Cosmeticos De Espana Sa A Case Study Solution and Analysis
Intro
Cosmeticos De Espana Sa A Case Study Analysis is the largest publishing company with a highest market share in the China's book retail market. CMP has become a specialized information service provider and a large detailed Science and Innovation publishing business through the integration of print media, audio-visual media and the network media.
Critical Issues
CMP has actually invested its 60 years journey smoothly, being an effective publishing house, nevertheless, the altering macro market trends and forces bring certain difficulties to the publishing market in basic and Cosmeticos De Espana Sa A Case Study Help in specific. These elements consist of;
• Entrance of the new publishing companies in the market.
• Declining development of the publishing market.
• Market saturation.
• Introduction of digital publishing strategies
• Enhancement of science and technology.
The change of the macro markets have raised numerous questions to the management at CPM that what could be the future of CMP in this circumstance? Do the long valuable experience, technical resources and the capabilities 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
Cosmeticos De Espana Sa A Case Study Analysis has particular strengths that can be utilized to reduce the hazards, overcome the weak point and get the opportunities. Strengths of CMP are given as follows;
• The long term experience of Cosmeticos De Espana Sa A Case Study Analysis in the publishing industry i.e. 60 years permits the business to provide high quality products at a lower expense using its previous experiences.
• The technical resources and abilities created by its successful journey provide a competitive benefit to CMP.
• Vast item portfolioof CMP assists it to diversify its danger and supply high value to its consumers.
• Strong financial position allows the business to think about a number of development chances without any worry of raising fund externally.
Weaknesses
Along with the strengths, the company has specific weaknesses which could increase restraints for the company in implementing its development program. The weaknesses of Cosmeticos De Espana Sa A Case Study Help are provided as follows;
• Despite of being a science and innovation publishing company, the company still has conventional ways ofpublishing which are not compatible with the growing technological shift.
• CMP extremely relies over the Chinese markets for its development. It must propose particular growth strategies to avoid its reliance over the Chinese markets to achieve long term growth.
Opportunities
Although, the development of the publishing market is declining since 2008, impacting Cosmeticos De Espana Sa A Case Study Analysis also, however the development could be revived by availing certain opportunities presented in the market. The marketplace chances for CMP consist of;
• The company might also introduce Digital Publishing by using its long term technical experience and a strong customer acknowledgment in the market.
• CMP might think about an advancement program through the expansion towards foreign markets in order to minimize its dependence over Chinese markets by using its huge financial resources.
Dangers
The changing macro trends in the market and increasing competitors in the publishing industry has presented particular dangers to Cosmeticos De Espana Sa A Case Study Analysis including;( Gurel, 2017).
• Introduction of digital publishing i.e. virtual libraries might lead to decreasing market share of Cosmeticos De Espana Sa A 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 competitors can gain a strong consumer base by using particular strategies like aggressive promo, quality items, etc.
• Entrance of brand-new publishing firms in the industry in addition to presence of high competitors increases the threat of losing the consumer base.
Financial Analysis.
The company has a quite competitive financial performance. Due to absence of information, the monetary ratios of CMP might not be computed. However, the overall monetary performance of the company might be examined by utilizing the graphs given in the case Appendices. It might be analyzed from the Appendix III that the yearly overall revenues of CMP throughout the period 2000-2012 are growing at a high development rate, showing that the annual need of the items of Cosmeticos De Espana Sa A Case Study Solution is growing and the business is quite efficient in bring in a large number of customers at a prospective cost.
Together with it, the second graph which reveals the annual growth in the Cosmeticos De Espana Sa A Case Study Solution overall possessions, reveals that the company is rather efficient in adding worth to its possessions through its revenues. The growth in possessions shows that the total worth of the company is likewise increasing with increasing the overall profits. (Unidentified, 2013).
Another financial analysis of the company utilizing the provided data might be the analysis regarding the distribution of total revenues of the business. 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 company could move towards other company segments with a prospective growth to attain its future development objective.
PESTEL Analysis
PESTEL analysis might be conducted to find out the numerous external forces affecting the efficiency of the company and the recent patterns in the external environment of the company. A quick PESTEL analysis of the company is provided as follows; (Alanzi, 2018).
Political.
As the publishing sector could have a significant impact on the mindset of the people about the communist ideology of the government, for that reason, the publishing sector is highly supervised and assisted by the Promotion Department of the Communist Party of China. It might be said that the total political forces impacting CMP company are high. The government policies concerning the publishing sector are likewise increasing with the passage of time.
Affordable.
Financial forces impacting the publishing sector in basic and the CMP in specific includesthe prices of paper, the earnings level of consumers, the inflation rate, and the general GDP growth of the country. All these forces combine impact the need for the publishing market.
Social and Demographical.
The consumer preferences are shifting towards digital publishing rather than the conventional was of publishing. In this regard, CMP needs to focus on digital publishing to meet the changing customer preferences.
