East Of Africa And West Of China Chinese Business In Africa Case Study Solution and Analysis
Intro
East Of Africa And West Of China Chinese Business In Africa Case Study Analysis is the largest publishing business with a greatest market share in the China's book retail market. CMP has actually become a specialized information company and a large detailed Science and Innovation publishing business through the combination of print media, audio-visual media and the network media.
Critical Issues
Although, East Of Africa And West Of China Chinese Business In Africa Case Study Help has actually invested its 60 years journey smoothly, being a successful publishing home, however, the changing macro market patterns and forces bring specific difficulties to the publishing industry in general and CMP in specific. These elements consist of;
• Entrance of the new publishing companies in the industry.
• Declining development of the publishing market.
• Market saturation.
• Introduction of digital publishing techniques
• Enhancement of science and technology.
The change 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 scenario? Do the long important experience, technical resources and the capabilities of the company could be utilized to pursue the future advancement unceasingly? How could the company sustain its long term competitive position in future?
Situational Analysis
Internal Analysis
SWOT Analysis
Strengths
East Of Africa And West Of China Chinese Business In Africa Case Study Help has certain strengths that can be utilized to minimize the hazards, overcome the weakness and obtain the opportunities. Strengths of CMP are given as follows;
• The long term experience of East Of Africa And West Of China Chinese Business In Africa Case Study Solution in the publishing market i.e. 60 years allows the company to provide high quality items at a lower expense utilizing its previous experiences.
• The technical resources and abilities created by its effective journey offer a competitive benefit to CMP.
• Huge item portfolioof CMP helps it to diversify its threat and offer high value to its consumers.
• Strong financial position allows the business to consider a number of development opportunities with no fear of raising fund externally.
Weak points
In addition to the strengths, the company has particular weak points which could increase restrictions for the company in executing its advancement program. The weaknesses of East Of Africa And West Of China Chinese Business In Africa Case Study Solution are given as follows;
• Despite of being a science and technology publishing firm, the business still has traditional ways ofpublishing which are not suitable with the growing technological shift.
• CMP highly relies over the Chinese markets for its development. It needs to propose particular growth plans to prevent its reliance over the Chinese markets to accomplish long term development.
Opportunities
Although, the development of the publishing market is declining since 2008, affecting East Of Africa And West Of China Chinese Business In Africa Case Study Analysis also, but the development might be revived by availing specific chances presented in the market. The market opportunities for CMP consist of;
• The company might also introduce Digital Publishing by utilizing its long term technical experience and a strong client acknowledgment in the market.
• CMP could think about a development program through the expansion towards foreign markets in order to reduce its dependence over Chinese markets by using its huge funds.
Threats
The changing macro trends in the market and increasing competitors in the publishing industry has presented certain dangers to East Of Africa And West Of China Chinese Business In Africa Case Study Analysis consisting of;( Gurel, 2017).
• Introduction of digital publishing i.e. virtual libraries could result in declining market share of East Of Africa And West Of China Chinese Business In Africa Case Study Solution due to the customer shift towards virtual libraries.
• The presence of large number of rivals in the publishing industry increase the risk for CMP to lose its competitive position in the market, as competitors can gain a strong consumer base by using particular techniques like aggressive promotion, quality items, and so on
• Entrance of brand-new publishing firms in the market along with presence of high competitors increases the risk of losing the consumer base.
Monetary Analysis.
Due to lack of data, the financial ratios of CMP might not be calculated. It could be analyzed from the Appendix III that the yearly total profits of East Of Africa And West Of China Chinese Business In Africa Case Study Help 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 company is quite effective in attracting a large number of clients at a potential price.
In addition to it, the second graph which reveals the annual growth in the East Of Africa And West Of China Chinese Business In Africa Case Study Solution overall possessions, reveals that the business is quite effective in including value to its possessions through its incomes. The growth in possessions shows that the overall value of the firm is also increasing with increasing the total revenues. (Unknown, 2013).
Another financial analysis of the company utilizing the provided data might be the analysis relating to the distribution of overall profits of the business. Major part of the revenues of CMP comes from the sales of its published books i.e. 64% as shown in the Case Appendix V. The business could move towards other organisation sections with a possible growth to achieve its future advancement goal.
PESTEL Analysis
PESTEL analysis might be conducted to discover the various external forces affecting the efficiency of the company and the current patterns in the external environment of the business. A quick PESTEL analysis of the business is provided as follows; (Alanzi, 2018).
Political.
As the publishing sector might have a significant impact on the state of mind of the people about the communist ideology of the government, for that reason, the publishing sector is extremely monitored and assisted by the Promotion Department of the Communist Party of China. For that reason, it might be stated that the overall political forces affecting East Of Africa And West Of China Chinese Business In Africa Case Study Solution service are high. The government policies relating to the publishing sector are likewise increasing with the passage of time.
Cost-effective.
Economic forces impacting the publishing sector in general and the East Of Africa And West Of China Chinese Business In Africa Case Study Help in particular includesthe prices of paper, the income level of consumers, the inflation rate, and the overall GDP development of the nation. All these forces integrate effect the need for the publishing market. Along with it, the economic policies related to the import of books affect the general service at CPM. China's financial conditions are rather beneficial for CMP with high GDP development and customer income level.
