Lego Group An Outsourcing Journey Case Study Solution and Analysis
Intro
Lego Group An Outsourcing Journey Case Study Help is the biggest publishing company with a greatest market share in the China's book retail market. CMP has actually ended up being a specialized information company and a large thorough Science and Technology publishing business through the integration of print media, audio-visual media and the network media.
Crucial Issues
Although, Lego Group An Outsourcing Journey Case Study Help has spent its 60 years journey efficiently, being a successful publishing house, nevertheless, the changing macro market patterns and forces bring certain challenges to the publishing market in general and CMP in particular. These factors include;
• Entryway of the new publishing companies in the market.
• Decreasing development of the publishing market.
• Market saturation.
• Intro of digital publishing methods
• Enhancement of science and technology.
The change 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 important experience, technical resources and the capabilities of the company could be used to pursue the future advancement unceasingly? How could the company sustain its long term competitive position in future?
Situational Analysis
Internal Analysis
SWOT Analysis
Strengths
Lego Group An Outsourcing Journey Case Study Analysis has particular strengths that can be made use of to reduce the hazards, conquer the weak point and avail the chances. Strengths of CMP are given as follows;
• The long term experience of Lego Group An Outsourcing Journey Case Study Help in the publishing industry i.e. 60 years permits the business to offer high quality items at a lower expense using its prior experiences.
• The technical resources and abilities created by its successful journey supply a competitive advantage to CMP.
• Huge product portfolioof CMP assists it to diversify its danger and supply high worth to its customers.
• Strong financial position permits the company to consider several advancement opportunities without any worry of raising fund externally.
Weaknesses
Along with the strengths, the company has certain weak points which could increase restraints for the company in executing its advancement program. The weaknesses of Lego Group An Outsourcing Journey 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 extremely relies over the Chinese markets for its growth. It must propose certain growth plans to prevent its dependence over the Chinese markets to attain long term development.
Opportunities
The development of the publishing industry is decreasing considering that 2008, affecting Lego Group An Outsourcing Journey Case Study Solution as well, however the development could be revived by availing certain opportunities provided in the market. The market chances for CMP include;
• The business could likewise present Digital Publishing by using its long term technical experience and a strong consumer recognition in the market.
• CMP might consider an advancement program through the growth towards foreign markets in order to minimize its dependence over Chinese markets by utilizing its vast financial resources.
Dangers
The changing macro trends in the market and increasing competitors in the publishing industry has positioned specific threats to Lego Group An Outsourcing Journey Case Study Analysis including;( Gurel, 2017).
• Introduction of digital publishing i.e. digital libraries might cause decreasing market share of Lego Group An Outsourcing Journey Case Study Help due to the customer shift towards digital libraries.
• The existence of large number of competitors in the publishing market increase the hazard for CMP to lose its competitive position in the market, as rivals can acquire a strong customer base by using particular methods like aggressive promo, quality items, and so on
• Entryway of brand-new publishing firms in the industry together with presence of high competition increases the hazard of losing the customer base.
Monetary Analysis.
The business has a quite competitive financial performance. Due to lack of information, the financial ratios of CMP might not be computed. Nevertheless, the overall monetary efficiency of the business could be evaluated by using the graphs given up the case Appendices. It might be evaluated from the Appendix III that the yearly total profits of CMP during the period 2000-2012 are growing at a high development rate, showing that the yearly demand of the products of Lego Group An Outsourcing Journey Case Study Analysis is growing and the company is quite efficient in bring in a a great deal of clients at a possible cost.
In addition to it, the 2nd chart which shows the annual growth in the Lego Group An Outsourcing Journey Case Study Analysis overall possessions, reveals that the company is rather effective in including value to its properties through its incomes. The development in properties reveals that the total worth of the firm is also increasing with increasing the total earnings. (Unidentified, 2013).
Another monetary analysis of the company using the provided information could be the analysis concerning the distribution of overall revenues of the company. Major part of the revenues of CMP originates from the sales of its released books i.e. 64% as shown in the Case Appendix V. The company could move towards other company sections with a prospective growth to accomplish its future development goal.
PESTEL Analysis
PESTEL analysis might be conducted to find out the different external forces impacting the efficiency of the business and the recent patterns in the external environment of the business. A short PESTEL analysis of the company is provided as follows; (Alanzi, 2018).
Political.
As the publishing sector could have a significant effect on the state of mind of individuals about the communist ideology of the government, for that reason, the publishing sector is extremely monitored and assisted by the Promotion Department of the Communist Party of China. It could be stated that the general political forces impacting CMP service are high. The federal government policies regarding the publishing sector are likewise increasing with the passage of time.
Affordable.
Economic forces impacting the publishing sector in general and the CMP in specific includesthe prices of paper, the income level of customers, the inflation rate, and the overall GDP development of the country. All these forces combine effect the demand for the publishing market.
