Desert Valley Brewery Ltd 2 Case Study Solution and Analysis
Intro
Desert Valley Brewery Ltd 2 Case Study Help is the largest publishing business with a highest market share in the China's book retail market. CMP has actually ended up being a specialized information service provider 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, Desert Valley Brewery Ltd 2 Case Study Solution has spent its 60 years journey efficiently, being a successful publishing house, however, the changing macro market patterns and forces bring specific challenges to the publishing market in general and CMP in specific. These aspects consist of;
• Entrance of the new publishing firms in the market.
• Decreasing growth of the publishing market.
• Market saturation.
• Introduction of digital publishing strategies
• 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 circumstance? Do the long valuable experience, technical resources and the abilities 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?
Situational Analysis
Internal Analysis
SWOT Analysis
Strengths
Desert Valley Brewery Ltd 2 Case Study Analysis has specific strengths that can be made use of to decrease the hazards, conquer the weakness and get the chances. Strengths of CMP are given as follows;
• The long term experience of Desert Valley Brewery Ltd 2 Case Study Solution in the publishing market i.e. 60 years permits the company to provide high quality products at a lower expense utilizing its prior experiences.
• The technical resources and capabilities generated by its effective journey offer a competitive benefit to CMP.
• Large product portfolioof CMP assists it to diversify its danger and provide high value to its consumers.
• Strong monetary position permits the business to think about several advancement opportunities without any fear of raising fund externally.
Weaknesses
In addition to the strengths, the business has specific weak points which might increase restrictions for the business in implementing its advancement program. The weaknesses of Desert Valley Brewery Ltd 2 Case Study Solution are given as follows;
• Despite of being a science and innovation publishing firm, the company still has conventional ways ofpublishing which are not suitable with the growing technological shift.
• CMP highly relies over the Chinese markets for its growth. It ought to propose specific expansion strategies to prevent its reliance over the Chinese markets to achieve long term growth.
Opportunities
Although, the growth of the publishing industry is decreasing given that 2008, impacting Desert Valley Brewery Ltd 2 Case Study Help too, but the development might be restored by availing certain opportunities provided in the market. The market opportunities for CMP consist of;
• The company could also introduce Digital Publishing by using its long term technical experience and a strong consumer acknowledgment in the market.
• CMP might think about an advancement program through the expansion towards foreign markets in order to lower its dependence over Chinese markets by using its vast financial resources.
Threats
The altering macro trends in the market and increasing competition in the publishing industry has posed specific risks to Desert Valley Brewery Ltd 2 Case Study Solution consisting of;( Gurel, 2017).
• Introduction of digital publishing i.e. virtual libraries could result in decreasing market share of Desert Valley Brewery Ltd 2 Case Study Help due to the customer shift towards digital libraries.
• The presence of a great deal of competitors in the publishing market increase the risk for CMP to lose its competitive position in the market, as competitors can gain a strong customer base by using specific techniques like aggressive promotion, quality products, etc.
• Entrance of brand-new publishing firms in the market together with presence of high competition increases the danger of losing the customer base.
Monetary Analysis.
The business has a quite competitive monetary efficiency. Due to absence of data, the financial ratios of CMP might not be determined. Nevertheless, the total financial performance of the business could be examined by using the graphs given up the case Appendices. It might be analyzed from the Appendix III that the annual overall incomes of CMP throughout the period 2000-2012 are growing at a high growth rate, revealing that the yearly demand of the products of Desert Valley Brewery Ltd 2 Case Study Solution is growing and the company is quite efficient in attracting a a great deal of customers at a prospective cost.
Along with it, the 2nd chart which shows the annual development in the Desert Valley Brewery Ltd 2 Case Study Help total assets, shows that the company is quite effective in including worth to its properties through its profits. The growth in assets reveals that the total worth of the company is likewise increasing with increasing the total profits. (Unidentified, 2013).
Another monetary analysis of the business utilizing the offered information could be the analysis concerning the distribution of overall revenues of the company. Huge part of the earnings 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 business segments with a prospective growth to accomplish its future advancement goal.
PESTEL Analysis
PESTEL analysis might be carried out to discover the different external forces affecting the performance of the company and the recent trends in the external environment of the company. A brief PESTEL analysis of the business is offered as follows; (Alanzi, 2018).
Political.
As the publishing sector might have a considerable impact on the state of mind of individuals about the communist ideology of the government, for that reason, the publishing sector is extremely supervised and directed by the Promotion Department of the Communist Party of China. It might be said that the overall political forces affecting CMP organisation are high. The government policies concerning the publishing sector are also increasing with the passage of time.
Affordable.
Financial forces impacting the publishing sector in basic and the Desert Valley Brewery Ltd 2 Case Study Analysis in specific includesthe costs of paper, the earnings level of customers, the inflation rate, and the total GDP development of the country. All these forces integrate effect the need for the publishing market. Along with it, the financial policies associated with the import of books impact the total company at CPM. China's economic conditions are quite favorable for CMP with high GDP development and consumer income level.
