Magna International Inc A Case Study Solution and Analysis
Introduction
Magna International Inc A Case Study Analysis is the largest publishing business with a highest market share in the China's book retail market. CMP offers a number of services consisting of; gathering info, processing information and communication services. Significant company segments of the business include; books, periodicals, consultancy and distribution. The business has a vast item portfolio and its major products include books, periodicals, online media, exhibits, research reports etc. Magna International Inc A Case Study Solution has become a specialized details service provider and a big detailed Science and Innovation publishing business through the combination of print media, audio-visual media and the network media.
Vital Issues
CMP has spent its 60 years journey efficiently, being a successful publishing house, however, the changing macro market trends and forces bring certain challenges to the publishing industry in general and Magna International Inc A Case Study Help in particular. These factors include;
• Entrance of the brand-new publishing companies in the industry.
• Decreasing growth of the publishing market.
• Market saturation.
• Introduction of digital publishing strategies
• 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 scenario? Do the long important experience, technical resources and the capabilities of the company could be made use of to pursue the future development unceasingly? How could the company sustain its long term competitive position in future?
Situational Analysis
Internal Analysis
SWOT Analysis
Strengths
Magna International Inc A Case Study Help has specific strengths that can be used to lower the threats, conquer the weakness and obtain the chances. Strengths of CMP are provided as follows;
• The long term experience of Magna International Inc A Case Study Solution in the publishing market i.e. 60 years enables the business to provide high quality items at a lower expense utilizing its previous experiences.
• The technical resources and capabilities generated by its effective journey supply a competitive advantage to CMP.
• Huge item portfolioof CMP helps it to diversify its threat and provide high value to its consumers.
• Strong financial position allows the company to consider a number of advancement chances without any fear of raising fund externally.
Weaknesses
Together with the strengths, the company has certain weaknesses which might increase restrictions for the company in executing its development program. The weak points of Magna International Inc A Case Study Solution are provided as follows;
• Despite of being a science and innovation publishing firm, the business still has conventional methods ofpublishing which are not suitable with the growing technological shift.
• CMP highly relies over the Chinese markets for its development. It needs to propose particular expansion strategies to avoid its reliance over the Chinese markets to achieve long term growth.
Opportunities
Although, the development of the publishing market is declining because 2008, affecting Magna International Inc A Case Study Solution too, however the development might be restored by availing certain chances provided in the market. The market chances for CMP consist of;
• The company could likewise present Digital Publishing by using its long term technical experience and a strong client recognition in the market.
• CMP could think about a development program through the growth towards foreign markets in order to lower its dependence over Chinese markets by utilizing its vast funds.
Risks
The altering macro patterns in the market and increasing competitors in the publishing industry has posed specific risks to Magna International Inc A Case Study Help consisting of;( Gurel, 2017).
• Intro of digital publishing i.e. virtual libraries might cause declining market share of Magna International Inc A Case Study Analysis due to the consumer shift towards virtual libraries.
• The existence of a great deal of rivals in the publishing industry increase the hazard for CMP to lose its competitive position in the market, as rivals can acquire a strong customer base by using specific strategies like aggressive promo, quality items, etc.
• Entryway of new publishing companies in the market along with existence of high competition increases the threat of losing the customer base.
Monetary Analysis.
Due to absence of information, the monetary ratios of CMP might not be determined. It could be analyzed from the Appendix III that the annual total earnings of Magna International Inc A Case Study Help throughout the period 2000-2012 are growing at a high development rate, revealing that the annual demand of the items of CMP is growing and the company is quite efficient in drawing in a large number of consumers at a potential price.
Along with it, the 2nd graph which shows the yearly growth in the Magna International Inc A Case Study Solution overall possessions, shows that the business is rather efficient in including value to its possessions through its incomes. The development in properties shows that the overall worth of the firm is also increasing with increasing the overall profits. (Unidentified, 2013).
Another monetary analysis of the business utilizing the given data could be the analysis concerning the distribution of overall revenues of the business. Huge part of the profits of CMP originates from the sales of its published books i.e. 64% as shown in the Case Appendix V. The company might move towards other company sections with a prospective development to accomplish its future advancement goal.
PESTEL Analysis
PESTEL analysis might be conducted to find out the various external forces impacting the efficiency of the company and the current trends in the external environment of the company. A short PESTEL analysis of the business is given as follows; (Alanzi, 2018).
Political.
