Strategic Management Case Study Solution and Analysis
Strategic Management Case Study Analysis is the biggest publishing business with a greatest market share in the China's book retail market. CMP offers a number of services consisting of; gathering info, processing details and communication services. Major company sectors of the business consist of; books, periodicals, consultancy and circulation. The business has a huge item portfolio and its major products include books, regulars, online media, exhibits, research study reports and so on. Strategic Management Case Study Solution has ended up being a specialized info service provider and a big comprehensive Science and Technology publishing business through the combination of print media, audio-visual media and the network media.
CMP has actually spent its 60 years journey smoothly, being a successful publishing house, nevertheless, the changing macro market patterns and forces bring certain challenges to the publishing market in general and Strategic Management Case Study Solution in particular. These factors include;
• Entrance of the brand-new publishing firms in the industry.
• Decreasing growth of the publishing market.
• Market saturation.
• Introduction of digital publishing strategies
• Enhancement of science and technology.
The transformation of the macro markets have raised numerous concerns 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 business could be utilized to pursue the future development unceasingly? How could the company sustain its long term competitive position in future?
Strategic Management Case Study Solution has particular strengths that can be used to reduce the hazards, get rid of the weak point and get the opportunities. Strengths of CMP are given as follows;
• The long term experience of Strategic Management Case Study Solution in the publishing industry i.e. 60 years enables the company to provide high quality products at a lower cost using its previous experiences.
• The technical resources and capabilities created by its effective journey supply a competitive benefit to CMP.
• Huge item portfolioof CMP helps it to diversify its risk and offer high value to its customers.
• Strong monetary position permits the company to consider several advancement opportunities with no fear of raising fund externally.
Together with the strengths, the company has specific weak points which might increase restraints for the business in executing its development program. The weak points of Strategic Management Case Study Analysis are given as follows;
• Despite of being a science and technology publishing company, the company still has standard ways ofpublishing which are not compatible with the growing technological shift.
• CMP highly relies over the Chinese markets for its development. It should propose certain expansion plans to prevent its reliance over the Chinese markets to accomplish long term development.
The growth of the publishing industry is decreasing considering that 2008, affecting Strategic Management Case Study Solution as well, but the growth could be revived by availing particular chances provided in the market. The market chances for CMP consist of;
• The company could likewise introduce Digital Publishing by utilizing its long term technical experience and a strong consumer acknowledgment in the market.
• CMP might think about an advancement program through the expansion towards foreign markets in order to reduce its reliance over Chinese markets by using its huge financial resources.
The altering macro patterns in the market and increasing competition in the publishing market has positioned particular dangers to Strategic Management Case Study Analysis consisting of;( Gurel, 2017).
• Intro of digital publishing i.e. virtual libraries might lead to declining market share of Strategic Management Case Study Solution due to the customer shift towards virtual libraries.
• The presence of large number of rivals in the publishing industry increase the hazard for CMP to lose its competitive position in the market, as competitors can gain a strong customer base by utilizing certain strategies like aggressive promotion, quality items, etc.
• Entryway of brand-new publishing firms in the industry together with presence of high competition increases the threat of losing the consumer base.
The business has a quite competitive financial efficiency. Due to absence of data, the monetary ratios of CMP could not be determined. The general financial performance of the company could be examined by utilizing the charts provided in the case Appendices. It could be examined from the Appendix III that the yearly overall earnings of CMP during the duration 2000-2012 are growing at a high growth rate, revealing that the yearly demand of the items of Strategic Management Case Study Analysis is growing and the business is quite efficient in attracting a large number of clients at a possible price.
In addition to it, the 2nd chart which shows the annual growth in the Strategic Management Case Study Analysis total assets, shows that the company is quite effective in adding value to its assets through its earnings. The development in possessions shows that the total worth of the firm is also increasing with increasing the total revenues. (Unidentified, 2013).
Another monetary analysis of the business using the offered information might be the analysis relating to the circulation of total profits of the business. Huge part of the earnings of CMP originates from the sales of its published books i.e. 64% as displayed in the Case Appendix V. The company could move towards other service segments with a possible development to accomplish its future development goal.
PESTEL analysis could be conducted to learn 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 company is given as follows; (Alanzi, 2018).
As the publishing sector might have a substantial impact on the mindset of the people about the communist ideology of the federal government, therefore, the publishing sector is highly supervised and directed by the Promotion Department of the Communist Party of China. It might be said that the general political forces impacting CMP 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 particular includesthe prices of paper, the earnings level of customers, the inflation rate, and the general GDP growth of the nation. All these forces integrate effect the demand for the publishing market.
