Red Hen Baking Company Case Study Solution and Analysis
Introduction
Red Hen Baking Company Case Study Solution is the largest publishing business with a highest market share in the China's book retail market. CMP supplies a variety of services consisting of; collecting information, processing information and interaction services. Major organisation sections of the company include; books, regulars, consultancy and distribution. The business has a large item portfolio and its significant items include books, regulars, online media, exhibits, research study reports etc. Red Hen Baking Company Case Study Help has actually ended up being a specialized details service provider and a big extensive Science and Technology publishing business through the integration of print media, audio-visual media and the network media.
Crucial Problems
CMP has invested its 60 years journey smoothly, being a successful publishing house, nevertheless, the changing macro market trends and forces bring specific challenges to the publishing market in general and Red Hen Baking Company Case Study Help in particular. These aspects consist of;
• Entrance of the new publishing companies in the market.
• Decreasing growth of the publishing market.
• Market saturation.
• Introduction of digital publishing strategies
• Improvement of science and innovation.
The change of the macro markets have raised several concerns to the management at CPM that what could be the future of CMP in this scenario? Do the long important experience, technical resources and the abilities of the company could be made use of to pursue the future advancement unceasingly? How could the company sustain its long term competitive position in future?
Situational Analysis
Internal Analysis
SWOT Analysis
Strengths
Red Hen Baking Company Case Study Analysis has specific strengths that can be made use of to minimize the hazards, overcome the weakness and get the chances. Strengths of CMP are provided as follows;
• The long term experience of Red Hen Baking Company Case Study Analysis in the publishing industry i.e. 60 years enables the business to provide high quality items at a lower expense utilizing its prior experiences.
• The technical resources and abilities created by its effective journey supply a competitive advantage to CMP.
• Large item portfolioof CMP assists it to diversify its danger and provide high worth to its customers.
• Strong monetary position allows the business to consider numerous advancement opportunities without any worry of raising fund externally.
Weaknesses
In addition to the strengths, the company has particular weaknesses which could increase restrictions for the company in implementing its development program. The weaknesses of Red Hen Baking Company Case Study Help are provided as follows;
• Despite of being a science and innovation publishing company, the company still has traditional methods ofpublishing which are not compatible with the growing technological shift.
• CMP extremely relies over the Chinese markets for its development. It needs to propose particular growth plans to prevent its reliance over the Chinese markets to attain long term growth.
Opportunities
Although, the growth of the publishing industry is decreasing considering that 2008, impacting Red Hen Baking Company Case Study Solution as well, however the growth might be restored by availing specific chances presented in the market. The market opportunities for CMP include;
• The company might also present Digital Publishing by using its long term technical experience and a strong consumer recognition in the market.
• CMP could consider a development program through the growth towards foreign markets in order to minimize its reliance over Chinese markets by using its vast financial resources.
Dangers
The changing macro trends in the market and increasing competitors in the publishing market has actually posed specific risks to Red Hen Baking Company Case Study Solution including;( Gurel, 2017).
• Intro of digital publishing i.e. digital libraries could result in declining market share of Red Hen Baking Company Case Study Analysis due to the customer shift towards virtual libraries.
• The existence of large number of rivals in the publishing industry increase the hazard for CMP to lose its competitive position in the market, as rivals can gain a strong consumer base by utilizing particular techniques like aggressive promotion, quality items, etc.
• Entryway of brand-new publishing firms in the industry in addition to presence of high competition increases the danger of losing the client base.
Financial Analysis.
The company has a quite competitive monetary performance. Due to absence of information, the monetary ratios of CMP might not be determined. The total financial efficiency of the business might be examined by using the graphs given in the case Appendices. It could be examined from the Appendix III that the annual overall incomes of CMP throughout the period 2000-2012 are growing at a high growth rate, revealing that the yearly need of the items of Red Hen Baking Company Case Study Solution is growing and the business is rather effective in bring in a large number of customers at a prospective price.
Together with it, the second graph which shows the yearly growth in the Red Hen Baking Company Case Study Solution total possessions, shows that the company is rather effective in adding value to its possessions through its earnings. The development in assets shows that the overall worth of the firm is also increasing with increasing the overall earnings. (Unidentified, 2013).
Another monetary analysis of the company using the given data might be the analysis regarding the circulation of total profits of the company. Major part of the earnings of CMP comes from the sales of its released books i.e. 64% as shown in the Case Appendix V. The company could move towards other company sectors with a possible growth to accomplish its future development goal.
PESTEL Analysis
PESTEL analysis could be performed to find out the numerous external forces impacting the efficiency of the company and the recent patterns in the external environment of the company. 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 the people about the communist ideology of the federal government, therefore, the publishing sector is highly monitored and directed by the Publicity Department of the Communist Celebration of China. For that reason, it could be said that the overall political forces affecting Red Hen Baking Company Case Study Solution service are high. The federal government policies concerning the publishing sector are likewise increasing with the passage of time.
