Levendary Cafe The China Challenge 2 Case Study Solution and Analysis
Intro
Levendary Cafe The China Challenge 2 Case Study Analysis is the biggest publishing business with a highest market share in the China's book retail market. CMP has ended up being a specialized information supplier and a big comprehensive Science and Technology publishing business through the integration of print media, audio-visual media and the network media.
Crucial Issues
Although, Levendary Cafe The China Challenge 2 Case Study Analysis has invested its 60 years journey efficiently, being an effective publishing house, nevertheless, the altering macro market patterns and forces bring specific obstacles to the publishing industry in basic and CMP in specific. These elements include;
• Entryway of the new publishing companies in the industry.
• Declining growth of the publishing market.
• Market saturation.
• Introduction of digital publishing techniques
• Improvement of science and innovation.
The improvement of the macro markets have raised several concerns 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 business could be made use of to strive for the future advancement unceasingly? How could the company sustain its long term competitive position in future?
Situational Analysis
Internal Analysis
SWOT Analysis
Strengths
Levendary Cafe The China Challenge 2 Case Study Solution has specific strengths that can be utilized to reduce the dangers, overcome the weakness and obtain the opportunities. Strengths of CMP are given as follows;
• The long term experience of Levendary Cafe The China Challenge 2 Case Study Help in the publishing industry i.e. 60 years enables the business to provide high quality products at a lower cost utilizing its previous experiences.
• The technical resources and capabilities produced by its effective journey supply a competitive advantage to CMP.
• Large product portfolioof CMP assists it to diversify its danger and supply high value to its clients.
• Strong monetary position permits the company to think about numerous development opportunities without any fear of raising fund externally.
Weaknesses
In addition to the strengths, the business has particular weaknesses which could increase constraints for the business in implementing its advancement program. The weaknesses of Levendary Cafe The China Challenge 2 Case Study Analysis are given as follows;
• Despite of being a science and innovation publishing company, the business still has traditional methods ofpublishing which are not compatible with the growing technological shift.
• CMP highly relies over the Chinese markets for its growth. It ought to propose particular expansion plans to prevent its reliance over the Chinese markets to attain long term growth.
Opportunities
The growth of the publishing market is declining given that 2008, impacting Levendary Cafe The China Challenge 2 Case Study Solution as well, but the development might be restored by availing particular opportunities provided in the market. The market opportunities for CMP consist of;
• The company might also present Digital Publishing by using its long term technical experience and a strong consumer acknowledgment in the market.
• CMP could consider a development program through the growth towards foreign markets in order to minimize its reliance over Chinese markets by utilizing its large funds.
Dangers
The altering macro trends in the market and increasing competition in the publishing market has actually posed specific threats to Levendary Cafe The China Challenge 2 Case Study Help consisting of;( Gurel, 2017).
• Introduction of digital publishing i.e. virtual libraries could cause declining market share of Levendary Cafe The China Challenge 2 Case Study Solution due to the consumer shift towards virtual libraries.
• The presence of a great deal of rivals in the publishing industry increase the threat for CMP to lose its competitive position in the market, as rivals can get a strong consumer base by utilizing specific strategies like aggressive promo, quality products, and so on
• Entrance of brand-new publishing companies in the market in addition to existence of high competitors increases the hazard of losing the client base.
Financial Analysis.
The company has a quite competitive financial performance. Due to absence of information, the financial ratios of CMP might not be determined. Nevertheless, the total monetary efficiency of the company might be evaluated by using the charts given in the case Appendices. It might be examined from the Appendix III that the annual overall revenues of CMP during the period 2000-2012 are growing at a high development rate, revealing that the yearly demand of the items of Levendary Cafe The China Challenge 2 Case Study Help is growing and the business is quite efficient in bring in a a great deal of consumers at a prospective rate.
Together with it, the second graph which reveals the annual development in the Levendary Cafe The China Challenge 2 Case Study Help overall properties, reveals that the business is quite efficient in including worth to its assets through its profits. The growth in possessions reveals that the total value of the company is also increasing with increasing the overall incomes. (Unknown, 2013).
Another financial analysis of the business using the offered information could be the analysis regarding the distribution of overall profits of the business. Huge part of the earnings of CMP comes from the sales of its published books i.e. 64% as shown in the Case Appendix V. The company could move towards other company sections with a possible development to accomplish its future advancement objective.
PESTEL Analysis
PESTEL analysis could be carried out to learn the various external forces impacting the efficiency of the company and the current patterns in the external environment of the company. A short PESTEL analysis of the business is offered as follows; (Alanzi, 2018).
Political.
As the publishing sector might have a substantial effect on the state of mind of individuals about the communist ideology of the government, for that reason, the publishing sector is extremely supervised and guided by the Promotion Department of the Communist Party of China. It could be stated that the total political forces affecting CMP organisation are high. The federal government policies regarding the publishing sector are also increasing with the passage of time.
