Shenzhen Capital Group 2 Case Study Solution and Analysis
Introduction
Shenzhen Capital Group 2 Case Study Solution is the largest publishing business with a greatest market share in the China's book retail market. CMP has actually ended up being a specialized info provider and a big detailed Science and Technology publishing business through the integration of print media, audio-visual media and the network media.
Crucial Issues
CMP has actually spent its 60 years journey efficiently, being an effective publishing house, nevertheless, the changing macro market trends and forces bring particular obstacles to the publishing industry in general and Shenzhen Capital Group 2 Case Study Help in particular. These aspects consist of;
• Entryway of the brand-new publishing companies in the market.
• Decreasing growth of the publishing market.
• Market saturation.
• Introduction of digital publishing methods
• Improvement of science and technology.
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 situation? Do the long important experience, technical resources and the abilities of the company could be made use of to strive for the future advancement unceasingly? How could the business sustain its long term competitive position in future?
Situational Analysis
Internal Analysis
SWOT Analysis
Strengths
Shenzhen Capital Group 2 Case Study Analysis has certain strengths that can be used to decrease the dangers, conquer the weak point and avail the chances. Strengths of CMP are offered as follows;
• The long term experience of Shenzhen Capital Group 2 Case Study Help in the publishing industry i.e. 60 years enables the business to offer high quality items at a lower cost using its previous experiences.
• The technical resources and capabilities created by its successful journey offer a competitive benefit to CMP.
• Large product portfolioof CMP assists it to diversify its risk and supply high value to its consumers.
• Strong financial position permits the company to think about several advancement chances with no fear of raising fund externally.
Weak points
In addition to the strengths, the company has certain weaknesses which might increase restraints for the business in executing its advancement program. The weak points of Shenzhen Capital Group 2 Case Study Analysis are given as follows;
• Despite of being a science and technology publishing company, the company still has conventional methods ofpublishing which are not suitable with the growing technological shift.
• CMP extremely relies over the Chinese markets for its growth. It needs to propose particular expansion strategies to avoid its dependence over the Chinese markets to achieve long term growth.
Opportunities
Although, the development of the publishing industry is decreasing considering that 2008, impacting Shenzhen Capital Group 2 Case Study Solution too, however the growth could be revived by availing specific chances provided in the market. The market chances for CMP include;
• The business might likewise present 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 growth towards foreign markets in order to decrease its reliance over Chinese markets by using its large funds.
Threats
The changing macro trends in the market and increasing competition in the publishing industry has presented certain dangers to Shenzhen Capital Group 2 Case Study Help consisting of;( Gurel, 2017).
• Intro of digital publishing i.e. digital libraries could lead to decreasing market share of Shenzhen Capital Group 2 Case Study Analysis due to the consumer shift towards virtual libraries.
• The presence of a great deal of competitors in the publishing industry increase the danger for CMP to lose its competitive position in the market, as rivals can acquire a strong consumer base by utilizing certain techniques like aggressive promo, quality products, and so on
• Entrance of new publishing companies in the market along with existence of high competitors increases the risk of losing the client base.
Monetary Analysis.
Due to lack of data, the monetary ratios of CMP could not be computed. It might be examined from the Appendix III that the yearly total incomes of Shenzhen Capital Group 2 Case Study Solution during the duration 2000-2012 are growing at a high development rate, revealing that the annual need of the products of CMP is growing and the company is rather efficient in bring in a big number of customers at a possible price.
Together with it, the 2nd chart which shows the annual growth in the Shenzhen Capital Group 2 Case Study Solution total assets, reveals that the business is quite efficient in adding worth to its properties through its revenues. The growth in possessions reveals that the overall value of the firm is likewise increasing with increasing the overall revenues. (Unknown, 2013).
Another monetary analysis of the business using the provided information might be the analysis regarding the distribution of total earnings of the company. 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 business sectors with a prospective growth to achieve its future advancement goal.
PESTEL Analysis
PESTEL analysis could be conducted to discover the numerous external forces impacting the performance of the business 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 could have a considerable influence on the frame of mind of the people about the communist ideology of the federal government, therefore, the publishing sector is extremely supervised and guided by the Promotion Department of the Communist Celebration of China. For that reason, it might be stated that the overall political forces impacting Shenzhen Capital Group 2 Case Study Solution organisation are high. The government policies concerning the publishing sector are likewise increasing with the passage of time.
Economical.
Economic forces affecting the publishing sector in basic and the CMP in specific includesthe rates of paper, the earnings level of customers, the inflation rate, and the overall GDP development of the country. All these forces combine impact the need for the publishing market.
Social and Demographical.
Social and demographical forces include the population development, the customer's choices towards checking out helpful materials and so on. China has the highest population in the world with a high population growth, showing the increasing number of consumers of the Shenzhen Capital Group 2 Case Study Analysis. The consumer choices are shifting towards digital publishing rather than the standard was of publishing. In this regard, CMP should focus on digital publishing to satisfy the changing customer preferences.
