Diamond Foods Inc 5 Case Study Solution and Analysis
Diamond Foods Inc 5 Case Study Solution is the largest publishing company with a greatest market share in the China's book retail market. CMP offers a variety of services including; gathering info, processing information and interaction services. Significant service sections of the company consist of; books, periodicals, consultancy and circulation. The business has a huge product portfolio and its major products include books, regulars, online media, exhibitions, research reports etc. Diamond Foods Inc 5 Case Study Analysis has ended up being a specialized info service provider and a large extensive Science and Technology publishing business through the integration of print media, audio-visual media and the network media.
Although, Diamond Foods Inc 5 Case Study Analysis has actually invested its 60 years journey efficiently, being a successful publishing home, nevertheless, the altering macro market patterns and forces bring specific difficulties to the publishing market in basic and CMP in specific. These elements include;
• Entrance of the 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 transformation 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 important experience, technical resources and the capabilities of the business could be utilized to strive for the future advancement unceasingly? How could the company sustain its long term competitive position in future?
Diamond Foods Inc 5 Case Study Analysis has specific strengths that can be used to lower the threats, conquer the weak point and avail the chances. Strengths of CMP are provided as follows;
• The long term experience of Diamond Foods Inc 5 Case Study Solution in the publishing market i.e. 60 years enables the company to provide high quality products at a lower expense utilizing its prior experiences.
• The technical resources and abilities produced by its effective journey supply a competitive benefit to CMP.
• Vast product portfolioof CMP helps it to diversify its risk and supply high worth to its customers.
• Strong financial position enables the business to think about a number of development opportunities with no worry of raising fund externally.
Along with the strengths, the company has specific weak points which could increase restrictions for the business in implementing its advancement program. The weak points of Diamond Foods Inc 5 Case Study Solution are offered as follows;
• Despite of being a science and technology publishing company, the company still has standard methods ofpublishing which are not suitable with the growing technological shift.
• CMP highly relies over the Chinese markets for its growth. It needs to propose certain expansion plans to avoid its dependence over the Chinese markets to achieve long term development.
Although, the development of the publishing market is declining given that 2008, impacting Diamond Foods Inc 5 Case Study Solution as well, however the growth could be restored by availing specific opportunities provided in the market. The marketplace chances for CMP consist of;
• The business might also introduce Digital Publishing by utilizing its long term technical experience and a strong consumer recognition in the market.
• CMP could think about an advancement program through the expansion towards foreign markets in order to reduce its dependence over Chinese markets by utilizing its vast funds.
The altering macro patterns in the market and increasing competitors in the publishing market has positioned particular hazards to Diamond Foods Inc 5 Case Study Solution consisting of;( Gurel, 2017).
• Intro of digital publishing i.e. virtual libraries might lead to declining market share of Diamond Foods Inc 5 Case Study Help due to the consumer shift towards virtual libraries.
• The existence of a great deal of rivals in the publishing industry increase the danger for CMP to lose its competitive position in the market, as rivals can acquire a strong consumer base by using particular techniques like aggressive promotion, quality products, etc.
• Entrance of brand-new publishing companies in the industry together with presence of high competition increases the danger of losing the consumer base.
The company has a quite competitive financial performance. Due to absence of information, the financial ratios of CMP might not be computed. However, the overall financial efficiency of the company could be examined by utilizing the graphs given in the case Appendices. It could be examined from the Appendix III that the annual total profits of CMP throughout the duration 2000-2012 are growing at a high development rate, revealing that the annual need of the items of Diamond Foods Inc 5 Case Study Help is growing and the business is quite effective in attracting a a great deal of clients at a prospective cost.
Together with it, the second chart which reveals the yearly growth in the Diamond Foods Inc 5 Case Study Solution total properties, shows that the business is rather efficient in adding value to its assets through its incomes. The development in assets shows that the total worth of the company is also increasing with increasing the total incomes. (Unknown, 2013).
Another financial analysis of the company using the offered information might be the analysis relating to the distribution of total earnings of the company. Huge part of the incomes of CMP originates from the sales of its published books i.e. 64% as displayed in the Case Appendix V. The business could move towards other company sectors with a prospective development to accomplish its future development goal.
PESTEL analysis could be performed to find out the different external forces affecting the efficiency of the business and the current patterns in the external environment of the company. A brief PESTEL analysis of the business is provided as follows; (Alanzi, 2018).
As the publishing sector could have a considerable influence on the mindset of individuals about the communist ideology of the government, therefore, the publishing sector is extremely monitored and guided by the Promotion Department of the Communist Celebration of China. Therefore, it could be said that the total political forces impacting Diamond Foods Inc 5 Case Study Analysis organisation are high. The government policies concerning the publishing sector are likewise increasing with the passage of time.
