Pepsi Bottling Group And Coca Cola Enterprises Case Study Solution and Analysis
Intro
Pepsi Bottling Group And Coca Cola Enterprises Case Study Analysis is the largest publishing company with a highest market share in the China's book retail market. CMP has actually ended up being a specialized details supplier and a big comprehensive Science and Technology publishing business through the combination of print media, audio-visual media and the network media.
Vital Problems
CMP has actually invested its 60 years journey smoothly, being an effective publishing home, nevertheless, the altering macro market trends and forces bring specific difficulties to the publishing market in general and Pepsi Bottling Group And Coca Cola Enterprises Case Study Solution in particular. These factors include;
• Entryway of the brand-new publishing companies in the market.
• Decreasing growth of the publishing market.
• Market saturation.
• Introduction of digital publishing strategies
• Enhancement of science and innovation.
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 valuable experience, technical resources and the abilities of the business could be made use of to pursue the future advancement unceasingly? How could the business sustain its long term competitive position in future?
Situational Analysis
Internal Analysis
SWOT Analysis
Strengths
Pepsi Bottling Group And Coca Cola Enterprises Case Study Solution has particular strengths that can be made use of to decrease the threats, get rid of the weakness and obtain the chances. Strengths of CMP are given as follows;
• The long term experience of Pepsi Bottling Group And Coca Cola Enterprises 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 prior experiences.
• The technical resources and capabilities produced by its successful journey supply a competitive advantage to CMP.
• Large product portfolioof CMP helps it to diversify its danger and offer high value to its consumers.
• Strong monetary position enables the business to think about a number of development chances without any fear of raising fund externally.
Weak points
Along with the strengths, the company has particular weak points which could increase restraints for the business in implementing its advancement program. The weak points of Pepsi Bottling Group And Coca Cola Enterprises Case Study Analysis are provided as follows;
• Despite of being a science and innovation publishing company, 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 should propose particular expansion plans to prevent its dependence over the Chinese markets to accomplish long term development.
Opportunities
Although, the growth of the publishing market is decreasing since 2008, affecting Pepsi Bottling Group And Coca Cola Enterprises Case Study Help too, but the growth could be revived by availing specific opportunities provided in the market. The market opportunities for CMP include;
• The business could also present Digital Publishing by utilizing its long term technical experience and a strong client acknowledgment in the market.
• CMP might think about a development program through the expansion towards foreign markets in order to minimize its dependence over Chinese markets by using its vast funds.
Risks
The changing macro patterns in the market and increasing competitors in the publishing market has actually postured specific threats to Pepsi Bottling Group And Coca Cola Enterprises Case Study Analysis including;( Gurel, 2017).
• Intro of digital publishing i.e. digital libraries might result in declining market share of Pepsi Bottling Group And Coca Cola Enterprises Case Study Help due to the customer shift towards digital libraries.
• The existence of a great deal of competitors in the publishing industry increase the risk for CMP to lose its competitive position in the market, as rivals can gain a strong consumer base by using particular methods like aggressive promo, quality products, and so on
• Entrance of brand-new publishing firms in the market along with presence of high competition increases the danger of losing the customer base.
Monetary Analysis.
Due to absence of data, the financial ratios of CMP could not be computed. It could be evaluated from the Appendix III that the annual total revenues of Pepsi Bottling Group And Coca Cola Enterprises Case Study Solution during the period 2000-2012 are growing at a high growth rate, revealing that the annual need of the items of CMP is growing and the company is rather efficient in attracting a large number of consumers at a prospective price.
In addition to it, the 2nd chart which shows the yearly development in the Pepsi Bottling Group And Coca Cola Enterprises Case Study Solution total assets, reveals that the business is rather effective in including worth to its properties through its profits. The growth in properties reveals that the total worth of the firm is also increasing with increasing the total incomes. (Unknown, 2013).
Another financial analysis of the company utilizing the offered data could be the analysis regarding the circulation of total earnings of the company. Huge part of the earnings of CMP originates from the sales of its published books i.e. 64% as shown in the Case Appendix V. The company could move towards other service sectors with a potential development to achieve its future advancement goal.
PESTEL Analysis
PESTEL analysis might be performed to discover the numerous external forces affecting the performance of the company and the recent trends in the external environment of the company. A brief PESTEL analysis of the business is given as follows; (Alanzi, 2018).
Political.
As the publishing sector might have a significant effect on the mindset of individuals about the communist ideology of the federal government, therefore, the publishing sector is highly monitored and guided by the Promotion Department of the Communist Party of China. Therefore, it could be said that the general political forces impacting Pepsi Bottling Group And Coca Cola Enterprises Case Study Help organisation are high. The government policies concerning the publishing sector are also increasing with the passage of time.
Cost-effective.
Financial forces impacting the publishing sector in general and the Pepsi Bottling Group And Coca Cola Enterprises Case Study Analysis in particular includesthe costs of paper, the income level of customers, the inflation rate, and the total GDP growth of the country. All these forces integrate impact the demand for the publishing market. Along with it, the economic policies related to the import of books impact the total company at CPM. Nevertheless, China's economic conditions are rather favorable for CMP with high GDP growth and customer earnings level.
