Demand Media Case Study Solution and Analysis
Demand Media Case Study Analysis is the biggest publishing company with a highest market share in the China's book retail market. CMP supplies a variety of services consisting of; gathering details, processing info and communication services. Significant business sectors of the business include; books, periodicals, consultancy and circulation. The business has a huge product portfolio and its major items consist of books, periodicals, online media, exhibitions, research study reports etc. Demand Media Case Study Help has actually ended up being a specialized information service provider and a big comprehensive Science and Innovation publishing business 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, however, the changing macro market trends and forces bring particular challenges to the publishing industry in general and Demand Media Case Study Analysis in specific. These elements consist of;
• Entryway of the brand-new publishing firms in the industry.
• Declining development of the publishing market.
• Market saturation.
• Introduction of digital publishing methods
• Improvement of science and innovation.
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 situation? Do the long valuable experience, technical resources and the capabilities of the business could be made use of to pursue the future development unceasingly? How could the company sustain its long term competitive position in future?
Demand Media Case Study Analysis has particular strengths that can be utilized to minimize the dangers, conquer the weakness and get the chances. Strengths of CMP are given as follows;
• The long term experience of Demand Media Case Study Analysis in the publishing market i.e. 60 years permits the company to provide high quality items at a lower expense using its previous experiences.
• The technical resources and capabilities generated by its effective journey provide a competitive advantage to CMP.
• Vast product portfolioof CMP helps it to diversify its threat and offer high value to its consumers.
• Strong financial position allows the business to consider numerous advancement chances without any fear of raising fund externally.
Together with the strengths, the business has specific weaknesses which could increase restrictions for the business in implementing its advancement program. The weak points of Demand Media Case Study Analysis are offered as follows;
• Despite of being a science and innovation publishing company, 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 development. It needs to propose specific growth plans to avoid its reliance over the Chinese markets to accomplish long term development.
The development of the publishing industry is decreasing given that 2008, impacting Demand Media Case Study Analysis as well, but the growth could be revived by availing certain opportunities provided in the market. The marketplace chances for CMP include;
• The business could likewise present Digital Publishing by using its long term technical experience and a strong customer recognition in the market.
• CMP might consider an advancement program through the expansion towards foreign markets in order to minimize its dependence over Chinese markets by using its large funds.
The changing macro patterns in the market and increasing competitors in the publishing market has positioned particular hazards to Demand Media Case Study Solution including;( Gurel, 2017).
• Introduction of digital publishing i.e. virtual libraries could lead to decreasing market share of Demand Media Case Study Solution due to the customer shift towards digital libraries.
• The existence of large number of competitors in the publishing market increase the risk for CMP to lose its competitive position in the market, as competitors can get a strong customer base by using particular methods like aggressive promo, quality products, and so on
• Entrance of new publishing firms in the market along with presence of high competitors increases the danger of losing the consumer base.
The business has a rather competitive monetary performance. Due to lack of information, the financial ratios of CMP might not be computed. The total financial performance of the company might be analyzed by using the charts provided in the case Appendices. It could be evaluated from the Appendix III that the annual overall earnings of CMP throughout the period 2000-2012 are growing at a high growth rate, showing that the yearly need of the products of Demand Media Case Study Solution is growing and the company is quite efficient in drawing in a large number of consumers at a potential rate.
In addition to it, the second chart which shows the annual development in the Demand Media Case Study Solution total possessions, reveals that the business is quite efficient in adding worth to its assets through its profits. The growth in possessions shows that the total worth of the company is also increasing with increasing the overall revenues. (Unknown, 2013).
Another monetary analysis of the business utilizing the given information could be the analysis concerning the circulation of total profits of the business. Huge part of the revenues of CMP comes 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 development to accomplish its future advancement objective.
PESTEL analysis could be performed to discover the various external forces affecting the performance of the business and the recent trends in the external environment of the business. A quick PESTEL analysis of the company is provided as follows; (Alanzi, 2018).
As the publishing sector could have a substantial influence on the frame of mind of individuals about the communist ideology of the government, therefore, the publishing sector is extremely supervised and guided by the Publicity Department of the Communist Celebration of China. For that reason, it could be said that the general political forces impacting Demand Media Case Study Help company are high. The government policies regarding the publishing sector are likewise increasing with the passage of time.
Economic forces affecting the publishing sector in general and the CMP in specific includesthe costs of paper, the income level of customers, the inflation rate, and the total GDP growth of the nation. All these forces integrate impact the need for the publishing market.
