Li Fung 2012 Case Study Solution and Analysis
Introduction
Li Fung 2012 Case Study Analysis is the biggest publishing company with a highest market share in the China's book retail market. CMP provides a variety of services including; collecting info, processing details and communication services. Significant service sectors of the business include; books, regulars, consultancy and distribution. The business has a large product portfolio and its major products consist of books, periodicals, online media, exhibits, research study reports etc. Li Fung 2012 Case Study Solution has ended up being a specialized information service provider and a big detailed Science and Innovation publishing business through the integration of print media, audio-visual media and the network media.
Vital Issues
Although, Li Fung 2012 Case Study Analysis has spent its 60 years journey efficiently, being a successful publishing home, nevertheless, the changing macro market trends and forces bring specific obstacles to the publishing market in general and CMP in particular. These elements include;
• Entryway of the brand-new publishing companies in the industry.
• Decreasing development of the publishing market.
• Market saturation.
• Introduction of digital publishing strategies
• Enhancement of science and innovation.
The transformation of the macro markets have raised several questions to the management at CPM that what could be the future of CMP in this circumstance? Do the long important experience, technical resources and the capabilities of the company could be made use of to pursue the future advancement unceasingly? How could the business sustain its long term competitive position in future?
Situational Analysis
Internal Analysis
SWOT Analysis
Strengths
Li Fung 2012 Case Study Help has specific strengths that can be used to reduce the dangers, overcome the weak point and get the chances. Strengths of CMP are given as follows;
• The long term experience of Li Fung 2012 Case Study Solution in the publishing market i.e. 60 years allows the company to provide high quality items at a lower expense using its prior experiences.
• The technical resources and capabilities created by its successful journey provide a competitive advantage to CMP.
• Vast product portfolioof CMP helps it to diversify its risk and supply high worth to its clients.
• Strong monetary position allows the company to consider numerous advancement opportunities without any worry of raising fund externally.
Weak points
Along with the strengths, the business has specific weak points which could increase restraints for the business in implementing its development program. The weaknesses of Li Fung 2012 Case Study Help are given as follows;
• Despite of being a science and technology publishing company, the business still has conventional methods ofpublishing which are not compatible with the growing technological shift.
• CMP highly relies over the Chinese markets for its growth. It needs to propose certain growth plans to prevent its dependence over the Chinese markets to attain long term growth.
Opportunities
The growth of the publishing industry is decreasing given that 2008, affecting Li Fung 2012 Case Study Solution as well, however the development could be restored by availing particular chances provided in the market. The market chances for CMP consist of;
• The company might also present Digital Publishing by utilizing its long term technical experience and a strong consumer acknowledgment in the market.
• CMP might think about a development program through the growth towards foreign markets in order to minimize its reliance over Chinese markets by utilizing its large funds.
Risks
The altering macro trends in the market and increasing competition in the publishing market has posed specific threats to Li Fung 2012 Case Study Solution consisting of;( Gurel, 2017).
• Introduction of digital publishing i.e. virtual libraries might result in declining market share of Li Fung 2012 Case Study Solution due to the consumer shift towards digital libraries.
• The presence 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 get a strong customer base by using certain techniques like aggressive promo, quality items, etc.
• Entryway of new publishing companies in the industry together with presence of high competition increases the danger of losing the client base.
Monetary Analysis.
Due to lack of information, the monetary ratios of CMP might not be computed. It could be examined from the Appendix III that the yearly total profits of Li Fung 2012 Case Study Analysis throughout the duration 2000-2012 are growing at a high development rate, showing that the annual demand of the items of CMP is growing and the company is rather efficient in bring in a large number of consumers at a possible rate.
Together with it, the 2nd graph which shows the yearly growth in the Li Fung 2012 Case Study Solution overall possessions, shows that the company is rather efficient in adding value to its properties through its earnings. The development in assets reveals that the total worth of the firm is likewise increasing with increasing the overall earnings. (Unknown, 2013).
Another monetary analysis of the business using the offered information could be the analysis relating to the circulation of total revenues 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 service segments with a potential development to accomplish its future advancement objective.
PESTEL Analysis
PESTEL analysis could be conducted to find out the numerous external forces impacting the performance of the company 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 might have a substantial impact on the frame of mind of individuals about the communist ideology of the government, for that reason, the publishing sector is extremely monitored and guided by the Publicity Department of the Communist Celebration of China. Therefore, it could be said that the overall political forces impacting Li Fung 2012 Case Study Solution business are high. The government policies relating to the publishing sector are likewise increasing with the passage of time.
Economical.
Economic forces impacting the publishing sector in general and the Li Fung 2012 Case Study Help in specific includesthe costs of paper, the income level of customers, the inflation rate, and the total GDP development of the nation. All these forces integrate impact the demand for the publishing market. Together with it, the economic policies connected to the import of books affect the total service at CPM. Nevertheless, China's economic conditions are rather favorable for CMP with high GDP growth and consumer income level.
