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Magna International Inc A Case Analysis

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Magna International Inc A Case Study Solution and Analysis


Intro

Magna International Inc A Case Study Analysis is the biggest publishing company with a highest market share in the China's book retail market. CMP has become a specialized details service provider and a large detailed Science and Innovation publishing company through the combination of print media, audio-visual media and the network media.

Important Concerns

CMP has actually invested its 60 years journey efficiently, being a successful publishing home, nevertheless, the altering macro market patterns and forces bring specific difficulties to the publishing industry in basic and Magna International Inc A Case Study Analysis in particular. These elements include;

• Entrance of the brand-new publishing firms in the industry.
• Decreasing development of the publishing market.
• Market saturation.
• Introduction of digital publishing strategies
• Enhancement of science and technology.
Executive Summary
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 important experience, technical resources and the capabilities of the company could be used to strive for the future advancement unceasingly? How could the business sustain its long term competitive position in future?

Situational Analysis
Internal Analysis
SWOT Analysis
Strengths


Magna International Inc A Case Study Solution has specific strengths that can be used to reduce the dangers, get rid of the weakness and obtain the chances. Strengths of CMP are provided as follows;

• The long term experience of Magna International Inc A Case Study Analysis in the publishing industry i.e. 60 years enables the business to offer high quality items at a lower expense using its previous experiences.
• The technical resources and abilities generated by its successful journey offer a competitive benefit to CMP.
• Large product portfolioof CMP helps it to diversify its risk and provide high worth to its consumers.
• Strong monetary position allows the company to think about a number of development chances with no fear of raising fund externally.

Weak points

Along with the strengths, the business has specific weak points which could increase restrictions for the business in implementing its advancement program. The weak points of Magna International Inc A Case Study Analysis are given as follows;

• Despite of being a science and innovation publishing company, 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 should propose specific expansion plans to avoid its reliance over the Chinese markets to achieve long term growth.
Porter's 5 Forces Analysis
Opportunities

The growth of the publishing market is declining since 2008, impacting Magna International Inc A Case Study Analysis as well, however the growth could be restored by availing particular chances provided in the market. The marketplace chances for CMP include;

• The company could also present Digital Publishing by utilizing its long term technical experience and a strong consumer recognition in the market.
• CMP might consider a development program through the growth towards foreign markets in order to decrease its dependence over Chinese markets by using its huge financial resources.

Hazards

The changing macro patterns in the market and increasing competition in the publishing market has actually posed specific hazards to Magna International Inc A Case Study Help consisting of;( Gurel, 2017).

• Introduction of digital publishing i.e. digital libraries might cause declining market share of Magna International Inc A Case Study Analysis due to the customer shift towards virtual libraries.
• The presence of large number of competitors in the publishing market increase the threat for CMP to lose its competitive position in the market, as rivals can acquire a strong customer base by utilizing specific strategies like aggressive promo, quality items, and so on
• Entrance of new publishing companies in the industry in addition to existence of high competitors increases the danger of losing the consumer base.

Financial Analysis.
Swot Analysis
The business has a rather competitive monetary performance. Due to lack of data, the monetary ratios of CMP might not be determined. However, the overall financial performance of the business could be examined by using the graphs given up the case Appendices. It could be analyzed from the Appendix III that the annual total earnings of CMP throughout the period 2000-2012 are growing at a high development rate, revealing that the annual need of the items of Magna International Inc A Case Study Help is growing and the company is rather efficient in bring in a a great deal of customers at a possible rate.

Along with it, the 2nd graph which reveals the annual development in the Magna International Inc A Case Study Help total properties, shows that the company is rather effective in including worth to its properties through its revenues. The development in assets shows that the total worth of the firm is also increasing with increasing the total incomes. (Unidentified, 2013).

Another financial analysis of the business using the given data might be the analysis regarding the circulation of total profits of the business. Major part of the incomes of CMP originates from the sales of its released books i.e. 64% as displayed in the Case Appendix V. The company could move towards other business sections with a potential development to achieve its future development goal.

PESTEL Analysis

PESTEL analysis could be carried out to discover the various external forces affecting the performance of the company and the recent trends in the external environment of the company. A brief PESTEL analysis of the company is offered as follows; (Alanzi, 2018).

Political.

As the publishing sector could have a significant impact on the state of mind of individuals about the communist ideology of the federal government, therefore, the publishing sector is extremely monitored and assisted by the Promotion Department of the Communist Celebration of China. It could be stated that the total political forces affecting CMP service are high. The federal government policies regarding the publishing sector are likewise increasing with the passage of time.

Cost-effective.

Financial forces impacting the publishing sector in general and the CMP in specific includesthe prices of paper, the earnings level of consumers, the inflation rate, and the overall GDP growth of the country. All these forces combine effect the demand for the publishing market.

Social and Demographical.

The customer preferences are shifting towards digital publishing rather than the standard was of publishing. In this regard, CMP should focus on digital publishing to fulfill the changing consumer choices.

Technological.

