River Bend Trading Navigating Rough Waters Case Study Solution and Analysis
Introduction
River Bend Trading Navigating Rough Waters Case Study Analysis is the biggest publishing business with a highest market share in the China's book retail market. CMP has actually ended up being a specialized information service provider and a large thorough Science and Technology publishing company through the combination of print media, audio-visual media and the network media.
Crucial Concerns
CMP has spent its 60 years journey smoothly, being an effective publishing house, nevertheless, the changing macro market trends and forces bring specific obstacles to the publishing industry in general and River Bend Trading Navigating Rough Waters Case Study Help in particular. These factors include;
• Entrance of the new publishing companies in the industry.
• Declining development of the publishing market.
• Market saturation.
• Introduction of digital publishing techniques
• Improvement of science and innovation.
The change of the macro markets have raised numerous concerns to the management at CPM that what could be the future of CMP in this circumstance? Do the long valuable experience, technical resources and the abilities of the business 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
River Bend Trading Navigating Rough Waters Case Study Solution has certain strengths that can be used to minimize the threats, conquer the weakness and obtain the opportunities. Strengths of CMP are given as follows;
• The long term experience of River Bend Trading Navigating Rough Waters Case Study Analysis in the publishing market i.e. 60 years allows the business to supply high quality items at a lower expense utilizing its prior experiences.
• The technical resources and abilities generated by its effective journey provide a competitive benefit to CMP.
• Large product portfolioof CMP helps it to diversify its threat and supply high value to its consumers.
• Strong financial position permits the business to think about several advancement chances without any worry of raising fund externally.
Weaknesses
Together with the strengths, the business has particular weaknesses which might increase restrictions for the company in executing its development program. The weak points of River Bend Trading Navigating Rough Waters Case Study Solution are given as follows;
• Despite of being a science and technology publishing company, the company still has standard ways ofpublishing which are not suitable with the growing technological shift.
• CMP extremely relies over the Chinese markets for its development. It must propose certain expansion strategies to prevent its dependence over the Chinese markets to attain long term growth.
Opportunities
The growth of the publishing industry is decreasing because 2008, impacting River Bend Trading Navigating Rough Waters Case Study Help as well, but the growth could be revived by availing particular chances provided in the market. The marketplace chances for CMP include;
• The business could likewise introduce Digital Publishing by using its long term technical experience and a strong customer recognition in the market.
• CMP might consider a development program through the expansion towards foreign markets in order to lower its reliance over Chinese markets by utilizing its vast financial resources.
Dangers
The changing macro trends in the market and increasing competitors in the publishing market has actually presented specific hazards to River Bend Trading Navigating Rough Waters Case Study Help consisting of;( Gurel, 2017).
• Introduction of digital publishing i.e. virtual libraries might lead to decreasing market share of River Bend Trading Navigating Rough Waters Case Study Help due to the customer shift towards digital libraries.
• The existence of a great deal of competitors in the publishing market increase the hazard for CMP to lose its competitive position in the market, as competitors can get a strong customer base by using particular techniques like aggressive promotion, quality products, etc.
• Entrance of new publishing companies in the market together with existence of high competition increases the hazard of losing the customer base.
Financial Analysis.
Due to lack of data, the financial ratios of CMP might not be computed. It could be examined from the Appendix III that the yearly overall profits of River Bend Trading Navigating Rough Waters Case Study Analysis throughout the period 2000-2012 are growing at a high growth rate, revealing that the annual demand of the items of CMP is growing and the business is quite efficient in drawing in a big number of clients at a possible cost.
In addition to it, the 2nd graph which reveals the annual development in the River Bend Trading Navigating Rough Waters Case Study Solution overall possessions, shows that the business is quite efficient in adding worth to its assets through its profits. The growth in assets reveals that the total worth of the firm is likewise increasing with increasing the total earnings. (Unknown, 2013).
Another financial analysis of the company utilizing the offered data could be the analysis concerning the distribution of overall profits of the company. Major part of the earnings of CMP comes from the sales of its published books i.e. 64% as displayed in the Case Appendix V. The company might move towards other service sectors with a possible development to achieve its future advancement goal.
PESTEL Analysis
PESTEL analysis might be performed to discover the different external forces affecting the efficiency of the company and the recent trends in the external environment of the business. A quick PESTEL analysis of the company is given as follows; (Alanzi, 2018).
Political.
As the publishing sector might have a substantial effect on the mindset of individuals about the communist ideology of the government, for that reason, the publishing sector is highly supervised and assisted by the Publicity Department of the Communist Party of China. It could be said that the overall political forces affecting CMP organisation are high. The federal government policies regarding the publishing sector are likewise increasing with the passage of time.
Economical.
Financial forces affecting the publishing sector in basic and the River Bend Trading Navigating Rough Waters Case Study Solution in particular includesthe rates of paper, the income level of consumers, the inflation rate, and the overall GDP development of the nation. All these forces integrate effect the demand for the publishing market. Along with it, the economic policies associated with the import of books affect the overall business at CPM. However, China's economic conditions are quite favorable for CMP with high GDP development and customer earnings level.
Social and Demographical.