Technological.
Technological forces affecting the CMP include the technological improvement in the reading strategies etc. Improvement of science and technology in addition to the rise of digital publishing might lower the need for the CMP items, if particular actions would not be taken quickly.
Environmental.
Ecological forces impacting Cosmeticos De Espana Sa A Case Study Analysis includes the issues of environmental neighborhoods over the use of paper in publishing books. The paper utilized in the books while publishing is required to be non reusable and the ink used while publishing should not be damaging for the environment.
Legal.
Legal guidelines for the publishing sector at whole are high. The legal regulations regarding the publishing sector is managed by the General Administration of Press and Publication. Publishing Regulation 1997 requires the publishers to be authorized first by the Federal government to be gone into in the publishing market. The ordinance forbids direct involvement of foreign entities and people in the publishing sector.
Market Analysis (Porter's Five Forces Design).
Porter's 5 Forces Design might be utilized to examine the attractiveness of the publishing market China. A short analysis of the Porter's Five Forces is offered as follows;.
Danger of New Entrants.
Risks of new entrants in the Chinese Publishing Industry is moderate. The prospective growth in the market tends to bring in brand-new entrants to the publishing industry. Nevertheless, the existence of extreme competition and the requirement of huge capital tends to demotivate brand-new entrants to enter in the market.
Risk of Substitution.
Danger of Replacement is high for the Chinese Publishing Market. The replacement items for the published files is the files presented in the virtual libraries on specific sites. The altering customer choices towards digital knowing increase the risk of alternative for the industry.
Competitive Competition.
Competitive competition in the publishing industry is high. The existence of large number of customers in the Chinese Publishing Industry like CIP, PTP and so on tends to produce high competitive rivalry for CMP. Along with it, new entrants are likewise entering into the marketplace increasing the competition for CMP.
Bargaining Power of Supplier.
The major suppliers of the Cosmeticos De Espana Sa A Case Study Solution consist of the suppliers of the paper for publishing files. As CMP is the largest publisher in the Chinese Publishing Market, for that reason the general bargaining power of supplier for CMP is low.
Bargaining Power of Purchaser.
Negotiating power of buyer in the publishing industry 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 documents at competitive costs.
Competitors Analysis.
CMP runs in a highly competitive industry with the existence of large number of rivals. However, the company has a competitive position in the market with the highest market share in the Chinese publishing market. Significant competitors of Cosmeticos De Espana Sa A Case Study Help consist of;.
• Chemical Industry Press (CIP).
• Posts and telecommunication Press (PTP).
Chemical Industry Press (CIP).
CIP acts as a danger 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 quickly in the existing market scenario.
Posts and telecommunication Press (PTP).
Another close competitor of CMP is PTP. It was also founded in the exact same period as CMP and CIP. It ranks sixth in the state-owned publishers in regards to service scale. It is also one of the prominent gamers in the publishing industry with an annual overall profits of RMB 550 million in 2010.
Alternatives
Alternative-1: Broaden towards New Markets
Pros
• Reducing dependence over the Chinese markets.
• Increasing number of Customers
• Development chances.
• Preventing the effect of market saturation in the Chinese publishing industry.
Cons
• Use of possible resources in expansion.
• Risk of failure in new markets.
• Time consuming.
Alernative-2: Introduce Digital Publishing
Pros
• Sustaining consumer base.
• Approaching brand-new markets.
• Easy to introduce utilizing existing capabilities.
• Low threat of Failure.
• Low requirement for funds.
• Increased product portfolio provides high value to consumers.
Cons
• Competition in the market by CIP, who has prior concentrate on the digital publishing.
• Shift of focus from the core service segments to the new one can lead the business to lose need of its products in the market.
Suggestions
With the deep analysis of the internal and external environment of the company along with the industry analysis and the rival analysis, Alternative 2 is recommended to CMP to achieve its future development. As the choices are shifting towards digital publishing and the company require an instant service to prevent the declining market growth. For that reason, intro of digital publishing could show to be an instant service with low quantity of threat for the company. However, the business could also think about the growth program after the success of its digital publishing program.
Implementation
In order to present digital publishing in its product portfolio, the business ought to initially gathers the information associated with the customer need, the possible markets, the federal government guidelines and the information associated with the rivals provided in the market. After that, the business needs to decide one prospective section for its initial offering. It needs to collect research study that how it could separate its digital publishing from the existing competitors' products. After all the steps above the business should choose the preliminary offering. If the initial offering proves a success, the company needs to go for the other markets. In this way the company would be able to execute its digital publishing program.
Conclusion
The development of the publishing industry is declining since 2008, revealing a danger to the company's long term presence, but the circumstance can be controlled by thinking about an advancement strategy in the future. The company could consider presenting digital publishingin its existing market to implement its advancement program at instant basis and to avoid the risk of failure for entrance in the brand-new markets.
