Location Choice For New Ventures Cities Case Study Solution and Analysis
Introduction
Location Choice For New Ventures Cities Case Study Help is the biggest publishing business with a greatest market share in the China's book retail market. CMP has ended up being a specialized information company and a big detailed Science and Technology publishing company through the combination of print media, audio-visual media and the network media.
Vital Concerns
Although, Location Choice For New Ventures Cities Case Study Analysis has invested its 60 years journey efficiently, being a successful publishing home, however, the altering macro market trends and forces bring certain challenges to the publishing industry in general and CMP in particular. These elements include;
• Entrance of the brand-new publishing companies in the market.
• Decreasing development of the publishing market.
• Market saturation.
• Intro of digital publishing techniques
• Improvement of science and innovation.
The change of the macro markets have raised several questions 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 abilities of the business could be utilized to strive for the future development unceasingly? How could the company sustain its long term competitive position in future?
Situational Analysis
Internal Analysis
SWOT Analysis
Strengths
Location Choice For New Ventures Cities Case Study Analysis has certain strengths that can be used to reduce the dangers, get rid of the weak point and avail the opportunities. Strengths of CMP are provided as follows;
• The long term experience of Location Choice For New Ventures Cities Case Study Analysis in the publishing market i.e. 60 years permits the company to offer high quality products at a lower expense utilizing its previous experiences.
• The technical resources and capabilities created by its effective journey provide a competitive benefit to CMP.
• Large product portfolioof CMP assists it to diversify its threat and offer high value to its customers.
• Strong monetary position enables the company to think about numerous advancement opportunities with no worry of raising fund externally.
Weaknesses
Along with the strengths, the company has specific weaknesses which might increase restraints for the company in executing its development program. The weaknesses of Location Choice For New Ventures Cities Case Study Help are provided as follows;
• Despite of being a science and innovation publishing company, the business still has standard methods ofpublishing which are not compatible with the growing technological shift.
• CMP extremely relies over the Chinese markets for its growth. It needs to propose specific growth plans to prevent its dependence over the Chinese markets to achieve long term growth.
Opportunities
Although, the development of the publishing market is declining considering that 2008, impacting Location Choice For New Ventures Cities Case Study Help as well, however the growth could be restored by availing specific chances provided in the market. The market opportunities for CMP include;
• The company could also introduce Digital Publishing by utilizing its long term technical experience and a strong client recognition in the market.
• CMP might consider an advancement program through the expansion towards foreign markets in order to reduce its dependence over Chinese markets by utilizing its large financial resources.
Risks
The changing macro patterns in the market and increasing competitors in the publishing market has postured specific dangers to Location Choice For New Ventures Cities Case Study Help including;( Gurel, 2017).
• Intro of digital publishing i.e. digital libraries might cause declining market share of Location Choice For New Ventures Cities Case Study Solution due to the customer shift towards digital libraries.
• The presence of large number of rivals in the publishing market increase the threat for CMP to lose its competitive position in the market, as competitors can gain a strong customer base by using particular techniques like aggressive promo, quality items, and so on
• Entrance of new publishing companies in the industry along with existence of high competition increases the hazard of losing the customer base.
Financial Analysis.
The company has a rather competitive financial performance. Due to absence of data, the monetary ratios of CMP might not be computed. However, the overall monetary performance of the company might be evaluated by using the charts given in the case Appendices. It could be analyzed from the Appendix III that the annual total revenues of CMP throughout the duration 2000-2012 are growing at a high growth rate, revealing that the annual demand of the items of Location Choice For New Ventures Cities Case Study Analysis is growing and the company is rather effective in drawing in a a great deal of consumers at a prospective rate.
In addition to it, the 2nd graph which reveals the annual development in the Location Choice For New Ventures Cities Case Study Analysis overall assets, reveals that the company is rather effective in adding value to its assets through its earnings. The growth in possessions shows that the total worth of the firm is also increasing with increasing the total revenues. (Unknown, 2013).
Another financial analysis of the business using the provided information might be the analysis concerning the circulation of total revenues of the business. Major part of the earnings of CMP originates from the sales of its published books i.e. 64% as shown in the Case Appendix V. The business might move towards other business segments with a prospective growth to achieve its future development objective.
PESTEL Analysis
PESTEL analysis could be conducted to find out the various external forces affecting the efficiency of the business and the recent trends in the external environment of the business. A short PESTEL analysis of the business is provided as follows; (Alanzi, 2018).
Political.
As the publishing sector could have a significant impact on the frame of mind of individuals about the communist ideology of the federal government, for that reason, the publishing sector is highly supervised and directed by the Publicity Department of the Communist Celebration of China. It could be said that the total political forces affecting CMP company are high. The federal government policies relating to the publishing sector are also increasing with the passage of time.
Affordable.
