Lone Star Power 2 Case Study Solution and Analysis
Lone Star Power 2 Case Study Analysis is the largest publishing business with a highest market share in the China's book retail market. CMP supplies a variety of services consisting of; collecting info, processing information and communication services. Major organisation segments of the company consist of; books, regulars, consultancy and distribution. The company has a vast product portfolio and its major products include books, regulars, online media, exhibits, research study reports etc. Lone Star Power 2 Case Study Analysis has actually become a specialized information provider and a big thorough Science and Technology publishing business through the combination of print media, audio-visual media and the network media.
Although, Lone Star Power 2 Case Study Analysis has spent its 60 years journey smoothly, being a successful publishing house, nevertheless, the altering macro market patterns and forces bring certain obstacles to the publishing industry in general and CMP in particular. These factors include;
• Entrance of the brand-new publishing companies in the industry.
• Decreasing growth of the publishing market.
• Market saturation.
• Intro of digital publishing methods
• Enhancement of science and innovation.
The transformation of the macro markets have raised a number of 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 strive for the future development unceasingly? How could the business sustain its long term competitive position in future?
Lone Star Power 2 Case Study Help has specific strengths that can be made use of to reduce the dangers, conquer the weakness and avail the opportunities. Strengths of CMP are provided as follows;
• The long term experience of Lone Star Power 2 Case Study Analysis in the publishing market i.e. 60 years enables the business to supply high quality products at a lower cost utilizing its prior experiences.
• The technical resources and capabilities produced by its effective journey offer a competitive benefit to CMP.
• Vast product portfolioof CMP helps it to diversify its threat and provide high worth to its consumers.
• Strong monetary position allows the business to consider numerous advancement chances without any worry of raising fund externally.
Together with the strengths, the company has particular weak points which might increase restrictions for the business in implementing 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 company, the business still has standard ways ofpublishing which are not compatible with the growing technological shift.
• CMP extremely relies over the Chinese markets for its growth. It must propose specific expansion strategies to prevent its reliance over the Chinese markets to accomplish long term development.
The development of the publishing industry is declining since 2008, affecting Lone Star Power 2 Case Study Analysis as well, however the development might be revived by availing specific opportunities provided in the market. The marketplace opportunities for CMP consist of;
• The business could also introduce Digital Publishing by utilizing its long term technical experience and a strong consumer recognition in the market.
• CMP could consider an advancement program through the expansion towards foreign markets in order to lower its reliance over Chinese markets by using its large financial resources.
The changing macro trends in the market and increasing competitors in the publishing market has presented particular dangers to Lone Star Power 2 Case Study Solution including;( Gurel, 2017).
• Introduction of digital publishing i.e. digital libraries might lead to decreasing market share of Lone Star Power 2 Case Study Analysis due to the consumer shift towards virtual libraries.
• The existence of large number of competitors in the publishing industry increase the threat for CMP to lose its competitive position in the market, as competitors can acquire a strong customer base by utilizing specific techniques like aggressive promotion, quality products, and so on
• Entryway of brand-new publishing firms in the market together with presence of high competition increases the danger of losing the client base.
Due to absence of data, the monetary ratios of CMP might not be calculated. It could be examined from the Appendix III that the annual total profits of Lone Star Power 2 Case Study Analysis throughout the duration 2000-2012 are growing at a high growth rate, revealing that the yearly need of the items of CMP is growing and the business is rather efficient in bring in a big number of clients at a potential rate.
In addition to it, the second chart which reveals the annual development in the Lone Star Power 2 Case Study Analysis overall properties, reveals that the business is quite efficient in adding worth to its properties through its earnings. The growth in properties shows that the overall value of the firm is likewise increasing with increasing the overall earnings. (Unidentified, 2013).
Another financial analysis of the company utilizing the offered data might be the analysis relating to the distribution of overall profits of the company. Major part of the revenues of CMP originates from the sales of its released books i.e. 64% as shown in the Case Appendix V. The business could move towards other service sections with a prospective development to attain its future development goal.
PESTEL analysis could be performed to learn the various external forces affecting the performance of the business and the recent patterns in the external environment of the company. A brief PESTEL analysis of the company is provided as follows; (Alanzi, 2018).
As the publishing sector might have a significant influence on the mindset of individuals about the communist ideology of the government, therefore, the publishing sector is highly monitored and assisted by the Publicity Department of the Communist Party of China. It might be stated that the general political forces affecting CMP service are high. The federal government policies relating to the publishing sector are likewise increasing with the passage of time.
