Heavy Metal A Baosteel Enters Brazil Case Study Solution and Analysis
Introduction
Heavy Metal A Baosteel Enters Brazil Case Study Solution is the largest publishing business with a highest market share in the China's book retail market. CMP has ended up being a specialized info service provider and a large extensive Science and Technology publishing business through the combination of print media, audio-visual media and the network media.
Vital Concerns
Although, Heavy Metal A Baosteel Enters Brazil Case Study Analysis has spent its 60 years journey efficiently, being a successful publishing house, however, the altering macro market trends and forces bring certain obstacles to the publishing market in general and CMP in specific. These elements include;
• Entryway of the new publishing firms in the market.
• Decreasing development of the publishing market.
• Market saturation.
• Introduction of digital publishing techniques
• Enhancement of science and technology.
The change of the macro markets have raised numerous concerns to the management at CPM that what could be the future of CMP in this scenario? Do the long important experience, technical resources and the abilities of the business could be utilized to pursue the future development unceasingly? How could the business sustain its long term competitive position in future?
Situational Analysis
Internal Analysis
SWOT Analysis
Strengths
Heavy Metal A Baosteel Enters Brazil Case Study Solution has certain strengths that can be utilized to reduce the dangers, conquer the weakness and obtain the chances. Strengths of CMP are offered as follows;
• The long term experience of Heavy Metal A Baosteel Enters Brazil Case Study Analysis in the publishing industry i.e. 60 years permits the business to provide high quality products at a lower expense using its prior experiences.
• The technical resources and abilities generated by its successful journey offer a competitive advantage to CMP.
• Large item portfolioof CMP assists it to diversify its threat and supply high value to its clients.
• Strong monetary position permits the company to consider numerous advancement opportunities with no fear of raising fund externally.
Weak points
Along with the strengths, the company has particular weak points which could increase restrictions for the business in executing its development program. The weaknesses of Heavy Metal A Baosteel Enters Brazil Case Study Solution are given as follows;
• Despite of being a science and technology publishing firm, the business still has traditional methods ofpublishing which are not suitable with the growing technological shift.
• CMP highly relies over the Chinese markets for its development. It ought to propose specific growth strategies to avoid its reliance over the Chinese markets to achieve long term growth.
Opportunities
Although, the development of the publishing market is decreasing because 2008, affecting Heavy Metal A Baosteel Enters Brazil Case Study Solution too, however the growth might be restored by availing certain chances provided in the market. The marketplace chances for CMP include;
• The business could 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 decrease its reliance over Chinese markets by utilizing its huge funds.
Threats
The altering macro patterns in the market and increasing competition in the publishing industry has actually positioned specific risks to Heavy Metal A Baosteel Enters Brazil Case Study Help consisting of;( Gurel, 2017).
• Introduction of digital publishing i.e. digital libraries could result in declining market share of Heavy Metal A Baosteel Enters Brazil Case Study Help due to the customer shift towards digital libraries.
• The existence of large number of rivals in the publishing industry increase the threat for CMP to lose its competitive position in the market, as competitors can acquire a strong customer base by utilizing specific techniques like aggressive promo, quality items, etc.
• Entryway of new publishing firms in the industry along with existence of high competition increases the hazard of losing the client base.
Monetary Analysis.
Due to absence of data, the financial ratios of CMP could not be determined. It might be evaluated from the Appendix III that the yearly overall incomes of Heavy Metal A Baosteel Enters Brazil Case Study Solution throughout the period 2000-2012 are growing at a high development rate, revealing that the yearly need of the products of CMP is growing and the company is rather effective in attracting a big number of customers at a possible rate.
Along with it, the second chart which shows the yearly development in the Heavy Metal A Baosteel Enters Brazil Case Study Help total properties, shows that the business is rather efficient in including worth to its possessions through its revenues. The growth in assets reveals that the total worth of the firm is likewise increasing with increasing the total revenues. (Unknown, 2013).
Another financial analysis of the company utilizing the offered information could be the analysis concerning the distribution of overall revenues of the business. Major part of the profits of CMP originates from the sales of its released books i.e. 64% as displayed in the Case Appendix V. The business might move towards other business sectors with a possible growth to attain its future development goal.
PESTEL Analysis
PESTEL analysis could be performed to discover the numerous external forces impacting the performance of the company and the current patterns in the external environment of the business. A quick PESTEL analysis of the company is provided as follows; (Alanzi, 2018).
Political.
As the publishing sector might have a significant effect on the state of mind of individuals about the communist ideology of the federal government, for that reason, the publishing sector is highly monitored and assisted by the Promotion Department of the Communist Celebration of China. For that reason, it might be said that the overall political forces impacting Heavy Metal A Baosteel Enters Brazil Case Study Solution service are high. The federal government policies relating to the publishing sector are also increasing with the passage of time.
Cost-effective.
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 overall GDP growth of the nation. All these forces integrate effect the need for the publishing market.
Social and Demographical.
