The Lego Group Envisioning Risks In Asia Case Study Solution and Analysis
Introduction
The Lego Group Envisioning Risks In Asia Case Study Analysis is the largest publishing business with a greatest market share in the China's book retail market. CMP has ended up being a specialized details supplier and a big comprehensive Science and Technology publishing business through the integration of print media, audio-visual media and the network media.
Vital Problems
Although, The Lego Group Envisioning Risks In Asia Case Study Analysis has actually invested its 60 years journey smoothly, being a successful publishing home, nevertheless, the changing macro market patterns and forces bring certain obstacles to the publishing industry in basic and CMP in particular. These elements consist of;
• Entrance of the brand-new publishing companies in the market.
• Decreasing development 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 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 capabilities of the business could be used to strive for the future development unceasingly? How could the company sustain its long term competitive position in future?
Situational Analysis
Internal Analysis
SWOT Analysis
Strengths
The Lego Group Envisioning Risks In Asia Case Study Analysis has particular strengths that can be made use of to minimize the hazards, overcome the weakness and get the chances. Strengths of CMP are offered as follows;
• The long term experience of The Lego Group Envisioning Risks In Asia Case Study Analysis in the publishing industry i.e. 60 years allows the company to offer high quality products at a lower cost using its previous experiences.
• The technical resources and capabilities produced by its successful journey supply a competitive benefit to CMP.
• Huge product portfolioof CMP helps it to diversify its threat and provide high worth to its customers.
• Strong monetary position allows the company to think about numerous advancement opportunities with no worry of raising fund externally.
Weaknesses
In addition to the strengths, the business has particular weaknesses which might increase restrictions for the business in executing its development program. The weak points of The Lego Group Envisioning Risks In Asia Case Study Solution are given as follows;
• Despite of being a science and innovation publishing company, the business still has standard methods ofpublishing which are not compatible with the growing technological shift.
• CMP extremely relies over the Chinese markets for its growth. It must propose certain expansion plans to prevent its reliance over the Chinese markets to attain long term development.
Opportunities
Although, the growth of the publishing industry is declining considering that 2008, impacting The Lego Group Envisioning Risks In Asia Case Study Help as well, but the growth could be restored by availing particular chances presented in the market. The marketplace opportunities for CMP consist of;
• The business might likewise introduce Digital Publishing by utilizing its long term technical experience and a strong customer recognition in the market.
• CMP might consider a development program through the expansion towards foreign markets in order to reduce its dependence over Chinese markets by using its huge financial resources.
Threats
The changing macro trends in the market and increasing competitors in the publishing industry has presented particular threats to The Lego Group Envisioning Risks In Asia Case Study Help including;( Gurel, 2017).
• Intro of digital publishing i.e. virtual libraries might cause decreasing market share of The Lego Group Envisioning Risks In Asia Case Study Help due to the consumer shift towards virtual libraries.
• The existence of large number of rivals 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 certain strategies like aggressive promo, quality products, and so on
• Entryway of brand-new publishing firms in the market in addition to presence of high competitors increases the danger of losing the consumer base.
Financial Analysis.
The business has a quite competitive financial performance. Due to lack of data, the financial ratios of CMP could not be calculated. However, the general monetary efficiency of the company could be analyzed by using the charts given in the case Appendices. It might be evaluated from the Appendix III that the yearly overall earnings of CMP throughout the period 2000-2012 are growing at a high growth rate, showing that the annual need of the products of The Lego Group Envisioning Risks In Asia Case Study Analysis is growing and the company is rather efficient in bring in a a great deal of consumers at a potential rate.
Along with it, the 2nd chart which shows the yearly development in the The Lego Group Envisioning Risks In Asia Case Study Solution total properties, reveals that the business is rather efficient in adding worth to its properties through its revenues. The growth in possessions reveals that the total worth of the company is likewise increasing with increasing the total incomes. (Unknown, 2013).
Another monetary analysis of the company using the given information might be the analysis regarding the circulation of overall incomes of the business. Huge part of the incomes of CMP originates from the sales of its published books i.e. 64% as shown in the Case Appendix V. The business could move towards other business sections with a prospective development to attain its future development goal.
PESTEL Analysis
PESTEL analysis could be performed to learn the various external forces affecting the efficiency of the company and the current trends in the external environment of the business. A brief PESTEL analysis of the business is given 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 supervised and guided by the Promotion Department of the Communist Party of China. For that reason, it could be stated that the overall political forces affecting The Lego Group Envisioning Risks In Asia Case Study Help company are high. The federal government policies concerning the publishing sector are likewise increasing with the passage of time.
Economical.
Financial forces impacting the publishing sector in basic and the The Lego Group Envisioning Risks In Asia Case Study Solution in specific includesthe rates of paper, the earnings level of customers, the inflation rate, and the overall GDP development of the country. All these forces integrate impact the demand for the publishing market. In addition to it, the financial policies connected to the import of books impact the general business at CPM. However, China's financial conditions are quite beneficial for CMP with high GDP development and consumer income level.
