Tencent Expanding From China To The World Case Study Solution and Analysis
Introduction
Tencent Expanding From China To The World Case Study Analysis is the largest publishing company with a highest market share in the China's book retail market. CMP supplies a number of services consisting of; gathering info, processing details and interaction services. Significant company segments of the business include; books, periodicals, consultancy and circulation. The business has a large item portfolio and its significant items include books, periodicals, online media, exhibitions, research reports and so on. Tencent Expanding From China To The World Case Study Solution has actually become a specialized information service provider and a large comprehensive Science and Technology publishing company through the combination of print media, audio-visual media and the network media.
Vital Problems
CMP has actually spent its 60 years journey efficiently, being a successful publishing house, nevertheless, the changing macro market trends and forces bring certain difficulties to the publishing market in general and Tencent Expanding From China To The World Case Study Help in specific. These aspects consist of;
• Entryway of the new publishing companies in the market.
• Decreasing development of the publishing market.
• Market saturation.
• Intro of digital publishing methods
• Improvement of science and innovation.
The improvement of the macro markets have raised numerous 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 capabilities of the business could be utilized to pursue the future development unceasingly? How could the company sustain its long term competitive position in future?
Situational Analysis
Internal Analysis
SWOT Analysis
Strengths
Tencent Expanding From China To The World Case Study Help has certain strengths that can be used to decrease the risks, get rid of the weak point and obtain the opportunities. Strengths of CMP are given as follows;
• The long term experience of Tencent Expanding From China To The World Case Study Help in the publishing market i.e. 60 years allows the business to supply high quality items at a lower cost using its previous experiences.
• The technical resources and capabilities produced by its effective journey provide a competitive benefit to CMP.
• Vast product portfolioof CMP assists it to diversify its risk and provide high worth to its customers.
• Strong monetary position enables the business to think about a number of development opportunities without any fear of raising fund externally.
Weaknesses
In addition to the strengths, the company has particular weak points which could increase restrictions for the business in executing its development program. The weaknesses of Tencent Expanding From China To The World Case Study Analysis are provided as follows;
• Despite of being a science and technology publishing firm, the business still has conventional methods ofpublishing which are not suitable with the growing technological shift.
• CMP extremely relies over the Chinese markets for its development. It should propose specific expansion strategies to avoid its dependence over the Chinese markets to attain long term development.
Opportunities
Although, the growth of the publishing industry is decreasing since 2008, impacting Tencent Expanding From China To The World Case Study Analysis too, however the development might be revived by availing particular opportunities provided in the market. The market chances for CMP consist of;
• The company might likewise present Digital Publishing by using its long term technical experience and a strong customer acknowledgment in the market.
• CMP might consider a development program through the expansion towards foreign markets in order to lower its reliance over Chinese markets by using its vast financial resources.
Risks
The changing macro patterns in the market and increasing competition in the publishing market has actually posed particular risks to Tencent Expanding From China To The World Case Study Analysis including;( Gurel, 2017).
• Introduction of digital publishing i.e. virtual libraries could lead to declining market share of Tencent Expanding From China To The World Case Study Solution due to the consumer shift towards digital libraries.
• The presence of large number of competitors in the publishing industry increase the threat for CMP to lose its competitive position in the market, as rivals can acquire a strong consumer base by utilizing particular strategies like aggressive promotion, quality products, and so on
• Entrance of new publishing companies in the market along with existence of high competition increases the risk of losing the consumer base.
Monetary Analysis.
The business has a rather competitive financial performance. Due to lack of data, the monetary ratios of CMP might not be determined. However, the total financial efficiency of the company might be analyzed by using the charts given in the case Appendices. It might be examined from the Appendix III that the annual total incomes of CMP during the period 2000-2012 are growing at a high growth rate, showing that the yearly demand of the products of Tencent Expanding From China To The World Case Study Analysis is growing and the company is rather efficient in attracting a large number of consumers at a potential cost.
Along with it, the second chart which shows the yearly growth in the Tencent Expanding From China To The World Case Study Analysis total properties, shows that the business is rather efficient in adding value to its properties through its revenues. The growth in assets reveals that the overall value of the company is also increasing with increasing the total earnings. (Unknown, 2013).
Another financial analysis of the business utilizing the given data might be the analysis regarding the circulation of total incomes of the business. Huge part of the profits of CMP comes from the sales of its published books i.e. 64% as displayed in the Case Appendix V. The company might move towards other business segments with a possible development to achieve its future development objective.
PESTEL Analysis
PESTEL analysis might be performed to discover the numerous external forces impacting the performance of the business and the recent trends in the external environment of the business. A quick PESTEL analysis of the company is offered as follows; (Alanzi, 2018).
Political.
As the publishing sector could have a considerable impact on the state of mind of individuals about the communist ideology of the government, therefore, the publishing sector is extremely monitored and directed by the Publicity Department of the Communist Celebration of China. It might be stated that the general political forces affecting CMP company are high. The federal government policies relating to the publishing sector are also increasing with the passage of time.
