Power Water Beverages Inc 2 Case Study Solution and Analysis
Power Water Beverages Inc 2 Case Study Analysis is the biggest publishing company with a highest market share in the China's book retail market. CMP supplies a number of services consisting of; gathering information, processing information and communication services. Significant business segments of the company include; books, periodicals, consultancy and distribution. The business has a huge product portfolio and its significant products include books, regulars, online media, exhibits, research reports etc. Power Water Beverages Inc 2 Case Study Solution has actually ended up being a specialized information provider and a large detailed Science and Technology publishing company through the combination of print media, audio-visual media and the network media.
Although, Power Water Beverages Inc 2 Case Study Help has actually invested its 60 years journey efficiently, being an effective publishing home, nevertheless, the changing macro market patterns and forces bring particular obstacles to the publishing industry in basic and CMP in specific. These factors include;
• Entryway of the new publishing companies in the market.
• Decreasing growth of the publishing market.
• Market saturation.
• Intro of digital publishing methods
• Enhancement 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 circumstance? Do the long important experience, technical resources and the capabilities 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?
Power Water Beverages Inc 2 Case Study Analysis has specific strengths that can be used to lower the risks, overcome the weakness and obtain the opportunities. Strengths of CMP are provided as follows;
• The long term experience of Power Water Beverages Inc 2 Case Study Help in the publishing market i.e. 60 years enables 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.
• Large item portfolioof CMP helps it to diversify its danger and provide high value to its consumers.
• Strong financial position enables the business to think about several development opportunities without any fear of raising fund externally.
Along with the strengths, the company has certain weak points which could increase constraints for the business in implementing its development program. The weaknesses of Power Water Beverages Inc 2 Case Study Help are provided as follows;
• Despite of being a science and technology publishing firm, the business still has conventional ways ofpublishing which are not compatible with the growing technological shift.
• CMP extremely relies over the Chinese markets for its growth. It should propose certain expansion plans to prevent its reliance over the Chinese markets to accomplish long term growth.
The growth of the publishing market is decreasing considering that 2008, impacting Power Water Beverages Inc 2 Case Study Help as well, but the development might be restored by availing certain opportunities presented in the market. The marketplace opportunities for CMP consist of;
• The business could likewise introduce Digital Publishing by utilizing its long term technical experience and a strong consumer 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 large financial resources.
The changing macro patterns in the market and increasing competition in the publishing market has actually positioned particular threats to Power Water Beverages Inc 2 Case Study Solution consisting of;( Gurel, 2017).
• Intro of digital publishing i.e. virtual libraries could result in declining market share of Power Water Beverages Inc 2 Case Study Analysis due to the customer shift towards virtual libraries.
• The presence of large number of rivals in the publishing market increase the danger for CMP to lose its competitive position in the market, as rivals can gain a strong consumer base by using particular strategies like aggressive promo, quality items, etc.
• Entrance of brand-new publishing companies in the industry in addition to existence of high competition increases the risk of losing the customer base.
The company has a rather competitive financial performance. Due to absence of information, the financial ratios of CMP could not be computed. The total financial efficiency of the business might be examined by using the graphs offered in the case Appendices. It could be analyzed 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 annual need of the products of Power Water Beverages Inc 2 Case Study Solution is growing and the company is rather effective in attracting a a great deal of customers at a possible price.
In addition to it, the 2nd graph which reveals the annual growth in the Power Water Beverages Inc 2 Case Study Help total assets, reveals that the company is rather efficient in including value to its properties through its earnings. The growth in properties shows that the overall worth of the company is also increasing with increasing the total revenues. (Unidentified, 2013).
Another monetary analysis of the business using the given information might be the analysis concerning the distribution of overall earnings of the business. Major part of the revenues of CMP originates from the sales of its released books i.e. 64% as shown in the Case Appendix V. The business might move towards other service sectors with a possible development to attain its future development goal.
PESTEL analysis could be performed to find out the numerous external forces affecting the performance of the business and the recent patterns in the external environment of the business. A short PESTEL analysis of the company is provided as follows; (Alanzi, 2018).
As the publishing sector might have a considerable effect on the mindset of individuals about the communist ideology of the federal government, therefore, the publishing sector is extremely monitored and guided by the Promotion Department of the Communist Party of China. Therefore, it could be stated that the general political forces affecting Power Water Beverages Inc 2 Case Study Solution service are high. The federal government policies concerning the publishing sector are also increasing with the passage of time.