Social and Demographical.
The customer choices are shifting towards digital publishing rather than the conventional was of publishing. In this regard, CMP ought to focus on digital publishing to fulfill the changing consumer preferences.
Technological.
Technological forces impacting the CMP consist of the technological advancement in the reading strategies etc. Improvement of science and technology in addition to the rise of digital publishing might reduce the need for the CMP products, if certain actions would not be taken soon.
Environmental.
Ecological forces impacting The Lego Group Envisioning Risks In Asia Case Study Solution consists of the concerns of ecological communities over the usage of paper in publishing books. The paper used in the books while publishing is required to be non reusable and the ink used while publishing must not be hazardous for the environment.
Legal.
Legal policies for the publishing sector at whole are high. The legal regulations concerning 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 entered in the publishing market. The regulation forbids direct involvement of foreign entities and individuals in the publishing sector.
Industry Analysis (Porter's Five Forces Design).
Porter's 5 Forces Model could be used to evaluate the beauty of the publishing market China. A brief analysis of the Porter's Five Forces is provided as follows;.
Risk of New Entrants.
Hazards of new entrants in the Chinese Publishing Industry is moderate. The prospective growth in the market tends to draw in new entrants to the publishing industry. The presence of intense competition and the requirement of big capital tends to demotivate new entrants to enter in the market.
Danger of Alternative.
Risk of Alternative is high for the Chinese Publishing Market. The substitute products for the published files is the files provided in the digital libraries on certain sites. The altering consumer choices towards digital learning increase the hazard of replacement for the market.
Competitive Competition.
Competitive competition in the publishing market is high. The existence of large number of customers in the Chinese Publishing Market like CIP, PTP etc. tends to produce high competitive competition for CMP. Together with it, new entrants are likewise participating in the market increasing the competitors for CMP.
Bargaining Power of Provider.
The significant providers of the The Lego Group Envisioning Risks In Asia Case Study Solution consist of the suppliers of the paper for releasing documents. As CMP is the biggest publisher in the Chinese Publishing Market, for that reason the total bargaining power of supplier for CMP is low.
Bargaining Power of Buyer.
Negotiating power of purchaser 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 buyers requires high quality files at competitive rates.
Rivals Analysis.
CMP runs in an extremely competitive market with the presence of large number of competitors. The company has a competitive position in the market with the highest market share in the Chinese publishing market. Significant rivals of The Lego Group Envisioning Risks In Asia Case Study Analysis include;.
• Chemical Market Press (CIP).
• Posts and telecommunication Press (PTP).
Chemical Industry Press (CIP).
CIPis among the close competitors of CMP. Founded in the exact same period, CIP releases comparable type of books. For a big time period, CIP held the largest market share, and still ranks third and 2nd in numerous market segments, with a significant focus on academic publications. CIP acts as a hazard 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 The Lego Group Envisioning Risks In Asia Case Study Analysis easily in the current market situation.
Posts and telecommunication Press (PTP).
Another close rival of CMP is PTP. It was likewise established in the exact same period as CMP and CIP. It ranks 6th in the state-owned publishers in regards to business scale. It is also among the prominent players in the publishing industry with a yearly overall revenues of RMB 550 million in 2010.
Alternatives
Alternative-1: Expand towards New Markets
Pros
• Reducing dependence over the Chinese markets.
• Increasing number of Customers
• Development opportunities.
• Avoiding the effect of market saturation in the Chinese publishing market.
Cons
• Use of possible resources in growth.
• Threat of failure in new markets.
• Time consuming.
Alernative-2: Present Digital Publishing
Pros
• Sustaining customer base.
• Approaching brand-new markets.
• Easy to present using present capabilities.
• Low danger of Failure.
• Low requirement for funds.
• Increased product portfolio offers high value to consumers.
Cons
• Competitors in the market by CIP, who has prior focus on the digital publishing.
• Shift of focus from the core company segments to the brand-new one can lead the company to lose demand of its items in the market.
Recommendations
As the preferences are shifting towards digital publishing and the business require an instant service to avoid the declining market development. The company could likewise consider the growth program after the success of its digital publishing program.
Execution
In order to present digital publishing in its product portfolio, the business must initially gathers the data associated with the consumer need, the possible markets, the federal government regulations and the information associated with the rivals provided in the market. After that, the company ought to choose one prospective segment for its preliminary offering. It ought to gather research study that how it could distinguish its digital publishing from the existing competitors' products. After all the steps above the company must choose the preliminary offering. The company must go for the other markets if the preliminary offering shows a success. In this method the company would be able to implement its digital publishing program.
Conclusion
The development of the publishing market is decreasing because 2008, revealing a danger to the company's long term existence, but the situation can be controlled by thinking about a development plan in the future. The company might consider presenting digital publishingin its existing market to implement its advancement program at instant basis and to avoid the danger of failure for entryway in the brand-new markets.