Social and Demographical.
Social and demographical forces consist of the population development, the consumer's preferences towards reading informative materials etc. China has the highest population in the world with a high population growth, showing the increasing variety of customers of the Strategic Management Case Study Analysis. However, the consumer choices are shifting towards digital publishing rather than the conventional was of publishing. In this regard, CMP ought to focus on digital publishing to satisfy the changing consumer preferences.
Technological forces affecting the CMP include the technological advancement in the reading methods and so on. Improvement of science and technology in addition to the increase of digital publishing could minimize the need for the CMP products, if specific actions would not be taken soon.
Ecological forces impacting Strategic Management Case Study Analysis consists of the issues of environmental neighborhoods over the usage of paper in publishing books. The paper utilized in the books while publishing is needed to be disposable and the ink utilized while publishing must not be damaging for the environment.
Legal regulations for the publishing sector at whole are high. Publishing Ordinance 1997 requires the publishers to be authorized initially by the Federal government to be gone into in the publishing market.
Industry Analysis (Porter's 5 Forces Design).
Porter's 5 Forces Design could be utilized to evaluate the beauty of the publishing market China. A short analysis of the Porter's Five Forces is given as follows;.
Hazard of New Entrants.
Dangers of new entrants in the Chinese Publishing Market is moderate. The possible development in the market tends to attract brand-new entrants to the publishing market. However, the presence of intense competition and the requirement of huge capital tends to demotivate brand-new entrants to go into in the marketplace.
Danger of Alternative.
Risk of Replacement is high for the Chinese Publishing Market. The substitute products for the released files is the documents presented in the virtual libraries on certain websites. The changing customer preferences towards digital learning increase the danger of replacement for the industry.
Competitive rivalry in the publishing industry is high. The existence of a great deal of customers in the Chinese Publishing Market like CIP, PTP and so on tends to produce high competitive competition for CMP. Together with it, new entrants are likewise entering into the market increasing the competition for CMP.
Bargaining Power of Provider.
The significant providers of the Strategic Management Case Study Analysis consist of the providers of the paper for publishing files. As CMP is the largest publisher in the Chinese Publishing Market, for that reason the overall bargaining power of provider for CMP is low.
Bargaining Power of Purchaser.
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 buyers requires high quality files at competitive rates.
CMP runs in a highly competitive industry with the existence of large number of rivals. The business has a competitive position in the market with the highest market share in the Chinese publishing market. Major rivals of Strategic Management 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 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 existing market scenario.
Posts and telecommunication Press (PTP).
Another close competitor of CMP is PTP. It was likewise established in the very same duration as CMP and CIP. It ranks 6th in the state-owned publishers in regards to organisation scale. It is also among the popular players in the publishing market with a yearly overall revenues of RMB 550 million in 2010.
Alternative-1: Broaden towards New Markets
• Minimizing dependence over the Chinese markets.
• Increasing variety of Customers
• Development chances.
• Preventing the impact of market saturation in the Chinese publishing market.
• Usage of prospective resources in expansion.
• Risk of failure in new markets.
• Time consuming.
Alernative-2: Introduce Digital Publishing
• Sustaining customer base.
• Approaching brand-new markets.
• Easy to introduce using current abilities.
• Low risk of Failure.
• Low requirement for funds.
• Increased product portfolio supplies high worth to clients.
• Competition in the market by CIP, who has prior concentrate on the digital publishing.
• Shift of focus from the core business sectors to the new one can lead the company to lose demand of its items in the market.
With the deep analysis of the external and internal environment of the company together with 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 company require an immediate service to prevent the decreasing market development. Therefore, introduction of digital publishing might prove to be an immediate service with low quantity of danger for the business. Nevertheless, the business could also think about the expansion program after the success of its digital publishing program.
In order to present digital publishing in its product portfolio, the company should initially collects the data related to the customer demand, the prospective markets, the federal government regulations and the information related to the rivals provided in the market. After that, the business must decide one possible section for its initial offering. It needs to gather research study that how it might separate its digital publishing from the existing competitors' items. After all the steps above the business must go for the initial offering. The company needs to go for the other markets if the preliminary offering shows a success. In this method the company would have the ability to implement its digital publishing program.
Although, the growth of the publishing market is declining since 2008, showing a hazard to the business's long term existence, however the scenario can be managed by thinking about a development strategy in the future. The company could think about presenting digital publishingin its existing market to implement its advancement program at immediate basis and to prevent the risk of failure for entryway in the brand-new markets.