Affordable.
Financial forces affecting the publishing sector in general and the Red Hen Baking Company Case Study Solution in specific includesthe prices of paper, the income level of consumers, the inflation rate, and the total GDP growth of the country. All these forces combine impact the demand for the publishing market. In addition to it, the economic policies connected to the import of books affect the total organisation at CPM. China's financial conditions are rather favorable for CMP with high GDP development and consumer earnings level.
Social and Demographical.
The customer preferences are shifting towards digital publishing rather than the conventional was of publishing. In this regard, CMP must focus on digital publishing to meet the altering consumer preferences.
Technological.
Technological forces affecting the CMP include the technological development in the reading techniques and so on. Improvement of science and innovation in addition to the increase of digital publishing could decrease the need for the CMP products, if specific actions would not be taken soon.
Environmental.
Environmental forces impacting Red Hen Baking Company Case Study Help 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 regulations for the publishing sector at whole are high. Publishing Ordinance 1997 needs the publishers to be authorized initially by the Federal government to be gone into in the publishing market.
Market Analysis (Porter's Five Forces Model).
Porter's 5 Forces Design might be used to analyze the attractiveness of the publishing industry China. A short analysis of the Porter's 5 Forces is provided as follows;.
Risk of New Entrants.
Threats of new entrants in the Chinese Publishing Industry is moderate. The possible growth in the market tends to draw in new entrants to the publishing market. However, the existence of extreme competitors and the requirement of huge capital tends to demotivate new entrants to enter in the market.
Risk of Alternative.
Threat of Alternative is high for the Chinese Publishing Market. The substitute items for the released files is the documents presented in the virtual libraries on certain websites. The altering consumer preferences towards digital learning increase the threat of alternative for the industry.
Competitive Rivalry.
Competitive rivalry in the publishing market is high. The presence of large number of consumers in the Chinese Publishing Industry like CIP, PTP and so on tends to produce high competitive competition for CMP. Along with it, new entrants are also participating in the market increasing the competitors for CMP.
Bargaining Power of Provider.
The significant providers of the Red Hen Baking Company Case Study Analysis 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 supplier for CMP is low.
Bargaining Power of Purchaser.
Haggling power of purchaser in the publishing industry is high. Due to the presence of a large number of publishers in the Chinese market and the marketplace saturation, the buyers needs high quality files at competitive costs.
Rivals Analysis.
CMP operates in a highly competitive market 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. Significant rivals of Red Hen Baking Company Case Study Analysis consist of;.
• Chemical Industry Press (CIP).
• Posts and telecommunication Press (PTP).
Chemical Industry Press (CIP).
CIPis one of the close competitors of CMP. Established in the same duration, CIP publishes comparable type of books. For a large period, CIP held the largest market share, and still ranks 3rd and second in various market sectors, with a significant focus on academic publications. CIP serves as a risk for CMP as it might wean its market share due to its long term competitive background. CIP is concentrated on digital publishing and might wean the marketplace share of Red Hen Baking Company Case Study Solution quickly in the current market situation.
Posts and telecommunication Press (PTP).
It was also founded in the very same period as Red Hen Baking Company Case Study Analysis and CIP. It is also one of the prominent players in the publishing market with an annual total revenues of RMB 550 million in 2010.
Alternatives
Alternative-1: Expand towards New Markets
Pros
• Lowering dependence over the Chinese markets.
• Increasing number of Customers
• Growth chances.
• Preventing the impact of market saturation in the Chinese publishing industry.
Cons
• Use of possible resources in expansion.
• Risk of failure in new markets.
• Time consuming.
Alernative-2: Introduce Digital Publishing
Pros
• Sustaining customer base.
• Approaching new markets.
• Easy to introduce utilizing 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 concentrate on the digital publishing.
• Shift of focus from the core company sections to the brand-new one can lead the company to lose need of its items in the market.
Recommendations
With the deep analysis of the external and internal environment of the business together with the market analysis and the competitor analysis, Alternative 2 is recommended to CMP to accomplish its future development. As the preferences are shifting towards digital publishing and the business need an instant solution to prevent the declining market development. Introduction of digital publishing might prove to be an instant service with low quantity of threat for the business. Nevertheless, the company might likewise consider the expansion program after the success of its digital publishing program.
Implementation
In order to introduce digital publishing in its item portfolio, the company should initially collects the information related to the customer need, the prospective markets, the government policies and the information related to the rivals provided in the market. If the initial offering shows a success, the business should go for the other markets. In this method the business would be able to execute its digital publishing program.
Conclusion
The growth of the publishing market is declining given that 2008, revealing a risk to the company's long term presence, but the scenario can be managed by considering a development strategy in the future. The business might think about presenting digital publishingin its existing market to implement its development program at instant basis and to prevent the threat of failure for entryway in the new markets.
