La Fageda 3 Case Study Solution and Analysis
Introduction
La Fageda 3 Case Study Analysis is the biggest publishing company with a greatest market share in the China's book retail market. CMP has become a specialized information supplier and a large extensive Science and Technology publishing business through the integration of print media, audio-visual media and the network media.
Critical Concerns
Although, La Fageda 3 Case Study Analysis has spent its 60 years journey efficiently, being a successful publishing house, nevertheless, the altering macro market patterns and forces bring particular challenges to the publishing industry in general and CMP in specific. These elements consist of;
• Entryway of the brand-new publishing firms in the market.
• Declining growth of the publishing market.
• Market saturation.
• Introduction of digital publishing methods
• Enhancement of science and innovation.
The transformation 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 situation? Do the long valuable experience, technical resources and the capabilities of the business could be made use of to pursue the future development unceasingly? How could the company sustain its long term competitive position in future?
Situational Analysis
Internal Analysis
SWOT Analysis
Strengths
La Fageda 3 Case Study Analysis has particular strengths that can be used to reduce the threats, overcome the weakness and obtain the chances. Strengths of CMP are offered as follows;
• The long term experience of La Fageda 3 Case Study Solution in the publishing industry i.e. 60 years enables the company to offer high quality items at a lower expense utilizing its previous experiences.
• The technical resources and capabilities produced by its effective journey provide a competitive benefit to CMP.
• Vast product portfolioof CMP assists it to diversify its danger and provide high worth to its clients.
• Strong monetary position allows the business to think about numerous advancement opportunities with no worry of raising fund externally.
Weaknesses
Along with the strengths, the business has certain weaknesses which could increase constraints for the company in implementing its development program. The weak points of La Fageda 3 Case Study Solution are provided as follows;
• Despite of being a science and technology publishing company, the business still has conventional ways ofpublishing which are not compatible with the growing technological shift.
• CMP extremely relies over the Chinese markets for its development. It needs to propose particular growth strategies to prevent its reliance over the Chinese markets to attain long term growth.
Opportunities
The development of the publishing market is decreasing since 2008, impacting La Fageda 3 Case Study Help as well, however the development might be restored by availing particular chances provided in the market. The marketplace opportunities for CMP consist of;
• The business might likewise introduce Digital Publishing by using its long term technical experience and a strong client recognition in the market.
• CMP could think about an advancement program through the growth towards foreign markets in order to minimize its dependence over Chinese markets by using its huge financial resources.
Risks
The altering macro patterns in the market and increasing competition in the publishing market has positioned particular hazards to La Fageda 3 Case Study Solution including;( Gurel, 2017).
• Introduction of digital publishing i.e. virtual libraries could cause decreasing market share of La Fageda 3 Case Study Help due to the customer shift towards digital libraries.
• The presence of large number of competitors in the publishing industry increase the threat for CMP to lose its competitive position in the market, as competitors can gain a strong customer base by using particular strategies like aggressive promotion, quality items, etc.
• Entryway of new publishing firms in the market in addition to presence of high competitors increases the hazard of losing the client base.
Financial Analysis.
The company has a rather competitive monetary efficiency. Due to lack of information, the monetary ratios of CMP could not be determined. Nevertheless, the general monetary performance of the company might be evaluated by using the charts given up the case Appendices. It might be analyzed from the Appendix III that the yearly overall profits of CMP during the duration 2000-2012 are growing at a high development rate, showing that the yearly need of the products of La Fageda 3 Case Study Analysis is growing and the business is quite efficient in attracting a large number of customers at a possible rate.
Along with it, the 2nd graph which shows the yearly growth in the La Fageda 3 Case Study Help overall properties, shows that the company is rather efficient in including worth to its properties through its revenues. The development in possessions reveals that the total value of the firm is likewise increasing with increasing the total incomes. (Unidentified, 2013).
Another monetary analysis of the business utilizing the provided information could be the analysis concerning the circulation of overall profits of the company. Major part of the profits of CMP originates from the sales of its published books i.e. 64% as shown in the Case Appendix V. The business might move towards other company sections with a potential growth to attain its future advancement objective.
PESTEL Analysis
PESTEL analysis might be carried out to discover the different external forces impacting the performance of the business and the recent patterns in the external environment of the company. A short PESTEL analysis of the company is given as follows; (Alanzi, 2018).
Political.
As the publishing sector could have a considerable effect on the frame of mind of individuals about the communist ideology of the federal government, therefore, the publishing sector is extremely supervised and assisted by the Publicity Department of the Communist Celebration of China. It could be stated that the total political forces affecting CMP company are high. The government policies regarding the publishing sector are likewise increasing with the passage of time.
Affordable.
