Friendly Cards Inc Case Study Solution and Analysis
Introduction
Friendly Cards Inc Case Study Help is the biggest publishing business with a greatest market share in the China's book retail market. CMP has actually ended up being a specialized details service provider and a large extensive Science and Technology publishing business through the combination of print media, audio-visual media and the network media.
Important Issues
Although, Friendly Cards Inc Case Study Solution has actually spent its 60 years journey efficiently, being a successful publishing house, nevertheless, the changing macro market patterns and forces bring particular difficulties to the publishing market in general and CMP in particular. These aspects include;
• Entrance of the new publishing companies in the industry.
• Decreasing growth of the publishing market.
• Market saturation.
• Intro of digital publishing strategies
• Enhancement 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 situation? 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?
Situational Analysis
Internal Analysis
SWOT Analysis
Strengths
Friendly Cards Inc Case Study Analysis has particular strengths that can be utilized to reduce the dangers, overcome the weakness and avail the opportunities. 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 permits the company to supply high quality products at a lower expense utilizing its previous experiences.
• The technical resources and abilities produced by its successful journey provide a competitive benefit to CMP.
• Vast item portfolioof CMP helps it to diversify its threat and offer high worth to its consumers.
• Strong monetary position allows the company to consider a number of advancement chances without any fear of raising fund externally.
Weaknesses
In addition to the strengths, the business has specific weak points which might increase restrictions for the business in implementing its development program. The weak points of Friendly Cards Inc Case Study Solution are offered as follows;
• Despite of being a science and technology publishing firm, the company still has conventional methods ofpublishing which are not suitable with the growing technological shift.
• CMP highly relies over the Chinese markets for its growth. It must propose certain expansion strategies to avoid its reliance over the Chinese markets to attain long term growth.
Opportunities
Although, the growth of the publishing market is decreasing since 2008, impacting Friendly Cards Inc Case Study Help too, however the growth could be restored by availing certain chances provided in the market. The market opportunities for CMP consist of;
• The business might likewise introduce Digital Publishing by utilizing its long term technical experience and a strong client recognition in the market.
• CMP might consider a development program through the growth towards foreign markets in order to decrease its reliance over Chinese markets by using its large funds.
Risks
The altering macro patterns in the market and increasing competitors in the publishing market has actually positioned particular threats to Friendly Cards Inc Case Study Help consisting of;( Gurel, 2017).
• Introduction of digital publishing i.e. digital libraries could result in decreasing market share of Friendly Cards Inc Case Study Help due to the consumer shift towards digital libraries.
• The existence of large number of rivals in the publishing market increase the danger for CMP to lose its competitive position in the market, as rivals can gain a strong customer base by using particular strategies like aggressive promo, quality products, and so on
• Entrance of new publishing companies in the market in addition to presence of high competitors increases the threat of losing the consumer base.
Monetary Analysis.
Due to absence of information, the monetary ratios of CMP could not be determined. It could be examined from the Appendix III that the annual overall earnings of Friendly Cards Inc Case Study Solution throughout the period 2000-2012 are growing at a high growth rate, revealing that the yearly need of the products of CMP is growing and the business is rather efficient in attracting a big number of customers at a prospective price.
Together with it, the second graph which reveals the yearly development in the Friendly Cards Inc Case Study Solution overall possessions, reveals that the business is rather efficient in including worth to its assets through its incomes. The development in possessions shows that the total worth of the company is also increasing with increasing the overall profits. (Unidentified, 2013).
Another monetary analysis of the company utilizing the offered information could be the analysis relating to the circulation of total earnings of the business. Major part of the earnings of CMP originates from the sales of its published books i.e. 64% as displayed in the Case Appendix V. The business might move towards other service segments with a prospective development to achieve its future advancement goal.
PESTEL Analysis
PESTEL analysis could be conducted to find out the different external forces impacting the efficiency of the company and the current patterns in the external environment of the business. A short PESTEL analysis of the business is offered as follows; (Alanzi, 2018).
Political.
As the publishing sector might have a substantial effect on the state of mind of individuals about the communist ideology of the government, therefore, the publishing sector is highly supervised and assisted by the Publicity Department of the Communist Party of China. It might be stated that the overall political forces affecting CMP service are high. The federal government policies relating to the publishing sector are likewise increasing with the passage of time.
Economical.
