Island Foods Inc Case Study Solution and Analysis
Island Foods Inc Case Study Solution is the largest publishing business with a greatest market share in the China's book retail market. CMP supplies a number of services consisting of; collecting info, processing info and communication services. Major service sections of the business consist of; books, regulars, consultancy and distribution. The business has a huge product portfolio and its major products consist of books, regulars, online media, exhibits, research reports and so on. Island Foods Inc Case Study Solution has actually ended up being a specialized details service provider and a big detailed Science and Technology publishing company through the integration of print media, audio-visual media and the network media.
CMP has actually invested its 60 years journey efficiently, being an effective publishing house, nevertheless, the changing macro market trends and forces bring certain obstacles to the publishing industry in basic and Island Foods Inc Case Study Solution in specific. These aspects include;
• Entryway of the brand-new publishing companies 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 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 utilized to pursue the future advancement unceasingly? How could the company sustain its long term competitive position in future?
Island Foods Inc Case Study Solution has particular strengths that can be used to decrease the threats, conquer the weak point and obtain the chances. Strengths of CMP are provided as follows;
• The long term experience of Island Foods Inc Case Study Analysis in the publishing market i.e. 60 years enables the company to provide high quality items at a lower expense utilizing its previous experiences.
• The technical resources and abilities produced by its effective journey offer a competitive advantage to CMP.
• Huge product portfolioof CMP helps it to diversify its threat and provide high worth to its customers.
• Strong financial position enables the company to think about several advancement opportunities with no worry of raising fund externally.
Together with the strengths, the business has particular weak points which could increase constraints for the company in executing its advancement program. The weak points of Island Foods Inc Case Study Help are provided as follows;
• Despite of being a science and innovation 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 development. It needs to propose certain growth strategies to prevent its reliance over the Chinese markets to attain long term development.
Although, the growth of the publishing market is declining because 2008, affecting Island Foods Inc Case Study Analysis as well, however the development might be revived by availing particular chances provided in the market. The marketplace opportunities for CMP consist of;
• The business might also introduce Digital Publishing by utilizing its long term technical experience and a strong client recognition in the market.
• CMP could think about a development program through the expansion towards foreign markets in order to minimize its dependence over Chinese markets by utilizing its huge funds.
The changing macro patterns in the market and increasing competition in the publishing industry has actually posed specific threats to Island Foods Inc Case Study Help including;( Gurel, 2017).
• Intro of digital publishing i.e. virtual libraries might lead to decreasing market share of Island Foods Inc Case Study Help due to the customer shift towards virtual libraries.
• The presence of large number of rivals in the publishing industry increase the hazard for CMP to lose its competitive position in the market, as competitors can gain a strong customer base by using certain methods like aggressive promotion, quality items, etc.
• Entrance of new publishing companies in the industry along with presence of high competitors increases the danger of losing the consumer base.
Due to absence of information, the financial ratios of CMP could not be determined. It might be examined from the Appendix III that the annual overall earnings of Island Foods Inc Case Study Analysis during the period 2000-2012 are growing at a high development rate, showing that the annual demand of the items of CMP is growing and the business is quite effective in attracting a big number of consumers at a potential rate.
Together with it, the second graph which shows the annual development in the Island Foods Inc Case Study Solution total properties, shows that the company is rather effective in including value to its assets through its earnings. The growth in properties shows that the total value of the firm is likewise increasing with increasing the total incomes. (Unidentified, 2013).
Another financial analysis of the business utilizing the given data could be the analysis concerning the circulation of total profits of the business. Huge part of the earnings of CMP originates from the sales of its published books i.e. 64% as shown in the Case Appendix V. The company could move towards other organisation sections with a potential development to achieve its future development objective.
PESTEL analysis might be performed to find out the different external forces impacting the efficiency of the business and the current trends in the external environment of the company. A quick PESTEL analysis of the company is offered as follows; (Alanzi, 2018).
As the publishing sector could have a significant influence on the frame of mind of the people about the communist ideology of the government, therefore, the publishing sector is highly supervised and directed by the Promotion Department of the Communist Party of China. It might be said that the overall political forces impacting CMP service are high. The government policies regarding the publishing sector are also increasing with the passage of time.
Economic forces impacting the publishing sector in general and the Island Foods Inc Case Study Solution in particular includesthe prices of paper, the income level of customers, the inflation rate, and the total GDP development of the nation. All these forces combine impact the demand for the publishing market. Along with it, the financial policies associated with the import of books affect the overall organisation at CPM. However, China's financial conditions are quite favorable for CMP with high GDP growth and customer income level.
