Cyclone Tire Company 2 Case Study Solution and Analysis
Cyclone Tire Company 2 Case Study Analysis is the biggest publishing business with a highest market share in the China's book retail market. CMP has become a specialized details supplier and a large comprehensive Science and Innovation publishing company through the combination of print media, audio-visual media and the network media.
CMP has actually invested its 60 years journey efficiently, being an effective publishing house, nevertheless, the altering macro market patterns and forces bring specific difficulties to the publishing industry in general and Cyclone Tire Company 2 Case Study Analysis in particular. These aspects consist of;
• Entrance of the new publishing companies in the industry.
• Decreasing development of the publishing market.
• Market saturation.
• Introduction of digital publishing methods
• Enhancement of science and technology.
The transformation of the macro markets have raised a number of 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 business could be utilized to pursue the future advancement unceasingly? How could the company sustain its long term competitive position in future?
Cyclone Tire Company 2 Case Study Solution has specific strengths that can be made use of to decrease the risks, get rid of the weakness and avail the chances. Strengths of CMP are provided as follows;
• The long term experience of Cyclone Tire Company 2 Case Study Help in the publishing industry i.e. 60 years allows the company to supply high quality products at a lower cost using its previous experiences.
• The technical resources and abilities generated by its successful journey provide a competitive advantage to CMP.
• Vast product portfolioof CMP helps it to diversify its danger and supply high value to its clients.
• Strong monetary position enables the company to think about a number of development chances with no fear of raising fund externally.
In addition to the strengths, the company has particular weaknesses which could increase restrictions for the business in implementing its advancement program. The weaknesses of Cyclone Tire Company 2 Case Study Help are provided as follows;
• Despite of being a science and technology publishing firm, the business still has traditional ways ofpublishing which are not suitable with the growing technological shift.
• CMP extremely relies over the Chinese markets for its growth. It should propose particular growth plans to avoid its reliance over the Chinese markets to attain long term growth.
Although, the development of the publishing industry is decreasing because 2008, impacting Cyclone Tire Company 2 Case Study Help also, however the development could be revived by availing particular opportunities presented in the market. The market chances for CMP include;
• The company could likewise introduce Digital Publishing by using its long term technical experience and a strong consumer recognition in the market.
• CMP might think about an advancement program through the expansion towards foreign markets in order to decrease its reliance over Chinese markets by using its large financial resources.
The changing macro patterns in the market and increasing competition in the publishing industry has posed certain threats to Cyclone Tire Company 2 Case Study Analysis including;( Gurel, 2017).
• Introduction of digital publishing i.e. virtual libraries could lead to decreasing market share of Cyclone Tire Company 2 Case Study Analysis due to the customer shift towards digital libraries.
• The existence of a great deal of rivals in the publishing industry increase the threat for CMP to lose its competitive position in the market, as competitors can get a strong consumer base by using certain techniques like aggressive promotion, quality items, etc.
• Entrance of brand-new publishing companies in the industry in addition to presence of high competition increases the hazard of losing the customer base.
Due to absence of information, the monetary ratios of CMP could not be computed. It could be analyzed from the Appendix III that the annual total profits of Cyclone Tire Company 2 Case Study Analysis throughout the period 2000-2012 are growing at a high growth rate, revealing that the annual demand of the items of CMP is growing and the company is quite efficient in bring in a big number of customers at a potential rate.
In addition to it, the 2nd chart which shows the annual growth in the Cyclone Tire Company 2 Case Study Analysis overall possessions, shows that the business is quite effective in adding value to its possessions through its revenues. The growth in properties reveals that the overall worth of the firm is also increasing with increasing the overall incomes. (Unidentified, 2013).
Another monetary analysis of the business utilizing the given information could be the analysis concerning the distribution of total incomes of the business. Major part of the revenues 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 service sections with a possible development to attain its future development goal.
PESTEL analysis could be carried out to find out the different external forces affecting the efficiency of the business and the current patterns in the external environment of the business. A short PESTEL analysis of the business is given as follows; (Alanzi, 2018).
As the publishing sector might have a considerable influence on the frame of mind of the people about the communist ideology of the federal government, therefore, the publishing sector is highly monitored and directed by the Promotion Department of the Communist Party of China. It could be stated that the general political forces impacting CMP organisation are high. The federal 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 Cyclone Tire Company 2 Case Study Solution in specific includesthe costs of paper, the earnings level of consumers, the inflation rate, and the total GDP growth of the nation. All these forces combine impact the demand for the publishing market. Along with it, the financial policies connected to the import of books impact the general organisation at CPM. Nevertheless, China's financial conditions are quite favorable for CMP with high GDP growth and consumer earnings level.