Financial forces impacting the publishing sector in basic and the CMP in particular includesthe rates of paper, the income level of customers, the inflation rate, and the total GDP growth of the country. All these forces combine impact the demand for the publishing market.
Social and Demographical.
The consumer preferences are moving towards digital publishing rather than the standard was of publishing. In this regard, CMP ought to focus on digital publishing to meet the changing consumer choices.
Technological forces affecting the CMP include the technological advancement in the reading strategies etc. Improvement of science and innovation together with the rise of digital publishing could decrease the demand for the CMP products, if certain actions would not be taken quickly.
Environmental forces affecting Lone Star Power 2 Case Study Help consists of the concerns of ecological neighborhoods over the use of paper in publishing books. The paper used in the books while publishing is required to be non reusable and the ink utilized while publishing should not be harmful for the environment.
Legal regulations for the publishing sector at whole are high. Publishing Ordinance 1997 needs the publishers to be approved initially by the Federal government to be entered in the publishing market.
Market Analysis (Porter's 5 Forces Design).
Porter's 5 Forces Model might be utilized to evaluate the attractiveness of the publishing industry China. A short analysis of the Porter's 5 Forces is given as follows;.
Hazard of New Entrants.
Threats of brand-new entrants in the Chinese Publishing Market is moderate. The prospective growth in the industry tends to attract brand-new entrants to the publishing market. The existence of extreme competition and the requirement of big capital tends to demotivate new entrants to go into in the market.
Hazard of Alternative.
Hazard of Alternative is high for the Chinese Publishing Industry. The replacement products for the published files is the documents provided in the virtual libraries on particular sites. The altering customer preferences towards digital knowing increase the threat of substitution for the industry.
Competitive rivalry in the publishing market is high. The presence of large number of customers in the Chinese Publishing Market like CIP, PTP and so on tends to produce high competitive rivalry for CMP. Along with it, brand-new entrants are likewise participating in the market increasing the competition for CMP.
Bargaining Power of Provider.
The major suppliers of the Lone Star Power 2 Case Study Analysis consist of the suppliers of the paper for releasing files. As CMP is the largest publisher in the Chinese Publishing Market, for that reason the total bargaining power of supplier for CMP is low.
Bargaining Power of Buyer.
Negotiating 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 prices.
CMP operates in a highly competitive industry with the presence of large number of competitors. The company has a competitive position in the market with the greatest market share in the Chinese publishing market. Major competitors of Lone Star Power 2 Case Study Help include;.
• Chemical Market Press (CIP).
• Posts and telecommunication Press (PTP).
Chemical Market Press (CIP).
CIP acts as a hazard 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 existing market situation.
Posts and telecommunication Press (PTP).
It was also founded in the same duration as Lone Star Power 2 Case Study Analysis and CIP. It is likewise one of the popular players in the publishing industry with a yearly total incomes of RMB 550 million in 2010.
Alternative-1: Expand towards New Markets
• Minimizing reliance over the Chinese markets.
• Increasing number of Clients
• Development opportunities.
• Preventing the impact of market saturation in the Chinese publishing market.
• Usage of potential resources in growth.
• Risk of failure in new markets.
• Time consuming.
Alernative-2: Present Digital Publishing
• Sustaining customer base.
• Approaching brand-new markets.
• Easy to introduce utilizing existing capabilities.
• Low threat of Failure.
• Low requirement for funds.
• Increased product portfolio provides high worth to customers.
• Competition in the market by CIP, who has prior focus on the digital publishing.
• Shift of focus from the core company sections to the new one can lead the company to lose need of its items in the market.
As the choices are moving towards digital publishing and the business need an instant option to avoid the declining industry growth. The business might also consider the expansion program after the success of its digital publishing program.
In order to present digital publishing in its product portfolio, the company ought to initially gathers the information related to the customer need, the potential markets, the government policies and the data related to the rivals provided in the market. If the preliminary offering shows a success, the business must go for the other markets. In this method the business would be able to implement its digital publishing program.
The development of the publishing industry is declining given that 2008, revealing a danger to the company's long term existence, but the circumstance can be controlled by considering an advancement plan in the future. The company could think about introducing digital publishingin its existing market to implement its advancement program at immediate basis and to avoid the risk of failure for entrance in the brand-new markets.