Demand Media Case Study Solution and Analysis
Introduction
Demand Media Case Study Analysis is the largest publishing company with a highest market share in the China's book retail market. CMP offers a number of services including; gathering info, processing information and communication services. Significant organisation sections of the company consist of; books, regulars, consultancy and distribution. The company has a vast item portfolio and its significant items consist of books, regulars, online media, exhibitions, research study reports etc. Demand Media Case Study Solution has actually become a specialized information service provider and a large extensive Science and Innovation publishing business through the combination of print media, audio-visual media and the network media.
Critical Issues
CMP has actually invested its 60 years journey smoothly, being a successful publishing home, nevertheless, the changing macro market trends and forces bring specific obstacles to the publishing market in basic and Demand Media Case Study Help in specific. These aspects include;
• Entrance of the brand-new publishing companies in the market.
• Declining growth of the publishing market.
• Market saturation.
• Intro of digital publishing strategies
• Enhancement of science and innovation.
The improvement of the macro markets have raised several questions 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 company could be used 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
Demand Media Case Study Help has specific strengths that can be made use of to decrease the hazards, overcome the weak point and obtain the chances. Strengths of CMP are given as follows;
• The long term experience of Demand Media Case Study Help in the publishing industry i.e. 60 years allows the business to provide high quality products at a lower cost using its previous experiences.
• The technical resources and abilities produced by its effective journey provide a competitive advantage to CMP.
• Large item portfolioof CMP helps it to diversify its threat and offer high value to its consumers.
• Strong financial position enables the company to think about numerous advancement chances with no fear of raising fund externally.
Weaknesses
In addition to the strengths, the business has certain weaknesses which might increase constraints for the business in implementing its development program. The weak points of Demand Media Case Study Help are offered as follows;
• Despite of being a science and innovation publishing firm, the company still has standard methods ofpublishing which are not compatible with the growing technological shift.
• CMP extremely relies over the Chinese markets for its development. It ought to propose particular growth strategies to avoid its reliance over the Chinese markets to accomplish long term growth.
Opportunities
The growth of the publishing market is declining because 2008, impacting Demand Media Case Study Help as well, however the development might be revived by availing specific chances provided in the market. The marketplace opportunities for CMP consist of;
• The business could also present Digital Publishing by using its long term technical experience and a strong consumer acknowledgment in the market.
• CMP could consider a development program through the growth towards foreign markets in order to decrease its reliance over Chinese markets by utilizing its vast funds.
Dangers
The altering macro trends in the market and increasing competition in the publishing market has actually postured particular risks to Demand Media Case Study Analysis including;( Gurel, 2017).
• Introduction of digital publishing i.e. virtual libraries could lead to declining market share of Demand Media Case Study Solution due to the customer shift towards digital libraries.
• The presence of a great deal of competitors in the publishing market increase the threat for CMP to lose its competitive position in the market, as rivals can acquire a strong consumer base by utilizing certain methods like aggressive promotion, quality items, and so on
• Entryway of brand-new publishing companies in the industry in addition to existence of high competitors increases the risk of losing the client base.
Financial Analysis.
Due to absence of information, the monetary ratios of CMP could not be calculated. It might be examined from the Appendix III that the yearly overall profits of Demand Media Case Study Solution throughout the period 2000-2012 are growing at a high growth rate, revealing that the yearly need of the items of CMP is growing and the company is quite effective in drawing in a large number of consumers at a possible price.
In addition to it, the 2nd chart which shows the annual growth in the Demand Media Case Study Help total properties, reveals that the business is quite effective in adding worth to its possessions through its incomes. The development in assets reveals that the total value of the company is also increasing with increasing the overall revenues. (Unidentified, 2013).
Another monetary analysis of the company utilizing the offered data might be the analysis concerning the distribution of overall earnings of the company. Major part of the incomes of CMP comes from the sales of its released books i.e. 64% as displayed in the Case Appendix V. The company could move towards other organisation sectors with a prospective growth to achieve its future advancement goal.
PESTEL Analysis
PESTEL analysis could be carried out to discover the numerous external forces impacting the efficiency of the business and the current trends in the external environment of the company. A short PESTEL analysis of the company is provided as follows; (Alanzi, 2018).
Political.
As the publishing sector might have a considerable influence on the state of mind of individuals about the communist ideology of the federal government, therefore, the publishing sector is extremely monitored and assisted by the Publicity Department of the Communist Celebration of China. It could be said that the overall political forces impacting CMP business are high. The government policies regarding the publishing sector are also increasing with the passage of time.
Affordable.
Financial forces affecting the publishing sector in general and the Demand Media Case Study Solution in specific includesthe costs of paper, the earnings level of consumers, the inflation rate, and the total GDP development of the nation. All these forces integrate effect the need for the publishing market. Along with it, the financial policies connected to the import of books affect the overall company at CPM. China's economic conditions are quite favorable for CMP with high GDP growth and consumer income level.
