The High Stakes Of Low Cost Competition Case Study Solution and Analysis
Introduction
The High Stakes Of Low Cost Competition Case Study Help is the biggest publishing business with a greatest market share in the China's book retail market. CMP supplies a variety of services consisting of; gathering information, processing information and communication services. Significant company segments of the business consist of; books, periodicals, consultancy and distribution. The company has a huge item portfolio and its major products include books, regulars, online media, exhibitions, research study reports etc. The High Stakes Of Low Cost Competition Case Study Solution has actually become a specialized details supplier and a large extensive 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 Case Study Analysis has actually invested its 60 years journey efficiently, being a successful publishing house, nevertheless, the changing macro market trends and forces bring certain obstacles to the publishing market in general and CMP in particular. These factors include;
• Entrance of the new publishing companies in the market.
• Declining development of the publishing market.
• Market saturation.
• Intro of digital publishing techniques
• 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 circumstance? Do the long important experience, technical resources and the abilities of the company could be used 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 Case Study Help has specific strengths that can be made use of to minimize the threats, conquer the weakness and avail the chances. Strengths of CMP are given as follows;
• The long term experience of The High Stakes Of Low Cost Competition Case Study Help in the publishing market i.e. 60 years permits the company to provide high quality products at a lower cost utilizing its previous experiences.
• The technical resources and capabilities created by its effective journey provide a competitive advantage to CMP.
• Large item portfolioof CMP helps it to diversify its threat and offer high value to its customers.
• Strong monetary position allows the company to think about a number of advancement chances with no fear of raising fund externally.
Weak points
In addition to the strengths, the business has particular weak points which might increase restraints for the business in implementing its development program. The weak points of The High Stakes Of Low Cost Competition Case Study Solution are provided as follows;
• Despite of being a science and technology publishing firm, the company still has traditional methods ofpublishing which are not compatible with the growing technological shift.
• CMP highly relies over the Chinese markets for its development. It ought to propose specific expansion plans to avoid its dependence over the Chinese markets to attain long term development.
Opportunities
Although, the growth of the publishing market is decreasing because 2008, impacting The High Stakes Of Low Cost Competition Case Study Help also, but the growth might be restored by availing particular opportunities provided in the market. The marketplace chances for CMP include;
• The company could also present Digital Publishing by utilizing its long term technical experience and a strong client recognition in the market.
• CMP might consider an advancement program through the growth towards foreign markets in order to decrease its dependence over Chinese markets by utilizing its huge funds.
Dangers
The altering macro trends in the market and increasing competitors in the publishing industry has postured specific dangers to The High Stakes Of Low Cost Competition Case Study Help including;( Gurel, 2017).
• Introduction of digital publishing i.e. digital libraries might result in declining market share of The High Stakes Of Low Cost Competition Case Study Solution due to the customer shift towards virtual libraries.
• The presence of large number of competitors in the publishing market increase the threat for CMP to lose its competitive position in the market, as competitors can gain a strong consumer base by using particular methods like aggressive promo, quality products, etc.
• Entryway of new publishing firms in the market in addition to existence of high competition increases the risk of losing the client base.
Monetary Analysis.
The company has a rather competitive monetary performance. Due to absence of data, the financial ratios of CMP might not be determined. The total financial performance of the company could be evaluated by using the charts offered in the case Appendices. It might be analyzed from the Appendix III that the annual overall incomes of CMP throughout the duration 2000-2012 are growing at a high growth rate, revealing that the annual need of the items of The High Stakes Of Low Cost Competition Case Study Solution is growing and the business is rather effective in attracting a large number of customers at a possible rate.
Together with it, the 2nd graph which shows the yearly development in the The High Stakes Of Low Cost Competition Case Study Analysis overall possessions, shows that the company is rather efficient in including worth to its possessions through its earnings. The development in possessions shows that the total worth of the company is also increasing with increasing the total incomes. (Unidentified, 2013).
Another monetary analysis of the business using the provided information might be the analysis regarding the distribution of total profits of the business. Major part of the earnings of CMP originates from the sales of its published books i.e. 64% as displayed in the Case Appendix V. The business might move towards other service sectors with a possible growth to attain its future development goal.
PESTEL Analysis
PESTEL analysis might be carried out to find out the numerous external forces impacting the performance of the company and the current patterns in the external environment of the business. A brief PESTEL analysis of the business is provided as follows; (Alanzi, 2018).
Political.
As the publishing sector might have a substantial effect on the mindset of individuals about the communist ideology of the federal government, therefore, the publishing sector is highly monitored and assisted by the Promotion Department of the Communist Party of China. It could be said that the overall political forces affecting CMP company are high. The federal government policies regarding the publishing sector are also increasing with the passage of time.
