Shenzhen Capital Group Case Study Solution and Analysis
Shenzhen Capital Group Case Study Analysis is the biggest publishing company with a highest market share in the China's book retail market. CMP has become a specialized information company and a large comprehensive Science and Technology publishing company through the integration of print media, audio-visual media and the network media.
Although, Shenzhen Capital Group Case Study Help has actually spent its 60 years journey smoothly, being an effective publishing house, nevertheless, the changing macro market patterns and forces bring certain difficulties to the publishing market in basic and CMP in specific. These elements consist of;
• Entrance of the brand-new publishing firms in the market.
• Declining growth of the publishing market.
• Market saturation.
• Introduction of digital publishing strategies
• Improvement of science and innovation.
The transformation of the macro markets have raised numerous questions to the management at CPM that what could be the future of CMP in this circumstance? Do the long important experience, technical resources and the capabilities of the business could be made use of to pursue the future advancement unceasingly? How could the business sustain its long term competitive position in future?
Shenzhen Capital Group Case Study Analysis has certain strengths that can be made use of to minimize the hazards, get rid of the weakness and get the chances. Strengths of CMP are provided as follows;
• The long term experience of Shenzhen Capital Group Case Study Analysis in the publishing industry i.e. 60 years enables the company to provide high quality products at a lower cost utilizing its prior experiences.
• The technical resources and capabilities produced by its successful journey provide a competitive benefit to CMP.
• Vast item portfolioof CMP assists it to diversify its threat and provide high value to its customers.
• Strong financial position permits the company to consider numerous development opportunities without any worry of raising fund externally.
In addition to the strengths, the business has particular weak points which could increase restrictions for the business in executing its advancement program. The weaknesses of Shenzhen Capital Group Case Study Analysis are offered as follows;
• Despite of being a science and technology publishing firm, the business still has conventional ways ofpublishing which are not suitable with the growing technological shift.
• CMP highly relies over the Chinese markets for its growth. It must propose particular growth plans to prevent its dependence over the Chinese markets to achieve long term development.
The development of the publishing market is declining given that 2008, impacting Shenzhen Capital Group Case Study Help as well, but the growth could be revived by availing specific chances provided in the market. The marketplace opportunities for CMP include;
• The business might likewise introduce Digital Publishing by using its long term technical experience and a strong consumer recognition in the market.
• CMP might consider an advancement program through the expansion towards foreign markets in order to lower its reliance over Chinese markets by utilizing its vast funds.
The altering macro trends in the market and increasing competitors in the publishing market has presented certain threats to Shenzhen Capital Group Case Study Solution consisting of;( Gurel, 2017).
• Intro of digital publishing i.e. digital libraries could cause declining market share of Shenzhen Capital Group Case Study Analysis due to the customer shift towards virtual libraries.
• The presence of a great deal of competitors in the publishing market increase the threat for CMP to lose its competitive position in the market, as competitors can acquire a strong consumer base by utilizing certain methods like aggressive promotion, quality items, and so on
• Entryway of new publishing firms in the market in addition to presence of high competitors increases the hazard of losing the client base.
The company has a quite competitive financial efficiency. Due to absence of data, the financial ratios of CMP could not be determined. Nevertheless, the overall monetary performance of the company might be analyzed by utilizing the charts given in the case Appendices. It might be analyzed from the Appendix III that the annual overall revenues of CMP throughout the period 2000-2012 are growing at a high growth rate, showing that the annual demand of the products of Shenzhen Capital Group Case Study Solution is growing and the company is rather efficient in bring in a large number of consumers at a possible price.
Along with it, the 2nd chart which shows the annual growth in the Shenzhen Capital Group Case Study Solution overall possessions, reveals that the business is rather efficient in including value to its assets through its incomes. The development in properties reveals that the overall value of the company is likewise increasing with increasing the total incomes. (Unidentified, 2013).
Another monetary analysis of the company using the provided information could be the analysis relating to the circulation of total earnings of the business. Huge 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 could move towards other company segments with a prospective development to achieve its future development goal.
PESTEL analysis could be conducted to learn the different external forces impacting the efficiency 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 might have a significant influence on the frame of mind of the people about the communist ideology of the government, therefore, the publishing sector is extremely monitored and directed by the Publicity Department of the Communist Party of China. Therefore, it might be stated that the general political forces affecting Shenzhen Capital Group Case Study Analysis 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 CMP in particular includesthe costs of paper, the earnings level of consumers, the inflation rate, and the general GDP growth of the nation. All these forces combine effect the need for the publishing market.
Social and Demographical.
