Likonot Ltd Case Study Solution and Analysis
Intro
Likonot Ltd Case Study Analysis is the largest publishing business with a highest market share in the China's book retail market. CMP offers a number of services including; collecting details, processing information and interaction services. Major business segments of the company consist of; books, regulars, consultancy and circulation. The company has a huge item portfolio and its major items include books, periodicals, online media, exhibits, research study reports etc. Likonot Ltd Case Study Analysis has actually become a specialized info service provider and a big comprehensive Science and Innovation publishing business through the combination of print media, audio-visual media and the network media.
Vital Concerns
Although, Likonot Ltd Case Study Analysis has actually spent its 60 years journey smoothly, being a successful publishing home, however, the changing macro market trends and forces bring particular obstacles to the publishing market in general and CMP in particular. These aspects include;
• Entrance of the brand-new publishing companies in the market.
• Declining development of the publishing market.
• Market saturation.
• Introduction of digital publishing methods
• Enhancement 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 situation? 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?
Situational Analysis
Internal Analysis
SWOT Analysis
Strengths
Likonot Ltd Case Study Solution has certain strengths that can be made use of to lower the dangers, get rid of the weak point and obtain the opportunities. Strengths of CMP are offered as follows;
• The long term experience of Likonot Ltd Case Study Analysis in the publishing market i.e. 60 years allows the company to supply high quality items at a lower cost using its prior experiences.
• The technical resources and capabilities created by its successful journey supply a competitive advantage to CMP.
• Vast item portfolioof CMP helps it to diversify its threat and offer high value to its consumers.
• Strong financial position enables the business to think about several development chances without any fear of raising fund externally.
Weaknesses
Together with the strengths, the company has specific weak points which could increase restrictions for the business in implementing its development program. The weaknesses of Likonot Ltd Case Study Analysis are provided as follows;
• Despite of being a science and technology publishing company, the business still has traditional methods ofpublishing which are not compatible with the growing technological shift.
• CMP extremely relies over the Chinese markets for its development. It needs to propose specific growth plans to prevent its reliance over the Chinese markets to achieve long term development.
Opportunities
The development of the publishing market is decreasing because 2008, impacting Likonot Ltd Case Study Solution as well, however the growth could be restored by availing particular opportunities provided in the market. The marketplace opportunities for CMP consist of;
• The company might likewise present Digital Publishing by utilizing its long term technical experience and a strong consumer acknowledgment in the market.
• CMP could consider a development program through the expansion towards foreign markets in order to minimize its reliance over Chinese markets by utilizing its vast funds.
Hazards
The altering macro trends in the market and increasing competitors in the publishing industry has actually presented certain hazards to Likonot Ltd Case Study Solution consisting of;( Gurel, 2017).
• Introduction 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 virtual libraries.
• The existence of a great deal of competitors in the publishing market increase the hazard for CMP to lose its competitive position in the market, as rivals can gain a strong customer base by using particular methods like aggressive promotion, quality products, etc.
• Entrance of brand-new publishing companies in the industry along with existence of high competitors increases the danger of losing the customer base.
Financial Analysis.
Due to absence of data, the financial ratios of CMP could not be determined. It could be examined from the Appendix III that the annual total profits of Likonot Ltd Case Study Solution throughout the period 2000-2012 are growing at a high growth rate, revealing that the yearly need of the products of CMP is growing and the company is rather efficient in attracting a large number of customers at a potential cost.
In addition to it, the 2nd graph which reveals the annual development in the Likonot Ltd Case Study Help total possessions, shows that the business is quite effective in including worth to its possessions through its incomes. The development in properties shows that the total worth of the firm is also increasing with increasing the total earnings. (Unidentified, 2013).
Another monetary analysis of the business using the offered data might be the analysis concerning the circulation of total earnings of the business. Major part of the revenues 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 sections with a possible growth to attain its future development objective.
PESTEL Analysis
PESTEL analysis could be conducted to learn the numerous external forces impacting the performance of the business and the current trends in the external environment of the company. A brief PESTEL analysis of the business is given as follows; (Alanzi, 2018).
Political.
As the publishing sector could have a substantial impact on the state of mind of individuals about the communist ideology of the federal government, for that reason, the publishing sector is extremely supervised and directed by the Promotion Department of the Communist Party of China. For that reason, it might be said that the total political forces affecting Likonot Ltd Case Study Solution company are high. The federal government policies relating to the publishing sector are also increasing with the passage of time.
Economical.
Economic forces impacting the publishing sector in general and the Likonot Ltd Case Study Solution in particular includesthe rates of paper, the earnings level of consumers, the inflation rate, and the overall GDP development of the country. All these forces combine impact the need for the publishing market. In addition to it, the financial policies associated with the import of books affect the total company at CPM. China's economic conditions are rather beneficial for CMP with high GDP development and customer income level.
