Longtop Financial Technologies A Case Study Solution and Analysis
Longtop Financial Technologies A Case Study Analysis is the largest publishing company with a highest market share in the China's book retail market. CMP has actually ended up being a specialized information supplier and a large extensive Science and Innovation publishing company through the integration of print media, audio-visual media and the network media.
CMP has spent its 60 years journey smoothly, being an effective publishing home, however, the changing macro market trends and forces bring particular difficulties to the publishing market in general and Longtop Financial Technologies A Case Study Solution in particular. These elements include;
• Entryway of the brand-new publishing companies in the market.
• Declining development of the publishing market.
• Market saturation.
• Intro of digital publishing methods
• Improvement of science and innovation.
The improvement of the macro markets have raised numerous questions to the management at CPM that what could be the future of CMP in this scenario? Do the long valuable experience, technical resources and the capabilities of the company could be used to strive for the future advancement unceasingly? How could the company sustain its long term competitive position in future?
Longtop Financial Technologies A Case Study Help has certain strengths that can be utilized to decrease the threats, overcome the weakness and obtain the chances. Strengths of CMP are given as follows;
• The long term experience of Longtop Financial Technologies A Case Study Help in the publishing industry i.e. 60 years permits the business to provide high quality items at a lower expense utilizing its previous experiences.
• The technical resources and abilities produced by its successful journey offer a competitive advantage to CMP.
• Vast product portfolioof CMP helps it to diversify its risk and offer high value to its customers.
• Strong financial position enables the company to consider several advancement opportunities without any worry of raising fund externally.
Together with the strengths, the business has particular weak points which could increase restrictions for the business in executing its advancement program. The weak points of Longtop Financial Technologies A Case Study Analysis are given as follows;
• Despite of being a science and technology publishing firm, the company still has standard methods ofpublishing which are not compatible with the growing technological shift.
• CMP extremely relies over the Chinese markets for its development. It ought to propose specific growth strategies to prevent its dependence over the Chinese markets to attain long term development.
The development of the publishing market is decreasing considering that 2008, impacting Longtop Financial Technologies A Case Study Help as well, however the growth might be revived by availing certain chances provided in the market. The market opportunities for CMP include;
• The company might also present Digital Publishing by utilizing its long term technical experience and a strong customer acknowledgment in the market.
• CMP might think about a development program through the expansion towards foreign markets in order to decrease its reliance over Chinese markets by using its large financial resources.
The altering macro trends in the market and increasing competitors in the publishing market has posed particular risks to Longtop Financial Technologies A Case Study Analysis consisting of;( Gurel, 2017).
• Intro of digital publishing i.e. virtual libraries might result in declining market share of Longtop Financial Technologies A Case Study Help due to the consumer shift towards virtual 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 competitors can acquire a strong consumer base by using certain strategies like aggressive promo, quality items, and so on
• Entrance of new publishing firms in the industry together with existence of high competitors increases the risk of losing the customer base.
Due to lack of information, the financial ratios of CMP might not be computed. It could be analyzed from the Appendix III that the yearly total revenues of Longtop Financial Technologies A Case Study Help during the period 2000-2012 are growing at a high growth rate, showing that the annual need of the items of CMP is growing and the business is quite effective in bring in a large number of customers at a possible rate.
Together with it, the 2nd graph which reveals the annual development in the Longtop Financial Technologies A Case Study Analysis total assets, shows that the business is quite efficient in adding value to its properties through its incomes. The development in possessions reveals that the overall worth of the firm is also increasing with increasing the total revenues. (Unidentified, 2013).
Another monetary analysis of the business utilizing the offered information might be the analysis relating to the circulation of total incomes of the business. Huge part of the incomes 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 service sectors with a potential development to achieve its future advancement objective.
PESTEL analysis might be performed to find out the various external forces impacting the performance of the business and the recent patterns in the external environment of the business. A quick PESTEL analysis of the company is provided as follows; (Alanzi, 2018).
As the publishing sector might have a substantial effect on the frame of mind of individuals about the communist ideology of the federal government, for that reason, the publishing sector is extremely monitored and directed by the Promotion Department of the Communist Celebration of China. For that reason, it could be stated that the total political forces affecting Longtop Financial Technologies A Case Study Analysis business are high. The federal government policies relating to the publishing sector are also increasing with the passage of time.