The customer choices are moving towards digital publishing rather than the standard was of publishing. In this regard, CMP should focus on digital publishing to satisfy the altering consumer preferences.
Technological forces affecting the CMP consist of the technological development in the reading strategies and so on. Improvement of science and innovation in addition to the increase of digital publishing might reduce the need for the CMP products, if particular actions would not be taken soon.
Ecological forces impacting Shenzhen Capital Group Case Study Help includes the concerns of environmental neighborhoods over the use of paper in publishing books. The paper used in the books while publishing is needed to be non reusable and the ink used while publishing needs to not be harmful for the environment.
Legal guidelines for the publishing sector at whole are high. The legal guidelines relating to the publishing sector is managed by the General Administration of Press and Publication. Publishing Ordinance 1997 requires the publishers to be approved initially by the Federal government to be gone into in the publishing market. The ordinance forbids direct involvement of foreign entities and individuals in the publishing sector.
Industry Analysis (Porter's Five Forces Model).
Porter's 5 Forces Model could be utilized to examine the attractiveness of the publishing market China. A short analysis of the Porter's 5 Forces is provided as follows;.
Hazard of New Entrants.
Dangers of brand-new entrants in the Chinese Publishing Market is moderate. The prospective growth in the industry tends to draw in new entrants to the publishing market. The existence of extreme competitors and the requirement of big capital tends to demotivate brand-new entrants to enter in the market.
Threat of Substitution.
Risk of Alternative is high for the Chinese Publishing Market. The substitute items for the released documents is the documents provided in the virtual libraries on certain websites. The altering customer preferences towards digital learning increase the threat of substitution for the industry.
Competitive rivalry in the publishing market is high. The existence of large number of consumers in the Chinese Publishing Market like CIP, PTP and so on tends to produce high competitive competition for CMP. In addition to it, brand-new entrants are also participating in the market increasing the competitors for CMP.
Bargaining Power of Supplier.
The significant suppliers of the Shenzhen Capital Group Case Study Help include the providers 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.
Negotiating power of buyer 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 costs.
CMP runs in a highly competitive industry with the existence of a great deal of rivals. However, the company 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 Industry Press (CIP).
• Posts and telecommunication Press (PTP).
Chemical Industry Press (CIP).
CIPis among the close competitors of CMP. Established in the exact same period, CIP publishes similar type of books. For a large period, CIP held the biggest market share, and still ranks second and third in different market segments, with a significant concentrate on educational publications. CIP serves as a threat for CMP as it could wean its market share due to its long term competitive background. CIP is focused on digital publishing and might wean the market share of Shenzhen Capital Group Case Study Help easily in the present market situation.
Posts and telecommunication Press (PTP).
Another close rival of CMP is PTP. It was likewise founded in the very same duration as CMP and CIP. It ranks sixth in the state-owned publishers in terms of service scale. It is likewise among the popular players in the publishing industry with an annual overall profits of RMB 550 million in 2010.
Alternative-1: Broaden towards New Markets
• Reducing reliance over the Chinese markets.
• Increasing number of Consumers
• Growth opportunities.
• Preventing the effect of market saturation in the Chinese publishing industry.
• Usage of potential resources in expansion.
• Danger of failure in new markets.
• Time consuming.
Alernative-2: Present Digital Publishing
• Sustaining consumer base.
• Approaching brand-new markets.
• Easy to introduce using current abilities.
• Low danger of Failure.
• Low requirement for funds.
• Increased item portfolio offers high value to consumers.
• Competitors in the market by CIP, who has prior concentrate on the digital publishing.
• Shift of focus from the core service sectors to the new one can lead the business to lose need of its items in the market.
With the deep analysis of the internal and external environment of the company in addition to the market analysis and the competitor analysis, Alternative 2 is suggested to CMP to attain its future advancement. As the preferences are moving towards digital publishing and the business require an immediate solution to avoid the declining industry development. For that reason, intro of digital publishing could prove to be an instant solution with low amount of threat for the company. Nevertheless, the company could likewise think about the expansion program after the success of its digital publishing program.
In order to introduce digital publishing in its item portfolio, the company should first gathers the information related to the consumer demand, the prospective markets, the federal government policies and the data related to the rivals provided in the market. If the initial offering proves a success, the company should go for the other markets. In this way the business would be able to implement its digital publishing program.
Although, the development of the publishing market is decreasing considering that 2008, showing a hazard to the company's long term existence, but the situation can be managed by considering a development strategy in the future. The business could consider presenting digital publishingin its existing market to implement its development program at immediate basis and to prevent the danger of failure for entrance in the new markets.