Shenzhen Capital Group 2 Case Study Solution and Analysis
Shenzhen Capital Group 2 Case Study Solution is the largest publishing company with a highest market share in the China's book retail market. CMP has become a specialized information service provider and a large thorough Science and Innovation publishing company through the combination of print media, audio-visual media and the network media.
Although, Shenzhen Capital Group 2 Case Study Analysis has actually spent its 60 years journey efficiently, being a successful publishing house, however, the altering macro market patterns and forces bring particular challenges to the publishing industry in basic and CMP in particular. These aspects include;
• Entryway of the new publishing firms in the market.
• Declining development of the publishing market.
• Market saturation.
• Intro of digital publishing strategies
• Improvement of science and innovation.
The transformation of the macro markets have raised a number of questions 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 strive for the future development unceasingly? How could the business sustain its long term competitive position in future?
Shenzhen Capital Group 2 Case Study Help has specific strengths that can be made use of to decrease the risks, overcome the weakness and avail the opportunities. Strengths of CMP are offered as follows;
• The long term experience of Shenzhen Capital Group 2 Case Study Solution in the publishing market i.e. 60 years permits the business to supply high quality products at a lower expense using its previous experiences.
• The technical resources and abilities created by its effective journey provide a competitive benefit to CMP.
• Huge product portfolioof CMP assists it to diversify its risk and offer high value to its customers.
• Strong monetary position permits the business to consider numerous advancement opportunities with no fear of raising fund externally.
In addition to the strengths, the company has certain weak points which might increase restraints for the business in implementing its advancement program. The weaknesses of Shenzhen Capital Group 2 Case Study Help are offered as follows;
• Despite of being a science and technology publishing company, the business still has traditional ways ofpublishing which are not suitable with the growing technological shift.
• CMP extremely relies over the Chinese markets for its growth. It needs to propose certain expansion plans to prevent its reliance over the Chinese markets to accomplish long term development.
Although, the growth of the publishing market is declining because 2008, affecting Shenzhen Capital Group 2 Case Study Help also, however the development could be revived by availing particular opportunities presented in the market. The marketplace opportunities for CMP include;
• The company might likewise present Digital Publishing by utilizing its long term technical experience and a strong customer acknowledgment in the market.
• CMP might think about a development program through the expansion towards foreign markets in order to lower its dependence over Chinese markets by utilizing its large funds.
The changing macro patterns in the market and increasing competition in the publishing market has postured particular threats to Shenzhen Capital Group 2 Case Study Solution consisting of;( Gurel, 2017).
• Intro of digital publishing i.e. digital libraries might cause declining market share of Shenzhen Capital Group 2 Case Study Solution due to the customer shift towards digital libraries.
• The existence of a great deal of rivals 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 utilizing specific strategies like aggressive promotion, quality items, etc.
• Entrance of brand-new publishing companies in the industry together with existence of high competition increases the hazard of losing the customer base.
Due to lack of information, the financial ratios of CMP could not be computed. It might be evaluated from the Appendix III that the annual total incomes of Shenzhen Capital Group 2 Case Study Solution during the duration 2000-2012 are growing at a high growth rate, revealing that the yearly need of the items of CMP is growing and the company is rather efficient in bring in a big number of clients at a potential price.
Along with it, the second chart which shows the yearly growth in the Shenzhen Capital Group 2 Case Study Help overall assets, shows that the company is quite effective in including value to its possessions through its earnings. The development in assets reveals that the overall value of the firm is also increasing with increasing the overall incomes. (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 earnings of CMP comes from the sales of its released books i.e. 64% as displayed in the Case Appendix V. The business might move towards other company sectors with a potential growth to attain its future advancement goal.
PESTEL analysis might be performed to learn the different 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 offered as follows; (Alanzi, 2018).
As the publishing sector could have a substantial effect on the frame of mind of individuals about the communist ideology of the government, therefore, the publishing sector is highly supervised and assisted by the Publicity Department of the Communist Party of China. It could be said that the general political forces affecting CMP organisation are high. The government policies relating to the publishing sector are likewise increasing with the passage of time.
Financial forces impacting the publishing sector in basic and the Shenzhen Capital Group 2 Case Study Analysis in particular includesthe prices of paper, the earnings level of consumers, the inflation rate, and the overall GDP growth of the nation. All these forces integrate effect the need for the publishing market. Along with it, the financial policies connected to the import of books impact the total organisation at CPM. China's financial conditions are rather favorable for CMP with high GDP growth and customer earnings level.
Social and Demographical.
