China Magic Going Home Case Study Solution and Analysis
China Magic Going Home Case Study Solution is the largest publishing company with a greatest market share in the China's book retail market. CMP has actually become a specialized information supplier and a large comprehensive Science and Technology publishing business through the combination of print media, audio-visual media and the network media.
Although, China Magic Going Home Case Study Help has invested its 60 years journey efficiently, being an effective publishing home, however, the changing macro market patterns and forces bring certain challenges to the publishing market in basic and CMP in particular. These elements include;
• Entryway of the brand-new publishing companies in the market.
• Declining growth of the publishing market.
• Market saturation.
• Intro of digital publishing methods
• Enhancement of science and technology.
The improvement of the macro markets have raised numerous 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?
China Magic Going Home Case Study Solution has certain strengths that can be made use of to reduce the dangers, get rid of the weakness and get the opportunities. Strengths of CMP are given as follows;
• The long term experience of China Magic Going Home Case Study Help in the publishing industry i.e. 60 years allows the business to supply high quality items at a lower expense utilizing its previous experiences.
• The technical resources and abilities created by its successful journey provide a competitive benefit to CMP.
• Large product portfolioof CMP helps it to diversify its danger and supply high value to its clients.
• Strong monetary position allows the business to consider numerous advancement opportunities with no fear of raising fund externally.
In addition to the strengths, the company has particular weak points which could increase restrictions for the company in executing its advancement program. The weaknesses of China Magic Going Home Case Study Analysis are provided as follows;
• Despite of being a science and technology publishing firm, the business still has conventional methods ofpublishing which are not suitable with the growing technological shift.
• CMP highly relies over the Chinese markets for its growth. It must propose certain growth strategies to avoid its dependence over the Chinese markets to accomplish long term development.
Although, the growth of the publishing industry is declining considering that 2008, impacting China Magic Going Home Case Study Solution too, but the growth could be revived by availing specific opportunities provided in the market. The market opportunities for CMP consist of;
• The business might likewise introduce Digital Publishing by using its long term technical experience and a strong customer recognition in the market.
• CMP might consider a development program through the expansion towards foreign markets in order to decrease its dependence over Chinese markets by using its large financial resources.
The altering macro patterns in the market and increasing competitors in the publishing industry has actually positioned certain dangers to China Magic Going Home Case Study Solution including;( Gurel, 2017).
• Introduction of digital publishing i.e. digital libraries could result in decreasing market share of China Magic Going Home Case Study Analysis due to the customer shift towards virtual libraries.
• The presence of a great deal of competitors in the publishing industry increase the threat for CMP to lose its competitive position in the market, as rivals can gain a strong consumer base by utilizing certain strategies like aggressive promo, quality items, and so on
• Entrance of brand-new publishing companies in the industry in addition to presence of high competition increases the hazard of losing the client base.
The company has a quite competitive monetary efficiency. Due to lack of data, the financial ratios of CMP could not be computed. The general monetary performance of the business could be analyzed by utilizing the graphs provided in the case Appendices. It might 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 need of the products of China Magic Going Home Case Study Help is growing and the company is rather effective in bring in a a great deal of consumers at a possible rate.
In addition to it, the second graph which reveals the annual development in the China Magic Going Home Case Study Help total assets, shows that the business is rather efficient in including worth to its properties through its revenues. The growth in possessions reveals that the overall worth of the company is also increasing with increasing the total incomes. (Unknown, 2013).
Another financial analysis of the company utilizing the offered data could be the analysis regarding the circulation of total incomes of the company. Major 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 business might move towards other organisation segments with a potential growth to attain its future development goal.
PESTEL analysis might be performed to learn the different external forces affecting the performance of the company and the recent patterns in the external environment of the company. A brief PESTEL analysis of the company is provided as follows; (Alanzi, 2018).
As the publishing sector might have a significant influence on the frame of mind of individuals about the communist ideology of the government, for that reason, the publishing sector is extremely supervised and assisted by the Promotion Department of the Communist Celebration of China. It could be said that the overall political forces impacting CMP service are high. The federal government policies regarding the publishing sector are likewise increasing with the passage of time.
Financial forces affecting the publishing sector in general and the CMP in specific includesthe prices of paper, the earnings level of consumers, the inflation rate, and the total GDP growth of the nation. All these forces combine effect the demand for the publishing market.
