The High Stakes Of Low Cost Competition 2 Case Study Solution and Analysis
Intro
The High Stakes Of Low Cost Competition 2 Case Study Solution is the largest publishing business with a highest market share in the China's book retail market. CMP has actually become a specialized details company and a big comprehensive Science and Technology publishing company through the combination of print media, audio-visual media and the network media.
Vital Concerns
Although, The High Stakes Of Low Cost Competition 2 Case Study Help has invested its 60 years journey efficiently, being an effective publishing home, nevertheless, the altering macro market trends and forces bring particular challenges to the publishing market in basic and CMP in specific. These factors include;
• Entryway of the new publishing companies in the industry.
• Decreasing growth of the publishing market.
• Market saturation.
• Introduction of digital publishing strategies
• Improvement of science and technology.
The change of the macro markets have raised numerous questions 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 abilities of the company could be made use of to pursue the future advancement unceasingly? How could the company sustain its long term competitive position in future?
Situational Analysis
Internal Analysis
SWOT Analysis
Strengths
The High Stakes Of Low Cost Competition 2 Case Study Analysis has specific strengths that can be used to lower the hazards, overcome the weak point and avail the chances. Strengths of CMP are given as follows;
• The long term experience of The High Stakes Of Low Cost Competition 2 Case Study Help in the publishing industry i.e. 60 years permits the business to supply high quality products at a lower cost utilizing its previous experiences.
• The technical resources and capabilities created by its successful journey provide a competitive benefit to CMP.
• Large product portfolioof CMP helps it to diversify its threat and offer high value to its customers.
• Strong monetary position enables the company to consider a number of advancement opportunities with no worry of raising fund externally.
Weaknesses
Along with the strengths, the company has certain weak points which could increase constraints for the business in implementing its development program. The weaknesses of The High Stakes Of Low Cost Competition 2 Case Study Analysis are provided as follows;
• Despite of being a science and innovation publishing company, the business still has traditional methods 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 plans to avoid its dependence over the Chinese markets to achieve long term development.
Opportunities
Although, the growth of the publishing market is decreasing because 2008, affecting The High Stakes Of Low Cost Competition 2 Case Study Help too, however the growth could be revived by availing particular chances presented in the market. The market chances for CMP include;
• The company could likewise introduce Digital Publishing by utilizing its long term technical experience and a strong customer acknowledgment in the market.
• CMP could consider an advancement program through the growth towards foreign markets in order to decrease its reliance over Chinese markets by utilizing its vast funds.
Threats
The altering macro trends in the market and increasing competitors in the publishing industry has actually positioned certain risks to The High Stakes Of Low Cost Competition 2 Case Study Help including;( Gurel, 2017).
• Intro of digital publishing i.e. virtual libraries might result in decreasing market share of The High Stakes Of Low Cost Competition 2 Case Study Help due to the customer shift towards virtual libraries.
• The existence of a great deal of rivals in the publishing market increase the risk for CMP to lose its competitive position in the market, as competitors can get a strong consumer base by using particular strategies like aggressive promotion, quality items, etc.
• Entrance of new publishing firms in the market along with existence of high competition increases the threat of losing the client base.
Monetary Analysis.
Due to absence of information, the financial ratios of CMP could not be calculated. It might be examined from the Appendix III that the yearly overall earnings of The High Stakes Of Low Cost Competition 2 Case Study Solution during the duration 2000-2012 are growing at a high development rate, revealing that the annual demand of the items of CMP is growing and the business is quite effective in bring in a big number of customers at a prospective rate.
Together with it, the second chart which reveals the annual growth in the The High Stakes Of Low Cost Competition 2 Case Study Analysis total assets, reveals that the business is rather effective in adding value to its assets through its revenues. The development in possessions reveals that the total worth of the company is likewise increasing with increasing the total earnings. (Unidentified, 2013).
Another monetary analysis of the company utilizing the given data might be the analysis concerning the distribution of overall incomes of the business. Huge part of the revenues of CMP comes from the sales of its released books i.e. 64% as displayed in the Case Appendix V. The business might move towards other organisation sectors with a possible development to accomplish its future advancement goal.
PESTEL Analysis
PESTEL analysis could be carried out to find out the different external forces affecting the efficiency of the company and the recent patterns in the external environment of the company. A quick PESTEL analysis of the business is provided as follows; (Alanzi, 2018).
Political.
As the publishing sector might have a significant effect on the state of mind of individuals about the communist ideology of the government, for that reason, the publishing sector is extremely monitored and directed by the Promotion Department of the Communist Celebration of China. It might be said that the overall political forces impacting CMP company are high. The government policies regarding the publishing sector are likewise increasing with the passage of time.
Affordable.
Financial forces affecting the publishing sector in general and the The High Stakes Of Low Cost Competition 2 Case Study Solution in particular includesthe costs of paper, the income level of consumers, the inflation rate, and the general GDP development of the nation. All these forces combine effect the need for the publishing market. In addition to it, the financial policies connected to the import of books impact the general organisation at CPM. China's economic conditions are quite favorable for CMP with high GDP development and customer income level.