Financial forces impacting the publishing sector in basic and the La Fageda 3 Case Study Solution in specific includesthe prices of paper, the income level of consumers, the inflation rate, and the general GDP growth of the country. All these forces integrate impact the demand for the publishing market. In addition to it, the financial policies associated with the import of books affect the overall service at CPM. Nevertheless, China's financial conditions are quite beneficial for CMP with high GDP growth and consumer income level.
Social and Demographical.
The customer choices are shifting towards digital publishing rather than the traditional was of publishing. In this regard, CMP needs to focus on digital publishing to fulfill the altering customer preferences.
Technological.
Technological forces affecting the CMP consist of the technological advancement in the reading methods and so on. Improvement of science and innovation together with the rise of digital publishing might decrease the need for the CMP products, if particular actions would not be taken quickly.
Environmental.
Ecological forces affecting La Fageda 3 Case Study Help includes the issues of ecological 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 must not be hazardous for the environment.
Legal.
Legal regulations for the publishing sector at whole are high. The legal regulations concerning the publishing sector is controlled by the General Administration of Press and Publication. Publishing Ordinance 1997 requires the publishers to be authorized initially by the Federal government to be entered in the publishing market. The ordinance prohibits direct participation 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 analyze the attractiveness of the publishing industry China. A brief 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 development in the industry tends to bring in new entrants to the publishing market. Nevertheless, the existence of intense competition and the requirement of substantial capital tends to demotivate brand-new entrants to go into in the market.
Hazard of Replacement.
Danger of Alternative is high for the Chinese Publishing Industry. The substitute items for the released documents is the files presented in the digital libraries on particular websites. The altering customer choices towards digital knowing increase the threat of substitution for the industry.
Competitive Competition.
Competitive rivalry in the publishing industry is high. The existence of a great deal of consumers in the Chinese Publishing Market like CIP, PTP and so on tends to produce high competitive rivalry for CMP. In addition to it, brand-new entrants are also entering into the market increasing the competition for CMP.
Bargaining Power of Provider.
The significant providers of the La Fageda 3 Case Study Solution include the suppliers of the paper for releasing files. 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 Buyer.
Haggling power of buyer in the publishing market 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 files at competitive rates.
Competitors Analysis.
CMP operates in a highly competitive industry with the presence of a great deal of competitors. Nevertheless, the business has a competitive position in the market with the greatest market share in the Chinese publishing market. Significant competitors of La Fageda 3 Case Study Solution include;.
• Chemical Industry Press (CIP).
• Posts and telecommunication Press (PTP).
Chemical Market Press (CIP).
CIPis among the close rivals of CMP. Founded in the very same period, CIP publishes comparable type of books. For a big time period, CIP held the biggest market share, and still ranks third and 2nd in numerous market sectors, with a major focus on instructional publications. CIP acts 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 might wean the market share of La Fageda 3 Case Study Analysis quickly in the current market circumstance.
Posts and telecommunication Press (PTP).
It was also founded in the very same period as La Fageda 3 Case Study Analysis and CIP. It is also one of the prominent players in the publishing market with an annual overall revenues of RMB 550 million in 2010.
Alternatives
Alternative-1: Expand towards New Markets
Pros
• Reducing dependence over the Chinese markets.
• Increasing variety of Clients
• Development opportunities.
• Preventing the impact of market saturation in the Chinese publishing industry.
Cons
• Usage of potential resources in growth.
• Threat of failure in brand-new markets.
• Time consuming.
Alernative-2: Introduce Digital Publishing
Pros
• Sustaining consumer base.
• Approaching new markets.
• Easy to introduce utilizing present abilities.
• Low danger of Failure.
• Low requirement for funds.
• Increased product portfolio offers high value to consumers.
Cons
• Competition in the market by CIP, who has prior concentrate on the digital publishing.
• Shift of focus from the core company sections to the brand-new one can lead the company to lose demand of its items in the market.
Suggestions
As the choices are moving towards digital publishing and the business need an instant solution to prevent the declining industry development. The business might also consider the expansion program after the success of its digital publishing program.
Implementation
In order to present digital publishing in its product portfolio, the company must first collects the information connected to the consumer need, the potential markets, the federal government policies and the information associated with the rivals presented in the market. After that, the company needs to decide one possible section for its initial offering. It should gather research that how it might separate its digital publishing from the existing rivals' items. The steps above the company should go for the initial offering. The business needs to go for the other markets if the preliminary offering proves a success. In this method the company would have the ability to execute its digital publishing program.
Conclusion
Although, the growth of the publishing market is decreasing because 2008, revealing a risk to the business's long term presence, however the circumstance can be controlled by thinking about an advancement plan in the future. The business could consider introducing digital publishingin its existing market to execute its advancement program at instant basis and to prevent the danger of failure for entrance in the brand-new markets.
