Managerial Economics Case Study Solution and Analysis
Introduction
Managerial Economics Case Study Solution is the biggest publishing company with a highest market share in the China's book retail market. CMP offers a variety of services including; gathering info, processing details and interaction services. Major service sectors of the company consist of; books, periodicals, consultancy and distribution. The company has a vast item portfolio and its significant products consist of books, periodicals, online media, exhibits, research reports etc. Managerial Economics Case Study Help has actually become a specialized info company and a large thorough Science and Technology publishing business through the integration of print media, audio-visual media and the network media.
Important Concerns
Although, Managerial Economics Case Study Analysis has invested its 60 years journey smoothly, being an effective publishing house, nevertheless, the altering macro market patterns and forces bring specific obstacles to the publishing market in basic and CMP 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 techniques
• Enhancement of science and technology.
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 abilities of the company could be utilized to pursue the future development unceasingly? How could the business sustain its long term competitive position in future?
Situational Analysis
Internal Analysis
SWOT Analysis
Strengths
Managerial Economics Case Study Analysis has particular strengths that can be used to reduce the risks, get rid of the weak point and obtain the chances. Strengths of CMP are given as follows;
• The long term experience of Managerial Economics Case Study Analysis in the publishing market i.e. 60 years enables the company to offer high quality products at a lower expense using its prior experiences.
• The technical resources and abilities created by its successful journey supply a competitive benefit to CMP.
• Large item portfolioof CMP assists it to diversify its danger and supply high worth to its customers.
• Strong financial position enables the company to consider a number of development opportunities without any fear of raising fund externally.
Weaknesses
Along with the strengths, the business has specific weak points which might increase constraints for the company in executing its development program. The weak points of Managerial Economics Case Study Help are offered as follows;
• Despite of being a science and innovation publishing firm, the company 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 ought to propose certain expansion strategies to avoid its dependence over the Chinese markets to achieve long term development.
Opportunities
Although, the development of the publishing market is declining because 2008, impacting Managerial Economics Case Study Solution too, however the development could be revived by availing particular chances presented in the market. The marketplace chances for CMP consist of;
• The company could also introduce Digital Publishing by using its long term technical experience and a strong client recognition in the market.
• CMP might think about a development program through the expansion towards foreign markets in order to lower its reliance over Chinese markets by using its huge financial resources.
Threats
The changing macro patterns in the market and increasing competitors in the publishing industry has presented particular risks to Managerial Economics Case Study Help consisting of;( Gurel, 2017).
• Intro of digital publishing i.e. digital libraries could cause declining market share of Managerial Economics Case Study Solution due to the consumer shift towards virtual libraries.
• The presence 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 gain a strong customer base by utilizing certain methods like aggressive promotion, quality items, and so on
• Entryway of new publishing companies in the industry together with existence of high competitors increases the hazard of losing the client base.
Monetary Analysis.
Due to absence of data, the monetary ratios of CMP might not be calculated. It could be evaluated from the Appendix III that the yearly overall earnings of Managerial Economics Case Study Help during the period 2000-2012 are growing at a high growth rate, revealing that the annual demand of the items of CMP is growing and the business is quite efficient in bring in a big number of customers at a prospective cost.
Along with it, the 2nd graph which shows the yearly development in the Managerial Economics Case Study Solution total assets, reveals that the company is rather efficient in including worth to its assets through its incomes. The growth in possessions reveals that the total worth of the firm is likewise increasing with increasing the total revenues. (Unidentified, 2013).
Another monetary analysis of the business using the offered data might be the analysis concerning the circulation of overall revenues of the business. Major part of the revenues 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 service segments with a potential growth to attain its future development objective.
PESTEL Analysis
PESTEL analysis could be performed to discover the numerous external forces affecting the efficiency of the business and the current patterns in the external environment of the business. A short PESTEL analysis of the business is offered as follows; (Alanzi, 2018).
Political.
As the publishing sector might have a considerable influence on the mindset of the people about the communist ideology of the government, for that reason, the publishing sector is highly supervised and guided by the Promotion Department of the Communist Celebration of China. It might be stated that the total political forces impacting CMP business are high. The federal government policies concerning the publishing sector are likewise increasing with the passage of time.
