Chestnut Foods 3 Case Study Solution and Analysis
Introduction
Chestnut Foods 3 Case Study Analysis is the largest publishing company with a greatest market share in the China's book retail market. CMP has become a specialized details company and a large extensive Science and Innovation publishing company through the integration of print media, audio-visual media and the network media.
Crucial Concerns
CMP has actually spent its 60 years journey smoothly, being an effective publishing house, nevertheless, the changing macro market trends and forces bring particular challenges to the publishing industry in general and Chestnut Foods 3 Case Study Solution in specific. These elements consist of;
• Entrance of the new publishing firms in the industry.
• Declining development of the publishing market.
• Market saturation.
• Intro of digital publishing techniques
• Improvement of science and innovation.
The improvement of the macro markets have raised several questions 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 advancement unceasingly? How could the company sustain its long term competitive position in future?
Situational Analysis
Internal Analysis
SWOT Analysis
Strengths
Chestnut Foods 3 Case Study Solution has specific strengths that can be used to lower the dangers, get rid of the weak point and obtain the opportunities. Strengths of CMP are given as follows;
• The long term experience of Chestnut Foods 3 Case Study Analysis in the publishing industry i.e. 60 years allows the business to offer high quality items at a lower cost utilizing its previous experiences.
• The technical resources and abilities produced by its successful journey provide a competitive benefit to CMP.
• Vast item portfolioof CMP assists it to diversify its danger and provide high worth to its customers.
• Strong monetary position permits the business to think about numerous advancement opportunities with no fear of raising fund externally.
Weak points
In addition to the strengths, the business has particular weak points which could increase constraints for the business in executing its development program. The weaknesses of Chestnut Foods 3 Case Study Solution are offered as follows;
• Despite of being a science and innovation publishing company, the business still has conventional methods ofpublishing which are not compatible with the growing technological shift.
• CMP highly relies over the Chinese markets for its growth. It must propose specific growth plans to prevent its reliance over the Chinese markets to achieve long term development.
Opportunities
Although, the development of the publishing market is declining since 2008, impacting Chestnut Foods 3 Case Study Analysis as well, however the development might be revived by availing particular opportunities presented in the market. The marketplace opportunities for CMP consist of;
• The company might also introduce Digital Publishing by utilizing its long term technical experience and a strong consumer recognition in the market.
• CMP could think about a development program through the expansion towards foreign markets in order to lower its dependence over Chinese markets by using its huge financial resources.
Dangers
The changing macro patterns in the market and increasing competition in the publishing industry has actually positioned specific dangers to Chestnut Foods 3 Case Study Help consisting of;( Gurel, 2017).
• Intro of digital publishing i.e. virtual libraries could cause declining market share of Chestnut Foods 3 Case Study Analysis due to the consumer shift towards virtual libraries.
• The existence of large number of rivals in the publishing industry increase the threat for CMP to lose its competitive position in the market, as competitors can acquire a strong consumer base by using particular techniques like aggressive promotion, quality items, and so on
• Entryway of new publishing firms in the industry in addition to presence of high competitors increases the danger of losing the consumer base.
Monetary Analysis.
Due to lack of information, the monetary ratios of CMP could not be calculated. It might be examined from the Appendix III that the annual total earnings of Chestnut Foods 3 Case Study Help throughout the duration 2000-2012 are growing at a high development rate, showing that the yearly need of the items of CMP is growing and the business is quite effective in attracting a large number of consumers at a possible rate.
In addition to it, the second chart which reveals the yearly development in the Chestnut Foods 3 Case Study Solution total possessions, shows that the business is rather effective in adding value to its properties through its earnings. The development in assets reveals that the overall value of the firm is likewise increasing with increasing the total earnings. (Unknown, 2013).
Another financial analysis of the company utilizing the provided information might be the analysis concerning the distribution of total revenues of the company. Major part of the profits of CMP comes from the sales of its released books i.e. 64% as shown in the Case Appendix V. The business might move towards other organisation segments with a possible growth to accomplish its future advancement goal.
PESTEL Analysis
PESTEL analysis could be conducted to learn the various external forces affecting the efficiency of the business and the recent trends in the external environment of the business. A quick PESTEL analysis of the business is given as follows; (Alanzi, 2018).
Political.
As the publishing sector could have a considerable impact on the frame of mind of individuals about the communist ideology of the federal government, for that reason, the publishing sector is extremely supervised and directed by the Publicity Department of the Communist Party of China. For that reason, it could be stated that the overall political forces impacting Chestnut Foods 3 Case Study Solution organisation are high. The government policies relating to the publishing sector are also increasing with the passage of time.
Economical.