Social and Demographical.
Social and demographical forces include the population development, the consumer's preferences towards reading helpful materials etc. China has the highest population on the planet with a high population growth, revealing the increasing variety of consumers of the Lego Group An Outsourcing Journey Case Study Help. However, the consumer preferences are moving towards digital publishing rather than the standard was of publishing. In this regard, CMP ought to concentrate on digital publishing to satisfy the changing consumer choices.
Technological.
Technological forces affecting the CMP consist of the technological improvement in the reading strategies and so on. Enhancement of science and innovation along with the rise of digital publishing could lower the need for the CMP products, if particular actions would not be taken soon.
Environmental.
Environmental forces impacting Lego Group An Outsourcing Journey Case Study Help includes the concerns of ecological communities over the usage of paper in publishing books. The paper utilized in the books while publishing is needed to be non reusable and the ink used while publishing must not be harmful for the environment.
Legal.
Legal regulations for the publishing sector at whole are high. The legal policies regarding the publishing sector is managed by the General Administration of Press and Publication. Publishing Ordinance 1997 requires the publishers to be authorized first 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 Design).
Porter's 5 Forces Model might be utilized to evaluate the appearance of the publishing industry China. A short analysis of the Porter's Five Forces is given as follows;.
Risk of New Entrants.
Dangers of new entrants in the Chinese Publishing Market is moderate. The possible growth in the industry tends to draw in brand-new entrants to the publishing industry. Nevertheless, the existence of extreme competition and the requirement of substantial capital tends to demotivate brand-new entrants to go into in the market.
Hazard of Alternative.
Risk of Substitution is high for the Chinese Publishing Market. The alternative items for the published files is the files presented in the virtual libraries on specific websites. The changing customer preferences towards digital knowing increase the threat of replacement for the market.
Competitive Competition.
Competitive competition in the publishing industry is high. The presence of a great deal of consumers in the Chinese Publishing Industry like CIP, PTP etc. tends to produce high competitive competition for CMP. Along with it, brand-new entrants are likewise participating in the marketplace increasing the competition for CMP.
Bargaining Power of Supplier.
The major suppliers of the Lego Group An Outsourcing Journey Case Study Help include the suppliers of the paper for publishing documents. As CMP is the largest publisher in the Chinese Publishing Market, for that reason the general bargaining power of supplier for CMP is low.
Bargaining Power of Purchaser.
Negotiating 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 purchasers requires high quality documents at competitive rates.
Rivals Analysis.
CMP operates in a highly competitive market with the presence of a great deal of rivals. Nevertheless, the business has a competitive position in the market with the greatest market share in the Chinese publishing market. Major rivals of Lego Group An Outsourcing Journey Case Study Analysis include;.
• Chemical Industry Press (CIP).
• Posts and telecommunication Press (PTP).
Chemical Market Press (CIP).
CIPis among the close rivals of CMP. Founded in the same period, CIP publishes comparable type of books. For a big period, CIP held the biggest market share, and still ranks second and third in numerous market segments, with a major concentrate on educational publications. CIP functions as a risk for CMP as it could wean its market share due to its long term competitive background. CIP is concentrated on digital publishing and could wean the marketplace share of Lego Group An Outsourcing Journey Case Study Help quickly in the present market circumstance.
Posts and telecommunication Press (PTP).
Another close competitor of CMP is PTP. It was also established in the same duration as CMP and CIP. It ranks sixth in the state-owned publishers in terms of organisation scale. It is likewise one of the popular players in the publishing market with a yearly total revenues of RMB 550 million in 2010.
Alternatives
Alternative-1: Broaden towards New Markets
Pros
• Minimizing reliance over the Chinese markets.
• Increasing variety of Consumers
• Development opportunities.
• Avoiding the impact of market saturation in the Chinese publishing industry.
Cons
• Usage of potential resources in expansion.
• Danger of failure in new markets.
• Time consuming.
Alernative-2: Introduce Digital Publishing
Pros
• Sustaining consumer base.
• Approaching new markets.
• Easy to introduce utilizing existing capabilities.
• Low risk 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 company segments to the brand-new one can lead the company to lose demand of its products in the market.
Recommendations
As the preferences are moving towards digital publishing and the business require an immediate service to prevent the decreasing market development. The business might 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 company ought to first collects the information related to the consumer demand, the possible markets, the federal government guidelines and the information related to the competitors provided in the market. If the initial offering shows a success, the company must go for the other markets. In this way the business would be able to execute its digital publishing program.
Conclusion
The growth of the publishing market is decreasing since 2008, revealing a threat to the company's long term presence, however the situation can be controlled by thinking about an advancement strategy in the future. The company could consider presenting digital publishingin its existing market to implement its advancement program at immediate basis and to avoid the threat of failure for entrance in the new markets.