Social and Demographical.
The customer 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 consumer preferences.
Technological.
Technological forces impacting the CMP include the technological improvement in the reading strategies etc. Improvement of science and technology together with the increase of digital publishing might decrease the need for the CMP products, if particular actions would not be taken quickly.
Environmental.
Ecological forces affecting Desert Valley Brewery Ltd 2 Case Study Help consists of the issues of ecological communities over the usage of paper in publishing books. The paper utilized in the books while publishing is needed to be non reusable and the ink used while publishing ought to not be hazardous for the environment.
Legal.
Legal policies for the publishing sector at whole are high. Publishing Regulation 1997 requires the publishers to be authorized initially by the Government to be gone into in the publishing market.
Industry Analysis (Porter's 5 Forces Design).
Porter's 5 Forces Model might be utilized to analyze the attractiveness of the publishing industry China. A quick analysis of the Porter's 5 Forces is provided as follows;.
Danger of New Entrants.
Risks of brand-new entrants in the Chinese Publishing Industry is moderate. The possible growth in the industry tends to draw in new entrants to the publishing industry. Nevertheless, the presence of extreme competition and the requirement of big capital tends to demotivate new entrants to enter in the marketplace.
Danger of Replacement.
Danger of Substitution is high for the Chinese Publishing Market. The alternative items for the released documents is the documents provided in the virtual libraries on certain sites. The altering consumer preferences towards digital knowing increase the hazard of replacement for the industry.
Competitive Rivalry.
Competitive competition in the publishing industry is high. The existence of large number of customers in the Chinese Publishing Market like CIP, PTP etc. tends to produce high competitive rivalry for CMP. Together with it, new entrants are also participating in the market increasing the competitors for CMP.
Bargaining Power of Supplier.
The major suppliers of the Desert Valley Brewery Ltd 2 Case Study Help include the suppliers of the paper for releasing files. As CMP is the biggest 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 buyer in the publishing industry is high. Due to the presence of a a great deal of publishers in the Chinese market and the marketplace saturation, the buyers needs high quality documents at competitive costs.
Competitors Analysis.
CMP runs in a highly competitive market with the existence of large number of rivals. The business has a competitive position in the market with the greatest market share in the Chinese publishing market. Major rivals of Desert Valley Brewery Ltd 2 Case Study Analysis consist of;.
• Chemical Industry Press (CIP).
• Posts and telecommunication Press (PTP).
Chemical Market Press (CIP).
CIPis one of the close competitors of CMP. Founded in the exact same period, CIP publishes comparable kind of books. For a large time period, CIP held the largest market share, and still ranks 2nd and third in numerous market segments, with a significant focus on academic 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 marketplace share of Desert Valley Brewery Ltd 2 Case Study Help easily in the existing market situation.
Posts and telecommunication Press (PTP).
Another close competitor of CMP is PTP. It was likewise founded in the exact same period as CMP and CIP. It ranks 6th in the state-owned publishers in terms of company scale. It is also one of the prominent gamers in the publishing industry with a yearly overall revenues of RMB 550 million in 2010.
Alternatives
Alternative-1: Expand towards New Markets
Pros
• Minimizing reliance over the Chinese markets.
• Increasing variety of Customers
• Development opportunities.
• Preventing the effect of market saturation in the Chinese publishing industry.
Cons
• Use of potential resources in growth.
• Danger of failure in new markets.
• Time consuming.
Alernative-2: Present Digital Publishing
Pros
• Sustaining consumer base.
• Approaching brand-new markets.
• Easy to introduce utilizing present capabilities.
• Low risk of Failure.
• Low requirement for funds.
• Increased product portfolio supplies 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 sections to the brand-new one can lead the company to lose need of its products in the market.
Suggestions
With the deep analysis of the internal and external environment of the company in addition to the industry analysis and the competitor analysis, Alternative 2 is recommended to CMP to attain its future development. As the preferences are moving towards digital publishing and the business require an instant service to prevent the decreasing market development. For that reason, introduction of digital publishing might prove to be an instant solution with low amount of risk for the company. The company might likewise consider the expansion program after the success of its digital publishing program.
Application
In order to introduce digital publishing in its item portfolio, the company needs to initially gathers the data associated with the customer need, the prospective markets, the government regulations and the data associated with the rivals presented in the market. After that, the business must choose one possible sector for its preliminary offering. It must collect research that how it could distinguish its digital publishing from the existing rivals' items. The actions above the business must go for the initial offering. If the preliminary offering proves a success, the company needs to opt for the other markets. In this method the company would have the ability to implement its digital publishing program.
Conclusion
The growth of the publishing industry is decreasing since 2008, revealing a risk to the company's long term presence, but the situation can be managed by considering a development plan in the future. The business might consider presenting digital publishingin its existing market to implement its development program at instant basis and to prevent the threat of failure for entryway in the brand-new markets.
