The New Economy 2 Case Study Solution and Analysis
Introduction
The New Economy 2 Case Study Help is the biggest publishing company with a highest market share in the China's book retail market. CMP has ended up being a specialized information service provider and a big extensive Science and Technology publishing company through the combination of print media, audio-visual media and the network media.
Crucial Problems
CMP has actually spent its 60 years journey efficiently, being a successful publishing home, however, the altering macro market trends and forces bring certain obstacles to the publishing market in general and The New Economy 2 Case Study Help in specific. These aspects include;
• Entryway of the new publishing firms in the industry.
• Decreasing development of the publishing market.
• Market saturation.
• Introduction of digital publishing methods
• Enhancement of science and innovation.
The improvement of the macro markets have raised numerous 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 capabilities of the company could be used to strive for the future development unceasingly? How could the business sustain its long term competitive position in future?
Situational Analysis
Internal Analysis
SWOT Analysis
Strengths
The New Economy 2 Case Study Solution has certain strengths that can be utilized to minimize the threats, conquer the weak point and obtain the opportunities. Strengths of CMP are offered as follows;
• The long term experience of The New Economy 2 Case Study Help in the publishing industry i.e. 60 years allows the company to supply high quality products at a lower cost using its previous experiences.
• The technical resources and capabilities generated by its successful journey offer a competitive benefit to CMP.
• Vast product portfolioof CMP assists it to diversify its risk and offer high value to its consumers.
• Strong financial position permits the company to consider numerous development chances with no fear of raising fund externally.
Weak points
Along with the strengths, the business has specific weaknesses which could increase constraints for the business in executing its development program. The weak points of The New Economy 2 Case Study Solution are offered as follows;
• Despite of being a science and innovation publishing firm, the business still has conventional ways ofpublishing which are not compatible with the growing technological shift.
• CMP highly relies over the Chinese markets for its development. It should propose certain expansion strategies to avoid its reliance over the Chinese markets to achieve long term development.
Opportunities
Although, the development of the publishing market is decreasing since 2008, impacting The New Economy 2 Case Study Help as well, however the growth could be restored by availing certain chances provided in the market. The marketplace opportunities for CMP consist of;
• The company could also present Digital Publishing by utilizing its long term technical experience and a strong customer acknowledgment in the market.
• CMP could think about an advancement program through the growth towards foreign markets in order to decrease its dependence over Chinese markets by using its huge financial resources.
Threats
The changing macro trends in the market and increasing competition in the publishing market has actually posed certain hazards to The New Economy 2 Case Study Help consisting of;( Gurel, 2017).
• Intro of digital publishing i.e. virtual libraries might result in declining market share of The New Economy 2 Case Study Solution due to the customer shift towards virtual libraries.
• The presence of a great deal of rivals in the publishing industry increase the risk for CMP to lose its competitive position in the market, as competitors can acquire a strong customer base by using specific methods like aggressive promotion, quality items, and so on
• Entryway of new publishing companies in the market along with existence of high competition increases the hazard of losing the consumer base.
Financial Analysis.
Due to absence of information, the monetary ratios of CMP might not be determined. It could be evaluated from the Appendix III that the yearly overall incomes of The New Economy 2 Case Study Solution throughout the duration 2000-2012 are growing at a high growth rate, showing that the annual need of the items of CMP is growing and the company is quite efficient in bring in a big number of customers at a potential rate.
In addition to it, the 2nd graph which shows the yearly development in the The New Economy 2 Case Study Help overall possessions, shows that the company is quite effective in adding worth to its properties through its earnings. The development in possessions reveals that the total value of the company is likewise increasing with increasing the overall earnings. (Unknown, 2013).
Another monetary analysis of the company using the offered information might be the analysis concerning the circulation of overall profits of the company. Major part of the earnings of CMP comes from the sales of its published books i.e. 64% as displayed in the Case Appendix V. The business could move towards other organisation sectors with a potential development to achieve its future development goal.
PESTEL Analysis
PESTEL analysis might be carried out to learn the numerous external forces affecting the efficiency of the company and the recent trends in the external environment of the company. A quick PESTEL analysis of the company is offered as follows; (Alanzi, 2018).
Political.
As the publishing sector could have a significant influence on the frame of mind of the people about the communist ideology of the federal government, therefore, the publishing sector is extremely monitored and assisted by the Publicity Department of the Communist Party of China. For that reason, it could be said that the overall political forces affecting The New Economy 2 Case Study Analysis service are high. The government policies relating to the publishing sector are likewise increasing with the passage of time.
Cost-effective.
Financial forces affecting the publishing sector in basic and the The New Economy 2 Case Study Solution in particular includesthe prices of paper, the earnings level of consumers, the inflation rate, and the total GDP growth of the nation. All these forces integrate impact the need for the publishing market. Along with it, the financial policies connected to the import of books affect the total business at CPM. However, China's economic conditions are rather favorable for CMP with high GDP growth and customer earnings level.
