Exercise 2 Solution Case Study Solution and Analysis
Exercise 2 Solution Case Study Analysis is the largest publishing company with a highest market share in the China's book retail market. CMP has become a specialized details company and a big thorough Science and Technology publishing business through the combination of print media, audio-visual media and the network media.
Although, Exercise 2 Solution Case Study Solution has invested its 60 years journey efficiently, being a successful publishing house, nevertheless, the altering macro market patterns and forces bring particular difficulties to the publishing market in basic and CMP in specific. These aspects consist of;
• Entrance of the new publishing companies in the industry.
• Declining growth of the publishing market.
• Market saturation.
• Intro of digital publishing techniques
• Improvement of science and technology.
The transformation of the macro markets have raised several concerns 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 capabilities of the company could be made use of to pursue the future advancement unceasingly? How could the company sustain its long term competitive position in future?
Exercise 2 Solution Case Study Help has certain strengths that can be made use of to lower the dangers, get rid of the weak point and get the opportunities. Strengths of CMP are offered as follows;
• The long term experience of Exercise 2 Solution Case Study Solution in the publishing market i.e. 60 years permits the business to offer high quality products at a lower expense utilizing its prior experiences.
• The technical resources and abilities generated by its successful journey provide a competitive benefit to CMP.
• Huge item portfolioof CMP helps it to diversify its threat and supply high value to its clients.
• Strong financial position allows the business to think about several development opportunities without any worry of raising fund externally.
In addition to the strengths, the company has particular weak points which could increase restrictions for the business in implementing its development program. The weaknesses of Exercise 2 Solution Case Study Analysis are provided as follows;
• Despite of being a science and innovation publishing company, the company still has standard methods ofpublishing which are not compatible with the growing technological shift.
• CMP highly relies over the Chinese markets for its growth. It ought to propose specific growth plans to prevent its dependence over the Chinese markets to achieve long term growth.
The growth of the publishing market is declining since 2008, affecting Exercise 2 Solution Case Study Help as well, however the growth might be restored by availing specific opportunities provided in the market. The market opportunities for CMP consist of;
• The business could likewise present Digital Publishing by utilizing its long term technical experience and a strong client acknowledgment in the market.
• CMP could think about an advancement program through the growth towards foreign markets in order to reduce its reliance over Chinese markets by using its large financial resources.
The altering macro trends in the market and increasing competitors in the publishing market has positioned particular risks to Exercise 2 Solution Case Study Help including;( Gurel, 2017).
• Introduction of digital publishing i.e. virtual libraries might result in declining market share of Exercise 2 Solution Case Study Solution due to the consumer shift towards digital libraries.
• The presence of a great deal of competitors in the publishing market increase the hazard for CMP to lose its competitive position in the market, as rivals can acquire a strong customer base by using specific techniques like aggressive promo, quality items, and so on
• Entryway of new publishing firms in the market along with presence of high competition increases the threat of losing the client base.
Due to absence of information, the monetary ratios of CMP could not be computed. It might be analyzed from the Appendix III that the annual total incomes of Exercise 2 Solution Case Study Help throughout the period 2000-2012 are growing at a high development rate, revealing that the yearly demand of the items of CMP is growing and the company is rather effective in drawing in a big number of clients at a potential rate.
Together with it, the 2nd chart which reveals the yearly development in the Exercise 2 Solution Case Study Solution total properties, reveals that the business is quite efficient in adding worth to its properties through its earnings. The development in properties reveals that the total value of the firm is likewise increasing with increasing the overall earnings. (Unidentified, 2013).
Another financial analysis of the business using the offered data could be the analysis relating to the circulation of total incomes of the business. Major 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 business could move towards other company sectors with a potential development to achieve its future advancement goal.
PESTEL analysis might be conducted to find out the numerous external forces affecting the efficiency of the company and the current patterns in the external environment of the company. A short PESTEL analysis of the business is offered as follows; (Alanzi, 2018).
As the publishing sector could have a significant effect on the frame of mind of individuals about the communist ideology of the government, therefore, the publishing sector is extremely supervised and directed by the Publicity Department of the Communist Celebration of China. For that reason, it might be said that the overall political forces affecting Exercise 2 Solution Case Study Solution organisation are high. The federal government policies regarding the publishing sector are also increasing with the passage of time.
Economic forces impacting the publishing sector in general and the CMP in particular includesthe rates of paper, the income level of consumers, the inflation rate, and the general GDP growth of the country. All these forces integrate effect the need for the publishing market.
Social and Demographical.
The customer preferences are moving towards digital publishing rather than the conventional was of publishing. In this regard, CMP ought to focus on digital publishing to satisfy the altering consumer preferences.
