Tencents Business Model Case Study Solution and Analysis
Introduction
Tencents Business Model Case Study Solution is the biggest publishing company with a highest market share in the China's book retail market. CMP has actually ended up being a specialized information supplier and a large extensive Science and Technology publishing company through the integration of print media, audio-visual media and the network media.
Crucial Concerns
CMP has spent its 60 years journey smoothly, being a successful publishing home, however, the altering macro market trends and forces bring certain difficulties to the publishing market in general and Tencents Business Model Case Study Help in specific. These factors consist of;
• Entrance of the brand-new publishing companies in the industry.
• Declining development of the publishing market.
• Market saturation.
• Introduction of digital publishing techniques
• 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 business could be made use of to strive for the future advancement unceasingly? How could the company sustain its long term competitive position in future?
Situational Analysis
Internal Analysis
SWOT Analysis
Strengths
Tencents Business Model Case Study Solution has specific strengths that can be utilized to lower the dangers, get rid of the weakness and obtain the opportunities. Strengths of CMP are provided as follows;
• The long term experience of Tencents Business Model Case Study Analysis in the publishing market i.e. 60 years allows the company to supply high quality items at a lower expense using its prior experiences.
• The technical resources and capabilities generated by its effective journey provide a competitive advantage to CMP.
• Vast item portfolioof CMP assists it to diversify its risk and provide high worth to its customers.
• Strong financial position enables the company to think about numerous development opportunities with no worry of raising fund externally.
Weaknesses
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 Tencents Business Model Case Study Analysis are provided as follows;
• Despite of being a science and innovation publishing firm, the company still has conventional methods ofpublishing which are not compatible with the growing technological shift.
• CMP highly relies over the Chinese markets for its development. It needs to propose certain growth plans to avoid its dependence over the Chinese markets to achieve long term growth.
Opportunities
The development of the publishing industry is decreasing because 2008, impacting Tencents Business Model Case Study Help as well, however the growth could be revived by availing specific opportunities presented in the market. The marketplace opportunities for CMP consist of;
• The company might also introduce Digital Publishing by using its long term technical experience and a strong customer recognition in the market.
• CMP could consider an advancement program through the expansion towards foreign markets in order to reduce its dependence over Chinese markets by utilizing its vast financial resources.
Dangers
The changing macro trends in the market and increasing competition in the publishing industry has presented certain threats to Tencents Business Model Case Study Help consisting of;( Gurel, 2017).
• Introduction of digital publishing i.e. digital libraries could cause declining market share of Tencents Business Model Case Study Help due to the customer shift towards virtual libraries.
• The presence of large number of rivals in the publishing market increase the hazard for CMP to lose its competitive position in the market, as competitors can get a strong customer base by utilizing specific strategies like aggressive promotion, quality items, and so on
• Entrance of brand-new publishing companies in the industry together with existence of high competition increases the threat of losing the consumer base.
Financial Analysis.
The business has a quite competitive monetary efficiency. Due to lack of data, the financial ratios of CMP could not be calculated. Nevertheless, the overall monetary performance of the company might be analyzed by utilizing the graphs given up the case Appendices. It could be evaluated from the Appendix III that the yearly overall revenues of CMP during the period 2000-2012 are growing at a high growth rate, revealing that the annual need of the items of Tencents Business Model Case Study Help is growing and the company is quite effective in bring in a large number of clients at a potential cost.
In addition to it, the second chart which shows the annual development in the Tencents Business Model Case Study Solution total possessions, reveals that the company is quite efficient in adding value to its possessions through its revenues. The growth in properties reveals that the total value of the company is also increasing with increasing the total profits. (Unknown, 2013).
Another monetary analysis of the business using the given data could be the analysis regarding the circulation of total incomes of the business. Huge part of the revenues of CMP originates from the sales of its released books i.e. 64% as displayed in the Case Appendix V. The company might move towards other service segments with a possible development to achieve its future development objective.
PESTEL Analysis
PESTEL analysis could be carried out to discover the different external forces affecting the performance of the company and the recent trends in the external environment of the company. A quick PESTEL analysis of the company is offered as follows; (Alanzi, 2018).
Political.
As the publishing sector might have a considerable impact on the mindset of the people about the communist ideology of the federal government, for that reason, the publishing sector is highly supervised and guided by the Promotion Department of the Communist Celebration of China. It might be said that the overall political forces affecting CMP service are high. The federal government policies concerning the publishing sector are likewise increasing with the passage of time.
Affordable.
Financial forces affecting the publishing sector in general and the CMP in specific includesthe prices of paper, the income level of consumers, the inflation rate, and the overall GDP growth of the country. All these forces combine impact the demand for the publishing market.
Social and Demographical.
Social and demographical forces consist of the population development, the consumer's choices towards checking out useful products and so on. China has the highest population worldwide with a high population growth, revealing the increasing number of consumers of the Tencents Business Model Case Study Help. The customer choices are shifting towards digital publishing rather than the standard was of publishing. In this regard, CMP needs to concentrate on digital publishing to satisfy the altering customer preferences.
