The Lego Group Envisioning Risks In Asia B Case Study Solution and Analysis
Intro
The Lego Group Envisioning Risks In Asia B Case Study Help is the largest publishing company with a greatest market share in the China's book retail market. CMP has actually become a specialized info company and a big comprehensive Science and Technology publishing company through the combination of print media, audio-visual media and the network media.
Critical Issues
Although, The Lego Group Envisioning Risks In Asia B Case Study Solution has actually invested its 60 years journey smoothly, being a successful publishing home, however, the altering macro market trends and forces bring specific difficulties to the publishing market in general and CMP in specific. These aspects include;
• Entryway 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 transformation of the macro markets have raised several concerns 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 business could be utilized to pursue the future advancement unceasingly? How could the business sustain its long term competitive position in future?
Situational Analysis
Internal Analysis
SWOT Analysis
Strengths
The Lego Group Envisioning Risks In Asia B Case Study Analysis has specific strengths that can be used to lower the dangers, conquer the weakness and obtain the chances. Strengths of CMP are offered as follows;
• The long term experience of The Lego Group Envisioning Risks In Asia B Case Study Help in the publishing industry i.e. 60 years allows the company to supply high quality items at a lower cost utilizing its previous experiences.
• The technical resources and abilities created by its effective journey provide a competitive benefit to CMP.
• Large item portfolioof CMP helps it to diversify its danger and offer high worth to its consumers.
• Strong monetary position enables the business to consider several development chances without any worry of raising fund externally.
Weaknesses
Together with the strengths, the business has certain weaknesses which might increase constraints for the company in executing its development program. The weak points of The Lego Group Envisioning Risks In Asia B Case Study Solution are offered as follows;
• Despite of being a science and innovation publishing company, 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 growth. It ought to propose certain expansion plans to avoid its dependence over the Chinese markets to accomplish long term growth.
Opportunities
The growth of the publishing industry is declining because 2008, affecting The Lego Group Envisioning Risks In Asia B Case Study Help as well, however the development could be restored by availing particular opportunities presented in the market. The marketplace chances for CMP consist of;
• The company could likewise present Digital Publishing by using its long term technical experience and a strong customer recognition in the market.
• CMP might think about a development program through the growth towards foreign markets in order to decrease its dependence over Chinese markets by utilizing its huge financial resources.
Dangers
The changing macro trends in the market and increasing competitors in the publishing market has postured particular risks to The Lego Group Envisioning Risks In Asia B Case Study Analysis consisting of;( Gurel, 2017).
• Introduction of digital publishing i.e. virtual libraries might result in decreasing market share of The Lego Group Envisioning Risks In Asia B Case Study Help due to the customer shift towards digital libraries.
• The presence of a great deal of competitors in the publishing industry increase the risk for CMP to lose its competitive position in the market, as rivals can gain a strong consumer base by using particular strategies 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.
Financial Analysis.
The business has a rather competitive monetary performance. Due to lack of information, the financial ratios of CMP might not be calculated. Nevertheless, the general financial efficiency of the business could be analyzed by using the graphs given in the case Appendices. It could be analyzed from the Appendix III that the yearly total revenues of CMP during the period 2000-2012 are growing at a high growth rate, revealing that the annual demand of the items of The Lego Group Envisioning Risks In Asia B Case Study Solution is growing and the business is rather efficient in attracting a large number of consumers at a prospective cost.
Along with it, the 2nd graph which reveals the annual growth in the The Lego Group Envisioning Risks In Asia B Case Study Help overall possessions, reveals that the business is rather effective in adding worth to its possessions through its incomes. The development in properties shows that the overall value of the company is likewise increasing with increasing the total profits. (Unidentified, 2013).
Another monetary analysis of the company utilizing the offered data could be the analysis relating to the distribution of total revenues of the business. Major part of the profits of CMP comes from the sales of its published books i.e. 64% as shown in the Case Appendix V. The business might move towards other company sections with a possible growth to accomplish its future advancement objective.
PESTEL Analysis
PESTEL analysis could be carried out to discover the various external forces affecting the performance of the company and the current patterns in the external environment of the business. A quick PESTEL analysis of the business is offered as follows; (Alanzi, 2018).
Political.
As the publishing sector could have a substantial impact on the mindset of individuals about the communist ideology of the federal government, therefore, the publishing sector is highly monitored and directed by the Publicity Department of the Communist Party of China. Therefore, it might be said that the overall political forces affecting The Lego Group Envisioning Risks In Asia B Case Study Help company are high. The federal government policies relating to the publishing sector are also increasing with the passage of time.
Economical.