Social and Demographical.
Social and demographical forces include the population growth, the customer's choices towards checking out useful products etc. China has the greatest population worldwide with a high population development, revealing the increasing variety of customers of the Cyclone Tire Company 2 Case Study Analysis. The consumer preferences are shifting towards digital publishing rather than the conventional was of publishing. In this regard, CMP should focus on digital publishing to meet the altering consumer preferences.
Technological forces affecting the CMP include the technological improvement in the reading methods etc. Enhancement of science and technology together with the increase of digital publishing might minimize the need for the CMP items, if particular actions would not be taken quickly.
Ecological forces affecting Cyclone Tire Company 2 Case Study Help includes the issues of ecological communities over the usage of paper in publishing books. The paper used in the books while publishing is required to be disposable and the ink utilized while publishing should not be harmful for the environment.
Legal regulations for the publishing sector at whole are high. The legal guidelines 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 entered in the publishing market. The regulation forbids direct participation of foreign entities and people in the publishing sector.
Market Analysis (Porter's Five Forces Model).
Porter's 5 Forces Model could be utilized to evaluate the beauty of the publishing market China. A quick analysis of the Porter's Five Forces is given as follows;.
Risk of New Entrants.
Risks of brand-new entrants in the Chinese Publishing Market is moderate. The prospective development in the industry tends to bring in brand-new entrants to the publishing market. However, the existence of intense competitors and the requirement of big capital tends to demotivate new entrants to enter in the market.
Threat of Replacement.
Danger of Substitution is high for the Chinese Publishing Market. The substitute products for the released documents is the documents provided in the virtual libraries on specific sites. The altering customer choices towards digital knowing increase the risk of alternative for the industry.
Competitive competition in the publishing market is high. The existence of large number of customers in the Chinese Publishing Market like CIP, PTP and so on tends to produce high competitive competition for CMP. Together with it, brand-new entrants are also entering into the marketplace increasing the competition for CMP.
Bargaining Power of Supplier.
The major suppliers of the Cyclone Tire Company 2 Case Study Help consist of the providers of the paper for publishing documents. 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 existence of a a great deal of publishers in the Chinese market and the market saturation, the buyers requires high quality files at competitive prices.
CMP operates in a highly competitive industry with the existence of large number of competitors. The company has a competitive position in the market with the highest market share in the Chinese publishing market. Significant rivals of Cyclone Tire Company 2 Case Study Solution include;.
• Chemical Industry Press (CIP).
• Posts and telecommunication Press (PTP).
Chemical Industry Press (CIP).
CIPis one of the close competitors of CMP. Established in the same period, CIP releases similar kind of books. For a large period, CIP held the biggest market share, and still ranks 2nd and third in various market sectors, with a significant focus on educational publications. CIP acts 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 market share of Cyclone Tire Company 2 Case Study Help easily in the present market circumstance.
Posts and telecommunication Press (PTP).
It was likewise founded in the very same period as Cyclone Tire Company 2 Case Study Analysis and CIP. It is likewise one of the prominent players 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
• Development chances.
• Avoiding the effect of market saturation in the Chinese publishing industry.
• Usage of potential resources in growth.
• Threat of failure in new markets.
• Time consuming.
Alernative-2: Present Digital Publishing
• Sustaining consumer base.
• Approaching new markets.
• Easy to present utilizing present capabilities.
• Low risk of Failure.
• Low requirement for funds.
• Increased item portfolio supplies high value to consumers.
• Competitors in the market by CIP, who has prior concentrate on the digital publishing.
• Shift of focus from the core organisation sections to the new one can lead the business to lose demand of its products in the market.
With the deep analysis of the external and internal environment of the company in addition to the market analysis and the rival analysis, Alternative 2 is suggested to CMP to accomplish its future development. As the preferences are moving towards digital publishing and the company require an instant option to avoid the declining market growth. Intro of digital publishing might prove to be an instant service with low amount of risk for the business. The business might likewise consider the growth program after the success of its digital publishing program.
In order to introduce digital publishing in its item portfolio, the business should first collects the data related to the customer demand, the prospective markets, the government policies and the data related to the rivals presented in the market. If the preliminary offering proves a success, the business must go for the other markets. In this method the business would be able to execute its digital publishing program.
Although, the growth of the publishing market is declining since 2008, revealing a threat to the company's long term presence, but the circumstance can be managed by considering a development strategy in the future. The company could think about presenting digital publishingin its existing market to execute its advancement program at instant basis and to prevent the threat of failure for entryway in the new markets.