Technological.
Technological forces impacting the CMP include the technological development in the reading methods and so on. Improvement of science and technology along with the increase of digital publishing might decrease the need for the CMP items, if certain actions would not be taken quickly.
Environmental.
Ecological forces impacting Shenzhen Capital Group 2 Case Study Help includes the concerns of environmental communities over the usage 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 should not be harmful for the environment.
Legal.
Legal guidelines for the publishing sector at whole are high. Publishing Regulation 1997 requires the publishers to be approved first by the Federal government to be gone into in the publishing market.
Market Analysis (Porter's 5 Forces Design).
Porter's Five Forces Design could be utilized to evaluate the attractiveness of the publishing industry China. A brief analysis of the Porter's Five Forces is provided as follows;.
Risk of New Entrants.
Threats of new entrants in the Chinese Publishing Market is moderate. The prospective development in the market tends to attract brand-new entrants to the publishing industry. The existence of extreme competition and the requirement of huge capital tends to demotivate new entrants to go into in the market.
Hazard of Substitution.
Threat of Replacement is high for the Chinese Publishing Market. The substitute products for the published files is the documents provided in the digital libraries on certain websites. The altering consumer preferences towards digital learning increase the danger of substitution for the industry.
Competitive Rivalry.
Competitive competition in the publishing industry is high. The existence of a great deal of customers in the Chinese Publishing Market like CIP, PTP and so on tends to produce high competitive competition for CMP. Along with it, brand-new entrants are likewise participating in the market increasing the competition for CMP.
Bargaining Power of Supplier.
The major suppliers of the Shenzhen Capital Group 2 Case Study Help include the suppliers of the paper for publishing documents. As CMP is the biggest publisher in the Chinese Publishing Market, therefore the general bargaining power of supplier for CMP is low.
Bargaining Power of Purchaser.
Bargaining power of buyer in the publishing industry is high. Due to the presence of a large number of publishers in the Chinese market and the market saturation, the buyers requires high quality files at competitive costs.
Competitors Analysis.
CMP operates in a highly competitive industry with the presence of a great deal of rivals. However, the company has a competitive position in the market with the highest market share in the Chinese publishing market. Major competitors of Shenzhen Capital Group 2 Case Study Help include;.
• Chemical Industry Press (CIP).
• Posts and telecommunication Press (PTP).
Chemical Market Press (CIP).
CIPis one of the close rivals of CMP. Founded in the very same period, CIP publishes similar type of books. For a big time period, CIP held the biggest market share, and still ranks 2nd and 3rd in different market segments, with a major focus on academic publications. CIP serves as a risk for CMP as it could wean its market share due to its long term competitive background. CIP is focused on digital publishing and could wean the market share of Shenzhen Capital Group 2 Case Study Analysis easily in the existing market circumstance.
Posts and telecommunication Press (PTP).
Another close competitor of CMP is PTP. It was likewise founded in the very same duration as CMP and CIP. It ranks 6th in the state-owned publishers in regards to business scale. It is also among the prominent players in the publishing market with a yearly overall earnings of RMB 550 million in 2010.
Alternatives
Alternative-1: Expand towards New Markets
Pros
• Lowering reliance over the Chinese markets.
• Increasing variety of Consumers
• Development chances.
• Preventing the effect of market saturation in the Chinese publishing market.
Cons
• Usage of possible resources in expansion.
• Threat of failure in brand-new markets.
• Time consuming.
Alernative-2: Present Digital Publishing
Pros
• Sustaining customer base.
• Approaching brand-new markets.
• Easy to introduce utilizing present abilities.
• Low threat of Failure.
• Low requirement for funds.
• Increased item portfolio supplies high value to clients.
Cons
• Competitors in the market by CIP, who has prior concentrate on the digital publishing.
• Shift of focus from the core company sectors to the new one can lead the company to lose need of its products in the market.
Suggestions
With the deep analysis of the external and internal environment of the business in addition to the market analysis and the rival analysis, Alternative 2 is advised to CMP to achieve its future development. As the choices are shifting towards digital publishing and the business require an instant solution to avoid the decreasing market development. For that reason, introduction of digital publishing might show to be an instant service with low amount of danger for the business. However, the business could likewise consider the growth program after the success of its digital publishing program.
Implementation
In order to present digital publishing in its product portfolio, the business must initially gathers the data associated with the customer need, the potential markets, the government regulations and the information associated with the rivals presented in the market. After that, the company should choose one prospective section for its preliminary offering. It ought to collect research that how it might differentiate its digital publishing from the existing competitors' items. After all the actions above the business should opt for the preliminary offering. The company must go for the other markets if the preliminary offering proves a success. In this way the business would be able to implement its digital publishing program.
Conclusion
The growth of the publishing market is decreasing considering that 2008, revealing a threat to the business's long term presence, however the scenario can be managed by thinking about a development strategy in the future. The company could consider presenting digital publishingin its existing market to execute its development program at instant basis and to avoid the threat of failure for entryway in the new markets.