Social and Demographical.
The customer choices 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 impacting the CMP include the technological development in the reading methods etc. Enhancement of science and technology in addition to the increase of digital publishing might decrease the demand for the CMP items, if particular actions would not be taken quickly.
Environmental.
Ecological forces affecting The High Stakes Of Low Cost Competition 2 Case Study Analysis consists of the issues of ecological communities over the use of paper in publishing books. The paper used in the books while publishing is required to be disposable and the ink utilized while publishing should not be hazardous for the environment.
Legal.
Legal regulations for the publishing sector at whole are high. The legal policies regarding 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 entered in the publishing market. The ordinance prohibits direct involvement of foreign entities and individuals in the publishing sector.
Market Analysis (Porter's Five Forces Design).
Porter's Five Forces Design could be used to analyze the attractiveness of the publishing market China. A brief analysis of the Porter's 5 Forces is provided as follows;.
Risk of New Entrants.
Risks of brand-new entrants in the Chinese Publishing Industry is moderate. The potential development in the market tends to attract new entrants to the publishing market. The existence of intense competition and the requirement of substantial capital tends to demotivate brand-new entrants to enter in the market.
Danger of Substitution.
Risk of Replacement is high for the Chinese Publishing Industry. The substitute products for the published documents is the files presented in the digital libraries on specific sites. The changing customer choices towards digital knowing increase the threat of substitution for the industry.
Competitive Competition.
Competitive competition in the publishing industry is high. The existence of a great deal of consumers in the Chinese Publishing Industry like CIP, PTP etc. tends to produce high competitive competition for CMP. Along with it, brand-new entrants are likewise participating in the marketplace increasing the competition for CMP.
Bargaining Power of Supplier.
The major providers of the The High Stakes Of Low Cost Competition 2 Case Study Analysis consist of the suppliers of the paper for publishing files. As CMP is the largest publisher in the Chinese Publishing Market, therefore the total bargaining power of provider for CMP is low.
Bargaining Power of Buyer.
Bargaining power of buyer in the publishing industry 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 documents at competitive costs.
Competitors Analysis.
CMP runs in a highly competitive market with the presence of a great deal of competitors. The business has a competitive position in the market with the highest market share in the Chinese publishing market. Major competitors of The High Stakes Of Low Cost Competition 2 Case Study Solution include;.
• Chemical Market Press (CIP).
• Posts and telecommunication Press (PTP).
Chemical Industry Press (CIP).
CIPis among the close rivals of CMP. Established in the exact same period, CIP publishes comparable type of books. For a large time period, CIP held the biggest market share, and still ranks second and third in various market segments, with a major concentrate on instructional publications. CIP serves as a danger for CMP as it could wean its market share due to its long term competitive background. CIP is concentrated on digital publishing and might wean the market share of The High Stakes Of Low Cost Competition 2 Case Study Solution easily in the present market circumstance.
Posts and telecommunication Press (PTP).
It was likewise established in the same period as The High Stakes Of Low Cost Competition 2 Case Study Help and CIP. It is also one of the prominent players in the publishing market with a yearly overall revenues of RMB 550 million in 2010.
Alternatives
Alternative-1: Broaden towards New Markets
Pros
• Decreasing dependence over the Chinese markets.
• Increasing number of Consumers
• Growth opportunities.
• Preventing the effect of market saturation in the Chinese publishing industry.
Cons
• Use of prospective resources in growth.
• Risk of failure in brand-new markets.
• Time consuming.
Alernative-2: Introduce Digital Publishing
Pros
• Sustaining consumer base.
• Approaching new markets.
• Easy to introduce using existing capabilities.
• Low threat of Failure.
• Low requirement for funds.
• Increased item portfolio supplies high worth to consumers.
Cons
• Competitors in the market by CIP, who has prior focus on the digital publishing.
• Shift of focus from the core company sectors to the brand-new one can lead the business to lose demand of its products in the market.
Suggestions
With the deep analysis of the internal and external environment of the company along with the market analysis and the competitor analysis, Alternative 2 is advised to CMP to accomplish its future advancement. As the preferences are moving towards digital publishing and the company require an instant service to avoid the decreasing industry growth. Intro of digital publishing might prove to be an immediate service with low amount of danger for the company. However, the company could likewise 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 company should first gathers the data connected to the consumer demand, the prospective markets, the government regulations and the data associated with the rivals provided in the market. After that, the company must choose one potential sector for its initial offering. It needs to collect research that how it could separate its digital publishing from the existing rivals' items. The steps above the business must go for the initial offering. If the preliminary offering shows a success, the business ought to go for the other markets. In this way the company would be able to execute its digital publishing program.
Conclusion
Although, the growth of the publishing industry is declining given that 2008, showing a hazard to the business's long term existence, but the scenario can be managed by thinking about a development plan in the future. The company might consider introducing digital publishingin its existing market to implement its advancement program at instant basis and to prevent the risk of failure for entryway in the new markets.