Technological forces affecting the CMP consist of the technological advancement in the reading strategies etc. Improvement of science and innovation in addition to the rise of digital publishing could reduce the demand for the CMP items, if particular actions would not be taken quickly.
Environmental forces impacting Exercise 2 Solution Case Study Analysis includes the issues of environmental communities over the use of paper in publishing books. The paper used in the books while publishing is needed to be disposable and the ink used while publishing needs to not be harmful for the environment.
Legal guidelines for the publishing sector at whole are high. The legal policies relating to the publishing sector is controlled by the General Administration of Press and Publication. Publishing Ordinance 1997 needs the publishers to be authorized first by the Government to be entered in the publishing market. The ordinance prohibits direct involvement of foreign entities and individuals in the publishing sector.
Market Analysis (Porter's Five Forces Design).
Porter's Five Forces Model might be utilized to evaluate the beauty of the publishing market China. A quick analysis of the Porter's 5 Forces is given as follows;.
Hazard of New Entrants.
Dangers of brand-new entrants in the Chinese Publishing Market is moderate. The potential development in the industry tends to attract new entrants to the publishing market. However, the existence of intense competition and the requirement of big capital tends to demotivate brand-new entrants to go into in the market.
Risk of Alternative.
Danger of Substitution is high for the Chinese Publishing Industry. The alternative items for the released files is the documents provided in the virtual libraries on particular sites. The altering consumer choices towards digital knowing increase the threat of substitution for the market.
Competitive rivalry in the publishing industry is high. The presence of large number of consumers 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 participating in the market increasing the competitors for CMP.
Bargaining Power of Supplier.
The major providers of the Exercise 2 Solution Case Study Solution consist of the suppliers of the paper for publishing files. As CMP is the largest publisher in the Chinese Publishing Market, for that reason the total bargaining power of provider for CMP is low.
Bargaining Power of Purchaser.
Bargaining power of purchaser in the publishing industry is high. Due to the existence of a a great deal of publishers in the Chinese market and the market saturation, the purchasers needs high quality documents at competitive costs.
CMP operates in a highly competitive market with the existence of a great deal of rivals. However, the business has a competitive position in the market with the highest market share in the Chinese publishing market. Major competitors of Exercise 2 Solution Case Study Solution consist of;.
• Chemical Industry Press (CIP).
• Posts and telecommunication Press (PTP).
Chemical Industry Press (CIP).
CIPis one of the close rivals of CMP. Established in the very same duration, CIP releases comparable type of books. For a big period, CIP held the biggest market share, and still ranks second and 3rd in various market sectors, with a significant focus on educational publications. CIP serves as a danger for CMP as it could wean its market share due to its long term competitive background. CIP is concentrated on digital publishing and could wean the market share of Exercise 2 Solution Case Study Solution easily in the current market scenario.
Posts and telecommunication Press (PTP).
It was likewise established in the same duration as Exercise 2 Solution Case Study Solution and CIP. It is also one of the popular gamers in the publishing industry with a yearly total profits of RMB 550 million in 2010.
Alternative-1: Expand towards New Markets
• Reducing reliance over the Chinese markets.
• Increasing number of Clients
• Growth opportunities.
• Preventing the impact of market saturation in the Chinese publishing industry.
• Use of prospective resources in growth.
• Risk of failure in new markets.
• Time consuming.
Alernative-2: Present Digital Publishing
• Sustaining customer base.
• Approaching brand-new markets.
• Easy to present utilizing present abilities.
• Low danger of Failure.
• Low requirement for funds.
• Increased product 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 company segments to the brand-new one can lead the business to lose demand of its products in the market.
With the deep analysis of the external and internal environment of the company together with the market analysis and the competitor analysis, Alternative 2 is recommended to CMP to achieve its future development. As the preferences are moving towards digital publishing and the company need an immediate service to prevent the decreasing industry development. Therefore, intro of digital publishing could prove to be an immediate service with low amount of risk for the company. The business could also think about the expansion program after the success of its digital publishing program.
In order to present digital publishing in its item portfolio, the company must first collects the information related to the consumer demand, the prospective markets, the federal government guidelines and the data related to the competitors presented in the market. If the initial offering proves a success, the business needs to go for the other markets. In this method the company would be able to implement its digital publishing program.
Although, the growth of the publishing market is declining because 2008, revealing a threat to the company's long term presence, but the circumstance can be controlled by thinking about an advancement plan in the future. The company might consider presenting digital publishingin its existing market to execute its development program at instant basis and to prevent the danger of failure for entrance in the new markets.