Tencent Holdings Limited Case Study Solution and Analysis
Introduction
Tencent Holdings Limited Case Study Help is the biggest publishing company with a greatest market share in the China's book retail market. CMP has actually become a specialized details supplier and a big comprehensive Science and Technology publishing business through the combination of print media, audio-visual media and the network media.
Crucial Concerns
CMP has spent its 60 years journey smoothly, being an effective publishing house, however, the altering macro market trends and forces bring certain difficulties to the publishing industry in general and Tencent Holdings Limited Case Study Analysis 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 techniques
• Enhancement of science and technology.
The improvement of the macro markets have raised several 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 abilities of the company could be utilized to strive for the future development unceasingly? How could the company sustain its long term competitive position in future?
Situational Analysis
Internal Analysis
SWOT Analysis
Strengths
Tencent Holdings Limited Case Study Analysis has specific strengths that can be made use of to reduce the threats, get rid of the weakness and avail the chances. Strengths of CMP are offered as follows;
• The long term experience of Tencent Holdings Limited Case Study Analysis in the publishing market i.e. 60 years allows the business to supply high quality items at a lower expense using its previous experiences.
• The technical resources and abilities produced by its effective journey offer a competitive advantage to CMP.
• Large item portfolioof CMP helps it to diversify its risk and offer high worth to its customers.
• Strong financial position enables the company to consider numerous development chances with no fear of raising fund externally.
Weak points
Together with the strengths, the company has certain weak points which could increase restrictions for the business in executing its advancement program. The weaknesses of Tencent Holdings Limited Case Study Analysis are offered as follows;
• Despite of being a science and technology publishing firm, the company still has traditional ways ofpublishing which are not suitable with the growing technological shift.
• CMP extremely relies over the Chinese markets for its development. It ought to propose particular 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 given that 2008, affecting Tencent Holdings Limited Case Study Solution also, but the development might be revived by availing particular chances presented in the market. The market opportunities for CMP consist of;
• The business could likewise introduce Digital Publishing by using its long term technical experience and a strong client acknowledgment in the market.
• CMP could think about a development program through the expansion towards foreign markets in order to minimize its reliance over Chinese markets by utilizing its vast financial resources.
Risks
The altering macro trends in the market and increasing competitors in the publishing industry has actually positioned particular dangers to Tencent Holdings Limited Case Study Solution consisting of;( Gurel, 2017).
• Introduction of digital publishing i.e. digital libraries might lead to declining market share of Tencent Holdings Limited Case Study Help due to the consumer shift towards virtual libraries.
• The presence of a great deal of rivals in the publishing industry increase the danger for CMP to lose its competitive position in the market, as rivals can gain a strong consumer base by utilizing particular strategies like aggressive promotion, quality products, etc.
• Entrance of new publishing firms in the market in addition to existence of high competitors increases the danger of losing the consumer base.
Financial Analysis.
Due to absence of information, the monetary ratios of CMP might not be determined. It could be evaluated from the Appendix III that the annual total earnings of Tencent Holdings Limited Case Study Analysis throughout the period 2000-2012 are growing at a high development rate, showing that the annual need of the items of CMP is growing and the business is rather effective in drawing in a big number of clients at a potential price.
Along with it, the second graph which reveals the annual growth in the Tencent Holdings Limited Case Study Help total possessions, reveals that the business is rather efficient in adding value to its properties through its profits. The growth in properties reveals that the total worth of the firm is also increasing with increasing the overall profits. (Unknown, 2013).
Another financial analysis of the company utilizing the offered data could be the analysis regarding the circulation of total revenues of the company. Huge part of the revenues of CMP comes from the sales of its published books i.e. 64% as displayed in the Case Appendix V. The business could move towards other business segments with a potential development to achieve its future advancement objective.
PESTEL Analysis
PESTEL analysis might be conducted to learn the various external forces affecting the performance of the company and the current patterns in the external environment of the company. A brief PESTEL analysis of the company is offered as follows; (Alanzi, 2018).
Political.
As the publishing sector could have a considerable influence on the mindset of individuals about the communist ideology of the federal government, therefore, the publishing sector is highly supervised and guided by the Promotion Department of the Communist Party of China. It might be said that the general political forces affecting CMP organisation are high. The government policies regarding the publishing sector are also increasing with the passage of time.
Economical.