Technological forces impacting the CMP include the technological advancement in the reading methods and so on. Enhancement of science and innovation in addition to the increase of digital publishing might minimize the need for the CMP items, if certain actions would not be taken quickly.

Environmental.
Vrio Analysis
Ecological forces impacting Magna International Inc A Case Study Help consists of the issues of ecological communities over the use of paper in publishing books. The paper used in the books while publishing is needed to be non reusable and the ink used while publishing needs to not be damaging for the environment.

Legal.

Legal regulations for the publishing sector at whole are high. Publishing Ordinance 1997 needs the publishers to be approved initially by the Government to be entered in the publishing market.

Market Analysis (Porter's 5 Forces Model).

Porter's Five Forces Model could be used to examine the attractiveness of the publishing industry China. A quick analysis of the Porter's 5 Forces is offered as follows;.

Threat of New Entrants.

Hazards of new entrants in the Chinese Publishing Market is moderate. The possible development in the industry tends to draw in brand-new entrants to the publishing industry. The presence of extreme competitors and the requirement of huge capital tends to demotivate new entrants to enter in the market.

Danger of Alternative.

Risk of Alternative is high for the Chinese Publishing Market. The replacement products for the released documents is the documents provided in the digital libraries on specific websites. The changing consumer choices towards digital knowing increase the risk of replacement for the industry.

Competitive Rivalry.

Competitive competition in the publishing industry is high. The presence of a great deal of customers in the Chinese Publishing Market like CIP, PTP etc. tends to produce high competitive competition for CMP. Together with it, new entrants are likewise participating in the marketplace increasing the competitors for CMP.

Bargaining Power of Supplier.

The significant suppliers of the Magna International Inc A Case Study Help consist of the suppliers of the paper for publishing files. As CMP is the largest publisher in the Chinese Publishing Market, for that reason the general bargaining power of supplier for CMP is low.

Bargaining Power of Purchaser.

Negotiating power of buyer in the publishing market 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 documents at competitive prices.

Competitors Analysis.

CMP operates in an extremely competitive market with the presence of a great deal of competitors. Nevertheless, the company has a competitive position in the market with the greatest market share in the Chinese publishing market. Major competitors of Magna International Inc A Case Study Solution consist of;.

• Chemical Industry Press (CIP).
• Posts and telecommunication Press (PTP).

Chemical Market Press (CIP).

CIPis among the close rivals of CMP. Established in the same period, CIP releases similar kind of books. For a big period, CIP held the largest market share, and still ranks third and 2nd in numerous market segments, with a significant focus on educational publications. CIP serves as a hazard for CMP as it could wean its market share due to its long term competitive background. CIP is focused on digital publishing and could wean the marketplace share of Magna International Inc A Case Study Help easily in the current market situation.

Posts and telecommunication Press (PTP).

Another close competitor of CMP is PTP. It was also established in the very same period as CMP and CIP. It ranks sixth in the state-owned publishers in terms of service scale. It is also among the popular gamers in the publishing industry with a yearly overall earnings of RMB 550 million in 2010.

Alternatives

Alternative-1: Expand towards New Markets

Pros

• Reducing dependence over the Chinese markets.
• Increasing number of Clients
• Growth opportunities.
• Preventing the effect of market saturation in the Chinese publishing market.

Cons
Recommendations
• Use of potential resources in expansion.
• Threat of failure in brand-new markets.
• Time consuming.

Alernative-2: Introduce Digital Publishing

Pros

• Sustaining customer base.
• Approaching brand-new markets.
• Easy to present using present capabilities.
• Low danger of Failure.
• Low requirement for funds.
• Increased product portfolio provides high worth to customers.

Cons

• Competitors in the market by CIP, who has prior concentrate on the digital publishing.
• Shift of focus from the core company sectors to the brand-new one can lead the company to lose need of its items in the market.

Recommendations

With the deep analysis of the internal and external environment of the business along with the industry analysis and the competitor analysis, Alternative 2 is recommended to CMP to attain its future development. As the choices are moving towards digital publishing and the business require an immediate service to prevent the decreasing industry growth. Intro of digital publishing might prove to be an immediate solution with low quantity of danger for the business. The business could likewise consider the growth program after the success of its digital publishing program.

Execution

In order to introduce digital publishing in its item portfolio, the business must first collects the data connected to the consumer need, the prospective markets, the government policies and the data related to the competitors presented in the market. After that, the business needs to choose one potential segment for its preliminary offering. It ought to collect research study that how it might separate its digital publishing from the existing competitors' products. The actions above the business must go for the preliminary offering. The company should go for the other markets if the preliminary offering proves a success. In this way the company would be able to execute its digital publishing program.

Conclusion

Although, the development of the publishing market is declining considering that 2008, showing a threat to the company's long term existence, however the circumstance can be managed by thinking about an advancement strategy in the future. The company might think about introducing digital publishingin its existing market to execute its advancement program at instant basis and to prevent the danger of failure for entrance in the brand-new markets.

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