Diamond Foods Inc 5 Case Study Solution and Analysis
Diamond Foods Inc 5 Case Study Analysis is the biggest publishing business with a greatest 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 integration of print media, audio-visual media and the network media.
Although, Diamond Foods Inc 5 Case Study Solution has spent its 60 years journey smoothly, being a successful publishing home, however, the changing macro market patterns and forces bring certain difficulties to the publishing market in general and CMP in specific. These factors consist of;
• Entrance of the brand-new publishing companies in the market.
• Declining growth of the publishing market.
• Market saturation.
• Introduction of digital publishing techniques
• Improvement of science and technology.
The transformation of the macro markets have raised a number of 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 abilities of the company could be used to pursue the future development unceasingly? How could the business sustain its long term competitive position in future?
Diamond Foods Inc 5 Case Study Solution has particular strengths that can be made use of to minimize the dangers, conquer the weakness and avail the chances. Strengths of CMP are provided as follows;
• The long term experience of Diamond Foods Inc 5 Case Study Help in the publishing market i.e. 60 years permits the company to supply high quality items at a lower cost using its previous experiences.
• The technical resources and abilities created by its effective journey provide a competitive advantage to CMP.
• Large product portfolioof CMP helps it to diversify its danger and provide high worth to its consumers.
• Strong monetary position allows the company to consider a number of development chances without any worry of raising fund externally.
Together with the strengths, the company has particular weak points which might increase restrictions for the business in executing its advancement program. The weaknesses of Diamond Foods Inc 5 Case Study Solution are given as follows;
• Despite of being a science and technology publishing company, the business still has conventional methods ofpublishing which are not suitable with the growing technological shift.
• CMP highly relies over the Chinese markets for its development. It should propose specific growth strategies to avoid its dependence over the Chinese markets to accomplish long term growth.
The development of the publishing industry is decreasing given that 2008, affecting Diamond Foods Inc 5 Case Study Help as well, but the growth might be revived by availing particular opportunities provided in the market. The marketplace opportunities for CMP consist of;
• The company might also present 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 growth towards foreign markets in order to minimize its reliance over Chinese markets by using its vast funds.
The altering macro patterns in the market and increasing competitors in the publishing market has positioned certain hazards to Diamond Foods Inc 5 Case Study Help consisting of;( Gurel, 2017).
• Intro of digital publishing i.e. digital libraries might result in declining market share of Diamond Foods Inc 5 Case Study Analysis due to the consumer shift towards virtual 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 competitors can acquire a strong consumer base by utilizing certain strategies like aggressive promo, quality products, and so on
• Entryway of new publishing firms in the industry together with presence of high competitors increases the danger of losing the consumer base.
Due to lack of data, the financial ratios of CMP could not be determined. It could be analyzed from the Appendix III that the yearly total revenues of Diamond Foods Inc 5 Case Study Solution throughout the period 2000-2012 are growing at a high development rate, showing that the yearly demand of the items of CMP is growing and the business is quite effective in attracting a large number of clients at a possible rate.
In addition to it, the 2nd chart which shows the annual development in the Diamond Foods Inc 5 Case Study Analysis overall possessions, reveals that the company is quite effective in including worth to its possessions through its revenues. The growth in properties shows that the total worth of the company is also increasing with increasing the total incomes. (Unidentified, 2013).
Another monetary analysis of the company utilizing the given information could be the analysis concerning the distribution of total profits of the company. Huge part of the profits of CMP comes from the sales of its released books i.e. 64% as shown in the Case Appendix V. The company could move towards other service sectors with a prospective development to accomplish its future advancement goal.
PESTEL analysis could be performed to discover the different external forces impacting the performance of the business and the recent patterns in the external environment of the business. A quick PESTEL analysis of the business is provided as follows; (Alanzi, 2018).
As the publishing sector might have a substantial effect on the mindset of the people about the communist ideology of the federal government, for that reason, the publishing sector is extremely monitored and guided by the Publicity Department of the Communist Party of China. It might be stated that the general political forces impacting CMP service are high. The federal government policies regarding the publishing sector are likewise increasing with the passage of time.
Financial forces affecting the publishing sector in general and the CMP in specific includesthe costs of paper, the earnings level of customers, the inflation rate, and the general GDP growth of the nation. All these forces integrate effect the need for the publishing market.
Social and Demographical.
