Economic Principles And Decision Making 3 Case Study Solution and Analysis
Intro
Economic Principles And Decision Making 3 Case Study Help is the biggest publishing company with a highest market share in the China's book retail market. CMP has ended up being a specialized information service provider and a big thorough Science and Technology publishing business through the integration of print media, audio-visual media and the network media.
Crucial Concerns
Although, Economic Principles And Decision Making 3 Case Study Solution has invested its 60 years journey smoothly, being an effective publishing house, however, the altering macro market trends and forces bring specific difficulties to the publishing market in general and CMP in specific. These factors include;
• Entryway of the new publishing companies in the market.
• Declining development of the publishing market.
• Market saturation.
• Intro of digital publishing strategies
• Improvement of science and technology.
The transformation of the macro markets have raised a number of questions to the management at CPM that what could be the future of CMP in this scenario? Do the long valuable experience, technical resources and the abilities of the business could be made use of 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
Economic Principles And Decision Making 3 Case Study Solution has certain strengths that can be made use of to lower the dangers, overcome the weak point and obtain the opportunities. Strengths of CMP are provided as follows;
• The long term experience of Economic Principles And Decision Making 3 Case Study Help in the publishing industry i.e. 60 years permits the company to supply high quality items at a lower expense using its prior experiences.
• The technical resources and abilities created by its effective journey provide a competitive advantage to CMP.
• Vast item portfolioof CMP helps it to diversify its danger and supply high worth to its customers.
• Strong monetary position enables the business to think about a number of advancement chances without any worry of raising fund externally.
Weak points
In addition to the strengths, the company has certain weak points which might increase restraints for the company in implementing its advancement program. The weak points of Economic Principles And Decision Making 3 Case Study Solution are offered as follows;
• Despite of being a science and innovation publishing company, the business still has traditional methods ofpublishing which are not suitable with the growing technological shift.
• CMP extremely relies over the Chinese markets for its development. It should propose specific expansion plans to avoid its reliance over the Chinese markets to accomplish long term growth.
Opportunities
Although, the growth of the publishing market is decreasing because 2008, affecting Economic Principles And Decision Making 3 Case Study Solution also, however the development might be restored by availing specific opportunities provided in the market. The marketplace opportunities for CMP consist of;
• The company might also introduce Digital Publishing by using its long term technical experience and a strong client recognition in the market.
• CMP could consider an advancement program through the expansion towards foreign markets in order to reduce its dependence over Chinese markets by utilizing its large funds.
Risks
The changing macro patterns in the market and increasing competitors in the publishing market has actually postured certain dangers to Economic Principles And Decision Making 3 Case Study Help including;( Gurel, 2017).
• Introduction of digital publishing i.e. virtual libraries might result in decreasing market share of Economic Principles And Decision Making 3 Case Study Analysis due to the customer shift towards digital libraries.
• The existence of a great deal of rivals in the publishing industry increase the hazard for CMP to lose its competitive position in the market, as rivals can get a strong customer base by using certain techniques like aggressive promo, quality products, etc.
• Entryway of new publishing companies in the industry along with existence of high competition increases the threat of losing the consumer base.
Monetary Analysis.
The company has a rather competitive financial performance. Due to lack of data, the financial ratios of CMP could not be determined. However, the overall monetary efficiency of the company might be analyzed by using the graphs given in the case Appendices. It could be evaluated from the Appendix III that the yearly overall incomes of CMP throughout the duration 2000-2012 are growing at a high growth rate, showing that the annual need of the products of Economic Principles And Decision Making 3 Case Study Solution is growing and the company is rather effective in attracting a large number of consumers at a possible cost.
In addition to it, the second graph which reveals the yearly development in the Economic Principles And Decision Making 3 Case Study Help total assets, reveals that the business is quite effective in adding worth to its possessions through its profits. The growth in possessions shows that the overall worth of the company is likewise increasing with increasing the overall revenues. (Unidentified, 2013).
Another monetary analysis of the business using the given data could be the analysis regarding the distribution of overall incomes of the business. Huge part of the profits of CMP originates from the sales of its released books i.e. 64% as shown in the Case Appendix V. The company could move towards other business sections with a possible growth to achieve its future development objective.
PESTEL Analysis
PESTEL analysis could be carried out to discover the numerous external forces affecting the performance of the business and the recent patterns in the external environment of the business. A brief PESTEL analysis of the business is given as follows; (Alanzi, 2018).
Political.
As the publishing sector might have a considerable impact on the mindset of individuals about the communist ideology of the government, therefore, the publishing sector is highly monitored and assisted by the Promotion Department of the Communist Party of China. For that reason, it could be stated that the general political forces affecting Economic Principles And Decision Making 3 Case Study Analysis business are high. The federal government policies concerning the publishing sector are likewise increasing with the passage of time.
Cost-effective.
Financial forces affecting the publishing sector in general and the Economic Principles And Decision Making 3 Case Study Solution in specific includesthe prices of paper, the earnings level of customers, the inflation rate, and the general GDP growth of the country. All these forces integrate impact the need for the publishing market. Along with it, the economic policies related to the import of books impact the total service at CPM. China's financial conditions are quite beneficial for CMP with high GDP development and consumer income level.
Social and Demographical.