Technological.
Technological forces impacting the CMP include the technological development in the reading methods and so on. Enhancement of science and innovation along with the rise of digital publishing might lower the need for the CMP items, if particular actions would not be taken quickly.
Environmental.
Environmental forces affecting Tencents Business Model Case Study Help includes the concerns of environmental neighborhoods over the usage of paper in publishing books. The paper used in the books while publishing is needed to be disposable and the ink utilized while publishing ought to not be damaging for the environment.
Legal.
Legal policies for the publishing sector at whole are high. The legal regulations regarding the publishing sector is controlled by the General Administration of Press and Publication. Publishing Ordinance 1997 requires the publishers to be approved first by the Federal government to be gone into in the publishing market. The regulation prohibits direct participation of foreign entities and people in the publishing sector.
Industry Analysis (Porter's 5 Forces Design).
Porter's 5 Forces Design might be used to analyze the attractiveness of the publishing market China. A short analysis of the Porter's 5 Forces is given as follows;.
Risk of New Entrants.
Threats of new entrants in the Chinese Publishing Market is moderate. The prospective growth in the industry tends to attract brand-new entrants to the publishing market. However, the existence of extreme competitors and the requirement of big capital tends to demotivate brand-new entrants to go into in the market.
Danger of Alternative.
Danger of Alternative is high for the Chinese Publishing Industry. The alternative products for the published files is the documents provided in the virtual libraries on specific websites. The altering customer choices towards digital learning increase the danger of alternative for the industry.
Competitive Rivalry.
Competitive rivalry in the publishing industry is high. The presence of large number of consumers in the Chinese Publishing Industry like CIP, PTP and so on tends to produce high competitive competition for CMP. Along with it, new entrants are likewise participating in the market increasing the competition for CMP.
Bargaining Power of Supplier.
The significant providers of the Tencents Business Model Case Study Solution consist of the providers of the paper for releasing documents. As CMP is the largest publisher in the Chinese Publishing Market, therefore the general bargaining power of supplier for CMP is low.
Bargaining Power of Purchaser.
Haggling power of buyer in the publishing market is high. Due to the presence of a large number of publishers in the Chinese market and the marketplace saturation, the purchasers requires high quality documents at competitive rates.
Rivals Analysis.
CMP operates in an extremely competitive market with the presence of large number of competitors. The company has a competitive position in the market with the greatest market share in the Chinese publishing market. Significant rivals of Tencents Business Model Case Study Help consist of;.
• Chemical Market Press (CIP).
• Posts and telecommunication Press (PTP).
Chemical Market Press (CIP).
CIPis one of the close rivals of CMP. Founded in the exact same period, CIP publishes comparable kind of books. For a big period, CIP held the largest market share, and still ranks second and third in numerous market sections, with a major focus on instructional publications. 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 marketplace share of Tencents Business Model Case Study Solution easily in the existing market circumstance.
Posts and telecommunication Press (PTP).
It was also established in the very same duration as Tencents Business Model Case Study Help and CIP. It is also one of the prominent gamers in the publishing industry with a yearly overall earnings of RMB 550 million in 2010.
Alternatives
Alternative-1: Broaden towards New Markets
Pros
• Decreasing dependence over the Chinese markets.
• Increasing number of Clients
• Development opportunities.
• Avoiding 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: Present Digital Publishing
Pros
• Sustaining customer base.
• Approaching new markets.
• Easy to present utilizing present capabilities.
• Low threat of Failure.
• Low requirement for funds.
• Increased product portfolio provides high worth to customers.
Cons
• Competition in the market by CIP, who has prior concentrate on the digital publishing.
• Shift of focus from the core service segments to the new one can lead the company to lose demand of its items in the market.
Recommendations
With the deep analysis of the external and internal environment of the company in addition to the industry analysis and the rival analysis, Alternative 2 is recommended to CMP to achieve its future advancement. As the choices are shifting towards digital publishing and the business require an immediate solution to avoid the decreasing market growth. Therefore, intro of digital publishing might show to be an instant service with low amount of threat for the company. Nevertheless, the company could also consider the expansion program after the success of its digital publishing program.
Implementation
In order to present digital publishing in its product portfolio, the company ought to first gathers the information connected to the consumer demand, the prospective markets, the government regulations and the information associated with the rivals presented in the market. After that, the company needs to choose one possible section for its preliminary offering. It ought to collect research that how it might separate its digital publishing from the existing rivals' products. After all the steps above the business must opt for the preliminary offering. The business ought to go for the other markets if the initial offering proves a success. In this way the business would be able to execute its digital publishing program.
Conclusion
The growth of the publishing market is declining because 2008, showing a hazard to the company's long term existence, but the circumstance can be controlled by thinking about an advancement plan in the future. The business could think about introducing digital publishingin its existing market to execute its development program at instant basis and to prevent the risk of failure for entryway in the brand-new markets.
