Shenzhen Capital Group Case Study Solution and Analysis
Shenzhen Capital Group Case Study Analysis is the largest publishing company with a greatest market share in the China's book retail market. CMP offers a number of services consisting of; collecting details, processing details and interaction services. Significant company sectors of the business include; books, regulars, consultancy and circulation. The business has a huge product portfolio and its significant products consist of books, periodicals, online media, exhibits, research reports and so on. Shenzhen Capital Group Case Study Solution has actually ended up being a specialized info service provider and a big extensive Science and Innovation publishing business through the combination of print media, audio-visual media and the network media.
Although, Shenzhen Capital Group Case Study Help has actually spent its 60 years journey efficiently, being a successful publishing house, nevertheless, the altering macro market patterns and forces bring certain obstacles to the publishing market in general and CMP in particular. These elements consist of;
• Entrance of the new publishing companies in the market.
• Declining growth of the publishing market.
• Market saturation.
• Introduction of digital publishing techniques
• 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 valuable experience, technical resources and the abilities of the business could be used to pursue the future advancement unceasingly? How could the business sustain its long term competitive position in future?
Shenzhen Capital Group Case Study Solution has specific strengths that can be utilized to reduce the risks, get rid of the weak point and avail the chances. Strengths of CMP are provided as follows;
• The long term experience of Shenzhen Capital Group Case Study Help in the publishing market i.e. 60 years enables the business to offer high quality items at a lower expense utilizing its previous experiences.
• The technical resources and abilities created by its effective journey offer a competitive benefit to CMP.
• Vast product portfolioof CMP helps it to diversify its risk and supply high value to its clients.
• Strong financial position allows the company to think about a number of development chances with no worry of raising fund externally.
In addition to the strengths, the business has certain weaknesses which might increase constraints for the business in implementing its development program. The weak points of Shenzhen Capital Group Case Study Help are given as follows;
• Despite of being a science and technology publishing firm, the company still has standard methods ofpublishing which are not compatible with the growing technological shift.
• CMP extremely relies over the Chinese markets for its development. It ought to propose specific growth plans to prevent its reliance over the Chinese markets to accomplish long term growth.
The development of the publishing industry is declining since 2008, impacting Shenzhen Capital Group Case Study Solution as well, but the growth might be restored by availing certain chances provided in the market. The marketplace opportunities for CMP include;
• The business might also present Digital Publishing by using its long term technical experience and a strong customer recognition in the market.
• CMP might consider an advancement program through the expansion towards foreign markets in order to decrease its dependence over Chinese markets by utilizing its huge financial resources.
The altering macro trends in the market and increasing competitors in the publishing industry has posed certain threats to Shenzhen Capital Group Case Study Help including;( Gurel, 2017).
• Intro of digital publishing i.e. virtual libraries could lead to decreasing market share of Shenzhen Capital Group Case Study Analysis due to the customer shift towards digital libraries.
• The existence of large number of rivals in the publishing market increase the threat for CMP to lose its competitive position in the market, as rivals can gain a strong customer base by using certain strategies like aggressive promotion, quality products, etc.
• Entryway of brand-new publishing companies in the industry along with presence of high competitors increases the hazard of losing the consumer base.
Due to absence of information, the monetary ratios of CMP could not be computed. It might be evaluated from the Appendix III that the annual overall earnings of Shenzhen Capital Group Case Study Solution throughout the period 2000-2012 are growing at a high development rate, revealing that the yearly need of the items of CMP is growing and the company is rather efficient in attracting a big number of clients at a possible rate.
In addition to it, the second chart which reveals the yearly development in the Shenzhen Capital Group Case Study Help overall properties, reveals that the business is rather effective in including value to its possessions through its revenues. The development in assets shows that the overall worth of the firm is also increasing with increasing the total earnings. (Unidentified, 2013).
Another monetary analysis of the business using the offered information could be the analysis relating to the circulation of overall profits of the company. Major part of the revenues of CMP originates from the sales of its released books i.e. 64% as displayed in the Case Appendix V. The business could move towards other organisation segments with a prospective growth to achieve its future advancement objective.
PESTEL analysis might be performed to find out the numerous external forces affecting the efficiency of the company and the recent patterns in the external environment of the company. A short PESTEL analysis of the business is given as follows; (Alanzi, 2018).
As the publishing sector could have a substantial effect on the state of mind of the people about the communist ideology of the government, for that reason, the publishing sector is highly monitored and directed by the Promotion Department of the Communist Celebration of China. For that reason, it could be stated that the overall political forces affecting Shenzhen Capital Group Case Study Solution business are high. The government policies regarding the publishing sector are likewise increasing with the passage of time.
Economic forces impacting the publishing sector in general and the CMP in specific includesthe prices of paper, the earnings level of customers, the inflation rate, and the total GDP growth of the country. All these forces combine impact the need for the publishing market.
