Li Fung 2012 Case Study Solution and Analysis
Li Fung 2012 Case Study Help is the largest publishing business with a greatest market share in the China's book retail market. CMP offers a variety of services including; gathering details, processing details and communication services. Major company sectors of the business include; books, periodicals, consultancy and circulation. The business has a huge product portfolio and its major items consist of books, regulars, online media, exhibits, research reports etc. Li Fung 2012 Case Study Analysis has become a specialized information service provider and a big extensive Science and Technology publishing business through the combination of print media, audio-visual media and the network media.
CMP has spent its 60 years journey efficiently, being an effective publishing home, however, the altering macro market patterns and forces bring specific obstacles to the publishing industry in basic and Li Fung 2012 Case Study Solution in specific. These factors include;
• Entrance of the brand-new publishing companies in the market.
• Decreasing development of the publishing market.
• Market saturation.
• Introduction of digital publishing techniques
• Improvement of science and innovation.
The transformation of the macro markets have raised numerous 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 capabilities of the company could be utilized to pursue the future development unceasingly? How could the business sustain its long term competitive position in future?
Li Fung 2012 Case Study Help has specific strengths that can be made use of to reduce the hazards, get rid of the weakness and get the opportunities. Strengths of CMP are provided as follows;
• The long term experience of Li Fung 2012 Case Study Solution in the publishing industry i.e. 60 years allows the company to supply high quality products at a lower cost utilizing its prior experiences.
• The technical resources and capabilities generated by its successful journey supply a competitive advantage to CMP.
• Huge item portfolioof CMP assists it to diversify its danger and provide high value to its consumers.
• Strong financial position allows the company to consider several advancement chances with no worry of raising fund externally.
In addition to the strengths, the company has specific weak points which could increase restraints for the company in implementing its advancement program. The weak points of Li Fung 2012 Case Study Help are offered as follows;
• Despite of being a science and technology publishing firm, 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 growth. It needs to propose certain growth strategies to prevent its reliance over the Chinese markets to accomplish long term development.
The growth of the publishing industry is decreasing given that 2008, impacting Li Fung 2012 Case Study Analysis as well, however the development might be revived by availing particular chances provided in the market. The marketplace chances for CMP consist of;
• The business might likewise introduce Digital Publishing by utilizing its long term technical experience and a strong consumer acknowledgment in the market.
• CMP might consider a development program through the expansion towards foreign markets in order to reduce its dependence over Chinese markets by using its large funds.
The changing macro patterns in the market and increasing competition in the publishing industry has posed certain threats to Li Fung 2012 Case Study Analysis including;( Gurel, 2017).
• Introduction of digital publishing i.e. virtual libraries could lead to decreasing market share of Li Fung 2012 Case Study Help due to the customer shift towards digital libraries.
• The existence of a great deal of rivals in the publishing market increase the danger for CMP to lose its competitive position in the market, as rivals can acquire a strong customer base by using certain techniques like aggressive promo, quality items, and so on
• Entrance of brand-new publishing firms in the industry along with presence of high competition increases the hazard of losing the client base.
The business has a quite competitive monetary efficiency. Due to lack of information, the monetary ratios of CMP could not be determined. Nevertheless, the general monetary performance of the business might be evaluated by utilizing the graphs given up the case Appendices. It could be evaluated from the Appendix III that the annual total incomes of CMP throughout the duration 2000-2012 are growing at a high development rate, revealing that the yearly need of the products of Li Fung 2012 Case Study Solution is growing and the business is rather efficient in drawing in a large number of customers at a possible cost.
Together with it, the 2nd chart which reveals the annual growth in the Li Fung 2012 Case Study Analysis total properties, shows that the company is rather effective in adding worth to its properties through its incomes. The development in assets shows that the total value of the firm is also increasing with increasing the total revenues. (Unidentified, 2013).
Another financial analysis of the company using the given information could be the analysis relating to the circulation of overall profits of the company. Major part of the incomes of CMP comes from the sales of its published books i.e. 64% as shown in the Case Appendix V. The business might move towards other service segments with a potential growth to achieve its future advancement goal.
PESTEL analysis could be performed to find out the various external forces impacting the efficiency of the business and the recent trends in the external environment of the company. A short PESTEL analysis of the business is given as follows; (Alanzi, 2018).
As the publishing sector might have a considerable influence on the mindset of the people about the communist ideology of the federal government, therefore, the publishing sector is highly monitored and directed by the Promotion Department of the Communist Celebration of China. It might be stated that the overall political forces impacting CMP service are high. The government policies concerning the publishing sector are likewise increasing with the passage of time.
