as follows;
• The long term experience of Avon Product Inc Case Study Help in the publishing industry i.e. 60 years permits the business to provide high quality items at a lower expense utilizing its prior experiences.
• The technical resources and capabilities produced by its effective journey provide a competitive advantage to CMP.
• Vast item portfolioof CMP helps it to diversify its risk and offer high value to its clients.
• Strong monetary position permits the company to consider several advancement opportunities without any worry of raising fund externally.
Together with the strengths, the company has particular weak points which might increase restrictions for the business in executing its advancement program. The weak points of Avon Product Inc Case Study Analysis are given as follows;
• Despite of being a science and innovation publishing firm, the company still has standard ways ofpublishing which are not suitable with the growing technological shift.
• CMP highly relies over the Chinese markets for its development. It should propose certain growth strategies to avoid its dependence over the Chinese markets to accomplish long term growth.
The development of the publishing market is decreasing since 2008, affecting Avon Product Inc Case Study Help as well, however the growth could be revived by availing particular opportunities provided in the market. The market opportunities for CMP consist of;
• The company could also present Digital Publishing by utilizing its long term technical experience and a strong consumer recognition in the market.
• CMP could think about an advancement program through the expansion towards foreign markets in order to lower its reliance over Chinese markets by using its vast funds.
The changing macro patterns in the market and increasing competition in the publishing market has actually postured particular dangers to Avon Product Inc Case Study Help including;( Gurel, 2017).
• Intro of digital publishing i.e. virtual libraries might lead to declining market share of Avon Product Inc Case Study Help due to the consumer shift towards digital libraries.
• The presence of large number of rivals in the publishing market increase the risk for CMP to lose its competitive position in the market, as rivals can gain a strong consumer base by utilizing certain methods like aggressive promo, quality products, etc.
• Entryway of brand-new publishing firms in the market along with existence of high competition increases the threat of losing the customer base.
Due to absence of data, the monetary ratios of CMP could not be computed. It could be analyzed from the Appendix III that the yearly overall revenues of Avon Product Inc Case Study Solution throughout the duration 2000-2012 are growing at a high growth rate, revealing that the yearly demand of the items of CMP is growing and the business is quite efficient in attracting a large number of customers at a potential cost.
In addition to it, the second graph which shows the annual development in the Avon Product Inc Case Study Solution total assets, shows that the business is quite efficient in including worth to its possessions through its incomes. The development in assets reveals that the overall value of the firm is likewise increasing with increasing the total earnings. (Unknown, 2013).
Another monetary analysis of the business utilizing the provided data might be the analysis concerning the distribution of total revenues of the company. Huge part of the profits of CMP comes from the sales of its published books i.e. 64% as shown in the Case Appendix V. The company might move towards other organisation sectors with a potential development to attain its future advancement objective.
PESTEL analysis might be carried out to find out the various external forces affecting the efficiency of the company and the current trends in the external environment of the business. A quick PESTEL analysis of the company is offered as follows; (Alanzi, 2018).
As the publishing sector could have a significant effect on the frame of mind of the people about the communist ideology of the federal government, therefore, the publishing sector is highly supervised and guided by the Promotion Department of the Communist Celebration of China. Therefore, it could be said that the total political forces impacting Avon Product Inc Case Study Analysis service are high. The government policies relating to the publishing sector are likewise increasing with the passage of time.
Economic forces impacting the publishing sector in general and the CMP in particular includesthe costs of paper, the income level of customers, the inflation rate, and the general GDP growth of the country. All these forces combine impact the demand for the publishing market.
Social and Demographical.
The consumer preferences are moving towards digital publishing rather than the conventional was of publishing. In this regard, CMP must focus on digital publishing to meet the changing customer choices.
Technological forces impacting the CMP consist of the technological improvement in the reading strategies and so on. Enhancement of science and technology along with the increase of digital publishing could minimize the need for the CMP products, if specific actions would not be taken quickly.
Environmental forces affecting Avon Product Inc Case Study Analysis includes the issues of ecological neighborhoods over the use of paper in publishing books. The paper used in the books while publishing is required to be disposable and the ink used while publishing should not be damaging for the environment.