Social and demographical forces include the population development, the consumer's choices towards reading helpful materials and so on. China has the highest population worldwide with a high population growth, showing the increasing variety of consumers of the Shenzhen Capital Group 2 Case Study Solution. The consumer choices are moving towards digital publishing rather than the conventional was of publishing. In this regard, CMP must focus on digital publishing to meet the changing customer preferences.
Technological forces affecting the CMP consist of the technological development in the reading strategies etc. Improvement of science and innovation along with the rise of digital publishing could lower the demand for the CMP products, if particular actions would not be taken soon.
Ecological forces impacting Shenzhen Capital Group 2 Case Study Help consists of the concerns of ecological neighborhoods over the usage of paper in publishing books. The paper utilized in the books while publishing is required to be disposable and the ink used while publishing must not be hazardous for the environment.
Legal regulations for the publishing sector at whole are high. The legal guidelines concerning the publishing sector is controlled by the General Administration of Press and Publication. Publishing Ordinance 1997 requires the publishers to be approved first by the Government to be entered in the publishing market. The regulation prohibits direct involvement of foreign entities and people in the publishing sector.
Industry Analysis (Porter's 5 Forces Model).
Porter's 5 Forces Design might be utilized to analyze the attractiveness of the publishing industry China. A quick analysis of the Porter's 5 Forces is given as follows;.
Hazard of New Entrants.
Dangers of brand-new entrants in the Chinese Publishing Industry is moderate. The prospective growth in the market tends to draw in new entrants to the publishing industry. The presence of intense competition and the requirement of substantial capital tends to demotivate brand-new entrants to enter in the market.
Danger of Substitution.
Threat of Alternative is high for the Chinese Publishing Market. The alternative products for the released documents is the documents presented in the digital libraries on specific sites. The changing consumer preferences towards digital learning increase the danger of alternative for the industry.
Competitive rivalry in the publishing market is high. The existence of a great deal of consumers in the Chinese Publishing Market like CIP, PTP and so on tends to produce high competitive competition for CMP. Together with it, brand-new entrants are likewise entering into the marketplace increasing the competition for CMP.
Bargaining Power of Provider.
The major suppliers of the Shenzhen Capital Group 2 Case Study Help include 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 Buyer.
Haggling power of buyer in the publishing industry is high. Due to the presence of a a great deal of publishers in the Chinese market and the market saturation, the buyers needs high quality files at competitive costs.
CMP runs in an extremely competitive industry with the existence of large number of competitors. The business has a competitive position in the market with the greatest market share in the Chinese publishing market. Major competitors of Shenzhen Capital Group 2 Case Study Solution include;.
• Chemical Industry Press (CIP).
• Posts and telecommunication Press (PTP).
Chemical Market Press (CIP).
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 CMP quickly in the present market scenario.
Posts and telecommunication Press (PTP).
Another close rival of CMP is PTP. It was also founded in the very same duration as CMP and CIP. It ranks 6th in the state-owned publishers in regards to organisation scale. It is likewise one of the popular gamers in the publishing industry with an annual overall revenues of RMB 550 million in 2010.
Alternative-1: Expand towards New Markets
• Decreasing reliance over the Chinese markets.
• Increasing number of Customers
• Growth chances.
• Avoiding the effect of market saturation in the Chinese publishing industry.
• Use of potential resources in growth.
• Risk of failure in new markets.
• Time consuming.
Alernative-2: Present Digital Publishing
• Sustaining consumer base.
• Approaching brand-new markets.
• Easy to present using present abilities.
• Low threat of Failure.
• Low requirement for funds.
• Increased product portfolio supplies high worth to consumers.
• Competitors in the market by CIP, who has prior focus on the digital publishing.
• Shift of focus from the core business segments to the new one can lead the company to lose demand of its items in the market.
As the preferences are moving towards digital publishing and the business require an instant solution to prevent the decreasing industry development. The company might also consider the expansion program after the success of its digital publishing program.
In order to introduce digital publishing in its product portfolio, the company needs to initially gathers the information related to the customer demand, the prospective 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 should collect research that how it might separate its digital publishing from the existing rivals' items. The actions above the company need to go for the preliminary offering. If the preliminary offering proves a success, the business ought to choose the other markets. In this way the business would have the ability to execute its digital publishing program.
Although, the development of the publishing market is declining because 2008, showing a risk to the company's long term presence, however the scenario can be managed by thinking about a development plan in the future. The business could think about introducing digital publishingin its existing market to implement its development program at instant basis and to prevent the danger of failure for entryway in the new markets.