Cost-effective.
Economic forces impacting the publishing sector in basic and the CMP in specific includesthe prices of paper, the income level of customers, the inflation rate, and the general GDP development of the country. All these forces combine impact the need 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 ought to focus on digital publishing to meet the changing consumer preferences.
Technological.
Technological forces affecting the CMP consist of the technological development in the reading methods etc. Enhancement of science and technology along with the rise of digital publishing could decrease the need for the CMP products, if particular actions would not be taken soon.
Environmental.
Ecological forces affecting Managerial Economics Case Study Analysis consists of the issues of environmental neighborhoods 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 utilized while publishing needs to not be damaging for the environment.
Legal.
Legal regulations for the publishing sector at whole are high. Publishing Regulation 1997 requires the publishers to be authorized initially by the Government to be entered in the publishing market.
Market Analysis (Porter's Five Forces Model).
Porter's 5 Forces Design might be used to evaluate the beauty of the publishing market China. A short analysis of the Porter's Five Forces is offered as follows;.
Risk of New Entrants.
Hazards of new entrants in the Chinese Publishing Market is moderate. The possible growth in the industry tends to bring in brand-new entrants to the publishing market. However, the existence of intense competitors and the requirement of big capital tends to demotivate new entrants to enter in the market.
Hazard of Alternative.
Threat of Substitution is high for the Chinese Publishing Market. The substitute items for the released files is the files provided in the digital libraries on certain sites. The changing customer preferences towards digital learning increase the risk of alternative for the market.
Competitive Competition.
Competitive rivalry in the publishing market is high. The presence of a great deal of customers in the Chinese Publishing Industry like CIP, PTP etc. tends to produce high competitive competition for CMP. Together with it, new entrants are also participating in the marketplace increasing the competition for CMP.
Bargaining Power of Provider.
The significant suppliers of the Managerial Economics Case Study Solution include the providers 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 marketplace saturation, the buyers requires high quality files at competitive prices.
Rivals Analysis.
CMP runs in an extremely competitive industry with the existence of a great deal of rivals. Nevertheless, the business has a competitive position in the market with the greatest market share in the Chinese publishing market. Significant rivals of Managerial Economics Case Study Analysis consist of;.
• Chemical Market Press (CIP).
• Posts and telecommunication Press (PTP).
Chemical Market Press (CIP).
CIP acts as a threat for CMP as it could 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 quickly in the existing market circumstance.
Posts and telecommunication Press (PTP).
Another close competitor 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 regards to business scale. It is likewise among the popular players in the publishing industry with an annual total incomes of RMB 550 million in 2010.
Alternatives
Alternative-1: Expand towards New Markets
Pros
• Minimizing reliance over the Chinese markets.
• Increasing number of Clients
• Growth opportunities.
• Preventing the effect of market saturation in the Chinese publishing industry.
Cons
• Usage of possible resources in expansion.
• Risk of failure in new markets.
• Time consuming.
Alernative-2: Introduce Digital Publishing
Pros
• Sustaining consumer base.
• Approaching new markets.
• Easy to present using current abilities.
• Low danger of Failure.
• Low requirement for funds.
• Increased product portfolio provides high value to consumers.
Cons
• Competition in the market by CIP, who has prior concentrate on the digital publishing.
• Shift of focus from the core service segments to the brand-new one can lead the business to lose need of its products in the market.
Recommendations
As the preferences are moving towards digital publishing and the company require an immediate solution to prevent the declining industry growth. The business might also think about the growth program after the success of its digital publishing program.
Execution
In order to present digital publishing in its item portfolio, the company ought to first collects the data related to the consumer need, the prospective markets, the federal government guidelines and the data related to the competitors provided in the market. If the initial offering proves a success, the business ought to go for the other markets. In this way the company would be able to execute its digital publishing program.
Conclusion
The development of the publishing industry is declining considering that 2008, showing a risk to the business's long term presence, however the scenario can be managed by thinking about a development plan in the future. The company might consider introducing digital publishingin its existing market to implement its development program at immediate basis and to avoid the threat of failure for entrance in the brand-new markets.
