Sofame Technologies Inc Sparking Growth In A Mature Manufacturing Company 2 Case Study Solution and Analysis
Introduction
Sofame Technologies Inc Sparking Growth In A Mature Manufacturing Company 2 Case Study Solution is the largest publishing business with a greatest market share in the China's book retail market. CMP offers a variety of services consisting of; collecting information, processing info and interaction services. Significant company sections of the business consist of; books, periodicals, consultancy and circulation. The company has a huge product portfolio and its significant items consist of books, periodicals, online media, exhibitions, research study reports and so on. Sofame Technologies Inc Sparking Growth In A Mature Manufacturing Company 2 Case Study Help has ended up being a specialized info company and a large detailed Science and Technology publishing business through the combination of print media, audio-visual media and the network media.
Critical Issues
CMP has spent its 60 years journey smoothly, being a successful publishing house, however, the altering macro market patterns and forces bring specific challenges to the publishing industry in general and Sofame Technologies Inc Sparking Growth In A Mature Manufacturing Company 2 Case Study Analysis in specific. These aspects consist of;
• Entryway of the brand-new publishing companies in the market.
• Declining development of the publishing market.
• Market saturation.
• Intro of digital publishing techniques
• 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 capabilities of the business 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
Sofame Technologies Inc Sparking Growth In A Mature Manufacturing Company 2 Case Study Analysis has specific strengths that can be used to minimize the hazards, conquer the weak point and avail the chances. Strengths of CMP are provided as follows;
• The long term experience of Sofame Technologies Inc Sparking Growth In A Mature Manufacturing Company 2 Case Study Analysis in the publishing market i.e. 60 years allows the company to supply high quality items at a lower cost using its prior experiences.
• The technical resources and capabilities produced by its effective journey provide a competitive advantage to CMP.
• Huge product portfolioof CMP assists it to diversify its danger and supply high value to its customers.
• Strong financial position enables the company to think about several advancement chances without any fear of raising fund externally.
Weak points
Along with the strengths, the company has particular weak points which might increase constraints for the business in executing its development program. The weaknesses of Sofame Technologies Inc Sparking Growth In A Mature Manufacturing Company 2 Case Study Analysis are given as follows;
• Despite of being a science and innovation publishing company, the company still has conventional ways ofpublishing which are not compatible with the growing technological shift.
• CMP extremely relies over the Chinese markets for its growth. It must propose particular expansion strategies to prevent its reliance over the Chinese markets to attain long term development.
Opportunities
Although, the growth of the publishing market is decreasing because 2008, affecting Sofame Technologies Inc Sparking Growth In A Mature Manufacturing Company 2 Case Study Help also, however the development might be restored by availing particular chances provided in the market. The market chances for CMP include;
• The company could also present Digital Publishing by using its long term technical experience and a strong consumer acknowledgment in the market.
• CMP might think about a development program through the expansion towards foreign markets in order to minimize its dependence over Chinese markets by using its vast financial resources.
Threats
The changing macro trends in the market and increasing competition in the publishing industry has positioned certain dangers to Sofame Technologies Inc Sparking Growth In A Mature Manufacturing Company 2 Case Study Solution consisting of;( Gurel, 2017).
• Introduction of digital publishing i.e. digital libraries could result in declining market share of Sofame Technologies Inc Sparking Growth In A Mature Manufacturing Company 2 Case Study Solution due to the consumer shift towards digital libraries.
• The existence 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 acquire a strong consumer base by utilizing specific techniques like aggressive promotion, quality products, etc.
• Entryway of new publishing companies in the industry together with presence of high competitors increases the danger of losing the consumer base.
Monetary Analysis.
The business has a rather competitive financial efficiency. Due to lack of information, the monetary ratios of CMP might not be determined. However, the total monetary performance of the company might be examined by utilizing the graphs given in the case Appendices. It might be evaluated from the Appendix III that the yearly overall profits of CMP throughout the duration 2000-2012 are growing at a high growth rate, showing that the annual demand of the products of Sofame Technologies Inc Sparking Growth In A Mature Manufacturing Company 2 Case Study Analysis is growing and the business is rather efficient in drawing in a a great deal of consumers at a potential price.
In addition to it, the second chart which reveals the yearly growth in the Sofame Technologies Inc Sparking Growth In A Mature Manufacturing Company 2 Case Study Analysis total properties, shows that the business is quite effective in adding worth to its properties through its earnings. The growth in properties reveals that the total value of the firm is likewise increasing with increasing the overall profits. (Unidentified, 2013).
Another monetary analysis of the company using the provided data could be the analysis concerning the circulation of total profits of the business. Major part of the earnings of CMP comes from the sales of its released books i.e. 64% as shown in the Case Appendix V. The company could move towards other service sections with a prospective development to attain its future advancement objective.
PESTEL Analysis
PESTEL analysis might be conducted to learn the numerous external forces affecting the performance of the company and the current trends in the external environment of the business. A brief PESTEL analysis of the business is given as follows; (Alanzi, 2018).
Political.
As the publishing sector might have a substantial effect on the frame of mind of the people about the communist ideology of the government, for that reason, the publishing sector is highly supervised and guided by the Publicity Department of the Communist Celebration of China. It might be stated that the general political forces affecting CMP business are high. The government policies concerning the publishing sector are likewise increasing with the passage of time.
Cost-effective.
