Old Problems Remain New Ones Crop Up Political Risk In The 21st Century Case Study Solution and Analysis
Introduction
Old Problems Remain New Ones Crop Up Political Risk In The 21st Century Case Study Solution is the biggest publishing company with a greatest market share in the China's book retail market. CMP has ended up being a specialized info company and a big comprehensive Science and Technology publishing company through the combination of print media, audio-visual media and the network media.
Critical Problems
Although, Old Problems Remain New Ones Crop Up Political Risk In The 21st Century Case Study Analysis has actually spent its 60 years journey efficiently, being an effective publishing house, nevertheless, the changing macro market patterns and forces bring particular obstacles to the publishing industry in basic and CMP in particular. These aspects include;
• Entrance of the brand-new publishing companies in the industry.
• Decreasing growth of the publishing market.
• Market saturation.
• Intro of digital publishing methods
• Improvement of science and innovation.
The improvement of the macro markets have raised a number of questions to the management at CPM that what could be the future of CMP in this situation? Do the long valuable experience, technical resources and the capabilities of the company could be made use of to strive for the future development unceasingly? How could the company sustain its long term competitive position in future?
Situational Analysis
Internal Analysis
SWOT Analysis
Strengths
Old Problems Remain New Ones Crop Up Political Risk In The 21st Century Case Study Help has specific strengths that can be used to reduce the hazards, get rid of the weakness and get the chances. Strengths of CMP are provided as follows;
• The long term experience of Old Problems Remain New Ones Crop Up Political Risk In The 21st Century Case Study Solution in the publishing industry i.e. 60 years permits the company to supply high quality products at a lower cost using its previous experiences.
• The technical resources and abilities generated by its effective journey offer a competitive advantage to CMP.
• Vast item portfolioof CMP helps it to diversify its danger and supply high worth to its consumers.
• Strong financial position permits the business to think about numerous development opportunities with no worry of raising fund externally.
Weaknesses
Together with the strengths, the company has specific weaknesses which could increase restrictions for the business in implementing its development program. The weak points of Old Problems Remain New Ones Crop Up Political Risk In The 21st Century Case Study Solution are given as follows;
• Despite of being a science and innovation publishing firm, the business still has standard ways ofpublishing which are not suitable with the growing technological shift.
• CMP highly relies over the Chinese markets for its development. It needs to propose certain growth strategies to avoid its dependence over the Chinese markets to attain long term development.
Opportunities
Although, the development of the publishing market is declining given that 2008, affecting Old Problems Remain New Ones Crop Up Political Risk In The 21st Century Case Study Help as well, but the development could be revived by availing certain opportunities presented in the market. The market opportunities for CMP consist of;
• The company might likewise introduce Digital Publishing by using its long term technical experience and a strong consumer acknowledgment in the market.
• CMP could consider an advancement program through the growth towards foreign markets in order to reduce its dependence over Chinese markets by using its huge funds.
Threats
The changing macro patterns in the market and increasing competitors in the publishing market has actually postured specific dangers to Old Problems Remain New Ones Crop Up Political Risk In The 21st Century Case Study Help consisting of;( Gurel, 2017).
• Intro of digital publishing i.e. virtual libraries might cause decreasing market share of Old Problems Remain New Ones Crop Up Political Risk In The 21st Century Case Study Solution due to the consumer shift towards digital libraries.
• The existence of a great deal of competitors in the publishing industry increase the danger for CMP to lose its competitive position in the market, as competitors can get a strong customer base by using particular methods like aggressive promotion, quality products, and so on
• Entryway of new publishing firms in the industry along with existence of high competitors increases the risk of losing the client base.
Financial Analysis.
The business has a quite competitive financial performance. Due to absence of information, the monetary ratios of CMP could not be calculated. The overall monetary performance of the business could be examined by utilizing the graphs provided in the case Appendices. It could be examined from the Appendix III that the annual total incomes of CMP during the duration 2000-2012 are growing at a high development rate, revealing that the yearly need of the items of Old Problems Remain New Ones Crop Up Political Risk In The 21st Century Case Study Solution is growing and the company is rather effective in drawing in a a great deal of customers at a possible rate.
Along with it, the second graph which shows the annual development in the Old Problems Remain New Ones Crop Up Political Risk In The 21st Century Case Study Analysis total possessions, reveals that the business is quite efficient in adding worth to its assets through its earnings. The growth in assets reveals that the overall worth of the firm is likewise increasing with increasing the overall revenues. (Unknown, 2013).
Another monetary analysis of the company utilizing the provided data might be the analysis regarding the circulation of total earnings 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 prospective development to accomplish its future advancement goal.
PESTEL Analysis
PESTEL analysis might be performed to discover the numerous external forces impacting the efficiency of the business and the current trends in the external environment of the business. A quick PESTEL analysis of the business is given as follows; (Alanzi, 2018).
Political.
As the publishing sector might have a considerable effect on the state of mind of the people about the communist ideology of the government, for that reason, the publishing sector is extremely monitored and guided by the Publicity Department of the Communist Party of China. For that reason, it could be stated that the overall political forces impacting Old Problems Remain New Ones Crop Up Political Risk In The 21st Century Case Study Help company 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 basic and the CMP in particular includesthe prices of paper, the income level of consumers, the inflation rate, and the total GDP development of the country. All these forces combine effect the demand for the publishing market.
