Sonaecom Takeover Of Portugal Telecom B Case Study Solution and Analysis
Introduction
Sonaecom Takeover Of Portugal Telecom B Case Study Analysis is the largest publishing company with a highest market share in the China's book retail market. CMP has actually become a specialized information company and a big thorough Science and Technology publishing business through the combination of print media, audio-visual media and the network media.
Crucial Concerns
CMP has actually invested its 60 years journey smoothly, being a successful publishing house, however, the changing macro market trends and forces bring certain difficulties to the publishing industry in basic and Sonaecom Takeover Of Portugal Telecom B Case Study Solution in specific. These factors include;
• Entrance of the new publishing companies in the industry.
• Decreasing development of the publishing market.
• Market saturation.
• Introduction of digital publishing methods
• Improvement of science and technology.
The improvement 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 circumstance? Do the long valuable experience, technical resources and the abilities of the company could be used 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
Sonaecom Takeover Of Portugal Telecom B Case Study Help has particular strengths that can be used to minimize the dangers, conquer the weakness and avail the opportunities. Strengths of CMP are given as follows;
• The long term experience of Sonaecom Takeover Of Portugal Telecom B Case Study Help in the publishing market i.e. 60 years allows the business to supply high quality products at a lower cost using its prior experiences.
• The technical resources and capabilities generated by its effective journey offer a competitive advantage to CMP.
• Vast item portfolioof CMP assists it to diversify its threat and provide high value to its clients.
• Strong financial position allows the business to think about numerous advancement opportunities without any worry of raising fund externally.
Weak points
In addition to the strengths, the business has particular weak points which might increase restrictions for the business in implementing its development program. The weak points of Sonaecom Takeover Of Portugal Telecom B Case Study Help are offered as follows;
• Despite of being a science and innovation publishing company, the business still has traditional ways ofpublishing which are not compatible with the growing technological shift.
• CMP extremely relies over the Chinese markets for its development. It should propose particular expansion strategies to avoid its reliance over the Chinese markets to achieve long term growth.
Opportunities
Although, the growth of the publishing market is decreasing given that 2008, impacting Sonaecom Takeover Of Portugal Telecom B Case Study Solution also, however the development might be revived by availing specific chances presented in the market. The marketplace opportunities for CMP include;
• The company might also introduce Digital Publishing by utilizing its long term technical experience and a strong customer acknowledgment in the market.
• CMP could consider an advancement program through the growth towards foreign markets in order to minimize its reliance over Chinese markets by using its large financial resources.
Risks
The altering macro patterns in the market and increasing competition in the publishing industry has positioned specific hazards to Sonaecom Takeover Of Portugal Telecom B Case Study Help including;( Gurel, 2017).
• Introduction of digital publishing i.e. virtual libraries could lead to decreasing market share of Sonaecom Takeover Of Portugal Telecom B Case Study Solution due to the customer shift towards virtual libraries.
• The presence of a great deal of rivals in the publishing market increase the danger for CMP to lose its competitive position in the market, as rivals can acquire a strong customer base by using certain strategies like aggressive promo, quality products, etc.
• Entrance of brand-new publishing firms in the market in addition to existence of high competition increases the risk of losing the customer base.
Financial Analysis.
The business has a rather competitive monetary performance. Due to absence of information, the monetary ratios of CMP might not be computed. The overall monetary efficiency of the business could be evaluated by using the graphs offered in the case Appendices. It could be analyzed from the Appendix III that the annual overall earnings of CMP throughout the period 2000-2012 are growing at a high growth rate, showing that the yearly need of the products of Sonaecom Takeover Of Portugal Telecom B Case Study Solution is growing and the business is rather effective in bring in a large number of customers at a potential price.
Together with it, the 2nd chart which shows the annual development in the Sonaecom Takeover Of Portugal Telecom B Case Study Solution total possessions, shows that the business is rather effective in including worth to its possessions through its revenues. The growth in possessions reveals that the overall value of the company is also increasing with increasing the overall revenues. (Unknown, 2013).
Another financial analysis of the company utilizing the given information might be the analysis regarding the distribution of total revenues of the company. Major part of the profits of CMP comes from the sales of its released books i.e. 64% as shown in the Case Appendix V. The business could move towards other business sectors with a possible development to accomplish its future development objective.
PESTEL Analysis
PESTEL analysis might be performed to find out the different external forces impacting 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).
Political.
As the publishing sector could have a considerable impact on the mindset of individuals about the communist ideology of the government, for that reason, the publishing sector is highly supervised and directed by the Publicity Department of the Communist Celebration of China. Therefore, it might be stated that the total political forces affecting Sonaecom Takeover Of Portugal Telecom B Case Study Analysis company are high. The government policies regarding the publishing sector are likewise increasing with the passage of time.
Economical.
