Corporate Strategy At Berkshire Partners Case Study Solution and Analysis
Intro
Corporate Strategy At Berkshire Partners Case Study Help is the largest publishing company with a highest market share in the China's book retail market. CMP provides a variety of services consisting of; gathering details, processing info and communication services. Significant organisation segments of the business include; books, periodicals, consultancy and distribution. The business has a vast item portfolio and its major products consist of books, regulars, online media, exhibitions, research reports and so on. Corporate Strategy At Berkshire Partners Case Study Help has become a specialized details supplier and a big thorough Science and Innovation publishing business through the combination of print media, audio-visual media and the network media.
Critical Issues
Although, Corporate Strategy At Berkshire Partners Case Study Help has spent its 60 years journey efficiently, being a successful publishing house, nevertheless, the altering macro market patterns and forces bring certain challenges to the publishing market in general and CMP in particular. These factors include;
• Entryway of the new publishing firms in the industry.
• Declining development of the publishing market.
• Market saturation.
• Introduction of digital publishing strategies
• Enhancement of science and innovation.
The change of the macro markets have raised numerous 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 business could be utilized to strive for the future advancement unceasingly? How could the company sustain its long term competitive position in future?
Situational Analysis
Internal Analysis
SWOT Analysis
Strengths
Corporate Strategy At Berkshire Partners Case Study Analysis has certain strengths that can be made use of to decrease the threats, conquer the weakness and get the opportunities. Strengths of CMP are offered as follows;
• The long term experience of Corporate Strategy At Berkshire Partners Case Study Solution in the publishing industry i.e. 60 years enables the business to provide high quality items at a lower expense using its prior experiences.
• The technical resources and capabilities created by its successful journey provide a competitive benefit to CMP.
• Huge product portfolioof CMP helps it to diversify its risk and provide high value to its customers.
• Strong financial position permits the business to think about numerous advancement opportunities without any fear of raising fund externally.
Weak points
In addition to the strengths, the business has particular weak points which might increase constraints for the company in executing its advancement program. The weaknesses of Corporate Strategy At Berkshire Partners Case Study Solution are offered as follows;
• Despite of being a science and innovation publishing company, the business still has conventional ways ofpublishing which are not suitable with the growing technological shift.
• CMP extremely relies over the Chinese markets for its development. It should propose specific expansion plans to avoid its dependence over the Chinese markets to accomplish long term development.
Opportunities
Although, the development of the publishing industry is decreasing since 2008, affecting Corporate Strategy At Berkshire Partners Case Study Analysis as well, however the development might be revived by availing certain opportunities presented in the market. The marketplace opportunities for CMP include;
• The company might also present Digital Publishing by using its long term technical experience and a strong client recognition in the market.
• CMP could consider an advancement program through the expansion towards foreign markets in order to minimize its reliance over Chinese markets by using its vast funds.
Dangers
The altering macro patterns in the market and increasing competition in the publishing industry has presented specific threats to Corporate Strategy At Berkshire Partners Case Study Help consisting of;( Gurel, 2017).
• Intro of digital publishing i.e. virtual libraries might lead to declining market share of Corporate Strategy At Berkshire Partners Case Study Help due to the customer shift towards virtual libraries.
• The presence 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 acquire a strong consumer base by using specific methods like aggressive promotion, quality products, etc.
• Entryway of new publishing companies in the market together with presence of high competition increases the hazard of losing the customer base.
Monetary Analysis.
The company has a quite competitive monetary performance. Due to lack of data, the monetary ratios of CMP could not be calculated. Nevertheless, the general monetary efficiency of the business could be examined by using the graphs given in the case Appendices. It might be examined from the Appendix III that the yearly overall revenues of CMP throughout the period 2000-2012 are growing at a high growth rate, revealing that the annual need of the items of Corporate Strategy At Berkshire Partners Case Study Analysis is growing and the business is rather effective in bring in a large number of clients at a potential rate.
Along with it, the second chart which shows the annual growth in the Corporate Strategy At Berkshire Partners Case Study Solution overall assets, shows that the business is rather effective in adding value to its assets through its earnings. The growth in properties shows that the overall worth of the firm is likewise increasing with increasing the total revenues. (Unidentified, 2013).
Another monetary analysis of the company using the provided information could be the analysis relating to the distribution of overall profits of the company. Huge part of the revenues of CMP comes from the sales of its published books i.e. 64% as displayed in the Case Appendix V. The business might move towards other service sections with a possible growth to attain its future development objective.
PESTEL Analysis
PESTEL analysis could be conducted to learn the different external forces impacting the efficiency of the company and the recent trends in the external environment of the company. A short PESTEL analysis of the company is offered as follows; (Alanzi, 2018).
Political.
As the publishing sector might have a considerable effect on the mindset of the people about the communist ideology of the government, for that reason, the publishing sector is highly supervised and guided by the Promotion Department of the Communist Party of China. It could be stated that the total political forces affecting CMP business are high. The government policies relating to the publishing sector are likewise increasing with the passage of time.