Social and demographical forces consist of the population growth, the consumer's preferences towards reading informative materials and so on. China has the greatest population on the planet with a high population growth, revealing the increasing number of consumers of the River Bend Trading Navigating Rough Waters Case Study Help. The customer choices are moving towards digital publishing rather than the traditional was of publishing. In this regard, CMP ought to concentrate on digital publishing to satisfy the altering consumer preferences.
Technological.
Technological forces affecting the CMP include the technological development in the reading methods etc. Enhancement of science and innovation along with the increase of digital publishing might lower the need for the CMP items, if specific actions would not be taken quickly.
Environmental.
Environmental forces impacting River Bend Trading Navigating Rough Waters Case Study Help includes the concerns of ecological neighborhoods over the usage of paper in publishing books. The paper utilized in the books while publishing is needed to be disposable and the ink used while publishing needs to not be damaging for the environment.
Legal.
Legal regulations for the publishing sector at whole are high. The legal regulations relating to the publishing sector is controlled by the General Administration of Press and Publication. Publishing Ordinance 1997 needs the publishers to be approved initially by the Government to be entered in the publishing market. The ordinance forbids direct participation of foreign entities and people in the publishing sector.
Industry Analysis (Porter's Five Forces Model).
Porter's 5 Forces Design could be utilized to examine the beauty of the publishing industry China. A short analysis of the Porter's 5 Forces is given as follows;.
Risk of New Entrants.
Risks of brand-new entrants in the Chinese Publishing Market is moderate. The possible growth in the industry tends to attract new entrants to the publishing industry. However, the existence of extreme competition and the requirement of substantial capital tends to demotivate brand-new entrants to go into in the market.
Hazard of Substitution.
Hazard of Alternative is high for the Chinese Publishing Industry. The substitute items for the published files is the files presented in the virtual libraries on particular sites. The altering consumer preferences towards digital knowing increase the threat of substitution for the industry.
Competitive Competition.
Competitive rivalry in the publishing industry 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 rivalry for CMP. Together with it, new entrants are also entering into the marketplace increasing the competitors for CMP.
Bargaining Power of Provider.
The significant providers of the River Bend Trading Navigating Rough Waters Case Study Help include the suppliers of the paper for releasing files. As CMP is the largest publisher in the Chinese Publishing Market, for that reason the general bargaining power of supplier for CMP is low.
Bargaining Power of Buyer.
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 market saturation, the purchasers needs high quality files at competitive prices.
Competitors Analysis.
CMP runs in an extremely competitive industry with the presence of large number of competitors. The company has a competitive position in the market with the greatest market share in the Chinese publishing market. Major rivals of River Bend Trading Navigating Rough Waters Case Study Help consist of;.
• Chemical Industry Press (CIP).
• Posts and telecommunication Press (PTP).
Chemical Market Press (CIP).
CIPis among the close competitors of CMP. Established in the very same duration, CIP releases comparable kind of books. For a large time period, CIP held the largest market share, and still ranks 3rd and 2nd in various market segments, with a major concentrate on educational publications. 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 River Bend Trading Navigating Rough Waters Case Study Analysis easily in the existing market situation.
Posts and telecommunication Press (PTP).
Another close competitor of CMP is PTP. It was also founded in the exact same period as CMP and CIP. It ranks 6th in the state-owned publishers in regards to organisation scale. It is also one of the popular gamers in the publishing market with an annual overall incomes of RMB 550 million in 2010.
Alternatives
Alternative-1: Expand towards New Markets
Pros
• Reducing dependence over the Chinese markets.
• Increasing number of Clients
• Development chances.
• Preventing the effect of market saturation in the Chinese publishing industry.
Cons
• Usage of prospective resources in expansion.
• Risk of failure in new markets.
• Time consuming.
Alernative-2: Introduce Digital Publishing
Pros
• Sustaining consumer base.
• Approaching new markets.
• Easy to present using current abilities.
• Low risk of Failure.
• Low requirement for funds.
• Increased product portfolio provides high value to consumers.
Cons
• Competitors in the market by CIP, who has prior focus on the digital publishing.
• Shift of focus from the core business sectors to the brand-new one can lead the business to lose need of its items in the market.
Recommendations
As the choices are moving towards digital publishing and the company require an immediate service to avoid the decreasing industry growth. The business could likewise consider the expansion program after the success of its digital publishing program.
Execution
In order to present digital publishing in its product portfolio, the company ought to first collects the data associated with the customer demand, the possible markets, the government regulations and the data connected to the competitors presented in the market. After that, the business should decide one possible sector for its preliminary offering. It should collect research that how it might separate its digital publishing from the existing competitors' items. After all the actions above the company must choose the preliminary offering. If the initial offering proves a success, the business ought to choose the other markets. In this method the business would be able to execute its digital publishing program.
Conclusion
Although, the growth of the publishing industry is decreasing considering that 2008, revealing a danger to the business's long term presence, but the circumstance can be managed by considering an advancement strategy in the future. The company might consider presenting digital publishingin its existing market to execute its development program at instant basis and to avoid the risk of failure for entrance in the brand-new markets.