Affordable.
Economic forces impacting the publishing sector in basic and the Levendary Cafe The China Challenge 2 Case Study Analysis in particular includesthe rates of paper, the earnings level of consumers, the inflation rate, and the total GDP development of the nation. All these forces integrate effect the need for the publishing market. Together with it, the financial policies related to the import of books affect the total business at CPM. China's economic conditions are rather favorable for CMP with high GDP development and customer earnings level.
Social and Demographical.
Social and demographical forces consist of the population development, the customer's choices towards reading informative materials etc. China has the greatest population in the world with a high population growth, revealing the increasing number of consumers of the Levendary Cafe The China Challenge 2 Case Study Solution. Nevertheless, the consumer preferences are shifting towards digital publishing rather than the conventional was of publishing. In this regard, CMP needs to concentrate on digital publishing to meet the altering customer preferences.
Technological.
Technological forces affecting the CMP consist of the technological improvement in the reading strategies and so on. Improvement of science and innovation along with the increase of digital publishing could lower the need for the CMP products, if particular actions would not be taken soon.
Environmental.
Environmental forces impacting Levendary Cafe The China Challenge 2 Case Study Solution consists of the issues of environmental communities over the usage of paper in publishing books. The paper used in the books while publishing is needed to be disposable and the ink utilized while publishing must not be harmful for the environment.
Legal.
Legal guidelines for the publishing sector at whole are high. Publishing Ordinance 1997 requires the publishers to be authorized first by the Federal government to be gone into in the publishing market.
Market Analysis (Porter's 5 Forces Model).
Porter's Five Forces Design might be utilized to evaluate the appearance of the publishing market China. A brief analysis of the Porter's Five Forces is given as follows;.
Hazard of New Entrants.
Hazards of new entrants in the Chinese Publishing Industry is moderate. The potential development in the market tends to draw in new entrants to the publishing market. The presence of extreme competitors and the requirement of big capital tends to demotivate brand-new entrants to enter in the market.
Hazard of Substitution.
Hazard of Replacement is high for the Chinese Publishing Industry. The replacement items for the released files is the documents presented in the digital libraries on specific websites. The altering consumer choices towards digital knowing increase the hazard of replacement for the industry.
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. In addition to it, brand-new entrants are also entering into the market increasing the competitors for CMP.
Bargaining Power of Supplier.
The significant providers of the Levendary Cafe The China Challenge 2 Case Study Solution include the suppliers of the paper for publishing files. As CMP is the largest publisher in the Chinese Publishing Market, for that reason the overall 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 a great deal of publishers in the Chinese market and the marketplace saturation, the buyers requires high quality files at competitive prices.
Rivals Analysis.
CMP runs in an extremely competitive industry with the existence of a great deal of rivals. However, the company has a competitive position in the market with the highest market share in the Chinese publishing market. Significant rivals of Levendary Cafe The China Challenge 2 Case Study Analysis consist of;.
• Chemical Industry Press (CIP).
• Posts and telecommunication Press (PTP).
Chemical Industry Press (CIP).
CIP acts as a threat for CMP as it could 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 easily in the current market scenario.
Posts and telecommunication Press (PTP).
Another close competitor of CMP is PTP. It was also founded in the same period as CMP and CIP. It ranks 6th in the state-owned publishers in terms of service scale. It is also among the popular players in the publishing market with a yearly overall profits of RMB 550 million in 2010.
Alternatives
Alternative-1: Broaden towards New Markets
Pros
• Decreasing reliance over the Chinese markets.
• Increasing number of Clients
• Development chances.
• Avoiding the effect of market saturation in the Chinese publishing market.
Cons
• Usage of possible resources in expansion.
• Threat of failure in brand-new markets.
• Time consuming.
Alernative-2: Present Digital Publishing
Pros
• Sustaining customer base.
• Approaching new markets.
• Easy to introduce utilizing present abilities.
• Low risk of Failure.
• Low requirement for funds.
• Increased item portfolio offers high worth to consumers.
Cons
• Competitors in the market by CIP, who has prior focus on the digital publishing.
• Shift of focus from the core business segments to the brand-new one can lead the business to lose demand of its products in the market.
Suggestions
As the choices are shifting towards digital publishing and the company require an immediate service to prevent the declining industry growth. The company might likewise consider the growth program after the success of its digital publishing program.
Application
In order to introduce digital publishing in its product portfolio, the business should first collects the information related to the consumer demand, the potential markets, the federal government regulations and the information related to the competitors provided in the market. If the preliminary offering shows a success, the business should go for the other markets. In this way the company would be able to implement its digital publishing program.
Conclusion
The development of the publishing industry is decreasing given that 2008, revealing a hazard to the business's long term presence, however the scenario can be controlled by considering an advancement plan in the future. The company could consider presenting digital publishingin its existing market to execute its advancement program at immediate basis and to avoid the threat of failure for entrance in the new markets.