Legal policies for the publishing sector at whole are high. The legal guidelines relating to the publishing sector is managed by the General Administration of Press and Publication. Publishing Ordinance 1997 requires the publishers to be approved initially by the Federal government to be gone into in the publishing market. The ordinance prohibits direct involvement of foreign entities and individuals in the publishing sector.
Industry Analysis (Porter's 5 Forces Model).
Porter's Five Forces Design might be used to examine the attractiveness of the publishing industry China. A quick analysis of the Porter's 5 Forces is provided as follows;.
Risk of New Entrants.
Threats of new entrants in the Chinese Publishing Market is moderate. The prospective development in the industry tends to draw in new entrants to the publishing market. The presence of intense competition and the requirement of substantial capital tends to demotivate new entrants to go into in the market.
Threat of Alternative.
Hazard of Substitution is high for the Chinese Publishing Market. The replacement products for the published documents is the documents presented in the digital libraries on certain sites. The altering consumer preferences towards digital learning increase the threat of alternative for the market.
Competitive rivalry in the publishing industry is high. The existence of a great deal of consumers in the Chinese Publishing Industry like CIP, PTP etc. tends to produce high competitive rivalry for CMP. Along with it, new entrants are likewise participating in the marketplace increasing the competitors for CMP.
Bargaining Power of Supplier.
The significant suppliers of the Avon Product Inc Case Study Analysis consist of the suppliers of the paper for releasing files. 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.
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 needs high quality files at competitive costs.
CMP operates in a highly competitive industry with the presence of large number of rivals. The business has a competitive position in the market with the highest market share in the Chinese publishing market. Major rivals of Avon Product Inc Case Study Analysis consist of;.
• Chemical Market Press (CIP).
• Posts and telecommunication Press (PTP).
Chemical Industry Press (CIP).
CIPis one of the close rivals of CMP. Founded in the exact same period, CIP publishes similar type of books. For a big period, CIP held the biggest market share, and still ranks 3rd and 2nd in numerous market sectors, with a significant focus on instructional publications. CIP functions as a hazard 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 market share of Avon Product Inc Case Study Analysis quickly in the existing market scenario.
Posts and telecommunication Press (PTP).
It was also established in the exact same period as Avon Product Inc Case Study Analysis and CIP. It is likewise one of the popular players in the publishing market with an annual overall earnings of RMB 550 million in 2010.
Alternative-1: Broaden towards New Markets
• Reducing reliance over the Chinese markets.
• Increasing number of Clients
• Development opportunities.
• Avoiding the impact of market saturation in the Chinese publishing industry.
• Use of prospective resources in expansion.
• Threat of failure in new markets.
• Time consuming.
Alernative-2: Introduce Digital Publishing
• Sustaining consumer base.
• Approaching new markets.
• Easy to introduce utilizing current capabilities.
• Low threat of Failure.
• Low requirement for funds.
• Increased product portfolio provides high value to clients.
• Competitors 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 business to lose need of its items in the market.
With the deep analysis of the internal and external environment of the company along with the industry analysis and the competitor analysis, Alternative 2 is suggested to CMP to achieve its future advancement. As the choices are shifting towards digital publishing and the business need an immediate solution to prevent the declining market growth. Therefore, intro of digital publishing might show to be an instant solution with low quantity of danger for the company. However, the company could also think about the growth program after the success of its digital publishing program.
In order to present digital publishing in its item portfolio, the company needs to initially gathers the information related to the customer demand, the prospective markets, the federal government regulations and the information connected to the competitors presented in the market. After that, the company ought to choose one prospective segment for its initial offering. It must collect research that how it could separate its digital publishing from the existing rivals' products. The actions above the company ought to go for the initial offering. If the preliminary offering shows a success, the business must opt for the other markets. In this way the business would have the ability to execute its digital publishing program.
Although, the development of the publishing market is declining because 2008, showing a threat to the business's long term existence, but the circumstance can be controlled by considering a development plan in the future. The company could consider presenting digital publishingin its existing market to implement its advancement program at immediate basis and to avoid the threat of failure for entrance in the new markets.