Kraft General Foods The Merger A Case Study Solution and Analysis
Kraft General Foods The Merger A 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 info supplier and a large comprehensive Science and Innovation publishing business through the integration of print media, audio-visual media and the network media.
CMP has actually spent its 60 years journey smoothly, being a successful publishing house, however, the changing macro market patterns and forces bring certain difficulties to the publishing industry in basic and Kraft General Foods The Merger A Case Study Solution in specific. These elements consist of;
• Entrance of the brand-new publishing firms in the industry.
• Decreasing development of the publishing market.
• Market saturation.
• Intro of digital publishing methods
• Enhancement of science and innovation.
The change of the macro markets have raised a number of questions to the management at CPM that what could be the future of CMP in this scenario? Do the long valuable experience, technical resources and the abilities of the company could be utilized to pursue the future advancement unceasingly? How could the business sustain its long term competitive position in future?
Kraft General Foods The Merger A Case Study Solution has specific strengths that can be utilized to decrease the hazards, get rid of the weakness and get the opportunities. Strengths of CMP are offered as follows;
• The long term experience of Kraft General Foods The Merger A Case Study Solution in the publishing industry i.e. 60 years enables the company to offer high quality products at a lower cost using its prior experiences.
• The technical resources and capabilities produced by its effective journey offer a competitive benefit to CMP.
• Huge item portfolioof CMP helps it to diversify its risk and provide high worth to its customers.
• Strong monetary position enables the business to think about numerous development chances without any fear of raising fund externally.
Along with the strengths, the company has certain weak points which might increase restrictions for the business in executing its development program. The weaknesses of Kraft General Foods The Merger A Case Study Analysis are offered as follows;
• Despite of being a science and innovation publishing firm, the business still has conventional ways ofpublishing which are not suitable with the growing technological shift.
• CMP extremely relies over the Chinese markets for its development. It must propose specific growth plans to avoid its reliance over the Chinese markets to accomplish long term growth.
Although, the development of the publishing market is decreasing considering that 2008, affecting Kraft General Foods The Merger A Case Study Help also, but the growth could be restored by availing certain chances presented in the market. The market opportunities for CMP include;
• The business might likewise introduce Digital Publishing by utilizing its long term technical experience and a strong consumer recognition in the market.
• CMP could consider a development program through the expansion towards foreign markets in order to minimize its dependence over Chinese markets by using its large financial resources.
The altering macro patterns in the market and increasing competitors in the publishing market has posed particular risks to Kraft General Foods The Merger A Case Study Analysis consisting of;( Gurel, 2017).
• Introduction of digital publishing i.e. virtual libraries could result in declining market share of Kraft General Foods The Merger A Case Study Help due to the customer shift towards virtual libraries.
• The presence of large number of rivals in the publishing industry increase the danger for CMP to lose its competitive position in the market, as rivals can acquire a strong consumer base by utilizing specific techniques like aggressive promotion, quality products, etc.
• Entrance of brand-new publishing companies in the market together with presence of high competitors increases the risk of losing the client base.
Due to lack of data, the monetary ratios of CMP might not be calculated. It might be examined from the Appendix III that the annual total incomes of Kraft General Foods The Merger A Case Study Solution during the period 2000-2012 are growing at a high growth rate, showing that the annual demand of the items of CMP is growing and the company is rather efficient in attracting a large number of clients at a possible cost.
In addition to it, the second graph which reveals the annual development in the Kraft General Foods The Merger A Case Study Solution overall assets, shows that the company is quite efficient in including value to its assets through its earnings. The development in assets shows that the overall worth of the company is also increasing with increasing the overall revenues. (Unknown, 2013).
Another financial analysis of the company using the offered data could be the analysis regarding the circulation of total incomes of the company. Major part of the profits of CMP comes from the sales of its released books i.e. 64% as shown in the Case Appendix V. The business might move towards other business segments with a potential development to achieve its future advancement goal.
PESTEL analysis could be performed to find out the different 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 given as follows; (Alanzi, 2018).
As the publishing sector might have a significant impact on the frame of mind of individuals about the communist ideology of the federal government, for that reason, the publishing sector is extremely monitored and assisted by the Promotion Department of the Communist Celebration of China. It might be stated that the overall political forces affecting CMP organisation are high. The government policies regarding the publishing sector are also increasing with the passage of time.
Financial forces impacting the publishing sector in basic and the Kraft General Foods The Merger A Case Study Analysis in particular includesthe costs of paper, the income level of customers, the inflation rate, and the general GDP growth of the country. All these forces integrate impact the need for the publishing market. Together with it, the economic policies related to the import of books impact the overall business at CPM. China's economic conditions are quite beneficial for CMP with high GDP growth and customer income level.
Social and Demographical.