Economic forces impacting the publishing sector in basic and the Power Water Beverages Inc 2 Case Study Solution in specific includesthe costs of paper, the income level of customers, the inflation rate, and the general GDP growth of the nation. All these forces integrate effect the demand for the publishing market. Together with it, the economic policies connected to the import of books affect the general organisation at CPM. Nevertheless, China's economic conditions are rather beneficial for CMP with high GDP growth and customer income level.
Social and Demographical.
Social and demographical forces consist of the population growth, the consumer's preferences towards reading informative products and so on. China has the greatest population on the planet with a high population growth, showing the increasing variety of customers of the Power Water Beverages Inc 2 Case Study Help. Nevertheless, the customer preferences are shifting towards digital publishing instead of the traditional was of publishing. In this regard, CMP should concentrate on digital publishing to satisfy the altering customer preferences.
Technological forces impacting the CMP consist of the technological development in the reading techniques etc. Enhancement of science and technology together with the increase of digital publishing could minimize the need for the CMP products, if specific actions would not be taken quickly.
Ecological forces affecting Power Water Beverages Inc 2 Case Study Help includes the concerns of ecological neighborhoods over the use of paper in publishing books. The paper utilized in the books while publishing is required to be disposable and the ink used while publishing ought to not be hazardous for the environment.
Legal guidelines for the publishing sector at whole are high. Publishing Ordinance 1997 requires the publishers to be approved first by the Federal government to be entered in the publishing market.
Industry Analysis (Porter's Five Forces Model).
Porter's Five Forces Model could be used to examine the beauty of the publishing industry China. A brief analysis of the Porter's Five Forces is offered as follows;.
Threat of New Entrants.
Threats of brand-new entrants in the Chinese Publishing Industry is moderate. The prospective development in the industry tends to bring in brand-new entrants to the publishing market. The presence of intense competition and the requirement of substantial capital tends to demotivate brand-new entrants to enter in the market.
Danger of Alternative.
Hazard of Replacement is high for the Chinese Publishing Industry. The replacement items for the published documents is the files provided in the virtual libraries on particular websites. The changing consumer preferences towards digital knowing increase the threat of substitution for the industry.
Competitive competition in the publishing market is high. The presence of large number of customers in the Chinese Publishing Industry like CIP, PTP etc. tends to produce high competitive competition for CMP. In addition to it, new entrants are likewise participating in the marketplace increasing the competitors for CMP.
Bargaining Power of Supplier.
The significant providers of the Power Water Beverages Inc 2 Case Study Help consist of the suppliers of the paper for releasing documents. 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 buyer in the publishing market is high. Due to the presence of a large number of publishers in the Chinese market and the market saturation, the purchasers requires high quality documents at competitive prices.
CMP operates in an extremely competitive market with the existence of a great deal of competitors. The company has a competitive position in the market with the greatest market share in the Chinese publishing market. Significant competitors of Power Water Beverages Inc 2 Case Study Solution 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 present market situation.
Posts and telecommunication Press (PTP).
Another close rival of CMP is PTP. It was likewise established in the very same duration as CMP and CIP. It ranks 6th in the state-owned publishers in terms of service scale. It is likewise one of the prominent gamers in the publishing market with a yearly overall incomes of RMB 550 million in 2010.
Alternative-1: Expand towards New Markets
• Lowering reliance over the Chinese markets.
• Increasing number of Consumers
• Development chances.
• Preventing the effect of market saturation in the Chinese publishing market.
• Use of prospective resources in expansion.
• Risk of failure in brand-new markets.
• Time consuming.
Alernative-2: Present Digital Publishing
• Sustaining customer base.
• Approaching brand-new markets.
• Easy to present utilizing current capabilities.
• Low threat of Failure.
• Low requirement for funds.
• Increased item portfolio offers high value to clients.
• Competitors 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 products in the market.
With the deep analysis of the internal and external environment of the business along with the market analysis and the competitor analysis, Alternative 2 is suggested to CMP to achieve its future development. As the preferences are shifting towards digital publishing and the company need an immediate option to avoid the declining industry development. Introduction of digital publishing might prove to be an immediate option with low amount of risk for the company. However, the business could also think about the growth program after the success of its digital publishing program.
In order to present digital publishing in its product portfolio, the business needs to initially gathers the information related to the customer demand, the possible markets, the federal government regulations and the information related to the competitors presented in the market. If the preliminary offering proves a success, the company should go for the other markets. In this method the company would be able to implement its digital publishing program.
The development of the publishing market is decreasing given that 2008, showing a hazard to the company's long term existence, however the situation can be managed by considering an advancement strategy in the future. The business could consider presenting digital publishingin its existing market to execute its advancement program at immediate basis and to avoid the risk of failure for entryway in the brand-new markets.