Economical.
Economic forces affecting the publishing sector in basic and the The High Stakes Of Low Cost Competition Case Study Help in specific includesthe prices of paper, the income level of customers, the inflation rate, and the overall GDP development of the country. All these forces integrate effect the need for the publishing market. In addition to it, the economic policies connected to the import of books impact the total service at CPM. China's economic conditions are rather beneficial for CMP with high GDP development and consumer earnings level.
Social and Demographical.
The customer choices are moving towards digital publishing rather than the traditional was of publishing. In this regard, CMP should focus on digital publishing to fulfill the altering consumer choices.
Technological.
Technological forces impacting the CMP include the technological improvement in the reading strategies and so on. Improvement of science and technology together with the increase of digital publishing might lower the need for the CMP products, if specific actions would not be taken quickly.
Environmental.
Ecological forces impacting The High Stakes Of Low Cost Competition Case Study Solution includes the issues of environmental 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 used while publishing needs to not be hazardous for the environment.
Legal.
Legal policies for the publishing sector at whole are high. Publishing Regulation 1997 needs the publishers to be approved initially by the Government to be gone into in the publishing market.
Market Analysis (Porter's 5 Forces Model).
Porter's Five Forces Design could be used to examine the beauty of the publishing market China. A quick analysis of the Porter's 5 Forces is given as follows;.
Risk of New Entrants.
Threats of brand-new entrants in the Chinese Publishing Industry is moderate. The prospective development in the industry tends to draw in brand-new entrants to the publishing industry. The presence of intense competition and the requirement of huge capital tends to demotivate new entrants to go into in the market.
Risk of Alternative.
Danger of Replacement is high for the Chinese Publishing Market. The substitute items for the published documents is the files presented in the virtual libraries on certain websites. The altering customer preferences towards digital knowing increase the danger of substitution for the industry.
Competitive Competition.
Competitive rivalry in the publishing industry is high. The existence of a great deal of customers in the Chinese Publishing Market like CIP, PTP and so on tends to produce high competitive rivalry for CMP. Together with it, new entrants are likewise entering into the market increasing the competitors for CMP.
Bargaining Power of Supplier.
The major providers of the The High Stakes Of Low Cost Competition Case Study Solution 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.
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 files at competitive rates.
Rivals Analysis.
CMP runs in an extremely competitive industry with the existence of a great deal of rivals. Nevertheless, the company has a competitive position in the market with the greatest market share in the Chinese publishing market. Major competitors of The High Stakes Of Low Cost Competition Case Study Solution include;.
• Chemical Industry Press (CIP).
• Posts and telecommunication Press (PTP).
Chemical Market Press (CIP).
CIP acts as a danger 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 present market situation.
Posts and telecommunication Press (PTP).
It was also founded in the very same duration as The High Stakes Of Low Cost Competition Case Study Solution and CIP. It is likewise one of the prominent players in the publishing industry with a yearly total revenues of RMB 550 million in 2010.
Alternatives
Alternative-1: Broaden towards New Markets
Pros
• Minimizing dependence over the Chinese markets.
• Increasing variety of Customers
• Development opportunities.
• Preventing the effect of market saturation in the Chinese publishing industry.
Cons
• Use of prospective resources in expansion.
• Risk of failure in brand-new markets.
• Time consuming.
Alernative-2: Introduce Digital Publishing
Pros
• Sustaining consumer base.
• Approaching new markets.
• Easy to introduce utilizing current abilities.
• Low threat of Failure.
• Low requirement for funds.
• Increased item portfolio provides high value to clients.
Cons
• Competitors in the market by CIP, who has prior concentrate on the digital publishing.
• Shift of focus from the core service sectors to the new one can lead the business to lose demand of its products in the market.
Recommendations
With the deep analysis of the internal and external environment of the business in addition to the market analysis and the competitor analysis, Alternative 2 is recommended to CMP to accomplish its future advancement. As the preferences are moving towards digital publishing and the business need an instant solution to avoid the declining industry growth. Intro of digital publishing might prove to be an immediate service with low quantity of danger for the company. However, the business could likewise think about 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 initially gathers the data related to the customer demand, the potential markets, the government regulations and the information related to the competitors provided in the market. If the preliminary offering proves a success, the company must go for the other markets. In this method the business would be able to execute its digital publishing program.
Conclusion
Although, the development of the publishing market is declining since 2008, revealing a hazard to the company's long term presence, however the situation can be managed by considering an advancement plan in the future. The company might think about presenting digital publishingin its existing market to execute its advancement program at immediate basis and to prevent the threat of failure for entrance in the brand-new markets.