Social and Demographical.
Social and demographical forces include the population growth, the customer's preferences towards checking out informative products etc. China has the highest population in the world with a high population growth, revealing the increasing variety of consumers of the Pepsi Bottling Group And Coca Cola Enterprises Case Study Help. The customer preferences are shifting towards digital publishing rather than the traditional was of publishing. In this regard, CMP needs to focus on digital publishing to meet the changing consumer choices.
Technological.
Technological forces impacting the CMP consist of the technological advancement in the reading techniques and so on. Improvement of science and innovation in addition to the rise of digital publishing could reduce the need for the CMP products, if specific actions would not be taken soon.
Environmental.
Environmental forces affecting Pepsi Bottling Group And Coca Cola Enterprises Case Study Analysis consists of the issues 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 should not be damaging for the environment.
Legal.
Legal policies for the publishing sector at whole are high. The legal guidelines relating to the publishing sector is managed by the General Administration of Press and Publication. Publishing Regulation 1997 requires the publishers to be approved initially by the Federal government to be gone into in the publishing market. The ordinance prohibits direct participation of foreign entities and people in the publishing sector.
Market Analysis (Porter's 5 Forces Design).
Porter's Five Forces Design might be used to evaluate the attractiveness of the publishing market China. A brief analysis of the Porter's Five Forces is offered as follows;.
Risk of New Entrants.
Dangers of new entrants in the Chinese Publishing Industry is moderate. The potential growth in the industry tends to bring in new entrants to the publishing industry. The presence of extreme competitors and the requirement of big capital tends to demotivate new entrants to enter in the market.
Risk of Substitution.
Risk of Replacement is high for the Chinese Publishing Industry. The alternative items for the released files is the files presented in the virtual libraries on particular sites. The changing customer preferences towards digital knowing increase the threat of replacement for the market.
Competitive Competition.
Competitive rivalry in the publishing industry is high. The existence of a great deal of customers in the Chinese Publishing Industry like CIP, PTP etc. tends to produce high competitive rivalry for CMP. In addition to it, new entrants are likewise entering into the market increasing the competition for CMP.
Bargaining Power of Supplier.
The major suppliers of the Pepsi Bottling Group And Coca Cola Enterprises Case Study Help include the providers of the paper for releasing files. As CMP is the biggest publisher in the Chinese Publishing Market, for that reason the general bargaining power of provider 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 market saturation, the purchasers needs high quality files at competitive rates.
Competitors Analysis.
CMP runs in a highly competitive industry with the existence of large number of competitors. The business has a competitive position in the market with the highest market share in the Chinese publishing market. Major rivals of Pepsi Bottling Group And Coca Cola Enterprises Case Study Solution consist of;.
• Chemical Industry Press (CIP).
• Posts and telecommunication Press (PTP).
Chemical Market Press (CIP).
CIP acts as a danger 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 easily in the existing market situation.
Posts and telecommunication Press (PTP).
Another close competitor of CMP is PTP. It was also established in the same period as CMP and CIP. It ranks 6th in the state-owned publishers in terms of company scale. It is also among the prominent players in the publishing market with a yearly total earnings of RMB 550 million in 2010.
Alternatives
Alternative-1: Expand towards New Markets
Pros
• Decreasing dependence over the Chinese markets.
• Increasing number of Clients
• Development chances.
• Avoiding the impact of market saturation in the Chinese publishing industry.
Cons
• Usage of prospective resources in expansion.
• Danger of failure in new markets.
• Time consuming.
Alernative-2: Introduce Digital Publishing
Pros
• Sustaining consumer base.
• Approaching new markets.
• Easy to present using present abilities.
• Low risk of Failure.
• Low requirement for funds.
• Increased item portfolio provides high worth to consumers.
Cons
• Competitors in the market by CIP, who has prior focus on the digital publishing.
• Shift of focus from the core business sections to the new one can lead the company to lose demand of its items in the market.
Recommendations
With the deep analysis of the external and internal environment of the company in addition to the industry analysis and the rival analysis, Alternative 2 is suggested to CMP to accomplish its future development. As the preferences are moving towards digital publishing and the company need an instant service to avoid the declining industry growth. Introduction of digital publishing might prove to be an immediate option with low amount of threat for the company. The company could also consider the expansion program after the success of its digital publishing program.
Execution
In order to introduce digital publishing in its item portfolio, the business must initially collects the information connected to the consumer demand, the prospective markets, the government policies and the information associated with the competitors presented in the market. After that, the company needs to choose one prospective section for its initial offering. It must gather research that how it might separate its digital publishing from the existing rivals' items. After all the actions above the company need to choose the preliminary offering. If the initial offering proves a success, the company should choose the other markets. In this method the company would be able to execute its digital publishing program.
Conclusion
The growth of the publishing industry is decreasing considering that 2008, revealing a threat to the business's long term presence, however the scenario can be controlled by considering an advancement plan in the future. The business might think about presenting digital publishingin its existing market to implement its advancement program at immediate basis and to prevent the danger of failure for entryway in the brand-new markets.
