Family Owned Business Case Study Solution and Analysis
Family Owned Business Case Study Analysis is the largest publishing company with a greatest market share in the China's book retail market. CMP has ended up being a specialized information company and a large thorough Science and Technology publishing business through the combination of print media, audio-visual media and the network media.
CMP has spent its 60 years journey efficiently, being an effective publishing house, however, the changing macro market trends and forces bring specific obstacles to the publishing market in basic and Family Owned Business Case Study Solution in specific. These elements include;
• Entrance of the new publishing firms in the industry.
• Decreasing development of the publishing market.
• Market saturation.
• Intro of digital publishing methods
• Enhancement of science and innovation.
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 circumstance? Do the long important experience, technical resources and the abilities of the company could be used to strive for the future advancement unceasingly? How could the business sustain its long term competitive position in future?
Family Owned Business Case Study Analysis has specific strengths that can be made use of to reduce the dangers, conquer the weak point and obtain the chances. Strengths of CMP are provided as follows;
• The long term experience of Family Owned Business Case Study Analysis in the publishing market i.e. 60 years allows the business to provide high quality products at a lower cost using its previous experiences.
• The technical resources and abilities created by its successful journey supply a competitive advantage to CMP.
• Vast product portfolioof CMP assists it to diversify its risk and provide high value to its customers.
• Strong financial position enables the business to think about several advancement chances with no fear of raising fund externally.
Along with the strengths, the business has particular weaknesses which might increase restrictions for the business in executing its advancement program. The weak points of Family Owned Business Case Study Solution are provided as follows;
• Despite of being a science and innovation publishing firm, the business still has conventional methods ofpublishing which are not compatible with the growing technological shift.
• CMP extremely relies over the Chinese markets for its growth. It should propose particular growth plans to avoid its dependence over the Chinese markets to attain long term development.
The growth of the publishing industry is decreasing since 2008, impacting Family Owned Business Case Study Solution as well, however the growth might be revived by availing certain opportunities presented in the market. The market opportunities for CMP include;
• The company might also introduce Digital Publishing by utilizing its long term technical experience and a strong client acknowledgment in the market.
• CMP could consider an advancement program through the expansion towards foreign markets in order to lower its dependence over Chinese markets by using its huge financial resources.
The altering macro trends in the market and increasing competitors in the publishing industry has actually presented particular hazards to Family Owned Business Case Study Help including;( Gurel, 2017).
• Intro of digital publishing i.e. digital libraries might lead to decreasing market share of Family Owned Business Case Study Help due to the customer shift towards digital libraries.
• The presence of large number of competitors in the publishing market increase the danger for CMP to lose its competitive position in the market, as competitors can acquire a strong consumer base by utilizing specific strategies like aggressive promotion, quality items, and so on
• Entrance of new publishing companies in the market together with existence of high competition increases the threat of losing the client base.
The company has a rather competitive financial efficiency. Due to lack of information, the financial ratios of CMP might not be determined. However, the general monetary performance of the company could be analyzed by using the graphs given in the case Appendices. It could be analyzed from the Appendix III that the yearly overall incomes of CMP during the period 2000-2012 are growing at a high growth rate, revealing that the yearly demand of the products of Family Owned Business Case Study Analysis is growing and the company is quite effective in attracting a large number of customers at a prospective rate.
Along with it, the second graph which shows the yearly development in the Family Owned Business Case Study Solution overall possessions, reveals that the business is rather effective in including worth to its possessions through its revenues. The growth in assets shows that the overall worth of the company is likewise increasing with increasing the overall profits. (Unidentified, 2013).
Another financial analysis of the company using the offered data could be the analysis regarding the circulation of overall earnings of the company. Major part of the revenues of CMP comes from the sales of its released books i.e. 64% as shown in the Case Appendix V. The business might move towards other business segments with a prospective growth to accomplish its future advancement goal.
PESTEL analysis could be performed to find out the different external forces impacting the performance of the company and the recent patterns in the external environment of the business. A brief PESTEL analysis of the company is offered as follows; (Alanzi, 2018).
As the publishing sector might have a significant effect on the frame of mind of the people about the communist ideology of the government, therefore, the publishing sector is extremely monitored and directed by the Publicity Department of the Communist Celebration of China. For that reason, it could be stated that the overall political forces impacting Family Owned Business Case Study Analysis service are high. The government policies concerning the publishing sector are also increasing with the passage of time.