Social and demographical forces include the population growth, the customer's preferences towards checking out useful materials and so on. China has the highest population on the planet with a high population growth, revealing the increasing variety of consumers of the Economic Principles And Decision Making 3 Case Study Analysis. Nevertheless, the consumer choices are moving towards digital publishing rather than the traditional was of publishing. In this regard, CMP needs to concentrate on digital publishing to meet the changing consumer preferences.
Technological.
Technological forces affecting the CMP consist of the technological advancement in the reading strategies and so on. Enhancement of science and technology in addition to the increase of digital publishing could decrease the demand for the CMP items, if specific actions would not be taken soon.
Environmental.
Environmental forces impacting Economic Principles And Decision Making 3 Case Study Solution includes the issues of ecological communities over the usage of paper in publishing books. The paper used in the books while publishing is required to be disposable and the ink utilized while publishing should not be harmful for the environment.
Legal.
Legal guidelines 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 needs the publishers to be approved first by the Federal government to be entered in the publishing market. The ordinance prohibits direct participation of foreign entities and people in the publishing sector.
Industry Analysis (Porter's Five Forces Model).
Porter's Five Forces Design could be utilized to analyze the attractiveness of the publishing industry China. A brief analysis of the Porter's 5 Forces is offered as follows;.
Threat of New Entrants.
Threats of new entrants in the Chinese Publishing Industry is moderate. The possible growth in the market tends to bring in brand-new entrants to the publishing industry. However, the existence of intense competition and the requirement of huge capital tends to demotivate brand-new entrants to enter in the market.
Risk of Replacement.
Hazard of Replacement is high for the Chinese Publishing Market. The replacement products for the released files is the files provided in the virtual libraries on specific sites. The changing customer preferences towards digital learning increase the danger of alternative for the industry.
Competitive Rivalry.
Competitive rivalry in the publishing industry is high. The presence of large number of consumers in the Chinese Publishing Industry like CIP, PTP etc. tends to produce high competitive competition for CMP. Together with it, brand-new entrants are likewise participating in the marketplace increasing the competition for CMP.
Bargaining Power of Supplier.
The significant providers of the Economic Principles And Decision Making 3 Case Study Analysis consist of the providers of the paper for publishing files. As CMP is the largest publisher in the Chinese Publishing Market, therefore the general bargaining power of supplier for CMP is low.
Bargaining Power of Buyer.
Haggling power of purchaser 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 purchasers requires high quality files at competitive costs.
Rivals Analysis.
CMP operates in a highly competitive market with the presence of a great deal of competitors. Nevertheless, the company has a competitive position in the market with the greatest market share in the Chinese publishing market. Major competitors of Economic Principles And Decision Making 3 Case Study Help consist of;.
• Chemical Market Press (CIP).
• Posts and telecommunication Press (PTP).
Chemical Market Press (CIP).
CIPis among the close rivals of CMP. Established in the same period, CIP releases comparable type of books. For a big time period, CIP held the biggest market share, and still ranks 2nd and third in various market sectors, with a major concentrate on educational publications. CIP acts as a hazard for CMP as it might wean its market share due to its long term competitive background. CIP is focused on digital publishing and could wean the market share of Economic Principles And Decision Making 3 Case Study Help easily in the current market scenario.
Posts and telecommunication Press (PTP).
Another close competitor of CMP is PTP. It was likewise founded in the very same period as CMP and CIP. It ranks 6th in the state-owned publishers in terms of business scale. It is also among the popular players in the publishing industry with an annual overall incomes of RMB 550 million in 2010.
Alternatives
Alternative-1: Broaden towards New Markets
Pros
• Decreasing dependence over the Chinese markets.
• Increasing variety of Customers
• Growth opportunities.
• Preventing the impact of market saturation in the Chinese publishing market.
Cons
• Usage of prospective resources in growth.
• Danger of failure in new markets.
• Time consuming.
Alernative-2: Introduce Digital Publishing
Pros
• Sustaining consumer base.
• Approaching new markets.
• Easy to present utilizing present capabilities.
• Low risk of Failure.
• Low requirement for funds.
• Increased product portfolio provides high worth to consumers.
Cons
• Competition in the market by CIP, who has prior concentrate on the digital publishing.
• Shift of focus from the core business sectors to the new one can lead the business to lose need of its items in the market.
Suggestions
With the deep analysis of the internal and external environment of the company along with the industry analysis and the competitor analysis, Alternative 2 is recommended to CMP to accomplish its future advancement. As the choices are shifting towards digital publishing and the company need an immediate option to prevent the decreasing industry growth. Therefore, intro of digital publishing might show to be an immediate option with low quantity of threat for the company. However, the business could also consider the growth program after the success of its digital publishing program.
Application
In order to introduce digital publishing in its product portfolio, the business should first gathers the data related to the customer need, the possible markets, the government guidelines and the data related to the rivals provided in the market. If the preliminary offering proves a success, the company ought to go for the other markets. In this way the business would be able to execute its digital publishing program.
Conclusion
Although, the growth of the publishing market is decreasing because 2008, showing a danger to the company's long term presence, but the circumstance can be controlled by considering a development strategy in the future. The business might consider introducing digital publishingin its existing market to implement its advancement program at instant basis and to prevent the threat of failure for entrance in the brand-new markets.