Financial forces affecting the publishing sector in general and the CMP in specific includesthe rates of paper, the earnings level of customers, the inflation rate, and the total GDP growth of the nation. All these forces combine impact the demand for the publishing market.
Social and Demographical.
The consumer preferences are moving towards digital publishing rather than the traditional was of publishing. In this regard, CMP needs to focus on digital publishing to satisfy the altering customer choices.
Technological.
Technological forces impacting the CMP consist of the technological advancement in the reading strategies etc. Enhancement of science and technology along with the rise of digital publishing might lower the demand for the CMP items, if specific actions would not be taken quickly.
Environmental.
Ecological forces affecting Friendly Cards Inc Case Study Help consists of the concerns 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 utilized while publishing ought to not be damaging for the environment.
Legal.
Legal regulations for the publishing sector at whole are high. Publishing Regulation 1997 needs the publishers to be approved initially by the Government to be gone into in the publishing market.
Industry Analysis (Porter's Five Forces Design).
Porter's Five Forces Design could be used to analyze the appearance of the publishing industry China. A quick analysis of the Porter's 5 Forces is given as follows;.
Hazard of New Entrants.
Dangers of new entrants in the Chinese Publishing Industry is moderate. The prospective growth in the market tends to bring in brand-new entrants to the publishing industry. The presence of intense competitors and the requirement of huge capital tends to demotivate new entrants to enter in the market.
Danger of Substitution.
Risk of Alternative is high for the Chinese Publishing Market. The alternative products for the published files is the files presented in the virtual libraries on particular websites. The altering customer choices towards digital knowing increase the danger of substitution for the industry.
Competitive Competition.
Competitive competition in the publishing industry is high. The presence of large number of consumers in the Chinese Publishing Market like CIP, PTP etc. tends to produce high competitive competition for CMP. In addition to it, new entrants are also participating in the market increasing the competition for CMP.
Bargaining Power of Provider.
The major providers of the Friendly Cards Inc Case Study Solution include the suppliers of the paper for publishing documents. As CMP is the largest publisher in the Chinese Publishing Market, therefore the total bargaining power of supplier for CMP is low.
Bargaining Power of Buyer.
Negotiating power of buyer 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 buyers requires high quality documents at competitive costs.
Rivals Analysis.
CMP runs in an extremely competitive market with the existence of large number of rivals. Nevertheless, the business 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 Analysis include;.
• Chemical Market Press (CIP).
• Posts and telecommunication Press (PTP).
Chemical Industry Press (CIP).
CIP acts as a threat for CMP as it might wean its market share due to its long term competitive background. CIP is focused on digital publishing and might wean the market share of CMP quickly in the existing market scenario.
Posts and telecommunication Press (PTP).
Another close rival of CMP is PTP. It was also established in the exact same period as CMP and CIP. It ranks sixth in the state-owned publishers in terms of business scale. It is likewise among the popular gamers in the publishing market with an annual overall revenues of RMB 550 million in 2010.
Alternatives
Alternative-1: Broaden towards New Markets
Pros
• Decreasing dependence over the Chinese markets.
• Increasing variety of Clients
• Growth opportunities.
• Preventing the effect of market saturation in the Chinese publishing market.
Cons
• Use of potential resources in expansion.
• Threat of failure in new markets.
• Time consuming.
Alernative-2: Introduce Digital Publishing
Pros
• Sustaining consumer base.
• Approaching brand-new markets.
• Easy to present utilizing current capabilities.
• Low danger of Failure.
• Low requirement for funds.
• Increased item portfolio provides high value to customers.
Cons
• Competition in the market by CIP, who has prior focus on the digital publishing.
• Shift of focus from the core business segments to the brand-new one can lead the business to lose need of its products in the market.
Recommendations
As the preferences are shifting towards digital publishing and the company need an immediate option to prevent the declining industry development. The company could also think about the growth program after the success of its digital publishing program.
Implementation
In order to introduce digital publishing in its product portfolio, the business ought to first collects the data related to the consumer need, the possible markets, the government guidelines and the information related to the rivals presented in the market. If the initial offering shows a success, the business should go for the other markets. In this method the business would be able to implement its digital publishing program.
Conclusion
The development of the publishing market is decreasing because 2008, revealing a danger to the business's long term presence, but the circumstance can be controlled by thinking about a development strategy in the future. The business could think about presenting digital publishingin its existing market to implement its advancement program at immediate basis and to prevent the danger of failure for entryway in the brand-new markets.