Economic forces impacting the publishing sector in basic and the CMP in specific includesthe costs of paper, the income level of customers, the inflation rate, and the overall GDP development of the nation. All these forces integrate effect the need for the publishing market.
Social and Demographical.
The customer choices are moving towards digital publishing rather than the conventional was of publishing. In this regard, CMP ought to focus on digital publishing to meet the changing customer choices.
Technological.
Technological forces impacting the CMP include the technological advancement in the reading techniques etc. Improvement of science and technology in addition to the rise of digital publishing might reduce the demand for the CMP products, if specific actions would not be taken soon.
Environmental.
Ecological forces affecting The Lego Group Envisioning Risks In Asia B Case Study Analysis includes the issues 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 should not be hazardous for the environment.
Legal.
Legal policies for the publishing sector at whole are high. The legal guidelines concerning the publishing sector is managed by the General Administration of Press and Publication. Publishing Ordinance 1997 requires the publishers to be authorized first by the Federal government to be entered in the publishing market. The regulation prohibits direct participation of foreign entities and individuals in the publishing sector.
Industry Analysis (Porter's Five Forces Model).
Porter's Five Forces Model might be used to analyze the attractiveness of the publishing market China. A quick analysis of the Porter's Five Forces is provided as follows;.
Risk of New Entrants.
Risks of new entrants in the Chinese Publishing Industry is moderate. The possible growth in the industry tends to attract brand-new entrants to the publishing market. The existence of extreme competition and the requirement of big capital tends to demotivate brand-new entrants to enter in the market.
Risk of Alternative.
Threat of Alternative is high for the Chinese Publishing Industry. The substitute products for the released documents is the files presented in the virtual libraries on particular sites. The altering consumer choices towards digital knowing increase the risk of replacement for the market.
Competitive Rivalry.
Competitive rivalry in the publishing market is high. The existence of a great deal 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 entering into the marketplace increasing the competition for CMP.
Bargaining Power of Supplier.
The major suppliers of the The Lego Group Envisioning Risks In Asia B Case Study Analysis include the providers of the paper for publishing documents. 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 Purchaser.
Haggling power of purchaser in the publishing industry is high. Due to the existence of a large number of publishers in the Chinese market and the market saturation, the buyers requires high quality documents at competitive rates.
Competitors Analysis.
CMP operates in an extremely competitive industry with the presence of large number of rivals. However, the company has a competitive position in the market with the greatest market share in the Chinese publishing market. Significant competitors of The Lego Group Envisioning Risks In Asia B Case Study Solution include;.
• Chemical Industry Press (CIP).
• Posts and telecommunication Press (PTP).
Chemical Market Press (CIP).
CIPis among the close rivals of CMP. Established in the exact same period, CIP publishes similar type of books. For a large time period, CIP held the largest market share, and still ranks third and second in various market segments, with a major concentrate on educational publications. 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 The Lego Group Envisioning Risks In Asia B Case Study Help quickly in the present market scenario.
Posts and telecommunication Press (PTP).
It was likewise founded in the exact same period as The Lego Group Envisioning Risks In Asia B Case Study Solution and CIP. It is likewise one of the popular gamers in the publishing industry with an annual overall revenues of RMB 550 million in 2010.
Alternatives
Alternative-1: Broaden towards New Markets
Pros
• Lowering reliance over the Chinese markets.
• Increasing number of Consumers
• Growth opportunities.
• Avoiding the impact of market saturation in the Chinese publishing industry.
Cons
• Use of potential resources in expansion.
• Threat of failure in brand-new markets.
• Time consuming.
Alernative-2: Introduce Digital Publishing
Pros
• Sustaining consumer base.
• Approaching brand-new markets.
• Easy to present using present abilities.
• Low threat of Failure.
• Low requirement for funds.
• Increased product portfolio supplies high worth to consumers.
Cons
• Competition in the market by CIP, who has prior focus on the digital publishing.
• Shift of focus from the core organisation segments to the brand-new one can lead the business to lose demand of its products in the market.
Recommendations
As the preferences are moving towards digital publishing and the business need an instant solution to prevent the declining industry development. The company might likewise consider the expansion program after the success of its digital publishing program.
Execution
In order to present digital publishing in its product portfolio, the business needs to first collects the information related to the consumer demand, the prospective markets, the government guidelines and the data related to the competitors provided in the market. If the initial offering proves a success, the company should go for the other markets. In this way the company would be able to implement its digital publishing program.
Conclusion
Although, the development of the publishing industry is decreasing given that 2008, revealing a threat to the company's long term existence, but the circumstance can be managed by considering an advancement strategy in the future. The business could consider presenting digital publishingin its existing market to execute its development program at immediate basis and to avoid the threat of failure for entrance in the new markets.