Economical.
Financial forces affecting the publishing sector in general and the CMP in specific includesthe prices of paper, the earnings level of customers, the inflation rate, and the general GDP growth of the country. All these forces combine effect the need for the publishing market.
Social and Demographical.
The customer choices are moving towards digital publishing rather than the traditional was of publishing. In this regard, CMP must focus on digital publishing to satisfy the altering consumer preferences.
Technological.
Technological forces affecting the CMP include the technological advancement in the reading methods and so on. Enhancement of science and innovation along with the increase of digital publishing might minimize the demand for the CMP products, if specific actions would not be taken quickly.
Environmental.
Ecological forces affecting Corporate Strategy At Berkshire Partners Case Study Solution includes the issues of ecological communities 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 should not be damaging for the environment.
Legal.
Legal guidelines for the publishing sector at whole are high. The legal regulations concerning the publishing sector is managed by the General Administration of Press and Publication. Publishing Ordinance 1997 needs the publishers to be authorized initially by the Government to be entered in the publishing market. The regulation forbids direct involvement of foreign entities and people in the publishing sector.
Market Analysis (Porter's Five Forces Model).
Porter's Five Forces Model could be used to examine the beauty of the publishing market China. A quick analysis of the Porter's 5 Forces is provided as follows;.
Hazard of New Entrants.
Risks of brand-new entrants in the Chinese Publishing Industry is moderate. The possible growth in the market tends to draw in brand-new entrants to the publishing market. The presence of extreme competition and the requirement of huge capital tends to demotivate new entrants to enter in the market.
Risk of Replacement.
Danger of Replacement is high for the Chinese Publishing Market. The substitute products for the published files is the documents provided in the virtual libraries on certain sites. The altering customer preferences towards digital learning increase the hazard of replacement for the market.
Competitive Competition.
Competitive competition in the publishing market is high. The presence of a great deal of customers in the Chinese Publishing Industry like CIP, PTP etc. tends to produce high competitive competition for CMP. In addition to it, new entrants are also participating in the marketplace increasing the competition for CMP.
Bargaining Power of Supplier.
The significant suppliers of the Corporate Strategy At Berkshire Partners Case Study Help include the suppliers of the paper for releasing files. As CMP is the largest publisher in the Chinese Publishing Market, for that reason the overall bargaining power of provider for CMP is low.
Bargaining Power of Buyer.
Bargaining power of buyer in the publishing market is high. Due to the existence of a a great deal of publishers in the Chinese market and the marketplace saturation, the buyers requires high quality documents at competitive costs.
Competitors Analysis.
CMP runs in an extremely competitive industry with the existence of large number of competitors. Nevertheless, the business has a competitive position in the market with the greatest market share in the Chinese publishing market. Major rivals of Corporate Strategy At Berkshire Partners Case Study Help consist of;.
• Chemical Industry Press (CIP).
• Posts and telecommunication Press (PTP).
Chemical Market Press (CIP).
CIP acts as a threat 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 CMP easily in the present market circumstance.
Posts and telecommunication Press (PTP).
It was also founded in the very same period as Corporate Strategy At Berkshire Partners Case Study Help 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.
Alternatives
Alternative-1: Broaden towards New Markets
Pros
• Reducing dependence over the Chinese markets.
• Increasing number of Consumers
• Development opportunities.
• Preventing the impact of market saturation in the Chinese publishing industry.
Cons
• Usage of prospective resources in growth.
• Danger of failure in brand-new markets.
• Time consuming.
Alernative-2: Present Digital Publishing
Pros
• Sustaining consumer base.
• Approaching new markets.
• Easy to introduce using present capabilities.
• Low danger of Failure.
• Low requirement for funds.
• Increased item portfolio provides high value to customers.
Cons
• Competition in the market by CIP, who has prior concentrate on the digital publishing.
• Shift of focus from the core business sections to the brand-new one can lead the business to lose demand of its items in the market.
Suggestions
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 advised to CMP to attain its future advancement. As the preferences are shifting towards digital publishing and the business require an immediate option to prevent the declining industry growth. For that reason, intro of digital publishing could show to be an immediate option with low amount of danger for the business. The business might likewise consider the expansion program after the success of its digital publishing program.
Application
In order to introduce digital publishing in its item portfolio, the company must initially collects the information associated with the customer need, the possible markets, the government guidelines and the information connected to the competitors presented in the market. After that, the business should decide one prospective sector for its initial offering. It ought to collect research that how it might differentiate its digital publishing from the existing rivals' products. After all the actions above the business should opt for the initial offering. If the initial offering proves a success, the business ought to go for the other markets. In this method the business would have the ability to execute its digital publishing program.
Conclusion
The development of the publishing industry is declining since 2008, revealing a risk to the company's long term presence, however the scenario can be managed by considering a development strategy in the future. The business could consider introducing digital publishingin its existing market to execute its development program at instant basis and to avoid the threat of failure for entrance in the new markets.