Financial forces affecting the publishing sector in basic and the Sofame Technologies Inc Sparking Growth In A Mature Manufacturing Company 2 Case Study Solution in specific includesthe costs of paper, the earnings level of customers, the inflation rate, and the overall GDP development of the country. All these forces integrate impact the need for the publishing market. In addition to it, the economic policies associated with the import of books affect the overall business at CPM. China's economic conditions are quite beneficial for CMP with high GDP development and customer income level.
Social and Demographical.
The customer choices are shifting towards digital publishing rather than the conventional was of publishing. In this regard, CMP should focus on digital publishing to meet the changing consumer preferences.
Technological.
Technological forces impacting the CMP include the technological development in the reading techniques and so on. Enhancement of science and technology in addition to the increase of digital publishing might lower the demand for the CMP items, if specific actions would not be taken quickly.
Environmental.
Ecological forces affecting Sofame Technologies Inc Sparking Growth In A Mature Manufacturing Company 2 Case Study Help includes the issues of ecological communities over the use of paper in publishing books. The paper used in the books while publishing is required to be disposable and the ink used while publishing should not be damaging for the environment.
Legal.
Legal regulations for the publishing sector at whole are high. Publishing Regulation 1997 requires the publishers to be authorized first by the Federal government to be entered in the publishing market.
Market Analysis (Porter's 5 Forces Model).
Porter's Five Forces Model could be used to examine the appearance of the publishing market China. A short analysis of the Porter's 5 Forces is offered as follows;.
Hazard of New Entrants.
Hazards of brand-new entrants in the Chinese Publishing Market is moderate. The possible growth in the industry tends to attract brand-new entrants to the publishing market. The existence of extreme competitors and the requirement of substantial capital tends to demotivate brand-new entrants to go into in the market.
Threat of Replacement.
Danger of Replacement is high for the Chinese Publishing Industry. The alternative items for the published documents is the documents provided in the digital libraries on certain sites. The altering consumer preferences towards digital learning increase the danger of substitution for the industry.
Competitive Competition.
Competitive rivalry in the publishing industry is high. The presence of large number of customers in the Chinese Publishing Industry like CIP, PTP etc. tends to produce high competitive competition for CMP. Together with it, brand-new entrants are also participating in the market increasing the competition for CMP.
Bargaining Power of Provider.
The significant providers of the Sofame Technologies Inc Sparking Growth In A Mature Manufacturing Company 2 Case Study Solution consist of the suppliers of the paper for publishing files. As CMP is the biggest publisher in the Chinese Publishing Market, therefore the total bargaining power of provider for CMP is low.
Bargaining Power of Purchaser.
Bargaining power of purchaser in the publishing industry is high. Due to the existence of a a great deal of publishers in the Chinese market and the market saturation, the purchasers needs high quality documents at competitive costs.
Competitors Analysis.
CMP runs in an extremely competitive market 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. Significant rivals of Sofame Technologies Inc Sparking Growth In A Mature Manufacturing Company 2 Case Study Help include;.
• Chemical Industry Press (CIP).
• Posts and telecommunication Press (PTP).
Chemical Industry Press (CIP).
CIPis one of the close rivals of CMP. Founded in the exact same duration, CIP releases similar kind of books. For a large time period, CIP held the biggest market share, and still ranks second and 3rd in various market sectors, with a significant focus on instructional publications. CIP functions as a risk for CMP as it could wean its market share due to its long term competitive background. CIP is concentrated on digital publishing and could wean the marketplace share of Sofame Technologies Inc Sparking Growth In A Mature Manufacturing Company 2 Case Study Help easily in the present market scenario.
Posts and telecommunication Press (PTP).
Another close rival of CMP is PTP. It was also established in the very same period as CMP and CIP. It ranks 6th in the state-owned publishers in regards to service scale. It is likewise among the popular players in the publishing market with a yearly overall revenues of RMB 550 million in 2010.
Alternatives
Alternative-1: Expand towards New Markets
Pros
• Decreasing dependence over the Chinese markets.
• Increasing number of Customers
• Development opportunities.
• Avoiding the impact of market saturation in the Chinese publishing market.
Cons
• Usage of prospective resources in expansion.
• Risk of failure in brand-new markets.
• Time consuming.
Alernative-2: Introduce Digital Publishing
Pros
• Sustaining customer base.
• Approaching new markets.
• Easy to introduce utilizing present abilities.
• Low danger of Failure.
• Low requirement for funds.
• Increased item portfolio supplies high worth to consumers.
Cons
• Competition in the market by CIP, who has prior concentrate on the digital publishing.
• Shift of focus from the core organisation 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 internal and external environment of the company in addition to the market analysis and the rival analysis, Alternative 2 is recommended to CMP to accomplish its future advancement. As the preferences are shifting towards digital publishing and the business need an instant option to prevent the decreasing industry development. For that reason, intro of digital publishing could prove to be an immediate option with low amount of risk for the company. The company might likewise consider the growth program after the success of its digital publishing program.
Implementation
In order to introduce digital publishing in its item portfolio, the company must first gathers the information related to the consumer need, the possible markets, the federal government guidelines and the data related to the competitors provided in the market. If the initial offering shows a success, the company should go for the other markets. In this method the business would be able to implement its digital publishing program.
Conclusion
Although, the growth of the publishing market is decreasing since 2008, showing a risk to the company's long term existence, but the scenario can be controlled by thinking about an advancement strategy in the future. The company could consider presenting digital publishingin its existing market to implement its advancement program at instant basis and to prevent the threat of failure for entryway in the brand-new markets.
