Lone Star Power 2 Case Study Solution and Analysis
Introduction
Lone Star Power 2 Case Study Analysis is the biggest publishing company with a highest market share in the China's book retail market. CMP provides a number of services consisting of; collecting info, processing information and communication services. Major company segments of the company consist of; books, periodicals, consultancy and distribution. The company has a large item portfolio and its major items consist of books, periodicals, online media, exhibitions, research reports and so on. Lone Star Power 2 Case Study Help has actually ended up being a specialized info company and a big thorough Science and Technology publishing business through the combination of print media, audio-visual media and the network media.
Important Concerns
CMP has invested its 60 years journey efficiently, being a successful publishing house, however, the changing macro market trends and forces bring particular challenges to the publishing industry in basic and Lone Star Power 2 Case Study Help in particular. These elements include;
• Entrance of the new publishing companies in the market.
• Decreasing development of the publishing market.
• Market saturation.
• Introduction of digital publishing techniques
• Enhancement of science and innovation.
The change 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 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?
Situational Analysis
Internal Analysis
SWOT Analysis
Strengths
Lone Star Power 2 Case Study Help has certain strengths that can be made use of to decrease the hazards, get rid of the weak point and get the opportunities. Strengths of CMP are offered as follows;
• The long term experience of Lone Star Power 2 Case Study Solution in the publishing industry i.e. 60 years allows the business to provide high quality items at a lower expense using its previous experiences.
• The technical resources and abilities created by its effective journey provide a competitive advantage to CMP.
• Large product portfolioof CMP assists it to diversify its danger and supply high value to its customers.
• Strong monetary position enables the business to think about several advancement chances with no fear of raising fund externally.
Weak points
In addition to the strengths, the company has certain weak points which might increase restrictions for the company in executing its advancement program. The weaknesses of Lone Star Power 2 Case Study Analysis 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 highly relies over the Chinese markets for its development. It needs to propose particular growth plans to prevent its dependence over the Chinese markets to attain long term growth.
Opportunities
The development of the publishing industry is decreasing since 2008, affecting Lone Star Power 2 Case Study Solution as well, but the growth could be restored by availing particular opportunities provided in the market. The marketplace opportunities for CMP include;
• The company could likewise introduce Digital Publishing by utilizing its long term technical experience and a strong customer recognition in the market.
• CMP might think about an advancement program through the growth towards foreign markets in order to minimize its reliance over Chinese markets by using its large financial resources.
Threats
The altering macro patterns in the market and increasing competition in the publishing industry has actually posed certain risks to Lone Star Power 2 Case Study Analysis consisting of;( Gurel, 2017).
• Introduction of digital publishing i.e. virtual libraries could result in decreasing market share of Lone Star Power 2 Case Study Help due to the customer shift towards digital libraries.
• The existence of a great deal of competitors in the publishing market increase the threat for CMP to lose its competitive position in the market, as competitors can get a strong customer base by utilizing particular techniques like aggressive promotion, quality products, and so on
• Entrance of brand-new publishing companies in the market together with presence of high competitors increases the risk of losing the consumer base.
Financial Analysis.
The business has a quite competitive monetary performance. Due to absence of information, the monetary ratios of CMP could not be calculated. However, the general monetary performance of the business might be analyzed by utilizing the charts given in the case Appendices. It could be evaluated from the Appendix III that the yearly total profits of CMP throughout the period 2000-2012 are growing at a high growth rate, showing that the annual demand of the items of Lone Star Power 2 Case Study Solution is growing and the company is quite effective in drawing in a large number of consumers at a potential price.
In addition to it, the second chart which reveals the yearly development in the Lone Star Power 2 Case Study Solution overall possessions, reveals that the company is quite effective in adding value to its possessions through its revenues. The growth in possessions shows that the total worth of the company is likewise increasing with increasing the overall incomes. (Unidentified, 2013).
Another financial analysis of the business utilizing the provided information could be the analysis concerning the distribution of total incomes of the company. Huge part of the revenues of CMP comes from the sales of its released books i.e. 64% as displayed in the Case Appendix V. The business could move towards other business segments with a possible development to achieve its future development goal.
PESTEL Analysis
PESTEL analysis could be conducted to discover the various external forces impacting the efficiency of the business and the current patterns in the external environment of the business. A quick PESTEL analysis of the business is offered as follows; (Alanzi, 2018).
Political.
As the publishing sector could have a considerable 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 Publicity Department of the Communist Party of China. It might be stated that the overall political forces impacting CMP organisation are high. The federal government policies regarding the publishing sector are also increasing with the passage of time.
Cost-effective.
