Danaka Corporation 2 Case Study Solution and Analysis
Intro
Danaka Corporation 2 Case Study Solution is the biggest publishing business with a greatest market share in the China's book retail market. CMP has actually become a specialized info company and a big comprehensive Science and Technology publishing business through the combination of print media, audio-visual media and the network media.
Important Concerns
Although, Danaka Corporation 2 Case Study Analysis has spent its 60 years journey smoothly, being a successful publishing home, however, the altering macro market trends and forces bring certain obstacles to the publishing market in general and CMP in specific. These factors consist of;
• Entryway of the brand-new publishing companies in the industry.
• Declining growth of the publishing market.
• Market saturation.
• Introduction of digital publishing methods
• Enhancement of science and technology.
The improvement of the macro markets have raised numerous concerns to the management at CPM that what could be the future of CMP in this circumstance? Do the long important experience, technical resources and the capabilities of the business could be used to pursue the future development unceasingly? How could the company sustain its long term competitive position in future?
Situational Analysis
Internal Analysis
SWOT Analysis
Strengths
Danaka Corporation 2 Case Study Analysis has certain strengths that can be used to decrease the risks, get rid of the weakness and get the opportunities. Strengths of CMP are given as follows;
• The long term experience of Danaka Corporation 2 Case Study Help in the publishing industry i.e. 60 years permits the business to offer high quality products at a lower expense using its previous experiences.
• The technical resources and abilities produced by its effective journey provide a competitive benefit to CMP.
• Huge item portfolioof CMP helps it to diversify its danger and offer high value to its clients.
• Strong monetary position allows the business to think about numerous development chances without any worry of raising fund externally.
Weak points
In addition to the strengths, the business has particular weak points which could increase restraints for the business in implementing its development program. The weaknesses of Danaka Corporation 2 Case Study Analysis are provided as follows;
• Despite of being a science and technology publishing company, the company still has traditional ways ofpublishing which are not compatible with the growing technological shift.
• CMP extremely relies over the Chinese markets for its development. It needs to propose particular expansion plans to prevent its dependence over the Chinese markets to achieve long term development.
Opportunities
Although, the development of the publishing industry is declining because 2008, impacting Danaka Corporation 2 Case Study Analysis also, but the growth could be restored by availing certain opportunities provided in the market. The market chances for CMP include;
• The company might also present Digital Publishing by utilizing its long term technical experience and a strong client acknowledgment in the market.
• CMP might consider a development program through the expansion towards foreign markets in order to reduce its dependence over Chinese markets by utilizing its vast funds.
Dangers
The altering macro trends in the market and increasing competitors in the publishing market has posed particular risks to Danaka Corporation 2 Case Study Analysis including;( Gurel, 2017).
• Introduction of digital publishing i.e. digital libraries could result in decreasing market share of Danaka Corporation 2 Case Study Analysis due to the customer shift towards digital libraries.
• The presence of large number of competitors in the publishing market increase the threat for CMP to lose its competitive position in the market, as competitors can acquire a strong customer base by utilizing particular methods like aggressive promo, quality items, etc.
• Entrance of new publishing companies in the market in addition to existence of high competition increases the threat of losing the consumer base.
Financial Analysis.
The business has a quite competitive financial performance. Due to lack of information, the monetary ratios of CMP might not be determined. The total financial efficiency of the business might be evaluated by using the graphs provided in the case Appendices. It might be examined from the Appendix III that the yearly total earnings of CMP throughout the duration 2000-2012 are growing at a high development rate, showing that the annual need of the items of Danaka Corporation 2 Case Study Help is growing and the company is rather effective in drawing in a a great deal of customers at a prospective rate.
Along with it, the 2nd graph which shows the annual development in the Danaka Corporation 2 Case Study Analysis overall possessions, reveals that the business is quite efficient in adding worth to its possessions through its earnings. The growth in assets reveals that the overall value of the firm is also increasing with increasing the overall incomes. (Unidentified, 2013).
Another monetary analysis of the company utilizing the provided information could be the analysis relating to the circulation of overall earnings of the business. Huge part of the revenues of CMP originates from the sales of its released books i.e. 64% as displayed in the Case Appendix V. The business could move towards other business sections with a prospective growth to attain its future advancement goal.
PESTEL Analysis
PESTEL analysis might be conducted to discover the numerous external forces affecting the efficiency of the company and the recent patterns in the external environment of the business. A brief PESTEL analysis of the business is given as follows; (Alanzi, 2018).
Political.
As the publishing sector might have a significant effect on the mindset of the people about the communist ideology of the federal government, therefore, the publishing sector is extremely monitored and guided by the Promotion Department of the Communist Celebration of China. Therefore, it might be said that the general political forces affecting Danaka Corporation 2 Case Study Help company are high. The federal government policies regarding the publishing sector are likewise increasing with the passage of time.
Cost-effective.