Financial forces impacting the publishing sector in basic and the Tencent Holdings Limited Case Study Analysis in particular includesthe costs of paper, the earnings level of customers, the inflation rate, and the total GDP development of the nation. All these forces integrate impact the need for the publishing market. In addition to it, the financial policies connected to the import of books affect the total service at CPM. China's economic conditions are rather beneficial for CMP with high GDP development and customer earnings level.
Social and Demographical.
Social and demographical forces consist of the population growth, the consumer's preferences towards reading useful products etc. China has the greatest population on the planet with a high population development, showing the increasing variety of consumers of the Tencent Holdings Limited Case Study Analysis. Nevertheless, the customer preferences are shifting towards digital publishing rather than the traditional was of publishing. In this regard, CMP ought to focus on digital publishing to meet the altering customer choices.
Technological.
Technological forces affecting the CMP consist of the technological improvement in the reading methods etc. Improvement of science and technology in addition to the increase of digital publishing might decrease the demand for the CMP items, if certain actions would not be taken soon.
Environmental.
Ecological forces impacting Tencent Holdings Limited Case Study Analysis includes the concerns 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 used while publishing must not be harmful for the environment.
Legal.
Legal regulations for the publishing sector at whole are high. Publishing Ordinance 1997 needs the publishers to be approved initially by the Federal government to be entered in the publishing market.
Industry Analysis (Porter's Five Forces Model).
Porter's 5 Forces Model could be used to examine the appearance of the publishing market China. A short analysis of the Porter's Five Forces is offered as follows;.
Danger of New Entrants.
Dangers of brand-new entrants in the Chinese Publishing Market is moderate. The potential growth in the industry tends to draw in new entrants to the publishing industry. The presence of extreme competitors and the requirement of big capital tends to demotivate new entrants to enter in the market.
Risk of Alternative.
Hazard of Replacement is high for the Chinese Publishing Industry. The replacement products for the released documents is the documents presented in the digital libraries on specific sites. The altering consumer choices towards digital knowing increase the risk of substitution for the market.
Competitive Competition.
Competitive rivalry in the publishing market is high. The existence of a great deal of consumers 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 also entering into the market increasing the competitors for CMP.
Bargaining Power of Supplier.
The major providers of the Tencent Holdings Limited Case Study Help include the providers of the paper for publishing files. As CMP is the biggest publisher in the Chinese Publishing Market, therefore the general 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 marketplace saturation, the purchasers needs high quality documents at competitive rates.
Competitors Analysis.
CMP operates in an extremely competitive industry with the presence of a great deal of rivals. Nevertheless, the business has a competitive position in the market with the greatest market share in the Chinese publishing market. Significant rivals of Tencent Holdings Limited 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 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 CMP quickly in the present market circumstance.
Posts and telecommunication Press (PTP).
It was likewise established in the very same duration as Tencent Holdings Limited Case Study Help and CIP. It is also one of the prominent players in the publishing market with a yearly overall incomes of RMB 550 million in 2010.
Alternatives
Alternative-1: Broaden towards New Markets
Pros
• Reducing dependence over the Chinese markets.
• Increasing number of Clients
• Development opportunities.
• Preventing the impact of market saturation in the Chinese publishing market.
Cons
• Usage of potential resources in growth.
• Risk of failure in new markets.
• Time consuming.
Alernative-2: Introduce Digital Publishing
Pros
• Sustaining consumer base.
• Approaching new markets.
• Easy to present utilizing present abilities.
• Low danger of Failure.
• Low requirement for funds.
• Increased product portfolio supplies high worth to clients.
Cons
• Competition in the market by CIP, who has prior focus on the digital publishing.
• Shift of focus from the core service segments to the brand-new one can lead the business to lose demand of its products in the market.
Recommendations
As the choices are moving towards digital publishing and the company require an instant option to prevent the declining market growth. The business could also think about the expansion program after the success of its digital publishing program.
Implementation
In order to introduce digital publishing in its product portfolio, the business should initially gathers the data associated with the customer demand, the possible markets, the government regulations and the data associated with the rivals provided in the market. After that, the business should decide one possible section for its preliminary offering. It should gather research that how it might differentiate its digital publishing from the existing competitors' products. After all the actions above the company need to opt for the preliminary offering. If the preliminary offering proves a success, the business must opt for the other markets. In this way the company would have the ability to implement its digital publishing program.
Conclusion
The growth of the publishing industry is declining because 2008, showing a hazard to the company's long term existence, however the situation can be managed by considering a development plan in the future. The business might consider presenting digital publishingin its existing market to implement its development program at immediate basis and to avoid the danger of failure for entrance in the new markets.