Financial forces affecting the publishing sector in basic and the Lone Star Power 2 Case Study Solution in specific includesthe rates of paper, the earnings level of customers, the inflation rate, and the total GDP growth of the nation. All these forces integrate impact the demand for the publishing market. Together with it, the financial policies related to the import of books impact the general business at CPM. China's financial conditions are rather beneficial for CMP with high GDP development and customer income level.
Social and Demographical.
Social and demographical forces include the population growth, the consumer's preferences towards checking out useful materials etc. China has the highest population worldwide with a high population growth, revealing the increasing variety of consumers of the Lone Star Power 2 Case Study Help. Nevertheless, the consumer choices are shifting towards digital publishing rather than the standard was of publishing. In this regard, CMP ought to focus on digital publishing to meet the altering consumer choices.
Technological.
Technological forces impacting the CMP consist of the technological development in the reading methods and so on. Enhancement of science and technology together with the rise of digital publishing could decrease the demand for the CMP items, if certain actions would not be taken soon.
Environmental.
Environmental forces affecting Lone Star Power 2 Case Study Analysis includes the issues of ecological neighborhoods over the usage 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.
Legal policies for the publishing sector at whole are high. Publishing Regulation 1997 requires the publishers to be authorized first by the Government to be gone into in the publishing market.
Market Analysis (Porter's Five Forces Design).
Porter's Five Forces Model might be utilized to examine the beauty of the publishing industry China. A quick analysis of the Porter's 5 Forces is given as follows;.
Risk of New Entrants.
Threats of new entrants in the Chinese Publishing Market is moderate. The prospective growth in the market tends to bring in new entrants to the publishing industry. Nevertheless, the presence of intense competitors and the requirement of big capital tends to demotivate new entrants to enter in the marketplace.
Danger of Substitution.
Hazard of Alternative is high for the Chinese Publishing Industry. The replacement items for the published documents is the files provided in the virtual libraries on specific websites. The changing consumer choices towards digital knowing increase the hazard of replacement for the market.
Competitive Competition.
Competitive competition in the publishing industry is high. The presence of large number of consumers in the Chinese Publishing Market like CIP, PTP etc. tends to produce high competitive rivalry for CMP. Along with it, new entrants are also participating in the marketplace increasing the competitors for CMP.
Bargaining Power of Supplier.
The significant suppliers of the Lone Star Power 2 Case Study Solution include the providers of the paper for publishing documents. As CMP is the biggest publisher in the Chinese Publishing Market, therefore the overall bargaining power of provider for CMP is low.
Bargaining Power of Buyer.
Bargaining power of purchaser in the publishing industry 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 operates in an extremely competitive market with the existence of large number of rivals. However, the business has a competitive position in the market with the highest market share in the Chinese publishing market. Significant competitors of Lone Star Power 2 Case Study Analysis include;.
• Chemical Industry Press (CIP).
• Posts and telecommunication Press (PTP).
Chemical Industry Press (CIP).
CIP acts as a risk 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 easily in the present market circumstance.
Posts and telecommunication Press (PTP).
Another close rival of CMP is PTP. It was also established in the exact same period as CMP and CIP. It ranks 6th in the state-owned publishers in terms of business scale. It is also among the popular players in the publishing market with a yearly total profits of RMB 550 million in 2010.
Alternatives
Alternative-1: Broaden towards New Markets
Pros
• Minimizing reliance over the Chinese markets.
• Increasing number of Consumers
• Growth opportunities.
• Avoiding the effect of market saturation in the Chinese publishing industry.
Cons
• Use of possible resources in growth.
• Risk of failure in new markets.
• Time consuming.
Alernative-2: Present Digital Publishing
Pros
• Sustaining customer base.
• Approaching new markets.
• Easy to present utilizing current capabilities.
• Low risk of Failure.
• Low requirement for funds.
• Increased product portfolio supplies high value to clients.
Cons
• Competitors in the market by CIP, who has prior focus on the digital publishing.
• Shift of focus from the core company sectors to the new one can lead the business to lose demand of its items in the market.
Suggestions
As the preferences are shifting towards digital publishing and the company need an instant option to avoid the declining industry development. The business could likewise think about 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 first gathers the data related to the customer need, the possible markets, the federal government policies and the information related to the competitors presented in the market. If the initial offering shows a success, the company ought to go for the other markets. In this method the company would be able to execute its digital publishing program.
Conclusion
Although, the development of the publishing industry is declining since 2008, showing a danger to the business's long term presence, however the scenario can be managed by thinking about a development plan in the future. The business might consider introducing digital publishingin its existing market to execute its advancement program at instant basis and to avoid the risk of failure for entryway in the new markets.
