Fortescue Metals Group Becoming The New Force In Iron Ore Case Study Solution and Analysis
Fortescue Metals Group Becoming The New Force In Iron Ore Case Study Help is the largest publishing business with a greatest market share in the China's book retail market. CMP has actually ended up being a specialized details supplier and a big extensive Science and Technology publishing business through the combination of print media, audio-visual media and the network media.
Although, Fortescue Metals Group Becoming The New Force In Iron Ore Case Study Analysis has actually spent its 60 years journey smoothly, being a successful publishing house, nevertheless, the altering macro market trends and forces bring particular challenges to the publishing industry in basic and CMP in specific. These factors include;
• Entryway of the brand-new publishing companies in the market.
• Decreasing development of the publishing market.
• Market saturation.
• Introduction of digital publishing strategies
• Improvement of science and technology.
The improvement of the macro markets have raised several questions to the management at CPM that what could be the future of CMP in this circumstance? Do the long valuable experience, technical resources and the capabilities of the business could be used to strive for the future development unceasingly? How could the business sustain its long term competitive position in future?
Fortescue Metals Group Becoming The New Force In Iron Ore Case Study Analysis has particular strengths that can be utilized to lower the dangers, get rid of the weak point and get the chances. Strengths of CMP are provided as follows;
• The long term experience of Fortescue Metals Group Becoming The New Force In Iron Ore Case Study Help in the publishing industry i.e. 60 years enables the business to supply high quality products at a lower cost utilizing its prior experiences.
• The technical resources and abilities generated by its successful journey provide a competitive advantage to CMP.
• Vast item portfolioof CMP helps it to diversify its risk and provide high worth to its consumers.
• Strong financial position allows the company to consider numerous development chances with no worry of raising fund externally.
In addition to the strengths, the business has specific weaknesses which might increase constraints for the business in executing its advancement program. The weak points of Fortescue Metals Group Becoming The New Force In Iron Ore Case Study Solution are offered as follows;
• Despite of being a science and innovation publishing company, the business still has conventional ways ofpublishing which are not compatible with the growing technological shift.
• CMP extremely relies over the Chinese markets for its development. It needs to propose particular expansion plans to avoid its dependence over the Chinese markets to achieve long term development.
The development of the publishing industry is decreasing given that 2008, impacting Fortescue Metals Group Becoming The New Force In Iron Ore Case Study Help as well, but the growth could be restored by availing particular chances provided in the market. The market opportunities for CMP include;
• The business might also present Digital Publishing by utilizing its long term technical experience and a strong client acknowledgment in the market.
• CMP could consider a development program through the growth towards foreign markets in order to minimize its dependence over Chinese markets by using its vast funds.
The altering macro patterns in the market and increasing competition in the publishing industry has actually presented certain threats to Fortescue Metals Group Becoming The New Force In Iron Ore Case Study Analysis consisting of;( Gurel, 2017).
• Intro of digital publishing i.e. digital libraries could result in decreasing market share of Fortescue Metals Group Becoming The New Force In Iron Ore Case Study Analysis due to the customer shift towards digital libraries.
• The presence of large number of competitors in the publishing industry increase the threat for CMP to lose its competitive position in the market, as rivals can acquire a strong consumer base by utilizing particular techniques like aggressive promotion, quality items, etc.
• Entryway of new publishing companies in the market together with existence of high competition increases the risk of losing the customer base.
The company has a rather competitive monetary performance. Due to absence of data, the monetary ratios of CMP could not be calculated. However, the total monetary performance of the company could be evaluated by using the charts given in the case Appendices. It might be evaluated from the Appendix III that the annual total profits of CMP during the period 2000-2012 are growing at a high growth rate, revealing that the yearly need of the items of Fortescue Metals Group Becoming The New Force In Iron Ore Case Study Analysis is growing and the company is quite effective in attracting a a great deal of clients at a possible rate.
In addition to it, the 2nd chart which shows the yearly development in the Fortescue Metals Group Becoming The New Force In Iron Ore Case Study Analysis total assets, reveals that the business is quite efficient in including value to its assets through its revenues. The growth in possessions shows that the total worth of the company is likewise increasing with increasing the total earnings. (Unknown, 2013).
Another monetary analysis of the company utilizing the given data could be the analysis regarding the circulation of overall profits of the business. Major part of the earnings of CMP comes from the sales of its published books i.e. 64% as displayed in the Case Appendix V. The company might move towards other service sections with a possible development to accomplish its future development goal.
PESTEL analysis might be carried out to discover the different external forces impacting the efficiency of the business 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 substantial influence on the frame of mind of individuals about the communist ideology of the federal government, for that reason, the publishing sector is extremely supervised and assisted by the Publicity Department of the Communist Celebration of China. Therefore, it might be said that the general political forces impacting Fortescue Metals Group Becoming The New Force In Iron Ore Case Study Solution service are high. The federal government policies concerning the publishing sector are likewise increasing with the passage of time.