Social and Demographical.
Social and demographical forces consist of the population growth, the customer's choices towards reading helpful products etc. China has the highest population in the world with a high population development, showing the increasing number of customers of the East Of Africa And West Of China Chinese Business In Africa Case Study Solution. Nevertheless, the customer preferences are moving 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.
Technological forces impacting the CMP include the technological improvement in the reading techniques etc. Enhancement of science and technology together with the increase of digital publishing could decrease the need for the CMP products, if particular actions would not be taken quickly.
Environmental.
Ecological forces impacting East Of Africa And West Of China Chinese Business In Africa Case Study Solution consists of the concerns of environmental neighborhoods over the use of paper in publishing books. The paper used in the books while publishing is needed to be non reusable and the ink utilized while publishing should not be damaging for the environment.
Legal.
Legal regulations for the publishing sector at whole are high. The legal policies regarding the publishing sector is controlled by the General Administration of Press and Publication. Publishing Ordinance 1997 requires the publishers to be authorized first by the Federal government to be entered in the publishing market. The regulation forbids direct involvement of foreign entities and people in the publishing sector.
Industry Analysis (Porter's 5 Forces Design).
Porter's 5 Forces Design could be used to examine the attractiveness of the publishing industry China. A quick analysis of the Porter's 5 Forces is offered as follows;.
Risk of New Entrants.
Hazards of brand-new entrants in the Chinese Publishing Market is moderate. The prospective growth in the industry tends to bring in brand-new entrants to the publishing industry. The presence of extreme competitors and the requirement of huge capital tends to demotivate new entrants to go into in the market.
Hazard of Substitution.
Hazard of Alternative is high for the Chinese Publishing Market. The substitute products for the released files is the documents provided in the virtual libraries on certain sites. The altering consumer preferences towards digital knowing increase the risk of substitution for the industry.
Competitive Rivalry.
Competitive rivalry in the publishing industry is high. The presence of a great deal of consumers in the Chinese Publishing Market like CIP, PTP and so on tends to produce high competitive competition for CMP. Along with it, new entrants are also participating in the marketplace increasing the competition for CMP.
Bargaining Power of Provider.
The significant suppliers of the East Of Africa And West Of China Chinese Business In Africa Case Study Solution include the providers of the paper for releasing documents. As CMP is the biggest publisher in the Chinese Publishing Market, for that reason the overall bargaining power of supplier for CMP is low.
Bargaining Power of Buyer.
Bargaining power of buyer 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 needs high quality files at competitive rates.
Rivals Analysis.
CMP operates in a highly competitive industry with the presence of large number of competitors. The business has a competitive position in the market with the highest market share in the Chinese publishing market. Significant competitors of East Of Africa And West Of China Chinese Business In Africa Case Study Help include;.
• Chemical Industry Press (CIP).
• Posts and telecommunication Press (PTP).
Chemical Market Press (CIP).
CIPis one of the close competitors of CMP. Established in the exact same duration, CIP publishes similar kind of books. For a large period, CIP held the biggest market share, and still ranks second and 3rd in numerous market segments, with a major focus on instructional publications. CIP functions as a threat for CMP as it might wean its market share due to its long term competitive background. CIP is concentrated on digital publishing and could wean the marketplace share of East Of Africa And West Of China Chinese Business In Africa Case Study Analysis easily in the current market scenario.
Posts and telecommunication Press (PTP).
Another close competitor of CMP is PTP. It was likewise founded in the same duration as CMP and CIP. It ranks 6th in the state-owned publishers in regards to business scale. It is likewise one of the popular gamers in the publishing industry with a yearly overall earnings of RMB 550 million in 2010.
Alternatives
Alternative-1: Broaden towards New Markets
Pros
• Reducing reliance over the Chinese markets.
• Increasing number of Customers
• Development opportunities.
• Preventing the effect of market saturation in the Chinese publishing industry.
Cons
• Usage of prospective resources in expansion.
• Danger of failure in new markets.
• Time consuming.
Alernative-2: Present Digital Publishing
Pros
• Sustaining customer base.
• Approaching brand-new markets.
• Easy to introduce utilizing existing capabilities.
• Low danger of Failure.
• Low requirement for funds.
• Increased item portfolio supplies high value to customers.
Cons
• Competition in the market by CIP, who has prior focus on the digital publishing.
• Shift of focus from the core business sectors to the new one can lead the business to lose demand of its products in the market.
Suggestions
As the preferences are shifting towards digital publishing and the company require an immediate option to avoid the declining market growth. The company could likewise think about the growth program after the success of its digital publishing program.
Implementation
In order to present digital publishing in its item portfolio, the company needs to first gathers the data related to the customer demand, the prospective markets, the federal government policies and the data related to the rivals provided in the market. If the initial offering shows a success, the company ought to go for the other markets. In this method the company would be able to implement its digital publishing program.
Conclusion
The growth of the publishing industry is decreasing considering that 2008, showing a danger to the business's long term existence, but the scenario can be managed by considering an advancement plan in the future. The company could think about 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.