Financial forces affecting the publishing sector in basic and the Sonaecom Takeover Of Portugal Telecom B Case Study Analysis in particular includesthe costs of paper, the income level of customers, the inflation rate, and the overall GDP growth of the country. All these forces integrate effect the need for the publishing market. In addition to it, the financial policies connected to the import of books impact the total company at CPM. China's economic conditions are quite favorable for CMP with high GDP growth and consumer income level.
Social and Demographical.
The consumer choices are shifting towards digital publishing rather than the standard was of publishing. In this regard, CMP needs to focus on digital publishing to fulfill the changing customer choices.
Technological.
Technological forces affecting the CMP include the technological advancement in the reading techniques and so on. Improvement of science and technology along with the rise of digital publishing might reduce the demand for the CMP products, if specific actions would not be taken quickly.
Environmental.
Ecological forces impacting Sonaecom Takeover Of Portugal Telecom B Case Study Analysis consists of the concerns of environmental 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 utilized while publishing must not be damaging for the environment.
Legal.
Legal guidelines for the publishing sector at whole are high. Publishing Regulation 1997 requires the publishers to be authorized first by the Government to be gone into in the publishing market.
Market Analysis (Porter's 5 Forces Model).
Porter's 5 Forces Design could be used to evaluate the beauty of the publishing market China. A short analysis of the Porter's Five Forces is given as follows;.
Danger of New Entrants.
Threats of new entrants in the Chinese Publishing Industry is moderate. The prospective growth in the industry tends to bring in brand-new entrants to the publishing market. The existence of extreme competition and the requirement of substantial capital tends to demotivate new entrants to enter in the market.
Danger of Substitution.
Risk of Alternative is high for the Chinese Publishing Market. The alternative products for the released documents is the files presented in the digital libraries on certain sites. The changing consumer choices towards digital knowing increase the threat of replacement for the market.
Competitive Competition.
Competitive competition in the publishing market is high. The presence of a great deal of customers in the Chinese Publishing Market like CIP, PTP and so on tends to produce high competitive rivalry for CMP. In addition to it, brand-new entrants are likewise entering into the marketplace increasing the competition for CMP.
Bargaining Power of Provider.
The major providers of the Sonaecom Takeover Of Portugal Telecom B Case Study Help include the providers of the paper for publishing documents. As CMP is the largest publisher in the Chinese Publishing Market, for that reason the total 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 existence of a large number of publishers in the Chinese market and the market saturation, the buyers needs high quality documents at competitive costs.
Rivals Analysis.
CMP runs in a highly competitive industry with the existence of a great deal of competitors. The company has a competitive position in the market with the greatest market share in the Chinese publishing market. Significant competitors of Sonaecom Takeover Of Portugal Telecom B Case Study Solution consist of;.
• Chemical Market Press (CIP).
• Posts and telecommunication Press (PTP).
Chemical Industry Press (CIP).
CIP acts 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 could wean the market share of CMP quickly in the current market situation.
Posts and telecommunication Press (PTP).
It was also founded in the same period as Sonaecom Takeover Of Portugal Telecom B Case Study Solution and CIP. It is likewise one of the prominent gamers in the publishing market with an annual total profits of RMB 550 million in 2010.
Alternatives
Alternative-1: Expand towards New Markets
Pros
• Lowering dependence over the Chinese markets.
• Increasing variety of Consumers
• Growth opportunities.
• Preventing the impact of market saturation in the Chinese publishing industry.
Cons
• Usage of possible resources in expansion.
• Risk of failure in brand-new markets.
• Time consuming.
Alernative-2: Introduce Digital Publishing
Pros
• Sustaining consumer base.
• Approaching new markets.
• Easy to introduce utilizing current capabilities.
• Low risk of Failure.
• Low requirement for funds.
• Increased item portfolio offers high worth to clients.
Cons
• Competitors in the market by CIP, who has prior focus on the digital publishing.
• Shift of focus from the core company sections to the new one can lead the business to lose demand of its products in the market.
Recommendations
With the deep analysis of the internal and external environment of the company along with the industry analysis and the rival analysis, Alternative 2 is advised to CMP to accomplish its future advancement. As the choices are moving towards digital publishing and the company require an instant solution to prevent the declining market development. Introduction of digital publishing might prove to be an instant service with low amount of risk for the company. However, the company might likewise think about the growth program after the success of its digital publishing program.
Application
In order to present digital publishing in its item portfolio, the company ought to initially gathers the data connected to the consumer need, the possible markets, the federal government regulations and the data associated with the rivals presented in the market. After that, the company should choose one potential segment for its initial offering. It ought to gather research study that how it might distinguish its digital publishing from the existing competitors' products. The actions above the company ought to go for the preliminary offering. If the initial offering proves a success, the business ought to go for the other markets. In this method the company would be able to execute its digital publishing program.
Conclusion
The growth of the publishing market is decreasing given that 2008, revealing a threat to the company's long term existence, however the situation can be controlled by considering an advancement plan in the future. The business could think about introducing digital publishingin its existing market to execute its advancement program at instant basis and to avoid the danger of failure for entrance in the new markets.
