Likonot Ltd Case Study Solution and Analysis
Likonot Ltd Case Study Analysis is the biggest publishing company with a highest market share in the China's book retail market. CMP supplies a variety of services consisting of; collecting info, processing details and communication services. Major service sections of the business consist of; books, regulars, consultancy and circulation. The business has a vast item portfolio and its major products consist of books, regulars, online media, exhibitions, research reports and so on. Likonot Ltd Case Study Solution has actually ended up being a specialized info provider and a big extensive Science and Technology publishing business through the combination of print media, audio-visual media and the network media.
Although, Likonot Ltd Case Study Solution has actually spent its 60 years journey efficiently, being an effective publishing house, nevertheless, the changing macro market patterns and forces bring particular obstacles to the publishing industry in basic and CMP in specific. These factors include;
• Entrance of the new publishing firms in the market.
• Declining development of the publishing market.
• Market saturation.
• Introduction of digital publishing strategies
• Improvement of science and technology.
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 circumstance? Do the long valuable experience, technical resources and the abilities of the business could be used to pursue the future advancement unceasingly? How could the business sustain its long term competitive position in future?
Likonot Ltd Case Study Analysis has particular strengths that can be made use of to minimize the dangers, get rid of the weak point and get the opportunities. Strengths of CMP are given as follows;
• The long term experience of Likonot Ltd Case Study Analysis in the publishing industry i.e. 60 years allows the business to supply high quality products at a lower cost using its prior experiences.
• The technical resources and abilities produced by its effective journey supply a competitive advantage to CMP.
• Large item portfolioof CMP assists it to diversify its danger and provide high value to its clients.
• Strong financial position enables the business to think about a number of development chances without any worry of raising fund externally.
Along with the strengths, the company has particular weaknesses which could increase constraints for the business in implementing its advancement program. The weak points of Likonot Ltd Case Study Help are given as follows;
• Despite of being a science and technology publishing firm, the business still has standard methods ofpublishing which are not suitable with the growing technological shift.
• CMP highly relies over the Chinese markets for its growth. It needs to propose certain expansion plans to prevent its reliance over the Chinese markets to achieve long term development.
The growth of the publishing market is declining because 2008, impacting Likonot Ltd Case Study Analysis as well, however the development might be revived by availing particular chances presented in the market. The marketplace chances for CMP include;
• The business could also introduce Digital Publishing by utilizing its long term technical experience and a strong client recognition in the market.
• CMP could consider an advancement program through the expansion towards foreign markets in order to reduce its dependence over Chinese markets by utilizing its vast funds.
The altering macro patterns in the market and increasing competitors in the publishing industry has actually presented particular dangers to Likonot Ltd Case Study Analysis consisting of;( Gurel, 2017).
• Intro of digital publishing i.e. virtual libraries could result in declining market share of Likonot Ltd Case Study Analysis due to the consumer shift towards digital libraries.
• The presence of large number of rivals in the publishing industry increase the danger for CMP to lose its competitive position in the market, as rivals can get a strong customer base by using particular methods like aggressive promotion, quality products, and so on
• Entrance of brand-new publishing firms in the industry in addition to presence of high competition increases the threat of losing the client base.
Due to absence of information, the financial ratios of CMP could not be calculated. It could be examined from the Appendix III that the annual overall incomes of Likonot Ltd Case Study Help during the duration 2000-2012 are growing at a high development rate, showing that the yearly need of the products of CMP is growing and the business is quite effective in drawing in a large number of consumers at a possible rate.
In addition to it, the second chart which shows the annual development in the Likonot Ltd Case Study Help overall assets, shows that the business is rather efficient in adding worth to its possessions through its profits. The growth in assets reveals that the total value of the company is also increasing with increasing the overall incomes. (Unidentified, 2013).
Another financial analysis of the business utilizing the provided information might be the analysis concerning the distribution of total earnings of the company. Huge part of the revenues of CMP originates from the sales of its published books i.e. 64% as shown in the Case Appendix V. The business could move towards other business sections with a possible development to accomplish its future advancement goal.
PESTEL analysis might be performed to find out the different external forces impacting the efficiency of the company and the current patterns in the external environment of the business. A quick PESTEL analysis of the business is offered as follows; (Alanzi, 2018).