Social and Demographical.
The consumer preferences are moving towards digital publishing rather than the traditional was of publishing. In this regard, CMP should focus on digital publishing to fulfill the altering consumer choices.
Technological.
Technological forces affecting the CMP consist of the technological improvement in the reading strategies etc. Improvement of science and innovation along with the rise of digital publishing could lower the demand for the CMP items, if particular actions would not be taken quickly.
Environmental.
Environmental forces affecting Old Problems Remain New Ones Crop Up Political Risk In The 21st Century Case Study Analysis includes the issues of ecological neighborhoods over the use of paper in publishing books. The paper used in the books while publishing is needed to be disposable and the ink used while publishing needs to not be hazardous for the environment.
Legal.
Legal guidelines for the publishing sector at whole are high. The legal guidelines concerning the publishing sector is managed by the General Administration of Press and Publication. Publishing Regulation 1997 requires the publishers to be authorized first by the Federal government to be gone into in the publishing market. The regulation prohibits direct participation of foreign entities and people in the publishing sector.
Industry Analysis (Porter's Five Forces Design).
Porter's Five Forces Design could be utilized to evaluate the attractiveness of the publishing industry China. A short analysis of the Porter's Five Forces is provided as follows;.
Threat of New Entrants.
Dangers of brand-new entrants in the Chinese Publishing Market is moderate. The prospective growth in the industry tends to draw in brand-new entrants to the publishing industry. The existence of extreme competition and the requirement of substantial capital tends to demotivate new entrants to enter in the market.
Risk of Substitution.
Risk of Alternative is high for the Chinese Publishing Industry. The replacement items for the published documents is the documents presented in the virtual libraries on particular websites. The changing customer choices towards digital learning increase the threat of substitution for the market.
Competitive Competition.
Competitive rivalry in the publishing market is high. The presence of a great deal of consumers in the Chinese Publishing Market like CIP, PTP and so on tends to produce high competitive competition for CMP. Together with it, brand-new entrants are also entering into the marketplace increasing the competition for CMP.
Bargaining Power of Provider.
The significant suppliers of the Old Problems Remain New Ones Crop Up Political Risk In The 21st Century Case Study Analysis consist of the providers of the paper for releasing files. As CMP is the biggest publisher in the Chinese Publishing Market, therefore the total bargaining power of provider for CMP is low.
Bargaining Power of Purchaser.
Haggling power of buyer in the publishing industry is high. Due to the presence of a large number of publishers in the Chinese market and the market saturation, the buyers requires high quality documents at competitive prices.
Competitors Analysis.
CMP operates in a highly competitive industry with the existence of a great deal of competitors. The company has a competitive position in the market with the highest market share in the Chinese publishing market. Major competitors of Old Problems Remain New Ones Crop Up Political Risk In The 21st Century Case Study Solution consist of;.
• Chemical Market Press (CIP).
• Posts and telecommunication Press (PTP).
Chemical Market Press (CIP).
CIP acts as a danger for CMP as it might wean its market share due to its long term competitive background. CIP is focused on digital publishing and could wean the market share of CMP quickly in the present market circumstance.
Posts and telecommunication Press (PTP).
Another close rival of CMP is PTP. It was also founded in the same duration as CMP and CIP. It ranks sixth in the state-owned publishers in regards to company scale. It is likewise one of the prominent gamers in the publishing industry with a yearly overall profits of RMB 550 million in 2010.
Alternatives
Alternative-1: Expand towards New Markets
Pros
• Decreasing reliance over the Chinese markets.
• Increasing number of Clients
• Development opportunities.
• Avoiding the effect of market saturation in the Chinese publishing market.
Cons
• Use of potential resources in growth.
• Risk of failure in new markets.
• Time consuming.
Alernative-2: Introduce Digital Publishing
Pros
• Sustaining consumer base.
• Approaching new markets.
• Easy to introduce using present abilities.
• Low risk of Failure.
• Low requirement for funds.
• Increased item portfolio supplies high worth to consumers.
Cons
• Competition in the market by CIP, who has prior concentrate on the digital publishing.
• Shift of focus from the core business sectors to the brand-new one can lead the company to lose need of its products in the market.
Suggestions
With the deep analysis of the internal and external environment of the business in addition to the market analysis and the rival analysis, Alternative 2 is suggested to CMP to accomplish its future development. As the choices are shifting towards digital publishing and the business need an immediate option to prevent the declining market development. Therefore, intro of digital publishing could show to be an instant service with low amount of risk for the company. However, the company might also consider the growth program after the success of its digital publishing program.
Implementation
In order to introduce digital publishing in its product portfolio, the business should initially collects the data related to the customer demand, the potential markets, the federal government regulations and the data related to the competitors presented in the market. If the preliminary offering shows a success, the company must go for the other markets. In this way the company would be able to implement its digital publishing program.
Conclusion
The development of the publishing market is decreasing because 2008, revealing a danger to the company's long term presence, however the situation can be managed by considering an advancement strategy in the future. The business might consider presenting digital publishingin its existing market to execute its advancement program at instant basis and to prevent the threat of failure for entrance in the new markets.