As the publishing sector might have a considerable influence on the frame of mind of the people about the communist ideology of the government, for that reason, the publishing sector is extremely monitored and assisted by the Promotion Department of the Communist Party of China. It could be said that the general political forces affecting CMP organisation are high. The government policies concerning the publishing sector are also increasing with the passage of time.
Economical.
Financial forces impacting the publishing sector in basic and the Magna International Inc A Case Study Help in particular includesthe prices of paper, the earnings level of consumers, the inflation rate, and the total GDP growth of the country. All these forces combine impact the demand for the publishing market. Together with it, the financial policies connected to the import of books impact the overall organisation at CPM. China's economic conditions are rather favorable for CMP with high GDP development and customer earnings level.
Social and Demographical.
The consumer 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.
Technological forces impacting the CMP consist of the technological improvement in the reading methods and so on. Improvement of science and technology together with the rise of digital publishing might decrease the demand for the CMP products, if certain actions would not be taken quickly.
Environmental.
Ecological forces impacting Magna International Inc A Case Study Analysis includes the issues of environmental neighborhoods over the usage 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 must not be hazardous for the environment.
Legal.
Legal policies for the publishing sector at whole are high. Publishing Regulation 1997 needs the publishers to be authorized first by the Federal government to be entered in the publishing market.
Market Analysis (Porter's Five Forces Design).
Porter's Five Forces Model might be utilized to examine the appearance of the publishing market China. A short analysis of the Porter's Five Forces is provided as follows;.
Risk of New Entrants.
Threats of brand-new entrants in the Chinese Publishing Market is moderate. The potential development in the industry tends to draw in new entrants to the publishing industry. The presence of intense competition and the requirement of big capital tends to demotivate new entrants to enter in the market.
Hazard of Replacement.
Risk of Alternative is high for the Chinese Publishing Industry. The alternative items for the released documents is the files presented in the digital libraries on particular websites. The changing consumer preferences towards digital learning increase the risk of alternative for the market.
Competitive Rivalry.
Competitive rivalry 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, brand-new entrants are likewise participating in the marketplace increasing the competitors for CMP.
Bargaining Power of Provider.
The major providers of the Magna International Inc A Case Study Analysis include the suppliers of the paper for publishing files. As CMP is the largest publisher in the Chinese Publishing Market, therefore the general bargaining power of supplier for CMP is low.
Bargaining Power of Purchaser.
Bargaining power of purchaser in the publishing industry 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 files at competitive prices.
Rivals Analysis.
CMP operates in an extremely competitive market with the existence of a great deal of rivals. Nevertheless, the company has a competitive position in the market with the greatest market share in the Chinese publishing market. Significant rivals of Magna International Inc A Case Study Help 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 present market scenario.
Posts and telecommunication Press (PTP).
Another close rival of CMP is PTP. It was also founded in the exact same period as CMP and CIP. It ranks sixth in the state-owned publishers in regards to company scale. It is also one of the prominent gamers in the publishing market with an annual total revenues of RMB 550 million in 2010.
Alternatives
Alternative-1: Expand towards New Markets
Pros
• Lowering dependence over the Chinese markets.
• Increasing number of Consumers
• Development opportunities.
• Preventing the effect of market saturation in the Chinese publishing market.
Cons
• Use of possible resources in expansion.
• Danger of failure in new markets.
• Time consuming.
Alernative-2: Introduce Digital Publishing
Pros
• Sustaining customer base.
• Approaching brand-new markets.
• Easy to introduce utilizing present capabilities.
• Low danger of Failure.
• Low requirement for funds.
• Increased item portfolio offers high value to customers.
Cons
• Competitors in the market by CIP, who has prior concentrate on the digital publishing.
• Shift of focus from the core company sections to the new one can lead the company to lose demand of its products in the market.
Recommendations
As the preferences are moving towards digital publishing and the business require an immediate service to avoid the decreasing industry development. The business might likewise consider the expansion program after the success of its digital publishing program.
Implementation
In order to present digital publishing in its product portfolio, the business needs to first collects the data related to the customer demand, the possible markets, the government regulations and the information related to the rivals presented in the market. If the preliminary offering proves a success, the business needs to go for the other markets. In this way the company would be able to execute its digital publishing program.
Conclusion
Although, the development of the publishing market is declining since 2008, revealing a risk to the company's long term presence, but the scenario can be managed by considering an advancement plan in the future. The business might consider introducing digital publishingin its existing market to execute its development program at instant basis and to prevent the threat of failure for entrance in the brand-new markets.