Financial forces impacting the publishing sector in general and the Diamond Foods Inc 5 Case Study Analysis in specific includesthe costs of paper, the earnings level of consumers, the inflation rate, and the general GDP growth of the nation. All these forces combine impact the demand for the publishing market. In addition to it, the financial policies connected to the import of books impact the total organisation at CPM. China's financial conditions are rather favorable for CMP with high GDP growth and customer income level.
Social and Demographical.
The consumer choices 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 customer choices.
Technological forces affecting the CMP include the technological improvement in the reading strategies and so on. Improvement of science and technology in addition to the rise of digital publishing could decrease the demand for the CMP products, if specific actions would not be taken quickly.
Ecological forces affecting Diamond Foods Inc 5 Case Study Help consists of the issues of environmental neighborhoods over the use of paper in publishing books. The paper used in the books while publishing is required to be disposable and the ink used while publishing needs to not be damaging for the environment.
Legal guidelines for the publishing sector at whole are high. The legal guidelines relating to the publishing sector is controlled by the General Administration of Press and Publication. Publishing Regulation 1997 requires the publishers to be approved initially by the Federal government to be entered in the publishing market. The ordinance forbids direct involvement of foreign entities and people in the publishing sector.
Market Analysis (Porter's 5 Forces Design).
Porter's Five Forces Model might be used to evaluate the attractiveness of the publishing market China. A quick analysis of the Porter's 5 Forces is given as follows;.
Risk of New Entrants.
Threats of brand-new entrants in the Chinese Publishing Industry is moderate. The potential growth in the market tends to draw in brand-new entrants to the publishing market. The presence of extreme competition and the requirement of huge capital tends to demotivate brand-new entrants to enter in the market.
Danger of Substitution.
Risk of Alternative is high for the Chinese Publishing Industry. The substitute items for the released documents is the documents provided in the digital libraries on certain sites. The altering consumer choices towards digital knowing increase the hazard of alternative for the industry.
Competitive competition in the publishing industry is high. The presence of large number of customers in the Chinese Publishing Industry like CIP, PTP and so on tends to produce high competitive competition for CMP. In addition to it, brand-new entrants are also entering into the market increasing the competitors for CMP.
Bargaining Power of Provider.
The significant suppliers of the Diamond Foods Inc 5 Case Study Analysis consist of 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 supplier for CMP is low.
Bargaining Power of Purchaser.
Haggling power of purchaser in the publishing market is high. Due to the presence of a a great deal of publishers in the Chinese market and the market saturation, the buyers requires high quality files at competitive costs.
CMP operates in an extremely competitive industry with the presence of a great deal of rivals. Nevertheless, the company has a competitive position in the market with the greatest market share in the Chinese publishing market. Significant competitors of Diamond Foods Inc 5 Case Study Analysis consist of;.
• Chemical Industry 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 easily in the existing market circumstance.
Posts and telecommunication Press (PTP).
Another close competitor of CMP is PTP. It was likewise established in the very same period as CMP and CIP. It ranks 6th in the state-owned publishers in regards to business scale. It is likewise among the popular players in the publishing market with an annual overall profits of RMB 550 million in 2010.
Alternative-1: Expand towards New Markets
• Minimizing reliance over the Chinese markets.
• Increasing number of Customers
• Growth opportunities.
• Preventing the impact of market saturation in the Chinese publishing market.
• Usage of prospective resources in growth.
• Threat of failure in brand-new markets.
• Time consuming.
Alernative-2: Present Digital Publishing
• Sustaining consumer base.
• Approaching new markets.
• Easy to present using current capabilities.
• Low risk of Failure.
• Low requirement for funds.
• Increased item portfolio provides high worth to clients.
• Competitors in the market by CIP, who has prior concentrate on the digital publishing.
• Shift of focus from the core business sections to the new one can lead the company to lose demand of its products in the market.
With the deep analysis of the external and internal environment of the business in addition to the market analysis and the competitor analysis, Alternative 2 is suggested to CMP to attain its future advancement. As the preferences are moving towards digital publishing and the company need an instant option to avoid the decreasing industry development. For that reason, intro of digital publishing could show to be an instant service with low quantity of danger for the business. The business might also think about the growth program after the success of its digital publishing program.
In order to present digital publishing in its product portfolio, the business should first collects the information related to the consumer demand, the prospective markets, the federal government guidelines and the information related to the competitors provided in the market. If the preliminary offering shows a success, the business must go for the other markets. In this way the company would be able to execute its digital publishing program.
The development of the publishing industry is declining since 2008, showing a risk to the business's long term presence, however the scenario can be managed by thinking about an advancement plan in the future. The business could consider presenting digital publishingin its existing market to implement its development program at instant basis and to avoid the threat of failure for entrance in the new markets.