Financial forces impacting the publishing sector in basic and the Fortescue Metals Group Becoming The New Force In Iron Ore Case Study Solution in specific includesthe costs of paper, the income level of customers, the inflation rate, and the general GDP growth of the country. All these forces integrate effect the need for the publishing market. In addition to it, the economic policies associated with the import of books affect the total company at CPM. China's economic conditions are quite favorable for CMP with high GDP growth and customer income level.
Social and Demographical.
The consumer choices are moving towards digital publishing rather than the standard was of publishing. In this regard, CMP must focus on digital publishing to meet the changing consumer preferences.
Technological forces affecting the CMP consist of the technological improvement in the reading techniques etc. Improvement of science and technology together with the rise of digital publishing might lower the need for the CMP items, if certain actions would not be taken quickly.
Environmental forces affecting Fortescue Metals Group Becoming The New Force In Iron Ore Case Study Solution consists of the issues of environmental neighborhoods over the use of paper in publishing books. The paper utilized in the books while publishing is needed to be disposable and the ink utilized while publishing must not be harmful for the environment.
Legal guidelines for the publishing sector at whole are high. The legal regulations regarding the publishing sector is controlled by the General Administration of Press and Publication. Publishing Ordinance 1997 requires the publishers to be authorized initially 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.
Market Analysis (Porter's Five Forces Design).
Porter's Five Forces Design might be utilized to analyze the beauty of the publishing industry China. A short analysis of the Porter's 5 Forces is offered as follows;.
Threat of New Entrants.
Dangers of brand-new entrants in the Chinese Publishing Industry is moderate. The potential growth in the industry tends to bring in brand-new entrants to the publishing industry. However, the presence of extreme competitors and the requirement of big capital tends to demotivate brand-new entrants to enter in the market.
Hazard of Substitution.
Hazard of Alternative is high for the Chinese Publishing Industry. The substitute products for the released documents is the files presented in the virtual libraries on specific websites. The altering consumer preferences towards digital knowing increase the hazard of replacement for the industry.
Competitive rivalry in the publishing industry is high. The existence of large number of customers in the Chinese Publishing Market like CIP, PTP etc. tends to produce high competitive rivalry for CMP. Together with it, brand-new entrants are likewise participating in the market increasing the competition for CMP.
Bargaining Power of Provider.
The significant providers of the Fortescue Metals Group Becoming The New Force In Iron Ore Case Study Analysis consist of the providers of the paper for releasing documents. As CMP is the largest publisher in the Chinese Publishing Market, therefore the total bargaining power of provider for CMP is low.
Bargaining Power of Buyer.
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 marketplace saturation, the buyers requires high quality files at competitive rates.
CMP operates in a highly competitive industry with the existence of large number of competitors. The company has a competitive position in the market with the highest market share in the Chinese publishing market. Major rivals of Fortescue Metals Group Becoming The New Force In Iron Ore Case Study Analysis include;.
• Chemical Market Press (CIP).
• Posts and telecommunication Press (PTP).
Chemical Market Press (CIP).
CIPis one of the close rivals of CMP. Established in the same period, CIP releases comparable type of books. For a big time period, CIP held the largest market share, and still ranks 3rd and 2nd in different market segments, with a significant concentrate on educational publications. CIP functions 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 Fortescue Metals Group Becoming The New Force In Iron Ore Case Study Analysis quickly in the current market scenario.
Posts and telecommunication Press (PTP).
It was also established in the very same period as Fortescue Metals Group Becoming The New Force In Iron Ore Case Study Analysis and CIP. It is also one of the prominent players in the publishing market with a yearly overall revenues of RMB 550 million in 2010.
Alternative-1: Broaden towards New Markets
• Lowering dependence over the Chinese markets.
• Increasing variety of Customers
• Development opportunities.
• Preventing the impact of market saturation in the Chinese publishing industry.
• Usage of prospective resources in expansion.
• Danger of failure in new markets.
• Time consuming.
Alernative-2: Present Digital Publishing
• Sustaining consumer base.
• Approaching brand-new markets.
• Easy to present utilizing existing abilities.
• Low threat of Failure.
• Low requirement for funds.
• Increased item portfolio provides high value to customers.
• 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 company to lose demand of its products in the market.
With the deep analysis of the internal and external 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 require an instant service to prevent the decreasing market development. Introduction of digital publishing could show to be an instant option with low quantity of risk for the business. Nevertheless, the business could also think about the expansion program after the success of its digital publishing program.
In order to introduce digital publishing in its item portfolio, the company should initially gathers the data related to the consumer need, the possible markets, the federal government policies and the information related to the rivals presented in the market. If the initial offering proves a success, the company must go for the other markets. In this method the business would be able to implement its digital publishing program.
Although, the development of the publishing market is decreasing considering that 2008, revealing a danger to the business's long term presence, but the circumstance can be controlled by considering a development plan in the future. The business could think about presenting digital publishingin its existing market to execute its development program at instant basis and to prevent the risk of failure for entryway in the brand-new markets.