Social and Demographical.
Social and demographical forces include the population development, the consumer's preferences towards reading informative products and so on. China has the greatest population in the world with a high population development, showing the increasing variety of customers of the Likonot Ltd Case Study Help. The consumer preferences are shifting towards digital publishing rather than the conventional was of publishing. In this regard, CMP ought to concentrate on digital publishing to fulfill the altering consumer choices.
Technological.
Technological forces affecting the CMP consist of the technological advancement in the reading strategies etc. Enhancement of science and innovation in addition to the increase of digital publishing might reduce the demand for the CMP items, if particular actions would not be taken soon.
Environmental.
Environmental forces impacting Likonot Ltd Case Study Help includes the issues of ecological communities over the use of paper in publishing books. The paper utilized 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.
Legal policies for the publishing sector at whole are high. Publishing Ordinance 1997 needs the publishers to be approved first by the Government to be entered in the publishing market.
Industry Analysis (Porter's Five Forces Design).
Porter's Five Forces Model could be used to evaluate the attractiveness of the publishing industry China. A short analysis of the Porter's 5 Forces is provided as follows;.
Hazard of New Entrants.
Dangers of brand-new entrants in the Chinese Publishing Market is moderate. The prospective development in the market tends to attract new entrants to the publishing industry. The presence of extreme competition and the requirement of huge capital tends to demotivate brand-new entrants to go into in the market.
Danger of Alternative.
Danger of Alternative is high for the Chinese Publishing Industry. The substitute items for the published documents is the files provided in the digital libraries on particular websites. The altering customer preferences towards digital learning increase the danger of alternative for the industry.
Competitive Competition.
Competitive competition in the publishing market is high. The presence of large number of consumers in the Chinese Publishing Industry like CIP, PTP etc. tends to produce high competitive rivalry for CMP. In addition to it, new entrants are also entering into the market increasing the competition for CMP.
Bargaining Power of Provider.
The major suppliers of the Likonot Ltd Case Study Solution consist of the suppliers of the paper for releasing files. As CMP is the largest publisher in the Chinese Publishing Market, therefore the overall bargaining power of supplier for CMP is low.
Bargaining Power of Buyer.
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 buyers needs high quality files at competitive prices.
Competitors Analysis.
CMP operates in an extremely 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 competitors of Likonot Ltd Case Study Help consist of;.
• Chemical Market Press (CIP).
• Posts and telecommunication Press (PTP).
Chemical Industry Press (CIP).
CIPis one of the close rivals of CMP. Founded in the very same period, CIP releases comparable type of books. For a large period, CIP held the biggest market share, and still ranks second and third in numerous market sectors, with a major concentrate on educational publications. CIP functions as a danger 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 Likonot Ltd Case Study Analysis quickly in the current market circumstance.
Posts and telecommunication Press (PTP).
It was also established in the same duration as Likonot Ltd Case Study Help and CIP. It is likewise one of the popular gamers in the publishing industry with an annual total earnings of RMB 550 million in 2010.
Alternatives
Alternative-1: Broaden towards New Markets
Pros
• Decreasing dependence over the Chinese markets.
• Increasing number of Customers
• Growth chances.
• Avoiding the effect of market saturation in the Chinese publishing industry.
Cons
• Usage of possible resources in expansion.
• Danger of failure in new markets.
• Time consuming.
Alernative-2: Introduce Digital Publishing
Pros
• Sustaining customer base.
• Approaching new markets.
• Easy to introduce utilizing existing capabilities.
• Low danger of Failure.
• Low requirement for funds.
• Increased product portfolio offers high worth to customers.
Cons
• Competition in the market by CIP, who has prior concentrate on the digital publishing.
• Shift of focus from the core organisation sections to the new one can lead the business to lose demand of its products in the market.
Recommendations
As the preferences are moving towards digital publishing and the company need an immediate solution to avoid the declining industry development. The company could likewise consider the expansion program after the success of its digital publishing program.
Implementation
In order to introduce digital publishing in its item portfolio, the company must initially gathers the information related to the customer demand, the potential markets, the federal government regulations and the data related to the rivals presented in the market. If the initial offering shows a success, the company should go for the other markets. In this way the business would be able to execute its digital publishing program.
Conclusion
Although, the growth of the publishing industry is declining since 2008, showing a threat to the company's long term presence, but the situation can be controlled by considering an advancement plan in the future. The company might consider presenting digital publishingin its existing market to implement its advancement program at immediate basis and to avoid the danger of failure for entrance in the new markets.