Social and demographical forces include the population growth, the customer's choices towards checking out useful materials and so on. China has the greatest population in the world with a high population growth, revealing the increasing variety of customers of the Heavy Metal A Baosteel Enters Brazil Case Study Help. However, the consumer choices are shifting towards digital publishing rather than the traditional was of publishing. In this regard, CMP needs to focus on digital publishing to meet the changing customer choices.
Technological.
Technological forces impacting the CMP include the technological improvement in the reading methods etc. Enhancement of science and innovation together with the increase of digital publishing could minimize the demand for the CMP products, if particular actions would not be taken soon.
Environmental.
Environmental forces impacting Heavy Metal A Baosteel Enters Brazil Case Study Help consists of 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 non reusable and the ink utilized while publishing ought to not be hazardous for the environment.
Legal.
Legal policies for the publishing sector at whole are high. The legal regulations relating to the publishing sector is controlled by the General Administration of Press and Publication. Publishing Regulation 1997 requires the publishers to be authorized initially by the Government to be gone into in the publishing market. The ordinance forbids direct involvement of foreign entities and individuals in the publishing sector.
Industry Analysis (Porter's 5 Forces Model).
Porter's Five Forces Design could be utilized to examine the beauty of the publishing market China. A brief analysis of the Porter's 5 Forces is given as follows;.
Threat of New Entrants.
Dangers of brand-new entrants in the Chinese Publishing Market is moderate. The potential growth in the market tends to attract new entrants to the publishing industry. The existence of intense competition and the requirement of big capital tends to demotivate brand-new entrants to go into in the market.
Hazard of Replacement.
Risk of Substitution is high for the Chinese Publishing Market. The alternative products for the released documents is the files provided in the virtual libraries on particular websites. The changing customer choices towards digital knowing increase the risk of alternative for the market.
Competitive Competition.
Competitive rivalry in the publishing industry is high. The existence of large number of customers in the Chinese Publishing Market like CIP, PTP and so on tends to produce high competitive rivalry for CMP. Along with it, new entrants are likewise participating in the market increasing the competitors for CMP.
Bargaining Power of Provider.
The major suppliers of the Heavy Metal A Baosteel Enters Brazil Case Study Solution consist of the providers of the paper for publishing files. 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 purchaser in the publishing industry is high. Due to the presence of a a great deal of publishers in the Chinese market and the market saturation, the buyers needs high quality documents at competitive prices.
Rivals Analysis.
CMP runs in a highly competitive industry with the existence of large number of rivals. The business has a competitive position in the market with the highest market share in the Chinese publishing market. Major competitors of Heavy Metal A Baosteel Enters Brazil Case Study Help include;.
• Chemical Industry Press (CIP).
• Posts and telecommunication Press (PTP).
Chemical Industry Press (CIP).
CIPis among the close competitors of CMP. Established in the exact same duration, CIP publishes comparable type of books. For a large time period, CIP held the biggest market share, and still ranks second and third in different market sectors, with a major 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 concentrated on digital publishing and could wean the market share of Heavy Metal A Baosteel Enters Brazil Case Study Analysis easily in the current market circumstance.
Posts and telecommunication Press (PTP).
It was likewise established in the exact same duration as Heavy Metal A Baosteel Enters Brazil Case Study Analysis and CIP. It is also one of the prominent gamers in the publishing market with a yearly total revenues of RMB 550 million in 2010.
Alternatives
Alternative-1: Broaden towards New Markets
Pros
• Decreasing dependence over the Chinese markets.
• Increasing number of Consumers
• Growth chances.
• Preventing the effect of market saturation in the Chinese publishing market.
Cons
• Use of potential resources in expansion.
• Threat of failure in brand-new markets.
• Time consuming.
Alernative-2: Introduce Digital Publishing
Pros
• Sustaining customer base.
• Approaching new markets.
• Easy to introduce utilizing existing abilities.
• Low danger of Failure.
• Low requirement for funds.
• Increased item portfolio offers high worth to clients.
Cons
• Competition in the market by CIP, who has prior concentrate 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 items in the market.
Recommendations
With the deep analysis of the external and internal environment of the company in addition to the industry analysis and the competitor analysis, Alternative 2 is suggested to CMP to achieve its future development. As the choices are shifting towards digital publishing and the business need an immediate service to prevent the declining industry development. Intro of digital publishing could show to be an immediate solution with low amount of risk for the company. Nevertheless, the business might likewise consider the growth program after the success of its digital publishing program.
Application
In order to introduce digital publishing in its item portfolio, the company ought to first collects the data related to the customer demand, the potential markets, the government policies and the information related to the rivals provided in the market. If the preliminary offering proves a success, the company needs to go for the other markets. In this way the company would be able to execute its digital publishing program.
Conclusion
The growth of the publishing industry is decreasing given that 2008, showing a danger to the company's long term presence, however the situation can be controlled by considering a development plan in the future. The business might consider introducing digital publishingin its existing market to execute its advancement program at immediate basis and to avoid the danger of failure for entrance in the brand-new markets.
