The Economist Case Study Solution and Analysis
Introduction
The Economist Case Study Solution is the largest publishing company with a greatest market share in the China's book retail market. CMP offers a number of services consisting of; gathering details, processing information and communication services. Significant company sections of the company include; books, periodicals, consultancy and distribution. The business has a large product portfolio and its significant items include books, regulars, online media, exhibitions, research reports and so on. The Economist Case Study Solution has actually become a specialized information company and a big extensive Science and Innovation publishing company through the integration of print media, audio-visual media and the network media.
Important Issues
CMP has spent its 60 years journey smoothly, being an effective publishing house, however, the changing macro market trends and forces bring particular obstacles to the publishing industry in general and The Economist Case Study Solution in specific. These factors include;
• Entryway of the new publishing companies in the market.
• Decreasing growth of the publishing market.
• Market saturation.
• Introduction of digital publishing strategies
• 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 situation? Do the long important experience, technical resources and the capabilities of the company could be utilized to strive for the future advancement unceasingly? How could the business sustain its long term competitive position in future?
Situational Analysis
Internal Analysis
SWOT Analysis
Strengths
The Economist Case Study Analysis has particular strengths that can be made use of to decrease the hazards, overcome the weak point and avail the opportunities. Strengths of CMP are offered as follows;
• The long term experience of The Economist Case Study Solution in the publishing industry i.e. 60 years permits the business to offer high quality items at a lower expense using its prior experiences.
• The technical resources and capabilities generated by its effective journey provide a competitive benefit to CMP.
• Large item portfolioof CMP helps it to diversify its threat and provide high worth to its clients.
• Strong monetary position permits the business to think about several advancement chances without any fear of raising fund externally.
Weaknesses
Together with the strengths, the business has certain weak points which could increase restrictions for the business in executing its advancement program. The weak points of The Economist Case Study Analysis are given as follows;
• Despite of being a science and innovation publishing company, the company still has traditional ways ofpublishing which are not compatible with the growing technological shift.
• CMP extremely relies over the Chinese markets for its growth. It needs to propose specific growth strategies to prevent its reliance over the Chinese markets to attain long term growth.
Opportunities
Although, the growth of the publishing industry is declining given that 2008, impacting The Economist Case Study Solution too, but the development could be restored by availing specific opportunities provided in the market. The marketplace chances for CMP include;
• The business might also introduce Digital Publishing by utilizing its long term technical experience and a strong consumer recognition in the market.
• CMP might consider a development program through the growth towards foreign markets in order to reduce its dependence over Chinese markets by utilizing its large funds.
Risks
The altering macro patterns in the market and increasing competitors in the publishing industry has positioned particular dangers to The Economist Case Study Solution consisting of;( Gurel, 2017).
• Intro of digital publishing i.e. digital libraries might lead to declining market share of The Economist Case Study Solution due to the consumer shift towards virtual libraries.
• The existence of large number of competitors in the publishing market increase the hazard for CMP to lose its competitive position in the market, as competitors can gain a strong consumer base by using particular methods like aggressive promotion, quality items, and so on
• Entryway of brand-new publishing firms in the market along with existence of high competitors increases the threat of losing the client base.
Monetary Analysis.
The company has a quite competitive monetary performance. Due to lack of information, the monetary ratios of CMP could not be determined. However, the total financial performance of the business could be evaluated by utilizing the graphs given in the case Appendices. It might be analyzed from the Appendix III that the annual total revenues of CMP during the period 2000-2012 are growing at a high development rate, revealing that the yearly need of the products of The Economist Case Study Help is growing and the company is rather effective in bring in a large number of customers at a possible cost.
In addition to it, the second graph which reveals the annual development in the The Economist Case Study Solution total properties, shows that the company is quite efficient in including value to its possessions through its earnings. The growth in properties reveals that the total value of the company is also increasing with increasing the overall profits. (Unidentified, 2013).
Another monetary analysis of the business using the given data could be the analysis regarding the distribution of overall revenues of the company. Huge part of the profits 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 sections with a prospective development to attain its future advancement goal.
PESTEL Analysis
PESTEL analysis could be performed to discover the numerous external forces affecting the efficiency of the business and the recent trends in the external environment of the company. A brief PESTEL analysis of the business is provided as follows; (Alanzi, 2018).
Political.
As the publishing sector could have a substantial impact on the mindset of the people about the communist ideology of the government, for that reason, the publishing sector is extremely monitored and assisted by the Promotion Department of the Communist Celebration of China. For that reason, it might be stated that the total political forces impacting The Economist Case Study Analysis company are high. The federal government policies regarding the publishing sector are likewise increasing with the passage of time.
Cost-effective.
