Nova Chemical Corporation Case Study Solution and Analysis
Introduction
Nova Chemical Corporation Case Study Analysis is the largest publishing company with a greatest market share in the China's book retail market. CMP has actually ended up being a specialized information provider and a big thorough Science and Innovation publishing business through the combination of print media, audio-visual media and the network media.
Crucial Issues
Although, Nova Chemical Corporation Case Study Analysis has invested its 60 years journey smoothly, being an effective publishing house, however, the changing macro market trends and forces bring specific difficulties to the publishing market in general and CMP in particular. These factors consist of;
• Entrance of the new publishing companies in the market.
• Declining growth of the publishing market.
• Market saturation.
• Intro of digital publishing methods
• Improvement of science and technology.
The transformation 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 abilities of the business could be used to strive for the future advancement unceasingly? How could the company sustain its long term competitive position in future?
Situational Analysis
Internal Analysis
SWOT Analysis
Strengths
Nova Chemical Corporation Case Study Analysis has specific strengths that can be made use of to reduce the risks, overcome the weakness and get the opportunities. Strengths of CMP are given as follows;
• The long term experience of Nova Chemical Corporation Case Study Analysis in the publishing market i.e. 60 years permits the company to provide high quality products at a lower cost utilizing its previous experiences.
• The technical resources and abilities generated by its effective journey supply a competitive advantage to CMP.
• Vast item portfolioof CMP assists it to diversify its threat and supply high value to its customers.
• Strong financial position permits the business to think about a number of advancement opportunities without any worry of raising fund externally.
Weak points
Together with the strengths, the business has specific weak points which could increase constraints for the business in implementing its advancement program. The weaknesses of Nova Chemical Corporation Case Study Analysis are given as follows;
• Despite of being a science and innovation publishing firm, the business still has traditional methods ofpublishing which are not compatible with the growing technological shift.
• CMP extremely relies over the Chinese markets for its growth. It ought to propose specific growth strategies to prevent its dependence over the Chinese markets to attain long term development.
Opportunities
The development of the publishing market is decreasing since 2008, affecting Nova Chemical Corporation Case Study Solution as well, but the development might be revived by availing specific opportunities presented in the market. The marketplace opportunities for CMP include;
• The company might also introduce Digital Publishing by using its long term technical experience and a strong consumer acknowledgment in the market.
• CMP could think about an advancement program through the growth towards foreign markets in order to decrease its dependence over Chinese markets by utilizing its large financial resources.
Hazards
The changing macro trends in the market and increasing competitors in the publishing industry has actually posed specific risks to Nova Chemical Corporation Case Study Help consisting of;( Gurel, 2017).
• Introduction of digital publishing i.e. virtual libraries might result in decreasing market share of Nova Chemical Corporation Case Study Solution due to the consumer shift towards digital libraries.
• The presence of a great deal of rivals in the publishing market increase the hazard for CMP to lose its competitive position in the market, as rivals can acquire a strong customer base by using certain techniques like aggressive promotion, quality items, and so on
• Entrance of new publishing firms in the industry along with presence of high competition increases the threat of losing the consumer base.
Monetary Analysis.
Due to lack of data, the financial ratios of CMP might not be computed. It could be evaluated from the Appendix III that the yearly total revenues of Nova Chemical Corporation Case Study Analysis during the period 2000-2012 are growing at a high development rate, showing that the yearly need of the items of CMP is growing and the business is rather effective in drawing in a large number of consumers at a potential rate.
Along with it, the second graph which reveals the annual development in the Nova Chemical Corporation Case Study Solution total properties, shows that the company is quite efficient in adding worth to its possessions through its earnings. The growth in properties shows that the total value of the firm is also increasing with increasing the overall earnings. (Unidentified, 2013).
Another monetary analysis of the company using the provided information might be the analysis relating to the distribution of total revenues of the company. Major part of the incomes of CMP comes from the sales of its released books i.e. 64% as shown in the Case Appendix V. The business could move towards other service sections with a potential development to achieve its future advancement objective.
PESTEL Analysis
PESTEL analysis could be carried out to discover the numerous external forces affecting the performance of the company and the recent patterns in the external environment of the business. A brief PESTEL analysis of the company is offered as follows; (Alanzi, 2018).
Political.
As the publishing sector could have a considerable effect on the frame of mind of individuals about the communist ideology of the federal government, for that reason, the publishing sector is highly supervised and assisted by the Publicity Department of the Communist Party of China. It might be said that the overall political forces impacting CMP company are high. The government policies relating to the publishing sector are likewise increasing with the passage of time.
Economical.
Financial forces impacting the publishing sector in basic and the Nova Chemical Corporation Case Study Solution in particular includesthe rates of paper, the income level of consumers, the inflation rate, and the overall GDP growth of the nation. All these forces integrate impact the demand for the publishing market. In addition to it, the economic policies associated with the import of books affect the overall business at CPM. China's financial conditions are quite beneficial for CMP with high GDP growth and customer income level.