Economic forces impacting the publishing sector in general and the Danaka Corporation 2 Case Study Analysis in particular includesthe prices of paper, the income level of customers, the inflation rate, and the general GDP development of the nation. All these forces integrate impact the demand for the publishing market. In addition to it, the economic policies associated with the import of books impact the general service at CPM. China's economic conditions are rather favorable for CMP with high GDP growth and consumer income level.
Social and Demographical.
Social and demographical forces consist of the population development, the consumer's choices towards checking out helpful products and so on. China has the greatest population worldwide with a high population growth, showing the increasing variety of customers of the Danaka Corporation 2 Case Study Analysis. However, the customer choices are moving towards digital publishing instead of the traditional was of publishing. In this regard, CMP needs to concentrate on digital publishing to meet the altering consumer preferences.
Technological.
Technological forces impacting the CMP include the technological improvement in the reading methods and so on. Improvement of science and technology together with the rise of digital publishing might minimize the need for the CMP items, if specific actions would not be taken soon.
Environmental.
Environmental forces impacting Danaka Corporation 2 Case Study Solution consists of the concerns of environmental neighborhoods over the usage of paper in publishing books. The paper used in the books while publishing is required to be non reusable and the ink used while publishing must not be damaging for the environment.
Legal.
Legal policies for the publishing sector at whole are high. Publishing Regulation 1997 needs the publishers to be approved first by the Federal government to be entered in the publishing market.
Industry Analysis (Porter's 5 Forces Design).
Porter's 5 Forces Model might be utilized to evaluate the beauty of the publishing market China. A quick analysis of the Porter's Five Forces is offered as follows;.
Threat of New Entrants.
Hazards of new entrants in the Chinese Publishing Industry is moderate. The potential development in the market tends to draw in new entrants to the publishing market. The existence of extreme competitors and the requirement of big capital tends to demotivate new entrants to go into in the market.
Danger of Replacement.
Danger of Alternative is high for the Chinese Publishing Industry. The alternative products for the published files is the files provided in the virtual libraries on specific sites. The changing consumer preferences towards digital learning increase the threat of substitution for the market.
Competitive Competition.
Competitive competition in the publishing industry is high. The existence of a great deal of customers in the Chinese Publishing Industry like CIP, PTP etc. tends to produce high competitive rivalry for CMP. Along with it, brand-new entrants are likewise entering into the marketplace increasing the competition for CMP.
Bargaining Power of Supplier.
The significant suppliers of the Danaka Corporation 2 Case Study Help include the providers of the paper for releasing documents. As CMP is the largest publisher in the Chinese Publishing Market, for that reason the total bargaining power of provider for CMP is low.
Bargaining Power of Buyer.
Negotiating power of purchaser in the publishing market is high. Due to the presence of a large number of publishers in the Chinese market and the marketplace saturation, the purchasers needs high quality documents at competitive prices.
Rivals Analysis.
CMP runs in a highly competitive market with the existence of a great deal of competitors. Nevertheless, the business has a competitive position in the market with the greatest market share in the Chinese publishing market. Significant rivals of Danaka Corporation 2 Case Study Solution consist of;.
• Chemical Market 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 could wean the market share of CMP quickly in the existing market circumstance.
Posts and telecommunication Press (PTP).
It was likewise established in the very same period as Danaka Corporation 2 Case Study Help and CIP. It is likewise one of the popular gamers in the publishing market with an annual total profits of RMB 550 million in 2010.
Alternatives
Alternative-1: Broaden towards New Markets
Pros
• Lowering reliance over the Chinese markets.
• Increasing variety of Consumers
• Development chances.
• Preventing the impact of market saturation in the Chinese publishing market.
Cons
• Use of potential resources in growth.
• Threat of failure in brand-new markets.
• Time consuming.
Alernative-2: Present Digital Publishing
Pros
• Sustaining customer base.
• Approaching brand-new markets.
• Easy to introduce utilizing existing capabilities.
• Low threat of Failure.
• Low requirement for funds.
• Increased item portfolio provides high worth to customers.
Cons
• Competition in the market by CIP, who has prior concentrate on the digital publishing.
• Shift of focus from the core company sections to the new one can lead the business to lose demand of its products in the market.
Suggestions
With the deep analysis of the external and internal environment of the company together with the industry analysis and the competitor analysis, Alternative 2 is advised to CMP to achieve its future development. As the preferences are moving towards digital publishing and the company need an instant solution to avoid the decreasing market development. For that reason, introduction of digital publishing might prove to be an immediate option with low amount of threat for the company. However, the business might also consider the expansion program after the success of its digital publishing program.
Implementation
In order to introduce digital publishing in its item portfolio, the business must first collects the information related to the consumer demand, the potential markets, the federal government regulations and the data related to the rivals presented in the market. If the preliminary offering proves a success, the company must go for the other markets. In this way the business would be able to execute its digital publishing program.
Conclusion
Although, the development of the publishing industry is declining considering that 2008, showing a hazard to the company's long term presence, however the situation can be managed by thinking about an advancement plan in the future. The business might consider presenting digital publishingin its existing market to execute its development program at immediate basis and to prevent the danger of failure for entrance in the new markets.