Social and Demographical.
Social and demographical forces consist of the population growth, the customer's choices towards reading helpful materials etc. China has the greatest population in the world with a high population development, revealing the increasing variety of customers of the The New Economy 2 Case Study Analysis. However, the consumer choices are moving towards digital publishing rather than the standard was of publishing. In this regard, CMP ought to concentrate on digital publishing to satisfy the altering customer choices.
Technological.
Technological forces affecting the CMP include the technological advancement in the reading methods and so on. Enhancement of science and technology along with the rise of digital publishing could decrease the need for the CMP products, if specific actions would not be taken quickly.
Environmental.
Environmental forces affecting The New Economy 2 Case Study Analysis includes the issues of environmental communities over the use of paper in publishing books. The paper used in the books while publishing is needed to be non reusable and the ink utilized while publishing must 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 first by the Federal government to be gone into in the publishing market.
Industry Analysis (Porter's 5 Forces Design).
Porter's Five Forces Design might be utilized to examine the appearance of the publishing industry China. A quick analysis of the Porter's 5 Forces is provided as follows;.
Hazard of New Entrants.
Hazards of new entrants in the Chinese Publishing Market is moderate. The possible growth in the market tends to attract new entrants to the publishing industry. The presence of extreme competitors and the requirement of substantial capital tends to demotivate brand-new entrants to enter in the market.
Danger of Substitution.
Threat of Replacement is high for the Chinese Publishing Industry. The alternative items for the released documents is the documents provided in the virtual libraries on particular sites. The changing customer preferences towards digital learning increase the threat of alternative for the industry.
Competitive Competition.
Competitive competition in the publishing industry is high. The presence of a great deal of consumers in the Chinese Publishing Industry like CIP, PTP etc. tends to produce high competitive competition for CMP. Together with it, new entrants are likewise entering into the market increasing the competitors for CMP.
Bargaining Power of Provider.
The major providers of the The New Economy 2 Case Study Analysis include the providers of the paper for releasing documents. As CMP is the largest publisher in the Chinese Publishing Market, therefore the total bargaining power of supplier for CMP is low.
Bargaining Power of Purchaser.
Haggling power of buyer in the publishing industry 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 documents at competitive rates.
Rivals Analysis.
CMP operates in an extremely competitive market with the existence of a great deal of rivals. The company has a competitive position in the market with the greatest market share in the Chinese publishing market. Significant competitors of The New Economy 2 Case Study Help include;.
• Chemical Market Press (CIP).
• Posts and telecommunication Press (PTP).
Chemical Market Press (CIP).
CIP acts as a threat for CMP as it could 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 current market circumstance.
Posts and telecommunication Press (PTP).
Another close rival of CMP is PTP. It was likewise established in the same period as CMP and CIP. It ranks sixth in the state-owned publishers in regards to service scale. It is also among the popular players in the publishing industry with a yearly total earnings of RMB 550 million in 2010.
Alternatives
Alternative-1: Expand towards New Markets
Pros
• Reducing dependence over the Chinese markets.
• Increasing variety of Customers
• Development opportunities.
• Avoiding the effect of market saturation in the Chinese publishing industry.
Cons
• Usage of potential resources in expansion.
• Threat of failure in new markets.
• Time consuming.
Alernative-2: Present Digital Publishing
Pros
• Sustaining consumer base.
• Approaching new markets.
• Easy to present utilizing existing capabilities.
• Low danger of Failure.
• Low requirement for funds.
• Increased item portfolio provides high value to clients.
Cons
• Competition in the market by CIP, who has prior focus on the digital publishing.
• Shift of focus from the core business sections to the brand-new one can lead the business to lose demand of its items in the market.
Suggestions
As the choices are shifting towards digital publishing and the business need an immediate service to prevent the declining market development. The business could also think about the growth program after the success of its digital publishing program.
Execution
In order to introduce digital publishing in its item portfolio, the company ought to initially collects the information related to the customer demand, the prospective markets, the government regulations and the data related to the competitors provided in the market. After that, the business needs to choose one possible sector for its initial offering. It ought to collect research that how it could differentiate its digital publishing from the existing competitors' products. The steps above the company ought to go for the initial offering. If the initial offering shows a success, the business must opt for the other markets. In this method the business would have the ability to implement its digital publishing program.
Conclusion
The development of the publishing industry is decreasing considering that 2008, showing a danger to the business's long term existence, but the situation can be controlled by considering an advancement plan in the future. The business might consider presenting digital publishingin its existing market to implement its development program at instant basis and to avoid the danger of failure for entrance in the brand-new markets.