Social and Demographical.
Social and demographical forces consist of the population development, the customer's choices towards reading useful materials etc. China has the highest population in the world with a high population growth, showing the increasing number of customers of the China Magic Going Home Case Study Analysis. Nevertheless, the customer choices are shifting towards digital publishing instead of the conventional was of publishing. In this regard, CMP needs to concentrate on digital publishing to meet the altering customer choices.
Technological forces impacting the CMP include the technological improvement in the reading techniques etc. Enhancement of science and technology in addition to the rise of digital publishing could decrease the demand for the CMP products, if certain actions would not be taken quickly.
Environmental forces impacting China Magic Going Home Case Study Analysis includes the issues of environmental communities over the usage of paper in publishing books. The paper utilized in the books while publishing is required to be disposable and the ink utilized while publishing must not be damaging for the environment.
Legal policies for the publishing sector at whole are high. Publishing Regulation 1997 requires the publishers to be approved first by the Government to be gone into in the publishing market.
Industry Analysis (Porter's 5 Forces Design).
Porter's 5 Forces Model could be used to examine the appearance of the publishing market China. A short analysis of the Porter's 5 Forces is given as follows;.
Hazard of New Entrants.
Dangers of new entrants in the Chinese Publishing Industry is moderate. The possible development in the market tends to bring in new entrants to the publishing industry. Nevertheless, the existence of intense competition and the requirement of substantial capital tends to demotivate brand-new entrants to enter in the marketplace.
Risk of Replacement.
Threat of Substitution is high for the Chinese Publishing Market. The alternative items for the released files is the documents presented in the virtual libraries on certain sites. The changing customer choices towards digital learning increase the danger of alternative for the industry.
Competitive competition in the publishing market is high. The existence 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 likewise participating in the marketplace increasing the competition for CMP.
Bargaining Power of Supplier.
The major providers of the China Magic Going Home Case Study Solution 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 Purchaser.
Bargaining 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 market saturation, the purchasers needs high quality files at competitive rates.
CMP operates in a highly competitive industry with the presence of a great deal of rivals. The company has a competitive position in the market with the highest market share in the Chinese publishing market. Significant competitors of China Magic Going Home Case Study Analysis include;.
• Chemical Market Press (CIP).
• Posts and telecommunication Press (PTP).
Chemical Industry Press (CIP).
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 CMP quickly in the existing market situation.
Posts and telecommunication Press (PTP).
Another close rival of CMP is PTP. It was also established in the very same duration as CMP and CIP. It ranks sixth in the state-owned publishers in terms of business scale. It is also one of the prominent gamers in the publishing industry with an annual total earnings of RMB 550 million in 2010.
Alternative-1: Expand towards New Markets
• Minimizing reliance over the Chinese markets.
• Increasing variety of Customers
• Growth chances.
• Avoiding the effect of market saturation in the Chinese publishing market.
• Use of possible resources in expansion.
• Threat of failure in brand-new markets.
• Time consuming.
Alernative-2: Present Digital Publishing
• Sustaining customer base.
• Approaching new markets.
• Easy to introduce utilizing present abilities.
• Low risk of Failure.
• Low requirement for funds.
• Increased product portfolio supplies high worth to clients.
• Competition in the market by CIP, who has prior concentrate on the digital publishing.
• Shift of focus from the core business sections 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 company along with the industry analysis and the rival analysis, Alternative 2 is recommended to CMP to attain its future development. As the choices are shifting towards digital publishing and the business need an instant service to prevent the declining industry growth. Intro of digital publishing might show to be an immediate solution with low quantity of risk for the company. The company might also consider the expansion program after the success of its digital publishing program.
In order to introduce digital publishing in its item portfolio, the business should initially gathers the data related to the customer need, the prospective markets, the government policies and the information related to the rivals provided in the market. If the preliminary offering shows a success, the company should go for the other markets. In this way the business would be able to execute its digital publishing program.
Although, the development of the publishing market is decreasing considering that 2008, revealing a threat to the company's long term presence, but the situation can be controlled by thinking about a development plan in the future. The company could think about introducing digital publishingin its existing market to implement its advancement program at immediate basis and to avoid the threat of failure for entryway in the brand-new markets.