Social and Demographical.
The consumer preferences are moving towards digital publishing rather than the conventional was of publishing. In this regard, CMP needs to focus on digital publishing to fulfill the changing customer choices.
Technological.
Technological forces affecting the CMP include the technological improvement in the reading strategies and so on. Improvement of science and innovation in addition to the increase of digital publishing might minimize the demand for the CMP products, if particular actions would not be taken quickly.
Environmental.
Ecological forces impacting Li Fung 2012 Case Study Analysis includes the concerns of environmental 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 ought to not be damaging for the environment.
Legal.
Legal guidelines for the publishing sector at whole are high. The legal guidelines relating to the publishing sector is controlled by the General Administration of Press and Publication. Publishing Regulation 1997 requires the publishers to be authorized first by the Federal government to be gone into in the publishing market. The regulation prohibits direct participation of foreign entities and individuals in the publishing sector.
Industry Analysis (Porter's 5 Forces Design).
Porter's 5 Forces Model could be utilized to analyze the appearance of the publishing market China. A quick analysis of the Porter's Five Forces is given as follows;.
Threat of New Entrants.
Dangers of new entrants in the Chinese Publishing Industry is moderate. The potential development in the industry tends to bring in new entrants to the publishing industry. The existence of extreme competition and the requirement of huge capital tends to demotivate new entrants to enter in the market.
Risk of Alternative.
Hazard of Substitution is high for the Chinese Publishing Industry. The alternative products for the released documents is the documents provided in the digital libraries on specific websites. The changing consumer choices towards digital knowing increase the danger of substitution for the industry.
Competitive Rivalry.
Competitive rivalry in the publishing industry is high. The existence of a great deal 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 likewise entering into the marketplace increasing the competition for CMP.
Bargaining Power of Provider.
The significant providers of the Li Fung 2012 Case Study Analysis consist of the providers of the paper for publishing documents. As CMP is the biggest publisher in the Chinese Publishing Market, for that reason the total bargaining power of provider for CMP is low.
Bargaining Power of Purchaser.
Haggling power of purchaser in the publishing market is high. Due to the presence of a a great deal of publishers in the Chinese market and the marketplace saturation, the buyers needs high quality files at competitive rates.
Competitors Analysis.
CMP runs in an extremely competitive market with the existence of large number of competitors. However, the business has a competitive position in the market with the highest market share in the Chinese publishing market. Significant rivals of Li Fung 2012 Case Study Solution consist of;.
• Chemical Industry Press (CIP).
• Posts and telecommunication Press (PTP).
Chemical Market Press (CIP).
CIPis one of the close competitors of CMP. Established in the exact same period, CIP releases similar kind of books. For a big time period, CIP held the largest market share, and still ranks 2nd and third in various market sectors, with a major focus on academic publications. CIP serves as a threat 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 marketplace share of Li Fung 2012 Case Study Solution quickly in the present market situation.
Posts and telecommunication Press (PTP).
Another close competitor of CMP is PTP. It was also founded in the exact same period as CMP and CIP. It ranks 6th in the state-owned publishers in regards to organisation scale. It is also one of the prominent gamers in the publishing market with a yearly total revenues of RMB 550 million in 2010.
Alternatives
Alternative-1: Broaden towards New Markets
Pros
• Decreasing dependence over the Chinese markets.
• Increasing number of Consumers
• Growth opportunities.
• Preventing the impact of market saturation in the Chinese publishing market.
Cons
• Use of possible resources in expansion.
• Threat of failure in brand-new markets.
• Time consuming.
Alernative-2: Present Digital Publishing
Pros
• Sustaining consumer base.
• Approaching new markets.
• Easy to introduce utilizing current abilities.
• Low risk of Failure.
• Low requirement for funds.
• Increased product portfolio provides high worth to consumers.
Cons
• Competition in the market by CIP, who has prior concentrate on the digital publishing.
• Shift of focus from the core business segments to the brand-new one can lead the company to lose demand of its items in the market.
Recommendations
With the deep analysis of the internal and external environment of the business along with the market analysis and the rival analysis, Alternative 2 is recommended to CMP to attain its future advancement. As the choices are shifting towards digital publishing and the company need an instant service to avoid the decreasing market development. Therefore, intro of digital publishing could prove to be an instant solution with low amount of threat for the company. Nevertheless, the business could also think about the growth program after the success of its digital publishing program.
Application
In order to introduce digital publishing in its product portfolio, the company should first gathers the data related to the consumer demand, the potential markets, the government guidelines and the information related to the competitors presented in the market. If the preliminary offering shows a success, the business ought to go for the other markets. In this method the company would be able to implement its digital publishing program.
Conclusion
Although, the development of the publishing industry is decreasing since 2008, showing a threat to the company's long term presence, but the scenario can be managed by considering an advancement plan in the future. The company might think about introducing digital publishingin its existing market to implement its advancement program at immediate basis and to prevent the threat of failure for entryway in the new markets.