Affordable.
Financial forces affecting the publishing sector in basic and the CMP in specific includesthe prices of paper, the earnings level of customers, the inflation rate, and the overall GDP growth of the country. All these forces integrate impact the demand for the publishing market.
Social and Demographical.
Social and demographical forces include the population development, the consumer's choices towards checking out helpful products and so on. China has the greatest population worldwide with a high population growth, revealing the increasing number of customers of the Tencent Expanding From China To The World Case Study Help. Nevertheless, the customer preferences are moving towards digital publishing instead of the traditional was of publishing. In this regard, CMP should focus on digital publishing to meet the altering customer preferences.
Technological.
Technological forces affecting the CMP include the technological advancement in the reading methods etc. Improvement of science and innovation together with the increase of digital publishing could decrease the demand for the CMP products, if particular actions would not be taken quickly.
Environmental.
Environmental forces affecting Tencent Expanding From China To The World Case Study Help consists of the issues of ecological communities over the usage of paper in publishing books. The paper utilized in the books while publishing is needed to be non reusable and the ink utilized while publishing needs to not be harmful for the environment.
Legal.
Legal policies for the publishing sector at whole are high. The legal policies relating to the publishing sector is managed by the General Administration of Press and Publication. Publishing Regulation 1997 requires the publishers to be authorized initially by the Government to be gone into in the publishing market. The ordinance prohibits direct participation of foreign entities and people in the publishing sector.
Market Analysis (Porter's 5 Forces Model).
Porter's Five Forces Model might be used to analyze the appearance of the publishing market China. A brief analysis of the Porter's 5 Forces is offered as follows;.
Hazard of New Entrants.
Risks of brand-new entrants in the Chinese Publishing Market is moderate. The possible growth in the market tends to attract brand-new entrants to the publishing market. Nevertheless, the presence of intense competition and the requirement of big capital tends to demotivate brand-new entrants to enter in the market.
Danger of Replacement.
Risk of Substitution is high for the Chinese Publishing Industry. The replacement items for the published files is the documents provided in the digital libraries on particular websites. The altering consumer choices towards digital knowing increase the risk of alternative for the industry.
Competitive Rivalry.
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. Together with it, brand-new entrants are also participating in the marketplace increasing the competitors for CMP.
Bargaining Power of Provider.
The major providers of the Tencent Expanding From China To The World Case Study Help consist of the providers of the paper for publishing files. As CMP is the biggest publisher in the Chinese Publishing Market, therefore the overall bargaining power of supplier for CMP is low.
Bargaining Power of Buyer.
Negotiating power of purchaser in the publishing market is high. Due to the existence of a a great deal of publishers in the Chinese market and the market saturation, the buyers needs high quality files at competitive costs.
Rivals Analysis.
CMP operates in a highly competitive industry with the existence of large number of competitors. The company has a competitive position in the market with the highest market share in the Chinese publishing market. Major competitors of Tencent Expanding From China To The World Case Study Analysis include;.
• Chemical Industry Press (CIP).
• Posts and telecommunication Press (PTP).
Chemical Market Press (CIP).
CIP acts as a hazard 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 current market circumstance.
Posts and telecommunication Press (PTP).
Another close competitor of CMP is PTP. It was also established in the same duration as CMP and CIP. It ranks 6th in the state-owned publishers in regards to organisation scale. It is also one of the popular players in the publishing market with an annual total revenues of RMB 550 million in 2010.
Alternatives
Alternative-1: Broaden towards New Markets
Pros
• Decreasing reliance over the Chinese markets.
• Increasing number of Consumers
• Growth opportunities.
• Preventing the impact of market saturation in the Chinese publishing industry.
Cons
• Use of prospective resources in growth.
• Danger of failure in new markets.
• Time consuming.
Alernative-2: Introduce Digital Publishing
Pros
• Sustaining customer base.
• Approaching new markets.
• Easy to introduce using present abilities.
• Low danger of Failure.
• Low requirement for funds.
• Increased product portfolio provides high value to customers.
Cons
• Competition in the market by CIP, who has prior concentrate on the digital publishing.
• Shift of focus from the core service sectors to the brand-new one can lead the business to lose demand of its products in the market.
Suggestions
As the choices are moving towards digital publishing and the business need an immediate option to avoid the decreasing market development. The company might also think about the growth program after the success of its digital publishing program.
Application
In order to introduce digital publishing in its item portfolio, the business needs to initially gathers the data related to the customer demand, the possible markets, the government guidelines and the information related to the rivals presented in the market. If the initial offering shows a success, the company ought to go for the other markets. In this way the business would be able to implement its digital publishing program.
Conclusion
Although, the development of the publishing industry 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 plan in the future. The business might consider introducing digital publishingin its existing market to implement its development program at instant basis and to prevent the danger of failure for entryway in the new markets.