Economic forces affecting the publishing sector in basic and the The Economist Case Study Analysis in specific includesthe rates of paper, the income level of customers, the inflation rate, and the overall GDP growth of the nation. All these forces combine impact the need for the publishing market. Together with it, the economic policies related to the import of books impact the total organisation at CPM. China's economic conditions are quite beneficial for CMP with high GDP growth and consumer earnings level.
Social and Demographical.
Social and demographical forces consist of the population development, the customer's choices towards checking out helpful materials etc. China has the greatest population on the planet with a high population development, showing the increasing variety of consumers of the The Economist Case Study Help. Nevertheless, the customer preferences are moving towards digital publishing rather than the conventional was of publishing. In this regard, CMP needs to focus on digital publishing to meet the altering consumer preferences.
Technological.
Technological forces impacting the CMP consist of the technological improvement in the reading strategies etc. Enhancement of science and technology in addition to the rise of digital publishing might minimize the demand for the CMP items, if specific actions would not be taken quickly.
Environmental.
Ecological forces affecting The Economist Case Study Analysis includes the concerns of environmental communities over the usage of paper in publishing books. The paper utilized in the books while publishing is required to be non reusable and the ink used while publishing must not be damaging for the environment.
Legal.
Legal policies for the publishing sector at whole are high. The legal regulations relating to the publishing sector is managed by the General Administration of Press and Publication. Publishing Ordinance 1997 requires the publishers to be approved initially by the Government to be gone into in the publishing market. The ordinance forbids direct involvement of foreign entities and individuals in the publishing sector.
Industry Analysis (Porter's 5 Forces Model).
Porter's 5 Forces Model might be used to evaluate the beauty of the publishing market China. A quick analysis of the Porter's 5 Forces is offered as follows;.
Danger of New Entrants.
Risks of brand-new entrants in the Chinese Publishing Market is moderate. The prospective development in the industry tends to draw in 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 substitute products for the released files is the documents provided in the digital libraries on specific sites. The altering consumer preferences towards digital learning increase the threat of replacement for the industry.
Competitive Rivalry.
Competitive competition in the publishing market is high. The presence of a great deal of consumers in the Chinese Publishing Market like CIP, PTP and so on tends to produce high competitive competition for CMP. Along with it, brand-new entrants are also participating in the marketplace increasing the competitors for CMP.
Bargaining Power of Provider.
The major suppliers of the The Economist Case Study Analysis consist of the providers of the paper for publishing documents. As CMP is the biggest publisher in the Chinese Publishing Market, for that reason the general bargaining power of supplier for CMP is low.
Bargaining Power of Buyer.
Bargaining power of buyer in the publishing industry is high. Due to the existence of a a great deal of publishers in the Chinese market and the market saturation, the buyers requires high quality files at competitive rates.
Rivals Analysis.
CMP operates in an extremely competitive market with the presence of large number of rivals. The business has a competitive position in the market with the greatest market share in the Chinese publishing market. Significant rivals of The Economist Case Study Help include;.
• Chemical Industry Press (CIP).
• Posts and telecommunication Press (PTP).
Chemical Market Press (CIP).
CIP acts as a danger 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 circumstance.
Posts and telecommunication Press (PTP).
It was likewise established in the very same duration as The Economist Case Study Help and CIP. It is likewise one of the prominent gamers in the publishing market with an annual overall revenues of RMB 550 million in 2010.
Alternatives
Alternative-1: Broaden towards New Markets
Pros
• Minimizing dependence over the Chinese markets.
• Increasing number of Customers
• Growth opportunities.
• Avoiding the effect of market saturation in the Chinese publishing market.
Cons
• Use of possible resources in expansion.
• Danger of failure in brand-new markets.
• Time consuming.
Alernative-2: Introduce Digital Publishing
Pros
• Sustaining customer base.
• Approaching brand-new markets.
• Easy to present using current capabilities.
• Low risk of Failure.
• Low requirement for funds.
• Increased product portfolio supplies high worth to customers.
Cons
• Competition in the market by CIP, who has prior focus on the digital publishing.
• Shift of focus from the core service sectors to the new one can lead the company to lose need of its items in the market.
Suggestions
As the preferences are moving towards digital publishing and the business need an instant service to avoid the declining market development. The company could also think about the expansion program after the success of its digital publishing program.
Application
In order to introduce digital publishing in its product portfolio, the company ought to initially collects the information related to the customer demand, the potential markets, the federal government regulations and the data related to the competitors presented in the market. If the preliminary offering shows a success, the business should go for the other markets. In this way the company would be able to execute its digital publishing program.
Conclusion
Although, the development of the publishing industry is declining because 2008, revealing a risk to the business's long term presence, but the scenario can be managed by thinking about a development plan in the future. The company could consider introducing digital publishingin its existing market to execute its development program at instant basis and to prevent the danger of failure for entrance in the new markets.