Social and Demographical.
Social and demographical forces consist of the population growth, the customer's preferences towards checking out helpful products etc. China has the greatest population on the planet with a high population growth, revealing the increasing variety of customers of the Demand Media Case Study Analysis. Nevertheless, the consumer choices are shifting towards digital publishing instead of the conventional was of publishing. In this regard, CMP should focus on digital publishing to meet the changing customer choices.
Technological forces impacting 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 items, if specific actions would not be taken soon.
Environmental forces affecting Demand Media Case Study Help 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 disposable and the ink utilized while publishing must not be hazardous for the environment.
Legal regulations for the publishing sector at whole are high. Publishing Ordinance 1997 requires the publishers to be authorized initially by the Government to be entered in the publishing market.
Market Analysis (Porter's 5 Forces Model).
Porter's 5 Forces Design might be utilized to examine the attractiveness of the publishing industry China. A short analysis of the Porter's Five Forces is given as follows;.
Hazard of New Entrants.
Threats of brand-new entrants in the Chinese Publishing Market is moderate. The possible growth in the market tends to bring in new entrants to the publishing market. The existence of intense competitors and the requirement of big capital tends to demotivate new entrants to go into in the market.
Danger of Replacement.
Risk of Alternative is high for the Chinese Publishing Market. The substitute items for the released files is the files provided in the virtual libraries on certain sites. The changing customer choices towards digital learning increase the danger of substitution for the industry.
Competitive competition in the publishing market is high. The presence of large number of customers in the Chinese Publishing Market like CIP, PTP and so on tends to produce high competitive competition for CMP. In addition to it, new entrants are also entering into the marketplace increasing the competitors for CMP.
Bargaining Power of Provider.
The major providers of the Demand Media Case Study Analysis include the suppliers of the paper for releasing documents. 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 Buyer.
Negotiating power of purchaser in the publishing industry is high. Due to the presence of a large number of publishers in the Chinese market and the market saturation, the purchasers requires high quality documents at competitive rates.
CMP runs in an extremely competitive industry with the presence of large number of competitors. Nevertheless, the business has a competitive position in the market with the highest market share in the Chinese publishing market. Significant competitors of Demand Media Case Study Solution consist of;.
• Chemical Industry Press (CIP).
• Posts and telecommunication Press (PTP).
Chemical Market Press (CIP).
CIPis among the close competitors of CMP. Established in the same period, CIP publishes similar kind of books. For a big period, CIP held the biggest market share, and still ranks 3rd and 2nd in numerous market sections, with a major focus on academic publications. CIP functions as a hazard 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 marketplace share of Demand Media Case Study Analysis quickly in the current market scenario.
Posts and telecommunication Press (PTP).
Another close rival of CMP is PTP. It was likewise established in the same duration as CMP and CIP. It ranks 6th in the state-owned publishers in terms of organisation scale. It is likewise one of the popular gamers in the publishing market with an annual overall profits of RMB 550 million in 2010.
Alternative-1: Broaden towards New Markets
• Reducing reliance over the Chinese markets.
• Increasing number of Consumers
• Growth opportunities.
• Preventing the impact of market saturation in the Chinese publishing industry.
• Use of possible resources in expansion.
• Danger of failure in new markets.
• Time consuming.
Alernative-2: Present Digital Publishing
• Sustaining consumer base.
• Approaching new markets.
• Easy to present utilizing existing capabilities.
• Low risk of Failure.
• Low requirement for funds.
• Increased item portfolio offers high worth to customers.
• Competitors in the market by CIP, who has prior focus on the digital publishing.
• Shift of focus from the core company segments to the brand-new one can lead the company to lose demand of its products in the market.
With the deep analysis of the internal and external environment of the business in addition to the market analysis and the rival analysis, Alternative 2 is recommended to CMP to accomplish its future development. As the preferences are moving towards digital publishing and the company require an instant service to prevent the decreasing industry growth. Therefore, intro of digital publishing might show to be an immediate service with low quantity of risk for the business. However, the company might likewise think about the expansion program after the success of its digital publishing program.
In order to introduce digital publishing in its product portfolio, the business needs to initially collects the data related to the consumer need, the possible markets, the government regulations and the data related to the rivals presented in the market. If the preliminary offering proves a success, the business needs to go for the other markets. In this way the company would be able to execute its digital publishing program.
Although, the growth of the publishing industry is declining given that 2008, showing a risk to the company's long term existence, but the situation can be controlled by considering an advancement plan in the future. The company might think about 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.