Social and Demographical.
Social and demographical forces consist of the population growth, the customer's preferences towards checking out useful materials etc. China has the highest population in the world with a high population development, revealing the increasing number of consumers of the Demand Media Case Study Analysis. Nevertheless, the consumer choices are moving towards digital publishing rather than the traditional was of publishing. In this regard, CMP ought to focus on digital publishing to meet the changing consumer preferences.
Technological.
Technological forces impacting the CMP include the technological advancement in the reading methods etc. Enhancement of science and technology along with the increase of digital publishing could minimize the demand for the CMP items, if particular actions would not be taken quickly.
Environmental.
Environmental forces affecting Demand Media Case Study Solution includes the issues 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 used while publishing ought to not be damaging for the environment.
Legal.
Legal regulations for the publishing sector at whole are high. Publishing Regulation 1997 requires the publishers to be authorized first by the Government to be gone into in the publishing market.
Market Analysis (Porter's 5 Forces Design).
Porter's 5 Forces Design could be utilized to examine the beauty of the publishing market China. A short analysis of the Porter's 5 Forces is offered as follows;.
Hazard of New Entrants.
Dangers of brand-new entrants in the Chinese Publishing Market is moderate. The potential development in the market tends to draw in brand-new entrants to the publishing market. Nevertheless, the existence of extreme competition and the requirement of substantial capital tends to demotivate new entrants to enter in the marketplace.
Hazard of Replacement.
Hazard of Replacement is high for the Chinese Publishing Market. The substitute items for the published files is the documents presented in the virtual libraries on certain sites. The changing consumer preferences towards digital learning increase the threat of replacement for the industry.
Competitive Competition.
Competitive rivalry in the publishing market is high. The existence of a great deal of consumers in the Chinese Publishing Market like CIP, PTP and so on 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 Provider.
The significant providers of the Demand Media Case Study Help include 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 provider for CMP is low.
Bargaining Power of Buyer.
Negotiating power of purchaser in the publishing industry is high. Due to the existence of a large number of publishers in the Chinese market and the market saturation, the buyers needs high quality files at competitive costs.
Competitors Analysis.
CMP operates in an extremely competitive industry with the presence of a great deal of rivals. The business has a competitive position in the market with the greatest market share in the Chinese publishing market. Significant competitors of Demand Media Case Study Help consist of;.
• Chemical Market Press (CIP).
• Posts and telecommunication Press (PTP).
Chemical Market Press (CIP).
CIPis one of the close rivals of CMP. Established in the exact same period, CIP releases similar type of books. For a big time period, CIP held the biggest market share, and still ranks 3rd and 2nd in various market segments, with a significant concentrate on instructional publications. CIP serves as a danger 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 Demand Media Case Study Analysis quickly in the existing market circumstance.
Posts and telecommunication Press (PTP).
It was also founded in the same period as Demand Media Case Study Solution and CIP. It is also one of the popular gamers in the publishing market with a yearly total incomes of RMB 550 million in 2010.
Alternatives
Alternative-1: Expand towards New Markets
Pros
• Reducing dependence over the Chinese markets.
• Increasing variety of Customers
• Growth chances.
• Preventing the impact of market saturation in the Chinese publishing market.
Cons
• Usage of potential resources in expansion.
• Risk of failure in new markets.
• Time consuming.
Alernative-2: Present Digital Publishing
Pros
• Sustaining consumer base.
• Approaching brand-new markets.
• Easy to introduce using current abilities.
• Low risk of Failure.
• Low requirement for funds.
• Increased product portfolio provides high value to customers.
Cons
• Competitors in the market by CIP, who has prior concentrate on the digital publishing.
• Shift of focus from the core business sectors to the brand-new one can lead the business to lose demand of its items in the market.
Recommendations
With the deep analysis of the external and internal environment of the company together with the market analysis and the rival analysis, Alternative 2 is suggested to CMP to attain its future advancement. As the choices are moving towards digital publishing and the business require an immediate service to prevent the decreasing market growth. For that reason, introduction of digital publishing might show to be an instant option with low quantity of threat for the business. Nevertheless, the business could likewise think about the expansion program after the success of its digital publishing program.
Application
In order to present digital publishing in its item portfolio, the business must initially collects the data associated with the consumer need, the prospective markets, the federal government policies and the data related to the rivals presented in the market. After that, the business ought to decide one potential segment for its initial offering. It should collect research study that how it might differentiate its digital publishing from the existing rivals' items. After all the actions above the company ought to go for the preliminary offering. If the preliminary offering shows a success, the business must go for the other markets. In this method the business would have the ability to implement its digital publishing program.
Conclusion
The development of the publishing industry is declining considering that 2008, revealing a risk to the business's long term existence, but the situation can be controlled by considering 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 prevent the risk of failure for entrance in the new markets.