Social and Demographical.
Social and demographical forces consist of the population growth, the customer's choices towards checking out useful materials and so on. China has the highest population worldwide with a high population development, revealing the increasing variety of customers of the Shenzhen Capital Group Case Study Analysis. Nevertheless, the consumer preferences are shifting towards digital publishing instead of the standard was of publishing. In this regard, CMP should concentrate on digital publishing to satisfy the changing consumer preferences.
Technological forces affecting the CMP consist of the technological development in the reading strategies and so on. Improvement of science and innovation along with the increase of digital publishing could reduce the demand for the CMP items, if specific actions would not be taken soon.
Environmental forces impacting Shenzhen Capital Group Case Study Solution includes the concerns of ecological communities over the use of paper in publishing books. The paper utilized in the books while publishing is required to be non reusable and the ink used while publishing should not be damaging for the environment.
Legal policies 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 Regulation 1997 requires the publishers to be authorized initially by the Government to be entered in the publishing market. The regulation prohibits direct involvement of foreign entities and individuals in the publishing sector.
Industry Analysis (Porter's 5 Forces Design).
Porter's 5 Forces Design could be utilized to examine the appearance of the publishing industry China. A quick analysis of the Porter's Five Forces is given as follows;.
Danger of New Entrants.
Risks of new entrants in the Chinese Publishing Industry is moderate. The potential growth in the market tends to attract brand-new entrants to the publishing industry. The existence of intense competition and the requirement of huge capital tends to demotivate brand-new entrants to go into in the market.
Hazard of Replacement.
Threat of Alternative is high for the Chinese Publishing Market. The replacement products for the published files is the documents provided in the digital libraries on particular websites. The changing customer choices towards digital learning increase the threat of replacement for the market.
Competitive rivalry in the publishing market is high. The presence of a great deal of consumers in the Chinese Publishing Market like CIP, PTP etc. tends to produce high competitive rivalry for CMP. In addition to it, brand-new entrants are also participating in the market increasing the competition for CMP.
Bargaining Power of Supplier.
The significant providers of the Shenzhen Capital Group Case Study Help include the providers of the paper for releasing documents. As CMP is the largest publisher in the Chinese Publishing Market, for that reason the general bargaining power of provider for CMP is low.
Bargaining Power of Buyer.
Bargaining power of buyer in the publishing market is high. Due to the presence of a a great deal of publishers in the Chinese market and the market saturation, the purchasers requires high quality files at competitive rates.
CMP runs in an extremely competitive market with the presence of a great deal of rivals. 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 Case Study Solution include;.
• Chemical Market Press (CIP).
• Posts and telecommunication Press (PTP).
Chemical Industry Press (CIP).
CIP acts 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 CMP easily in the current market situation.
Posts and telecommunication Press (PTP).
It was likewise established in the very same duration as Shenzhen Capital Group Case Study Help and CIP. It is also one of the prominent gamers in the publishing industry with a yearly total profits of RMB 550 million in 2010.
Alternative-1: Expand towards New Markets
• Minimizing reliance over the Chinese markets.
• Increasing number of Clients
• Growth chances.
• Preventing the impact of market saturation in the Chinese publishing industry.
• Use of possible resources in growth.
• Threat of failure in brand-new markets.
• Time consuming.
Alernative-2: Introduce Digital Publishing
• Sustaining consumer base.
• Approaching brand-new markets.
• Easy to introduce utilizing current abilities.
• Low threat of Failure.
• Low requirement for funds.
• Increased item portfolio provides high value to consumers.
• Competition in the market by CIP, who has prior concentrate on the digital publishing.
• Shift of focus from the core company sections to the new one can lead the company to lose demand of its products in the market.
With the deep analysis of the internal and external environment of the company together with the market analysis and the competitor analysis, Alternative 2 is recommended to CMP to achieve its future development. As the preferences are shifting towards digital publishing and the company require an instant service to avoid the declining market development. Therefore, introduction of digital publishing could prove to be an instant service with low quantity of risk for the business. Nevertheless, the company could also think about the expansion program after the success of its digital publishing program.
In order to introduce digital publishing in its item portfolio, the business ought to initially gathers the information connected to the consumer demand, the prospective markets, the government regulations and the information related to the competitors presented in the market. After that, the company must decide one possible sector for its initial offering. It ought to gather research that how it could separate its digital publishing from the existing competitors' items. The actions above the company ought to go for the initial offering. The business needs to go for the other markets if the initial offering proves a success. In this way the company would be able to implement its digital publishing program.
The growth of the publishing industry is decreasing considering that 2008, revealing a threat to the business's long term presence, however the situation can be managed by thinking about an advancement strategy in the future. The company could consider presenting digital publishingin its existing market to implement its development program at immediate basis and to avoid the threat of failure for entryway in the new markets.