Friendly Cards Inc Case Study Solution and Analysis
Friendly Cards Inc Case Study Analysis is the biggest publishing business with a greatest market share in the China's book retail market. CMP has ended up being a specialized information provider and a large extensive Science and Innovation publishing company through the combination of print media, audio-visual media and the network media.
Although, Friendly Cards Inc Case Study Solution has actually invested its 60 years journey efficiently, being a successful publishing home, nevertheless, the altering macro market patterns and forces bring specific difficulties to the publishing market in basic and CMP in specific. These elements consist of;
• Entrance of the new publishing companies in the industry.
• Decreasing growth of the publishing market.
• Market saturation.
• Intro of digital publishing strategies
• Improvement of science and technology.
The improvement 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 circumstance? Do the long valuable experience, technical resources and the abilities of the business could be made use of to strive for the future advancement unceasingly? How could the business sustain its long term competitive position in future?
Friendly Cards Inc Case Study Analysis has particular strengths that can be used to lower the hazards, get rid of the weak point and obtain the chances. Strengths of CMP are given as follows;
• The long term experience of Friendly Cards Inc Case Study Solution in the publishing industry i.e. 60 years allows the company to offer high quality products at a lower cost utilizing its prior experiences.
• The technical resources and capabilities generated by its effective journey supply a competitive benefit to CMP.
• Large product portfolioof CMP helps it to diversify its danger and offer high worth to its customers.
• Strong monetary position permits the company to think about a number of development opportunities without any fear of raising fund externally.
In addition to the strengths, the company has certain weak points which might increase restraints for the business in executing its development program. The weak points of Friendly Cards Inc Case Study Solution are given as follows;
• Despite of being a science and innovation publishing firm, the company still has traditional ways ofpublishing which are not compatible with the growing technological shift.
• CMP extremely relies over the Chinese markets for its development. It must propose certain growth strategies to avoid its dependence over the Chinese markets to accomplish long term development.
The development of the publishing market is declining since 2008, impacting Friendly Cards Inc Case Study Analysis as well, but the growth might be restored by availing certain chances presented in the market. The market chances for CMP include;
• The company might also introduce Digital Publishing by utilizing its long term technical experience and a strong consumer recognition in the market.
• CMP might consider an advancement program through the growth towards foreign markets in order to minimize its dependence over Chinese markets by utilizing its vast funds.
The changing macro patterns in the market and increasing competitors in the publishing industry has actually posed particular threats to Friendly Cards Inc Case Study Solution consisting of;( Gurel, 2017).
• Introduction of digital publishing i.e. digital libraries might cause declining market share of Friendly Cards Inc Case Study Help due to the customer shift towards virtual libraries.
• The existence 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 get a strong consumer base by using particular strategies like aggressive promo, quality items, etc.
• Entryway of new publishing companies in the market in addition to existence of high competitors increases the threat of losing the consumer base.
Due to lack of data, the monetary ratios of CMP might not be calculated. It could be evaluated from the Appendix III that the yearly overall profits of Friendly Cards Inc Case Study Solution during the duration 2000-2012 are growing at a high development rate, revealing that the yearly demand of the items of CMP is growing and the business is quite effective in attracting a big number of consumers at a possible rate.
Together with it, the 2nd graph which shows the yearly growth in the Friendly Cards Inc Case Study Analysis total assets, reveals that the business is quite efficient in adding value to its properties through its incomes. The growth in possessions reveals that the total value of the firm is also increasing with increasing the total profits. (Unknown, 2013).
Another monetary analysis of the company utilizing the given information might be the analysis concerning the circulation of overall profits of the company. Major part of the revenues of CMP comes from the sales of its published books i.e. 64% as displayed in the Case Appendix V. The company could move towards other organisation segments with a potential growth to achieve its future development objective.
PESTEL analysis could be performed to discover the various external forces impacting the performance of the business and the recent patterns in the external environment of the company. A brief PESTEL analysis of the company is provided as follows; (Alanzi, 2018).
As the publishing sector could have a considerable influence on the mindset of the people about the communist ideology of the federal government, therefore, the publishing sector is highly monitored and assisted by the Publicity Department of the Communist Party of China. It could be said that the overall political forces impacting CMP service are high. The government policies relating to the publishing sector are likewise increasing with the passage of time.
Financial forces impacting the publishing sector in basic and the CMP in particular includesthe costs of paper, the income level of customers, the inflation rate, and the total GDP growth of the country. All these forces integrate impact the need for the publishing market.