As the publishing sector might have a considerable influence on the state of mind of the people about the communist ideology of the federal government, for that reason, the publishing sector is highly monitored and guided by the Publicity Department of the Communist Party of China. It might be stated that the general political forces affecting CMP company are high. The government policies regarding the publishing sector are also increasing with the passage of time.
Economic forces affecting the publishing sector in general and the CMP in particular includesthe prices of paper, the income level of customers, the inflation rate, and the overall GDP development of the country. All these forces integrate effect the need for the publishing market.
Social and Demographical.
The customer choices are moving towards digital publishing rather than the traditional was of publishing. In this regard, CMP needs to focus on digital publishing to fulfill the changing customer choices.
Technological forces affecting the CMP consist of the technological improvement in the reading techniques etc. Enhancement of science and technology along with the rise of digital publishing might lower the demand for the CMP products, if specific actions would not be taken soon.
Ecological forces impacting Likonot Ltd 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 required to be disposable and the ink used while publishing should not be damaging for the environment.
Legal guidelines for the publishing sector at whole are high. Publishing Regulation 1997 requires the publishers to be authorized first by the Government to be entered in the publishing market.
Industry Analysis (Porter's 5 Forces Model).
Porter's Five Forces Model could be used to analyze the attractiveness of the publishing industry China. A quick analysis of the Porter's Five Forces is provided as follows;.
Threat of New Entrants.
Hazards of brand-new entrants in the Chinese Publishing Industry is moderate. The potential growth in the market tends to bring in new entrants to the publishing market. The presence of intense competition and the requirement of substantial capital tends to demotivate new entrants to go into in the market.
Threat of Replacement.
Threat of Substitution is high for the Chinese Publishing Market. The replacement items for the published files is the files provided in the virtual libraries on specific websites. The changing consumer preferences towards digital knowing increase the risk 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 Industry like CIP, PTP and so on tends to produce high competitive rivalry for CMP. Together with it, new entrants are likewise participating in the market increasing the competitors for CMP.
Bargaining Power of Supplier.
The major suppliers of the Likonot Ltd Case Study Solution include the suppliers of the paper for publishing 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 Purchaser.
Negotiating 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 documents at competitive prices.
CMP runs in an extremely competitive market with the presence of large number of rivals. The company has a competitive position in the market with the highest market share in the Chinese publishing market. Major competitors of Likonot Ltd Case Study Help consist of;.
• Chemical Industry Press (CIP).
• Posts and telecommunication Press (PTP).
Chemical Market 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 quickly in the present market circumstance.
Posts and telecommunication Press (PTP).
It was also established in the exact same duration as Likonot Ltd Case Study Solution and CIP. It is likewise one of the popular players in the publishing market with a yearly overall profits of RMB 550 million in 2010.
Alternative-1: Expand towards New Markets
• Lowering reliance over the Chinese markets.
• Increasing number of Clients
• Development opportunities.
• Avoiding the effect of market saturation in the Chinese publishing industry.
• Usage of potential resources in expansion.
• Risk of failure in new markets.
• Time consuming.
Alernative-2: Present Digital Publishing
• Sustaining customer base.
• Approaching new markets.
• Easy to present using current abilities.
• Low risk of Failure.
• Low requirement for funds.
• Increased product portfolio supplies high worth to consumers.
• Competition in the market by CIP, who has prior concentrate on the digital publishing.
• Shift of focus from the core company sections to the new one can lead the company to lose demand of its items in the market.
With the deep analysis of the internal and external environment of the business along with the industry analysis and the competitor analysis, Alternative 2 is recommended to CMP to achieve its future development. As the choices are moving towards digital publishing and the business need an instant solution to prevent the declining market growth. Therefore, introduction of digital publishing could prove to be an immediate service with low amount of risk for the company. The company could likewise consider the expansion program after the success of its digital publishing program.
In order to introduce digital publishing in its product portfolio, the company ought to initially gathers the information associated with the customer demand, the potential markets, the government policies and the information associated with the rivals presented in the market. After that, the business must decide one possible sector for its preliminary offering. It should gather research that how it could differentiate its digital publishing from the existing rivals' items. After all the steps above the company must go for the preliminary offering. The company ought to go for the other markets if the initial offering shows a success. In this method the business would be able to implement its digital publishing program.
Although, the development of the publishing market is declining given that 2008, showing a hazard to the business's long term existence, however the scenario can be controlled by considering a development plan in the future. The company might consider introducing digital publishingin its existing market to implement its development program at immediate basis and to avoid the risk of failure for entrance in the new markets.