Financial forces impacting the publishing sector in basic and the Longtop Financial Technologies A Case Study Help in specific includesthe rates of paper, the earnings level of consumers, the inflation rate, and the general GDP development of the country. All these forces combine impact the need for the publishing market. Together with it, the economic policies associated with the import of books affect the overall business at CPM. However, China's financial conditions are quite favorable for CMP with high GDP growth and consumer earnings level.
Social and Demographical.
The customer choices are moving towards digital publishing rather than the conventional was of publishing. In this regard, CMP ought to focus on digital publishing to fulfill the changing customer preferences.
Technological forces impacting the CMP include the technological development in the reading techniques etc. Enhancement of science and innovation together with the rise of digital publishing might reduce the demand for the CMP items, if certain actions would not be taken soon.
Environmental forces impacting Longtop Financial Technologies A Case Study Help consists of the issues 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 hazardous for the environment.
Legal regulations for the publishing sector at whole are high. Publishing Ordinance 1997 needs the publishers to be authorized first by the Government to be gone into in the publishing market.
Industry Analysis (Porter's Five Forces Design).
Porter's 5 Forces Model could be utilized to evaluate the beauty of the publishing industry China. A brief analysis of the Porter's 5 Forces is given as follows;.
Danger of New Entrants.
Risks of brand-new entrants in the Chinese Publishing Industry is moderate. The prospective development in the industry tends to attract brand-new entrants to the publishing market. However, the presence of intense competition and the requirement of big capital tends to demotivate new entrants to go into in the market.
Risk of Substitution.
Hazard of Alternative is high for the Chinese Publishing Industry. The replacement products for the released documents is the documents provided in the virtual libraries on specific websites. The altering consumer preferences towards digital knowing increase the risk of substitution for the market.
Competitive competition in the publishing market is high. The presence of a great deal 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 likewise entering into the market increasing the competition for CMP.
Bargaining Power of Supplier.
The major suppliers of the Longtop Financial Technologies A Case Study Analysis include the suppliers of the paper for publishing documents. As CMP is the biggest publisher in the Chinese Publishing Market, therefore the total bargaining power of provider for CMP is low.
Bargaining Power of Buyer.
Bargaining power of buyer in the publishing industry is high. Due to the existence of a a great deal of publishers in the Chinese market and the market saturation, the purchasers needs high quality files at competitive costs.
CMP operates in an extremely competitive industry with the presence of a great deal of competitors. Nevertheless, the business has a competitive position in the market with the greatest market share in the Chinese publishing market. Significant rivals of Longtop Financial Technologies A Case Study Analysis consist of;.
• Chemical Industry Press (CIP).
• Posts and telecommunication Press (PTP).
Chemical Industry 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 easily in the current market situation.
Posts and telecommunication Press (PTP).
It was likewise established in the exact same period as Longtop Financial Technologies A Case Study Help and CIP. It is likewise one of the prominent players in the publishing market with a yearly overall revenues of RMB 550 million in 2010.
Alternative-1: Broaden towards New Markets
• Lowering reliance over the Chinese markets.
• Increasing number of Consumers
• Development chances.
• Preventing the impact of market saturation in the Chinese publishing market.
• Usage of potential resources in growth.
• Threat of failure in brand-new markets.
• Time consuming.
Alernative-2: Present Digital Publishing
• Sustaining customer base.
• Approaching new markets.
• Easy to introduce utilizing existing abilities.
• Low danger of Failure.
• Low requirement for funds.
• Increased product portfolio offers high value to consumers.
• Competition in the market by CIP, who has prior concentrate on the digital publishing.
• Shift of focus from the core company segments to the brand-new one can lead the business to lose need of its products in the market.
As the preferences are shifting towards digital publishing and the company need an immediate service to avoid the decreasing market growth. The company could likewise think about the growth program after the success of its digital publishing program.
In order to present digital publishing in its product portfolio, the company must initially gathers the data related to the consumer demand, the possible markets, the federal government guidelines and the data related to the competitors provided in the market. If the preliminary offering shows a success, the company must go for the other markets. In this way the company would be able to execute its digital publishing program.
The development of the publishing industry is decreasing given that 2008, showing a threat to the business's long term existence, however the circumstance can be controlled by considering an advancement strategy in the future. The business might think about introducing digital publishingin its existing market to execute its development program at instant basis and to prevent the threat of failure for entryway in the brand-new markets.