Northcutt Bikes The Service Department 2 Case Study Solution and Analysis
Introduction
Northcutt Bikes The Service Department 2 Case Study Analysis is the largest publishing company with a highest market share in the China's book retail market. CMP has actually become a specialized info supplier and a big extensive Science and Technology publishing company through the integration of print media, audio-visual media and the network media.
Critical Issues
Although, Northcutt Bikes The Service Department 2 Case Study Analysis has spent its 60 years journey efficiently, being an effective publishing house, however, the changing macro market patterns and forces bring particular challenges to the publishing industry in basic and CMP in specific. These elements consist of;
• Entryway of the new publishing firms in the industry.
• Decreasing development of the publishing market.
• Market saturation.
• Intro of digital publishing techniques
• Improvement of science and technology.
The improvement 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 situation? Do the long important experience, technical resources and the capabilities of the business 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
Northcutt Bikes The Service Department 2 Case Study Help has certain strengths that can be made use of to minimize the risks, conquer the weakness and get the opportunities. Strengths of CMP are provided as follows;
• The long term experience of Northcutt Bikes The Service Department 2 Case Study Help in the publishing market i.e. 60 years enables the business to supply high quality items at a lower expense utilizing its prior experiences.
• The technical resources and abilities generated by its successful journey offer a competitive benefit to CMP.
• Huge item portfolioof CMP assists it to diversify its risk and offer high worth to its clients.
• Strong financial position allows the business to consider a number of development chances with no worry of raising fund externally.
Weaknesses
Along with the strengths, the business has particular weak points which could increase restraints for the business in executing its development program. The weak points of Northcutt Bikes The Service Department 2 Case Study Solution are provided as follows;
• Despite of being a science and innovation publishing firm, the company still has traditional ways ofpublishing which are not compatible with the growing technological shift.
• CMP highly relies over the Chinese markets for its growth. It should propose specific expansion strategies to prevent its dependence over the Chinese markets to accomplish long term growth.
Opportunities
The growth of the publishing industry is declining since 2008, affecting Northcutt Bikes The Service Department 2 Case Study Help as well, however the development could be restored by availing particular opportunities provided in the market. The market chances for CMP consist of;
• The business might likewise present Digital Publishing by using its long term technical experience and a strong customer recognition in the market.
• CMP could consider an advancement program through the expansion towards foreign markets in order to decrease its reliance over Chinese markets by using its vast funds.
Dangers
The altering macro trends in the market and increasing competitors in the publishing industry has actually posed particular risks to Northcutt Bikes The Service Department 2 Case Study Help consisting of;( Gurel, 2017).
• Introduction of digital publishing i.e. virtual libraries might lead to decreasing market share of Northcutt Bikes The Service Department 2 Case Study Analysis due to the consumer shift towards virtual libraries.
• The existence of large number of rivals in the publishing market increase the danger for CMP to lose its competitive position in the market, as competitors can get a strong consumer base by using specific strategies like aggressive promotion, quality products, etc.
• Entrance of brand-new publishing companies in the market together with presence of high competition increases the threat of losing the client base.
Monetary Analysis.
The company has a rather competitive financial performance. Due to absence of information, the financial ratios of CMP could not be determined. However, the overall monetary efficiency of the company could be examined by using the graphs given in the case Appendices. It could be analyzed from the Appendix III that the annual total profits of CMP throughout the period 2000-2012 are growing at a high development rate, revealing that the yearly demand of the items of Northcutt Bikes The Service Department 2 Case Study Analysis is growing and the company is quite efficient in drawing in a large number of clients at a prospective cost.
Together with it, the 2nd chart which reveals the annual growth in the Northcutt Bikes The Service Department 2 Case Study Solution overall possessions, shows that the company is rather efficient in adding worth to its assets through its earnings. The growth in assets reveals that the total value of the firm is likewise increasing with increasing the total profits. (Unidentified, 2013).
Another monetary analysis of the company using the given data could be the analysis relating to the distribution of total revenues of the company. Huge part of the profits of CMP comes from the sales of its published books i.e. 64% as shown in the Case Appendix V. The company might move towards other organisation sections with a potential development to accomplish its future advancement objective.
PESTEL Analysis
PESTEL analysis could be conducted to learn the numerous external forces affecting the efficiency of the business and the current patterns in the external environment of the company. A brief PESTEL analysis of the business is offered as follows; (Alanzi, 2018).
Political.