Economic forces affecting the publishing sector in general and the CMP in particular includesthe prices of paper, the income level of customers, the inflation rate, and the general GDP growth of the nation. 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 should focus on digital publishing to satisfy the altering consumer preferences.
Technological.
Technological forces impacting the CMP include the technological advancement in the reading techniques etc. Improvement of science and innovation along with the increase of digital publishing might lower the need for the CMP products, if particular actions would not be taken soon.
Environmental.
Environmental forces affecting Chestnut Foods 3 Case Study Help consists of the concerns of environmental 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 used while publishing needs to not be damaging for the environment.
Legal.
Legal policies for the publishing sector at whole are high. The legal regulations regarding the publishing sector is controlled by the General Administration of Press and Publication. Publishing Ordinance 1997 requires the publishers to be approved first by the Federal government to be gone into in the publishing market. The regulation prohibits direct participation of foreign entities and people in the publishing sector.
Industry Analysis (Porter's 5 Forces Design).
Porter's 5 Forces Design might be used to analyze the beauty of the publishing market China. A short analysis of the Porter's Five Forces is given as follows;.
Danger of New Entrants.
Threats of new entrants in the Chinese Publishing Industry is moderate. The prospective growth in the market tends to attract brand-new entrants to the publishing industry. Nevertheless, the existence of extreme competitors and the requirement of huge capital tends to demotivate brand-new entrants to enter in the marketplace.
Threat of Substitution.
Threat of Alternative is high for the Chinese Publishing Industry. The replacement products for the released files is the documents presented in the digital libraries on certain sites. The altering customer choices towards digital knowing increase the risk of replacement for the market.
Competitive Competition.
Competitive rivalry in the publishing industry is high. The presence of large number 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 participating in the market increasing the competition for CMP.
Bargaining Power of Provider.
The significant suppliers of the Chestnut Foods 3 Case Study Help include the suppliers of the paper for releasing documents. As CMP is the biggest publisher in the Chinese Publishing Market, for that reason the overall bargaining power of supplier for CMP is low.
Bargaining Power of Purchaser.
Bargaining power of buyer in the publishing market is high. Due to the existence of a large number of publishers in the Chinese market and the market saturation, the buyers requires high quality files at competitive prices.
Rivals Analysis.
CMP operates in an extremely competitive market with the presence 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 competitors of Chestnut Foods 3 Case Study Analysis include;.
• Chemical Market Press (CIP).
• Posts and telecommunication Press (PTP).
Chemical Industry Press (CIP).
CIPis among the close competitors of CMP. Founded in the same period, CIP releases comparable type of books. For a big period, CIP held the largest market share, and still ranks 3rd and 2nd in various market segments, with a major focus on educational publications. CIP serves 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 Chestnut Foods 3 Case Study Solution quickly in the current market situation.
Posts and telecommunication Press (PTP).
It was likewise founded in the very same period as Chestnut Foods 3 Case Study Analysis and CIP. It is likewise one of the popular players in the publishing industry with a yearly overall profits of RMB 550 million in 2010.
Alternatives
Alternative-1: Broaden towards New Markets
Pros
• Lowering dependence over the Chinese markets.
• Increasing number of Customers
• Growth chances.
• Avoiding the impact of market saturation in the Chinese publishing industry.
Cons
• Usage of possible resources in expansion.
• Threat of failure in new markets.
• Time consuming.
Alernative-2: Introduce Digital Publishing
Pros
• Sustaining consumer base.
• Approaching new markets.
• Easy to present utilizing existing capabilities.
• Low danger of Failure.
• Low requirement for funds.
• Increased product portfolio offers 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 business segments to the brand-new one can lead the company to lose demand of its products in the market.
Suggestions
With the deep analysis of the internal and external environment of the company together with the market analysis and the competitor analysis, Alternative 2 is advised to CMP to achieve its future advancement. As the choices are moving towards digital publishing and the business require an instant option to avoid the declining market development. Therefore, introduction of digital publishing could prove to be an immediate option with low quantity of danger for the company. Nevertheless, the company might likewise think about the expansion program after the success of its digital publishing program.
Execution
In order to present digital publishing in its product portfolio, the business must first gathers the data related to the consumer demand, the potential markets, the federal government regulations and the data related to the rivals provided in the market. If the initial offering shows a success, the company must go for the other markets. In this method the company would be able to implement its digital publishing program.
Conclusion
Although, the development of the publishing industry is declining because 2008, revealing a hazard to the company's long term presence, however the situation can be managed by thinking about a development plan in the future. The business might consider presenting digital publishingin its existing market to execute its development program at immediate basis and to avoid the danger of failure for entryway in the brand-new markets.