Financial forces impacting the publishing sector in general and the CMP in particular includesthe rates of paper, the earnings level of customers, the inflation rate, and the total GDP growth of the nation. All these forces integrate effect the need for the publishing market.
Social and Demographical.
Social and demographical forces include the population development, the customer's choices towards checking out useful materials and so on. China has the highest population on the planet with a high population growth, revealing the increasing number of consumers of the Location Choice For New Ventures Cities Case Study Analysis. The customer choices are shifting towards digital publishing rather than the traditional was of publishing. In this regard, CMP ought to focus on digital publishing to meet the changing consumer choices.
Technological.
Technological forces impacting the CMP include the technological improvement in the reading techniques and so on. Improvement of science and innovation along with the rise of digital publishing might lower the demand for the CMP products, if specific actions would not be taken quickly.
Environmental.
Environmental forces affecting Location Choice For New Ventures Cities 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 required to be non reusable and the ink used while publishing should not be damaging for the environment.
Legal.
Legal guidelines for the publishing sector at whole are high. Publishing Ordinance 1997 needs the publishers to be authorized first by the Government to be entered in the publishing market.
Market Analysis (Porter's 5 Forces Model).
Porter's Five Forces Design could be used to analyze the attractiveness of the publishing industry China. A brief analysis of the Porter's Five Forces is offered as follows;.
Threat of New Entrants.
Hazards of brand-new entrants in the Chinese Publishing Industry is moderate. The prospective development in the market tends to attract brand-new entrants to the publishing market. However, the presence of intense competitors and the requirement of substantial capital tends to demotivate brand-new entrants to go into in the marketplace.
Danger of Alternative.
Danger of Alternative is high for the Chinese Publishing Market. The replacement products for the published documents is the documents presented in the digital libraries on specific sites. The changing consumer preferences towards digital learning increase the threat of substitution for the market.
Competitive Rivalry.
Competitive competition in the publishing market is high. The existence of large number of consumers in the Chinese Publishing Industry like CIP, PTP etc. tends to produce high competitive rivalry for CMP. Together with it, new entrants are likewise entering into the market increasing the competition for CMP.
Bargaining Power of Provider.
The major suppliers of the Location Choice For New Ventures Cities Case Study Help 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 provider for CMP is low.
Bargaining Power of Purchaser.
Haggling power of purchaser in the publishing market is high. Due to the existence of a large number of publishers in the Chinese market and the market saturation, the purchasers needs high quality documents at competitive costs.
Competitors Analysis.
CMP operates in an extremely competitive market with the existence of a great deal of competitors. The business has a competitive position in the market with the highest market share in the Chinese publishing market. Major rivals of Location Choice For New Ventures Cities Case Study Analysis consist of;.
• Chemical Market Press (CIP).
• Posts and telecommunication Press (PTP).
Chemical Market Press (CIP).
CIP acts as a threat for CMP as it might 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 quickly in the current market scenario.
Posts and telecommunication Press (PTP).
It was also founded in the same duration as Location Choice For New Ventures Cities Case Study Analysis and CIP. It is likewise one of the prominent players in the publishing industry with an annual total profits of RMB 550 million in 2010.
Alternatives
Alternative-1: Expand towards New Markets
Pros
• Reducing reliance over the Chinese markets.
• Increasing number of Consumers
• Development chances.
• Avoiding the effect of market saturation in the Chinese publishing industry.
Cons
• Use of prospective resources in growth.
• Risk of failure in brand-new markets.
• Time consuming.
Alernative-2: Introduce Digital Publishing
Pros
• Sustaining customer base.
• Approaching brand-new markets.
• Easy to present utilizing present capabilities.
• Low risk of Failure.
• Low requirement for funds.
• Increased item portfolio provides high value to customers.
Cons
• Competition in the market by CIP, who has prior focus on the digital publishing.
• Shift of focus from the core service sectors to the new one can lead the business to lose demand of its products in the market.
Recommendations
With the deep analysis of the internal and external environment of the company together with the industry analysis and the competitor analysis, Alternative 2 is recommended to CMP to accomplish its future advancement. As the choices are shifting towards digital publishing and the business require an instant service to prevent the declining market growth. Therefore, intro of digital publishing could show to be an instant solution with low amount of threat for the business. However, the company could likewise consider the expansion program after the success of its digital publishing program.
Execution
In order to introduce digital publishing in its item portfolio, the business must initially gathers the information related to the customer need, the possible markets, the federal government regulations and the information related to the rivals presented in the market. If the initial offering proves a success, the business needs to 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 since 2008, revealing a hazard to the business's long term existence, but the circumstance can be controlled by thinking about a development plan in the future. The business might think about introducing digital publishingin its existing market to execute its advancement program at instant basis and to avoid the danger of failure for entrance in the brand-new markets.