As the publishing sector might have a considerable effect on the frame of mind of individuals about the communist ideology of the federal government, therefore, the publishing sector is highly supervised and directed by the Publicity Department of the Communist Celebration of China. Therefore, it might be said that the total political forces affecting Northcutt Bikes The Service Department 2 Case Study Analysis service 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 general and the CMP in particular includesthe costs of paper, the earnings level of customers, the inflation rate, and the overall GDP development of the country. All these forces combine effect the need for the publishing market.
Social and Demographical.
Social and demographical forces consist of the population growth, the customer's choices towards reading informative materials etc. China has the greatest population on the planet with a high population development, revealing the increasing variety of customers of the Northcutt Bikes The Service Department 2 Case Study Help. However, the customer preferences are shifting towards digital publishing rather than the conventional was of publishing. In this regard, CMP needs to concentrate on digital publishing to meet the altering customer preferences.
Technological.
Technological forces affecting the CMP consist of the technological advancement in the reading techniques and so on. Enhancement of science and innovation in addition to the increase of digital publishing might reduce the demand for the CMP products, if specific actions would not be taken quickly.
Environmental.
Environmental forces impacting Northcutt Bikes The Service Department 2 Case Study Help consists of the concerns of environmental communities 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 harmful for the environment.
Legal.
Legal regulations for the publishing sector at whole are high. Publishing Ordinance 1997 requires the publishers to be approved initially by the Government to be entered in the publishing market.
Market Analysis (Porter's Five Forces Design).
Porter's 5 Forces Model could be used to examine the beauty of the publishing market China. A brief analysis of the Porter's 5 Forces is provided as follows;.
Risk of New Entrants.
Dangers 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 market. The existence of extreme competitors and the requirement of big capital tends to demotivate new entrants to go into in the market.
Hazard of Substitution.
Hazard of Alternative is high for the Chinese Publishing Industry. The alternative items for the published files is the files presented in the virtual libraries on particular websites. The altering consumer preferences towards digital knowing increase the risk of substitution for the industry.
Competitive Rivalry.
Competitive rivalry in the publishing market is high. The presence of a great deal of consumers in the Chinese Publishing Market like CIP, PTP etc. tends to produce high competitive competition for CMP. In addition to it, new entrants are likewise entering into the market increasing the competitors for CMP.
Bargaining Power of Supplier.
The major providers of the Northcutt Bikes The Service Department 2 Case Study Analysis consist of the providers of the paper for publishing documents. 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 buyers requires high quality documents at competitive prices.
Rivals Analysis.
CMP operates in a highly competitive industry with the existence of a great deal of rivals. The business has a competitive position in the market with the highest market share in the Chinese publishing market. Major competitors of Northcutt Bikes The Service Department 2 Case Study Analysis include;.
• Chemical Market 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 existing market circumstance.
Posts and telecommunication Press (PTP).
Another close rival of CMP is PTP. It was also founded in the same period as CMP and CIP. It ranks 6th in the state-owned publishers in terms of service scale. It is also among the popular gamers in the publishing market with a yearly total incomes of RMB 550 million in 2010.
Alternatives
Alternative-1: Broaden towards New Markets
Pros
• Minimizing dependence over the Chinese markets.
• Increasing number of Customers
• Development chances.
• Avoiding the impact of market saturation in the Chinese publishing industry.
Cons
• Use of potential resources in expansion.
• Risk of failure in brand-new markets.
• Time consuming.
Alernative-2: Introduce Digital Publishing
Pros
• Sustaining consumer base.
• Approaching new markets.
• Easy to present utilizing existing abilities.
• Low risk of Failure.
• Low requirement for funds.
• Increased product portfolio supplies high worth to consumers.
Cons
• Competition in the market by CIP, who has prior focus on the digital publishing.
• Shift of focus from the core organisation sections to the new one can lead the business to lose demand of its items in the market.
Recommendations
With the deep analysis of the internal and external environment of the company in addition to the market analysis and the competitor analysis, Alternative 2 is advised to CMP to attain its future advancement. As the choices are moving towards digital publishing and the business require an instant option to prevent the declining market growth. Introduction of digital publishing could show to be an immediate option with low amount of danger for the business. However, the business might likewise consider the growth program after the success of its digital publishing program.
Application
In order to introduce digital publishing in its product portfolio, the business ought to initially gathers the data related to the consumer need, the potential markets, the federal government policies and the data related to the rivals provided in the market. If the initial offering shows a success, the business ought to go for the other markets. In this method the business would be able to execute its digital publishing program.
Conclusion
Although, the growth of the publishing market is declining considering that 2008, showing a threat to the business's long term existence, but the scenario can be controlled by considering an advancement plan in the future. The business might think about introducing digital publishingin its existing market to implement its development program at immediate basis and to avoid the danger of failure for entryway in the new markets.
