Shanghai Zhangjiang Hi Tech Park Development Co Ltd 2 Case Study Solution and Analysis
Intro
Shanghai Zhangjiang Hi Tech Park Development Co Ltd 2 Case Study Analysis is the biggest publishing company with a greatest market share in the China's book retail market. CMP has actually become a specialized information service provider and a large detailed Science and Innovation publishing business through the integration of print media, audio-visual media and the network media.
Crucial Concerns
Although, Shanghai Zhangjiang Hi Tech Park Development Co Ltd 2 Case Study Help has actually invested its 60 years journey smoothly, being an effective publishing house, nevertheless, the changing macro market patterns and forces bring specific difficulties to the publishing industry in general and CMP in specific. These elements consist of;
• Entryway of the new publishing companies in the industry.
• Declining growth of the publishing market.
• Market saturation.
• Introduction of digital publishing strategies
• Improvement of science and technology.
The transformation 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 scenario? Do the long valuable experience, technical resources and the capabilities of the company could be utilized to strive for the future development unceasingly? How could the business sustain its long term competitive position in future?
Situational Analysis
Internal Analysis
SWOT Analysis
Strengths
Shanghai Zhangjiang Hi Tech Park Development Co Ltd 2 Case Study Help has certain strengths that can be made use of to reduce the hazards, get rid of the weakness and obtain the chances. Strengths of CMP are provided as follows;
• The long term experience of Shanghai Zhangjiang Hi Tech Park Development Co Ltd 2 Case Study Analysis in the publishing market i.e. 60 years permits the company to provide high quality items at a lower cost utilizing its previous experiences.
• The technical resources and capabilities created by its effective journey provide a competitive benefit to CMP.
• Vast product portfolioof CMP assists it to diversify its threat and offer high worth to its consumers.
• Strong monetary position enables the company to think about numerous development chances without any fear of raising fund externally.
Weaknesses
Along with the strengths, the business has specific weaknesses which could increase constraints for the business in implementing its advancement program. The weaknesses of Shanghai Zhangjiang Hi Tech Park Development Co Ltd 2 Case Study Help are offered as follows;
• Despite of being a science and technology publishing firm, the company still has traditional ways ofpublishing which are not suitable with the growing technological shift.
• CMP highly relies over the Chinese markets for its development. It should propose certain growth strategies to prevent its dependence over the Chinese markets to achieve long term development.
Opportunities
Although, the development of the publishing market is decreasing given that 2008, affecting Shanghai Zhangjiang Hi Tech Park Development Co Ltd 2 Case Study Analysis as well, however the development could be revived by availing particular chances provided in the market. The marketplace opportunities for CMP include;
• The business could likewise present Digital Publishing by utilizing its long term technical experience and a strong client acknowledgment in the market.
• CMP could think about an advancement program through the growth towards foreign markets in order to lower its reliance over Chinese markets by utilizing its large funds.
Dangers
The changing macro trends in the market and increasing competition in the publishing industry has actually presented specific threats to Shanghai Zhangjiang Hi Tech Park Development Co Ltd 2 Case Study Solution including;( Gurel, 2017).
• Intro of digital publishing i.e. virtual libraries might lead to declining market share of Shanghai Zhangjiang Hi Tech Park Development Co Ltd 2 Case Study Solution due to the consumer shift towards virtual libraries.
• The presence of a great deal of competitors in the publishing industry increase the risk for CMP to lose its competitive position in the market, as competitors can gain a strong consumer base by utilizing certain techniques like aggressive promo, quality items, and so on
• Entrance of brand-new publishing companies in the industry together with presence of high competitors increases the risk of losing the consumer base.
Monetary Analysis.
Due to lack of data, the monetary ratios of CMP could not be determined. It could be analyzed from the Appendix III that the annual total revenues of Shanghai Zhangjiang Hi Tech Park Development Co Ltd 2 Case Study Help throughout the duration 2000-2012 are growing at a high growth rate, showing that the yearly demand of the products of CMP is growing and the business is rather effective in attracting a large number of consumers at a possible rate.
Together with it, the second graph which reveals the yearly growth in the Shanghai Zhangjiang Hi Tech Park Development Co Ltd 2 Case Study Help overall assets, reveals that the business is quite effective in adding value to its possessions through its earnings. The growth in properties reveals that the total value of the company is likewise increasing with increasing the overall earnings. (Unidentified, 2013).
Another financial analysis of the business using the offered information might be the analysis relating to the distribution of total incomes of the business. 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 business could move towards other company segments with a possible development to attain its future development goal.
PESTEL Analysis
PESTEL analysis could be performed to discover the numerous external forces affecting the efficiency of the business and the recent trends in the external environment of the company. A quick PESTEL analysis of the company is offered as follows; (Alanzi, 2018).
Political.
As the publishing sector could have a substantial impact on the mindset of individuals about the communist ideology of the government, therefore, the publishing sector is highly supervised and directed by the Publicity Department of the Communist Party of China. Therefore, it might be stated that the general political forces impacting Shanghai Zhangjiang Hi Tech Park Development Co Ltd 2 Case Study Analysis business are high. The government policies concerning the publishing sector are likewise increasing with the passage of time.