Social and demographical forces include the population development, the consumer's choices towards checking out useful materials etc. China has the greatest population worldwide with a high population growth, showing the increasing number of customers of the Diamond Foods Inc 5 Case Study Analysis. The consumer preferences are shifting towards digital publishing rather than the standard was of publishing. In this regard, CMP must concentrate on digital publishing to satisfy the altering customer choices.
Technological forces impacting the CMP consist of the technological development in the reading strategies etc. Improvement of science and technology in addition to the rise of digital publishing might minimize the demand for the CMP items, if specific actions would not be taken quickly.
Environmental forces affecting Diamond Foods Inc 5 Case Study Analysis includes the issues of environmental communities 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 regulations for the publishing sector at whole are high. Publishing Regulation 1997 requires the publishers to be authorized initially by the Government to be entered in the publishing market.
Industry Analysis (Porter's Five Forces Model).
Porter's Five Forces Design could be utilized to evaluate the attractiveness of the publishing market China. A brief analysis of the Porter's 5 Forces is given as follows;.
Threat of New Entrants.
Hazards of new entrants in the Chinese Publishing Industry is moderate. The possible growth in the industry tends to bring in new entrants to the publishing industry. Nevertheless, the existence of extreme competition and the requirement of big capital tends to demotivate new entrants to go into in the market.
Risk of Alternative.
Risk of Replacement is high for the Chinese Publishing Market. The alternative products for the published documents is the documents presented in the virtual libraries on specific websites. The changing customer choices towards digital knowing increase the threat of alternative for the industry.
Competitive rivalry in the publishing market is high. The existence of large number of consumers 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 participating in the market increasing the competitors for CMP.
Bargaining Power of Supplier.
The major providers of the Diamond Foods Inc 5 Case Study Solution consist of the providers of the paper for releasing documents. As CMP is the largest publisher in the Chinese Publishing Market, therefore the general bargaining power of provider for CMP is low.
Bargaining Power of Purchaser.
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 market saturation, the buyers needs high quality documents at competitive rates.
CMP runs in an extremely competitive market with the presence of large number of competitors. The company has a competitive position in the market with the greatest market share in the Chinese publishing market. Major competitors of Diamond Foods Inc 5 Case Study Analysis consist of;.
• Chemical Market Press (CIP).
• Posts and telecommunication Press (PTP).
Chemical Industry Press (CIP).
CIP acts as a risk for CMP as it could 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 scenario.
Posts and telecommunication Press (PTP).
Another close rival of CMP is PTP. It was likewise founded in the same period as CMP and CIP. It ranks sixth in the state-owned publishers in regards to organisation scale. It is also one of the popular players in the publishing market with a yearly overall earnings of RMB 550 million in 2010.
Alternative-1: Broaden towards New Markets
• Lowering reliance over the Chinese markets.
• Increasing number of Consumers
• Growth opportunities.
• Preventing the impact of market saturation in the Chinese publishing market.
• Use of prospective resources in growth.
• Danger of failure in brand-new markets.
• Time consuming.
Alernative-2: Introduce Digital Publishing
• Sustaining customer base.
• Approaching new markets.
• Easy to introduce using existing abilities.
• Low danger of Failure.
• Low requirement for funds.
• Increased item portfolio offers high worth to clients.
• Competition in the market by CIP, who has prior focus on the digital publishing.
• Shift of focus from the core business segments to the brand-new one can lead the company to lose need of its products in the market.
With the deep analysis of the external and internal environment of the company along with the industry analysis and the competitor analysis, Alternative 2 is advised to CMP to attain its future advancement. As the preferences are shifting towards digital publishing and the business need an immediate service to prevent the declining market development. Introduction of digital publishing might show to be an immediate service with low amount of threat for the business. The company might also consider the growth program after the success of its digital publishing program.
In order to introduce digital publishing in its product portfolio, the company needs to first gathers the data connected to the customer need, the prospective markets, the federal government guidelines and the data connected to the rivals presented in the market. After that, the business must decide one prospective section for its initial offering. It must collect research that how it could separate its digital publishing from the existing rivals' products. After all the actions above the company should go for the preliminary offering. The company must go for the other markets if the preliminary offering shows a success. In this method the business would be able to implement its digital publishing program.
The development of the publishing market is declining considering that 2008, showing a threat to the company's long term existence, but the circumstance can be controlled by considering a development strategy in the future. The business might consider presenting digital publishingin its existing market to implement its development program at immediate basis and to avoid the danger of failure for entrance in the new markets.