Financial forces impacting the publishing sector in basic and the CMP in particular includesthe costs of paper, the earnings level of customers, the inflation rate, and the overall GDP growth of the country. All these forces integrate effect the demand for the publishing market.
Social and Demographical.
Social and demographical forces include the population growth, the consumer's preferences towards reading helpful products etc. China has the highest population on the planet with a high population growth, revealing the increasing number of consumers of the Li Fung 2012 Case Study Solution. The consumer preferences are shifting towards digital publishing rather than the traditional was of publishing. In this regard, CMP needs to concentrate on digital publishing to meet the changing consumer preferences.
Technological forces impacting the CMP include the technological improvement in the reading techniques etc. Improvement of science and technology along with the increase of digital publishing could decrease the demand for the CMP products, if specific actions would not be taken soon.
Ecological forces affecting Li Fung 2012 Case Study Help includes the issues of ecological neighborhoods 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 ought to not be hazardous for the environment.
Legal policies for the publishing sector at whole are high. The legal policies concerning the publishing sector is managed by the General Administration of Press and Publication. Publishing Ordinance 1997 requires the publishers to be approved initially by the Federal government to be entered in the publishing market. The ordinance prohibits direct participation of foreign entities and people in the publishing sector.
Market Analysis (Porter's 5 Forces Model).
Porter's Five Forces Design could be utilized to analyze the appearance of the publishing market China. A quick analysis of the Porter's Five Forces is provided as follows;.
Risk of New Entrants.
Hazards of brand-new entrants in the Chinese Publishing Market is moderate. The possible growth in the industry tends to attract brand-new entrants to the publishing industry. The presence of intense competition and the requirement of substantial capital tends to demotivate brand-new entrants to go into in the market.
Danger of Replacement.
Threat of Replacement is high for the Chinese Publishing Market. The replacement products for the published documents is the documents presented in the digital libraries on certain websites. The changing consumer preferences towards digital learning increase the danger of alternative for the market.
Competitive rivalry in the publishing industry is high. The existence of a great deal of consumers in the Chinese Publishing Market like CIP, PTP etc. tends to produce high competitive rivalry for CMP. Along with it, brand-new entrants are likewise entering into the market increasing the competitors for CMP.
Bargaining Power of Provider.
The significant suppliers of the Li Fung 2012 Case Study Analysis include the suppliers of the paper for publishing documents. As CMP is the biggest publisher in the Chinese Publishing Market, therefore the general bargaining power of supplier for CMP is low.
Bargaining Power of Buyer.
Negotiating 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 documents at competitive rates.
CMP runs in a highly competitive industry with the existence of a great deal of rivals. The company has a competitive position in the market with the highest market share in the Chinese publishing market. Major rivals of Li Fung 2012 Case Study Solution consist of;.
• Chemical Market Press (CIP).
• Posts and telecommunication Press (PTP).
Chemical Industry Press (CIP).
CIP acts as a risk for CMP as it could wean its market share due to its long term competitive background. CIP is focused on digital publishing and might wean the market share of CMP easily in the present market situation.
Posts and telecommunication Press (PTP).
Another close rival of CMP is PTP. It was likewise founded in the exact same duration as CMP and CIP. It ranks 6th in the state-owned publishers in terms of organisation scale. It is also one of the popular players in the publishing industry with an annual overall earnings of RMB 550 million in 2010.
Alternative-1: Expand towards New Markets
• Minimizing dependence over the Chinese markets.
• Increasing number of Consumers
• Development chances.
• Avoiding the impact of market saturation in the Chinese publishing market.
• Use of prospective resources in growth.
• Danger of failure in brand-new markets.
• Time consuming.
Alernative-2: Introduce Digital Publishing
• Sustaining consumer base.
• Approaching brand-new markets.
• Easy to introduce utilizing present capabilities.
• Low danger of Failure.
• Low requirement for funds.
• Increased product portfolio offers high worth to clients.
• Competition in the market by CIP, who has prior focus on the digital publishing.
• Shift of focus from the core service segments to the new one can lead the company to lose demand of its items in the market.
As the choices are shifting towards digital publishing and the company need an instant solution to prevent the declining industry development. The company might likewise think about the expansion program after the success of its digital publishing program.
In order to introduce digital publishing in its item portfolio, the company must first collects the data related to the consumer need, the potential markets, the government guidelines and the information related to the competitors presented in the market. If the preliminary offering proves a success, the business ought to go for the other markets. In this method the company would be able to execute its digital publishing program.
Although, the development of the publishing industry is decreasing given that 2008, revealing a threat to the company's long term existence, however the circumstance can be managed by considering an advancement plan in the future. The business could think about introducing digital publishingin its existing market to implement its development program at immediate basis and to prevent the threat of failure for entrance in the new markets.