Social and Demographical.
The consumer choices are shifting towards digital publishing rather than the conventional was of publishing. In this regard, CMP should focus on digital publishing to meet the changing consumer preferences.
Technological.
Technological forces impacting the CMP include the technological improvement in the reading strategies etc. Improvement of science and technology together with the increase of digital publishing could minimize the need for the CMP items, if specific actions would not be taken quickly.
Environmental.
Ecological forces impacting Nova Chemical Corporation Case Study Analysis includes the concerns of environmental communities over the use of paper in publishing books. The paper used in the books while publishing is needed to be disposable and the ink utilized while publishing must 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 first by the Government to be gone into in the publishing market.
Market Analysis (Porter's 5 Forces Design).
Porter's Five Forces Design could be used to evaluate the appearance of the publishing market China. A quick analysis of the Porter's Five Forces is provided as follows;.
Risk of New Entrants.
Threats of brand-new entrants in the Chinese Publishing Industry is moderate. The possible development in the market tends to bring in new entrants to the publishing industry. However, the presence of extreme competitors and the requirement of big capital tends to demotivate new entrants to go into in the marketplace.
Danger of Replacement.
Threat of Replacement is high for the Chinese Publishing Industry. The replacement products for the released files is the documents provided in the digital libraries on specific sites. The changing consumer preferences towards digital learning increase the danger of replacement for the industry.
Competitive Competition.
Competitive rivalry in the publishing market is high. The presence of large number of customers in the Chinese Publishing Industry like CIP, PTP and so on tends to produce high competitive competition for CMP. Together with it, brand-new entrants are likewise participating in the market increasing the competition for CMP.
Bargaining Power of Provider.
The significant providers of the Nova Chemical Corporation Case Study Help consist of the providers of the paper for publishing files. As CMP is the biggest publisher in the Chinese Publishing Market, for that reason the overall bargaining power of provider for CMP is low.
Bargaining Power of Purchaser.
Bargaining 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 purchasers needs high quality files at competitive prices.
Rivals Analysis.
CMP runs in an extremely competitive industry with the existence of large number of rivals. Nevertheless, the business has a competitive position in the market with the greatest market share in the Chinese publishing market. Major competitors of Nova Chemical Corporation Case Study Analysis consist of;.
• Chemical Market Press (CIP).
• Posts and telecommunication Press (PTP).
Chemical Market Press (CIP).
CIP acts as a hazard 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 quickly in the current market situation.
Posts and telecommunication Press (PTP).
Another close rival of CMP is PTP. It was likewise established in the exact same period as CMP and CIP. It ranks 6th in the state-owned publishers in terms of business scale. It is also among the popular players in the publishing market with a yearly overall profits of RMB 550 million in 2010.
Alternatives
Alternative-1: Expand towards New Markets
Pros
• Decreasing dependence over the Chinese markets.
• Increasing variety of Customers
• Growth chances.
• Avoiding the impact of market saturation in the Chinese publishing industry.
Cons
• Use of potential resources in expansion.
• Risk of failure in new markets.
• Time consuming.
Alernative-2: Introduce Digital Publishing
Pros
• Sustaining customer base.
• Approaching brand-new markets.
• Easy to present utilizing present capabilities.
• Low danger of Failure.
• Low requirement for funds.
• Increased item portfolio supplies high worth to clients.
Cons
• Competition in the market by CIP, who has prior focus on the digital publishing.
• Shift of focus from the core company segments to the new one can lead the company to lose need of its products in the market.
Recommendations
With the deep analysis of the external and internal environment of the company together with the industry analysis and the competitor analysis, Alternative 2 is recommended to CMP to attain its future development. As the preferences are shifting towards digital publishing and the company require an instant solution to prevent the decreasing industry development. Intro of digital publishing might show to be an immediate solution with low quantity of danger for the business. The business might likewise think about the expansion program after the success of its digital publishing program.
Implementation
In order to introduce digital publishing in its item portfolio, the business should initially collects the information connected to the customer demand, the potential markets, the federal government guidelines and the data connected to the rivals provided in the market. After that, the business should choose one possible segment for its preliminary offering. It should gather research study that how it could separate its digital publishing from the existing competitors' items. The steps above the company should go for the initial offering. The company must go for the other markets if the preliminary offering proves a success. In this way the business would have the ability to execute its digital publishing program.
Conclusion
The development of the publishing market is decreasing since 2008, revealing a hazard to the business's long term presence, however the circumstance can be controlled by thinking about a development plan in the future. The business might consider introducing digital publishingin its existing market to implement its advancement program at instant basis and to avoid the threat of failure for entrance in the brand-new markets.