Affordable.
Financial forces impacting the publishing sector in general and the Shanghai Zhangjiang Hi Tech Park Development Co Ltd 2 Case Study Help in specific includesthe rates of paper, the income level of customers, the inflation rate, and the general GDP growth of the country. All these forces integrate impact the need for the publishing market. Along with it, the financial policies related to the import of books impact the general organisation at CPM. Nevertheless, China's financial conditions are rather beneficial for CMP with high GDP growth and consumer earnings level.
Social and Demographical.
Social and demographical forces consist of the population development, the customer's choices towards reading informative products etc. China has the highest population worldwide with a high population development, revealing the increasing number of consumers of the Shanghai Zhangjiang Hi Tech Park Development Co Ltd 2 Case Study Help. The consumer preferences are shifting towards digital publishing rather than the traditional was of publishing. In this regard, CMP ought to focus on digital publishing to satisfy the altering consumer preferences.
Technological.
Technological forces affecting the CMP consist of the technological improvement in the reading methods and so on. Enhancement of science and technology together with the increase of digital publishing might minimize the demand for the CMP products, if certain actions would not be taken quickly.
Environmental.
Environmental forces impacting Shanghai Zhangjiang Hi Tech Park Development Co Ltd 2 Case Study Help includes the concerns of environmental communities over the use of paper in publishing books. The paper utilized in the books while publishing is needed to be non reusable and the ink used while publishing ought to not be hazardous for the environment.
Legal.
Legal policies for the publishing sector at whole are high. Publishing Regulation 1997 requires the publishers to be approved initially by the Government to be entered in the publishing market.
Industry Analysis (Porter's Five Forces Design).
Porter's Five Forces Model could be utilized to analyze the appearance of the publishing market China. A short analysis of the Porter's Five Forces is provided as follows;.
Risk of New Entrants.
Risks of brand-new entrants in the Chinese Publishing Market is moderate. The potential development in the market tends to attract new entrants to the publishing market. The presence of intense competitors and the requirement of huge capital tends to demotivate new entrants to go into in the market.
Hazard of Replacement.
Risk of Replacement is high for the Chinese Publishing Industry. The replacement items for the released documents is the files presented in the digital libraries on certain websites. The altering customer choices towards digital knowing increase the hazard of replacement for the market.
Competitive Competition.
Competitive rivalry in the publishing market is high. The presence of a great deal of customers in the Chinese Publishing Industry like CIP, PTP etc. tends to produce high competitive rivalry for CMP. Together with it, new entrants are also entering into the market increasing the competition for CMP.
Bargaining Power of Supplier.
The significant suppliers of the Shanghai Zhangjiang Hi Tech Park Development Co Ltd 2 Case Study Analysis include the suppliers of the paper for releasing files. As CMP is the largest publisher in the Chinese Publishing Market, for that reason the total bargaining power of supplier for CMP is low.
Bargaining Power of Buyer.
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 marketplace saturation, the buyers needs high quality documents at competitive prices.
Competitors Analysis.
CMP runs in an extremely competitive market with the presence 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. Significant rivals of Shanghai Zhangjiang Hi Tech Park Development Co Ltd 2 Case Study Help 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 could wean the market share of CMP easily in the current market scenario.
Posts and telecommunication Press (PTP).
Another close rival 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 service scale. It is also among the popular gamers in the publishing industry with a yearly overall profits of RMB 550 million in 2010.
Alternatives
Alternative-1: Expand towards New Markets
Pros
• Reducing reliance over the Chinese markets.
• Increasing number of Customers
• Growth chances.
• Preventing the impact of market saturation in the Chinese publishing market.
Cons
• Use of prospective resources in expansion.
• Danger of failure in new markets.
• Time consuming.
Alernative-2: Present Digital Publishing
Pros
• Sustaining customer base.
• Approaching brand-new markets.
• Easy to introduce utilizing current abilities.
• Low risk of Failure.
• Low requirement for funds.
• Increased product portfolio supplies high worth to customers.
Cons
• Competitors in the market by CIP, who has prior focus on the digital publishing.
• Shift of focus from the core service segments to the new one can lead the business to lose need of its products in the market.
Recommendations
As the choices are moving towards digital publishing and the company require an immediate service to prevent the decreasing industry development. The business could also consider the expansion program after the success of its digital publishing program.
Application
In order to present digital publishing in its product portfolio, the company must first gathers the information connected to the consumer need, the potential markets, the government regulations and the data associated with the rivals provided in the market. After that, the company needs to decide one potential segment for its initial offering. It should collect research study that how it might separate its digital publishing from the existing rivals' products. The actions above the business must go for the initial offering. If the initial offering proves a success, the company should opt for the other markets. In this method the business would have the ability to execute its digital publishing program.
Conclusion
The development of the publishing market is declining since 2008, showing a risk to the company's long term existence, however the circumstance can be controlled by thinking about an advancement plan in the future. The business might consider introducing digital publishingin its existing market to implement its advancement program at instant basis and to prevent the risk of failure for entrance in the brand-new markets.