Social and Demographical.
The customer preferences are shifting towards digital publishing rather than the conventional was of publishing. In this regard, CMP should focus on digital publishing to satisfy the changing customer choices.
Technological forces impacting the CMP consist of the technological development in the reading techniques etc. Improvement of science and innovation in addition to the rise of digital publishing might lower the need for the CMP items, if certain actions would not be taken soon.
Environmental forces impacting Friendly Cards Inc Case Study Solution consists of the issues of ecological 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 used while publishing should not be harmful for the environment.
Legal guidelines for the publishing sector at whole are high. The legal policies regarding the publishing sector is managed by the General Administration of Press and Publication. Publishing Ordinance 1997 needs the publishers to be authorized initially by the Government to be entered in the publishing market. The ordinance forbids direct participation of foreign entities and people in the publishing sector.
Industry Analysis (Porter's 5 Forces Model).
Porter's Five Forces Design might be used to examine the attractiveness of the publishing industry China. A brief analysis of the Porter's 5 Forces is offered as follows;.
Risk of New Entrants.
Risks of new entrants in the Chinese Publishing Industry is moderate. The prospective growth in the market tends to attract brand-new entrants to the publishing industry. However, the existence of extreme competition and the requirement of substantial capital tends to demotivate brand-new entrants to go into in the marketplace.
Danger of Substitution.
Danger of Substitution is high for the Chinese Publishing Industry. The substitute items for the released files is the files provided in the virtual libraries on particular websites. The changing consumer choices towards digital learning increase the danger of replacement for the industry.
Competitive competition in the publishing market is high. The presence of large number of customers in the Chinese Publishing Market 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 significant suppliers of the Friendly Cards Inc Case Study Analysis consist of the suppliers of the paper for publishing documents. As CMP is the biggest publisher in the Chinese Publishing Market, therefore the general bargaining power of provider for CMP is low.
Bargaining Power of Purchaser.
Negotiating power of purchaser in the publishing industry is high. Due to the existence of a large number of publishers in the Chinese market and the marketplace saturation, the buyers needs high quality documents at competitive rates.
CMP operates in a highly competitive market 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. Significant competitors of Friendly Cards Inc Case Study Solution include;.
• Chemical Market Press (CIP).
• Posts and telecommunication Press (PTP).
Chemical Industry Press (CIP).
CIPis among the close rivals of CMP. Established in the exact same period, CIP publishes similar kind of books. For a big period, CIP held the biggest market share, and still ranks second and 3rd in various market segments, with a significant focus on educational publications. CIP serves as a danger 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 Friendly Cards Inc Case Study Analysis quickly in the existing market situation.
Posts and telecommunication Press (PTP).
It was also founded in the exact same period as Friendly Cards Inc Case Study Help and CIP. It is likewise one of the popular gamers in the publishing market with a yearly overall profits of RMB 550 million in 2010.
Alternative-1: Broaden towards New Markets
• Lowering dependence over the Chinese markets.
• Increasing number of Clients
• Growth chances.
• Avoiding the impact of market saturation in the Chinese publishing market.
• Usage of prospective resources in growth.
• Threat of failure in new markets.
• Time consuming.
Alernative-2: Present Digital Publishing
• Sustaining consumer base.
• Approaching new markets.
• Easy to introduce utilizing current capabilities.
• Low risk of Failure.
• Low requirement for funds.
• Increased item portfolio provides high worth to clients.
• Competition in the market by CIP, who has prior focus on the digital publishing.
• Shift of focus from the core service sectors to the brand-new one can lead the business to lose need of its items in the market.
With the deep analysis of the external and internal environment of the company together with the market analysis and the rival analysis, Alternative 2 is advised to CMP to accomplish its future development. As the choices are shifting towards digital publishing and the company require an instant solution to avoid the declining industry development. Introduction of digital publishing could show to be an immediate option with low amount of risk for the business. Nevertheless, the business could likewise consider the growth program after the success of its digital publishing program.
In order to present digital publishing in its product portfolio, the business ought to first collects the data related to the consumer demand, the potential markets, the government regulations and the information related to the rivals presented in the market. If the preliminary offering shows a success, the business must go for the other markets. In this way the company would be able to implement its digital publishing program.
Although, the development of the publishing market is decreasing because 2008, showing a risk to the company's long term existence, however the circumstance can be managed by considering a development strategy in the future. The company might think about presenting digital publishingin its existing market to implement its advancement program at instant basis and to avoid the threat of failure for entryway in the brand-new markets.