Social and Demographical.
The customer choices are moving towards digital publishing rather than the standard was of publishing. In this regard, CMP should focus on digital publishing to fulfill the changing consumer choices.
Technological forces affecting the CMP include the technological development in the reading techniques and so on. Enhancement of science and technology in addition to the rise of digital publishing could lower the demand for the CMP items, if specific actions would not be taken soon.
Environmental forces affecting Island Foods Inc Case Study Help includes the issues of ecological neighborhoods over the usage of paper in publishing books. The paper utilized in the books while publishing is required to be non reusable and the ink utilized while publishing must not be damaging for the environment.
Legal regulations for the publishing sector at whole are high. The legal guidelines concerning 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 Federal government to be gone into in the publishing market. The ordinance forbids direct involvement of foreign entities and people in the publishing sector.
Industry Analysis (Porter's Five Forces Model).
Porter's Five Forces Design could be utilized to examine the appearance of the publishing market China. A brief analysis of the Porter's 5 Forces is offered as follows;.
Risk of New Entrants.
Dangers of brand-new entrants in the Chinese Publishing Market is moderate. The prospective development in the industry tends to bring in new entrants to the publishing industry. Nevertheless, the existence of extreme competition and the requirement of huge capital tends to demotivate brand-new entrants to go into in the marketplace.
Hazard of Replacement.
Threat of Replacement is high for the Chinese Publishing Market. The replacement items for the published documents is the documents presented in the virtual libraries on specific websites. The changing customer choices towards digital learning increase the hazard of alternative for the industry.
Competitive competition in the publishing industry is high. The existence of large number of customers in the Chinese Publishing Industry like CIP, PTP etc. tends to produce high competitive competition for CMP. In addition to it, brand-new entrants are likewise entering into the marketplace increasing the competition for CMP.
Bargaining Power of Provider.
The major suppliers of the Island Foods Inc Case Study Help consist of the suppliers of the paper for releasing files. As CMP is the biggest publisher in the Chinese Publishing Market, therefore the total bargaining power of supplier for CMP is low.
Bargaining Power of Purchaser.
Bargaining 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 requires high quality documents at competitive prices.
CMP operates in a highly competitive industry with the existence of large number of rivals. Nevertheless, the company has a competitive position in the market with the highest market share in the Chinese publishing market. Significant competitors of Island Foods Inc Case Study Analysis include;.
• Chemical Market Press (CIP).
• Posts and telecommunication Press (PTP).
Chemical Market Press (CIP).
CIP acts 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 CMP quickly in the present market situation.
Posts and telecommunication Press (PTP).
Another close rival of CMP is PTP. It was likewise established in the exact same duration as CMP and CIP. It ranks sixth in the state-owned publishers in regards to company scale. It is also among the popular gamers in the publishing industry with a yearly total incomes of RMB 550 million in 2010.
Alternative-1: Broaden towards New Markets
• Lowering reliance over the Chinese markets.
• Increasing number of Clients
• Development opportunities.
• Avoiding the effect of market saturation in the Chinese publishing industry.
• Use of prospective resources in growth.
• Risk of failure in brand-new markets.
• Time consuming.
Alernative-2: Introduce Digital Publishing
• Sustaining customer base.
• Approaching brand-new markets.
• Easy to introduce utilizing existing abilities.
• Low risk of Failure.
• Low requirement for funds.
• Increased item portfolio provides high value to customers.
• Competition in the market by CIP, who has prior concentrate on the digital publishing.
• Shift of focus from the core organisation sections to the brand-new one can lead the company to lose demand of its items in the market.
With the deep analysis of the external and internal environment of the company in addition to 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 business need an instant option to avoid the decreasing market growth. Introduction of digital publishing could prove to be an instant service with low quantity of threat for the company. However, the company 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 company needs to first gathers the data related to the consumer need, the possible markets, the federal government policies and the data related to the competitors presented in the market. If the preliminary offering shows a success, the business needs to go for the other markets. In this way the company would be able to implement its digital publishing program.
Although, the growth of the publishing market is declining given that 2008, revealing a hazard to the company's long term existence, but the circumstance can be controlled by considering an advancement strategy in the future. The business could think about presenting digital publishingin its existing market to implement its advancement program at instant basis and to avoid the risk of failure for entryway in the new markets.