Social and demographical forces consist of 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 development, revealing the increasing variety of customers of the Kraft General Foods The Merger A Case Study Analysis. The consumer choices are moving towards digital publishing rather than the conventional was of publishing. In this regard, CMP ought to focus on digital publishing to meet the changing consumer choices.
Technological forces impacting the CMP include the technological improvement in the reading methods etc. Enhancement of science and technology together with the rise of digital publishing could lower the demand for the CMP products, if certain actions would not be taken quickly.
Ecological forces affecting Kraft General Foods The Merger A Case Study Solution includes the issues of environmental communities over the use of paper in publishing books. The paper used in the books while publishing is required to be non reusable and the ink used while publishing should not be hazardous for the environment.
Legal regulations for the publishing sector at whole are high. Publishing Regulation 1997 requires the publishers to be authorized initially by the Federal government to be entered in the publishing market.
Market Analysis (Porter's 5 Forces Design).
Porter's Five Forces Design could be used to analyze the appearance of the publishing industry China. A brief analysis of the Porter's Five Forces is provided as follows;.
Risk of New Entrants.
Hazards of new entrants in the Chinese Publishing Market is moderate. The potential growth in the industry tends to draw in brand-new entrants to the publishing market. However, the existence of extreme competitors and the requirement of big capital tends to demotivate new entrants to enter in the marketplace.
Hazard of Substitution.
Danger of Substitution is high for the Chinese Publishing Market. The substitute products for the released documents is the documents presented in the virtual libraries on specific sites. The altering consumer preferences towards digital knowing increase the risk of replacement for the industry.
Competitive rivalry in the publishing industry is high. The presence of large number of consumers in the Chinese Publishing Industry like CIP, PTP etc. tends to produce high competitive rivalry for CMP. Along with it, brand-new entrants are also entering into the marketplace increasing the competition for CMP.
Bargaining Power of Provider.
The major suppliers of the Kraft General Foods The Merger A Case Study Help include 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 supplier for CMP is low.
Bargaining Power of Buyer.
Bargaining power of buyer in the publishing market is high. Due to the presence of a large number of publishers in the Chinese market and the marketplace saturation, the purchasers needs high quality files at competitive rates.
CMP operates in a highly competitive industry with the existence of large number of competitors. The business has a competitive position in the market with the greatest market share in the Chinese publishing market. Significant competitors of Kraft General Foods The Merger A Case Study Solution consist of;.
• Chemical Market Press (CIP).
• Posts and telecommunication Press (PTP).
Chemical Industry Press (CIP).
CIPis among the close competitors of CMP. Founded in the very same duration, CIP publishes similar kind of books. For a big time period, CIP held the biggest market share, and still ranks second and 3rd in numerous market segments, with a major concentrate on instructional publications. CIP functions as a hazard 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 marketplace share of Kraft General Foods The Merger A Case Study Help easily in the existing market scenario.
Posts and telecommunication Press (PTP).
It was also founded in the exact same duration as Kraft General Foods The Merger A Case Study Solution and CIP. It is also one of the prominent players in the publishing industry with a yearly overall profits of RMB 550 million in 2010.
Alternative-1: Expand towards New Markets
• Reducing reliance over the Chinese markets.
• Increasing number of Clients
• Development opportunities.
• Avoiding the effect of market saturation in the Chinese publishing market.
• Usage of prospective resources in growth.
• Threat of failure in new markets.
• Time consuming.
Alernative-2: Introduce Digital Publishing
• Sustaining consumer base.
• Approaching new markets.
• Easy to introduce using existing abilities.
• Low risk of Failure.
• Low requirement for funds.
• Increased product portfolio offers high value to clients.
• Competition in the market by CIP, who has prior concentrate on the digital publishing.
• Shift of focus from the core service sectors to the brand-new one can lead the company to lose demand of its items in the market.
With the deep analysis of the internal and external environment of the business together with the market analysis and the rival analysis, Alternative 2 is advised to CMP to accomplish its future advancement. As the choices are shifting towards digital publishing and the business require an instant solution to prevent the declining market growth. Introduction of digital publishing could show to be an instant option with low quantity of danger for the business. Nevertheless, the business might likewise think about the expansion program after the success of its digital publishing program.
In order to introduce digital publishing in its product portfolio, the business should first gathers the information associated with the customer need, the possible markets, the government guidelines and the information associated with the rivals provided in the market. After that, the business needs to choose one potential segment for its initial offering. It ought to collect research that how it might separate its digital publishing from the existing competitors' products. After all the steps above the company ought to opt for the preliminary offering. If the initial offering proves a success, the company should go for the other markets. In this way the company would be able to execute its digital publishing program.
Although, the growth of the publishing industry is declining considering that 2008, revealing a threat to the company's long term presence, however the circumstance can be managed by considering a development plan in the future. The company might consider introducing digital publishingin its existing market to execute its development program at instant basis and to avoid the danger of failure for entryway in the brand-new markets.