Financial 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 overall GDP development of the nation. All these forces combine impact the demand for the publishing market.
Social and Demographical.
The customer preferences are shifting towards digital publishing rather than the standard was of publishing. In this regard, CMP must focus on digital publishing to meet the changing customer choices.
Technological forces impacting the CMP consist of the technological development in the reading techniques etc. Improvement of science and technology along with the increase of digital publishing might reduce the need for the CMP products, if particular actions would not be taken quickly.
Environmental forces affecting Family Owned Business Case Study Solution consists of the concerns of environmental neighborhoods over the usage of paper in publishing books. The paper used in the books while publishing is required to be disposable and the ink used while publishing must not be harmful for the environment.
Legal regulations for the publishing sector at whole are high. The legal guidelines regarding the publishing sector is managed by the General Administration of Press and Publication. Publishing Ordinance 1997 needs the publishers to be approved first by the Federal government to be gone into 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 5 Forces Model could be utilized to examine the beauty of the publishing industry China. A quick analysis of the Porter's 5 Forces is given as follows;.
Risk of New Entrants.
Dangers of new entrants in the Chinese Publishing Industry is moderate. The potential growth in the industry tends to attract new entrants to the publishing market. The presence of extreme competitors and the requirement of substantial capital tends to demotivate new entrants to go into in the market.
Threat of Replacement.
Risk of Replacement is high for the Chinese Publishing Industry. The replacement products for the released documents is the documents presented in the virtual libraries on specific sites. The altering customer preferences towards digital learning increase the threat of substitution for the industry.
Competitive rivalry in the publishing market is high. The existence of a great deal of customers in the Chinese Publishing Industry like CIP, PTP and so on tends to produce high competitive competition for CMP. Along with it, new entrants are also entering into the market increasing the competitors for CMP.
Bargaining Power of Supplier.
The major suppliers of the Family Owned Business Case Study Analysis consist of the suppliers of the paper for releasing files. As CMP is the biggest publisher in the Chinese Publishing Market, for that reason the overall bargaining power of provider for CMP is low.
Bargaining Power of Purchaser.
Haggling 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 marketplace saturation, the buyers requires high quality documents at competitive rates.
CMP runs in a highly competitive industry with the existence of large number of rivals. The company has a competitive position in the market with the greatest market share in the Chinese publishing market. Major competitors of Family Owned Business Case Study Help include;.
• Chemical Market Press (CIP).
• Posts and telecommunication Press (PTP).
Chemical Market Press (CIP).
CIPis one of the close rivals of CMP. Founded in the exact same period, CIP publishes comparable type of books. For a large time period, CIP held the largest market share, and still ranks 3rd and second in different market sectors, with a major focus on instructional publications. CIP functions as a risk 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 Family Owned Business Case Study Solution quickly in the current market scenario.
Posts and telecommunication Press (PTP).
Another close rival 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 organisation scale. It is also one of the popular players in the publishing market with an annual total earnings of RMB 550 million in 2010.
Alternative-1: Expand towards New Markets
• Lowering reliance over the Chinese markets.
• Increasing variety of Consumers
• Development chances.
• Preventing the effect of market saturation in the Chinese publishing market.
• Use of potential resources in expansion.
• Risk of failure in brand-new markets.
• Time consuming.
Alernative-2: Introduce Digital Publishing
• Sustaining consumer base.
• Approaching brand-new markets.
• Easy to present using current capabilities.
• Low threat of Failure.
• Low requirement for funds.
• Increased product portfolio offers high worth to consumers.
• 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.
As the choices are shifting towards digital publishing and the company need an instant solution to prevent the declining industry growth. The company could 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 initially gathers the information related to the customer demand, the prospective markets, the federal government regulations and the data connected to the rivals provided in the market. After that, the company ought to choose one potential segment for its initial offering. It should collect research that how it might distinguish its digital publishing from the existing competitors' items. The actions above the business should go for the initial offering. If the preliminary offering proves a success, the company needs to opt for the other markets. In this way the company would be able to execute its digital publishing program.
Although, the development of the publishing market is decreasing because 2008, revealing a danger to the business's long term existence, but the scenario can be managed by considering a development strategy in the future. The business could think about introducing digital publishingin its existing market to implement its advancement program at instant basis and to prevent the risk of failure for entryway in the new markets.