Virgin Group Finding New Avenues For Growth Case Study Solution and Analysis
Introduction
Virgin Group Finding New Avenues For Growth Case Study Solution is the biggest publishing company with a highest market share in the China's book retail market. CMP has actually ended up being a specialized information supplier and a large detailed Science and Technology publishing company through the integration of print media, audio-visual media and the network media.
Vital Issues
Although, Virgin Group Finding New Avenues For Growth Case Study Analysis has invested its 60 years journey smoothly, being an effective publishing house, nevertheless, the changing macro market trends and forces bring particular obstacles to the publishing market in basic and CMP in particular. These elements consist of;
• Entryway of the brand-new publishing firms in the market.
• Declining growth of the publishing market.
• Market saturation.
• Introduction of digital publishing strategies
• Enhancement of science and technology.
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 scenario? Do the long important 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
Virgin Group Finding New Avenues For Growth Case Study Analysis has specific strengths that can be used to reduce the threats, conquer the weak point and obtain the opportunities. Strengths of CMP are given as follows;
• The long term experience of Virgin Group Finding New Avenues For Growth Case Study Solution in the publishing industry i.e. 60 years allows the company to offer high quality items at a lower cost utilizing its prior experiences.
• The technical resources and capabilities produced by its successful journey supply a competitive advantage to CMP.
• Huge item portfolioof CMP helps it to diversify its risk and provide high worth to its consumers.
• Strong monetary position allows the business to think about a number of development chances with no fear of raising fund externally.
Weak points
Together with the strengths, the company has specific weaknesses which might increase restrictions for the business in executing its advancement program. The weaknesses of Virgin Group Finding New Avenues For Growth Case Study Help are given as follows;
• Despite of being a science and innovation publishing company, the company still has traditional methods ofpublishing which are not compatible with the growing technological shift.
• CMP extremely relies over the Chinese markets for its development. It needs to propose particular expansion strategies to avoid its dependence over the Chinese markets to attain long term development.
Opportunities
The development of the publishing market is declining because 2008, affecting Virgin Group Finding New Avenues For Growth Case Study Analysis as well, however the growth could be revived by availing certain opportunities provided in the market. The market chances for CMP include;
• The company could likewise introduce Digital Publishing by using its long term technical experience and a strong consumer acknowledgment in the market.
• CMP might consider a development program through the expansion towards foreign markets in order to reduce its reliance over Chinese markets by utilizing its large funds.
Dangers
The changing macro trends in the market and increasing competition in the publishing industry has actually postured particular risks to Virgin Group Finding New Avenues For Growth Case Study Solution consisting of;( Gurel, 2017).
• Intro of digital publishing i.e. digital libraries might cause decreasing market share of Virgin Group Finding New Avenues For Growth Case Study Help due to the customer shift towards digital libraries.
• The existence of large number of rivals in the publishing market increase the hazard 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.
• Entrance of brand-new publishing firms in the industry together with existence of high competition increases the threat of losing the customer base.
Monetary Analysis.
The company has a rather competitive monetary performance. Due to lack of data, the monetary ratios of CMP might not be determined. The overall monetary performance of the business could be evaluated by using the charts given in the case Appendices. It might be analyzed from the Appendix III that the yearly total revenues of CMP throughout the duration 2000-2012 are growing at a high development rate, revealing that the yearly need of the items of Virgin Group Finding New Avenues For Growth Case Study Analysis is growing and the business is rather effective in attracting a large number of consumers at a prospective rate.
Along with it, the 2nd chart which reveals the yearly growth in the Virgin Group Finding New Avenues For Growth Case Study Help total possessions, reveals that the company is rather effective in adding worth to its possessions through its profits. The growth in properties shows that the overall worth of the company is likewise increasing with increasing the total revenues. (Unknown, 2013).
Another monetary analysis of the company utilizing the provided information might be the analysis concerning the distribution of total earnings of the business. Major part of the earnings of CMP comes from the sales of its released books i.e. 64% as shown in the Case Appendix V. The company could move towards other business sectors with a prospective development to accomplish its future development objective.
PESTEL Analysis
PESTEL analysis could be carried out to find out the different external forces affecting the efficiency of the company and the current trends in the external environment of the company. A brief PESTEL analysis of the business is provided as follows; (Alanzi, 2018).
Political.
As the publishing sector could have a considerable 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 Promotion Department of the Communist Party of China. For that reason, it might be said that the total political forces affecting Virgin Group Finding New Avenues For Growth Case Study Analysis company are high. The federal government policies relating to the publishing sector are likewise increasing with the passage of time.
Cost-effective.
Financial forces affecting the publishing sector in general and the Virgin Group Finding New Avenues For Growth Case Study Solution in particular includesthe prices of paper, the earnings level of customers, the inflation rate, and the total GDP growth of the country. All these forces integrate impact the need for the publishing market. Together with it, the financial policies related to the import of books affect the general service at CPM. China's economic conditions are rather beneficial for CMP with high GDP development and consumer income level.
Social and Demographical.
Social and demographical forces include the population development, the customer's choices towards checking out informative materials etc. China has the highest population in the world with a high population growth, revealing the increasing number of customers of the Virgin Group Finding New Avenues For Growth Case Study Help. Nevertheless, the customer preferences are moving towards digital publishing rather than the conventional was of publishing. In this regard, CMP must focus on digital publishing to meet the altering customer choices.
Technological.
Technological forces impacting the CMP consist of the technological improvement in the reading techniques etc. Enhancement of science and innovation along with the increase of digital publishing might reduce the demand for the CMP items, if specific actions would not be taken soon.
Environmental.
Environmental forces affecting Virgin Group Finding New Avenues For Growth Case Study Help includes the concerns 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 must not be damaging for the environment.
Legal.
Legal regulations for the publishing sector at whole are high. Publishing Regulation 1997 requires the publishers to be authorized initially by the Federal government to be entered in the publishing market.
Industry Analysis (Porter's Five Forces Model).
Porter's 5 Forces Design might be used to examine the appearance of the publishing industry China. A brief analysis of the Porter's Five Forces is given as follows;.
Hazard of New Entrants.
Threats of new entrants in the Chinese Publishing Market is moderate. The possible growth in the market tends to bring in brand-new entrants to the publishing industry. However, the presence of intense competition and the requirement of big capital tends to demotivate new entrants to enter in the market.
Danger of Substitution.
Danger of Replacement is high for the Chinese Publishing Industry. The alternative products for the released documents is the files provided in the digital libraries on particular sites. The changing consumer preferences towards digital knowing increase the hazard of replacement for the market.
Competitive Rivalry.
Competitive rivalry in the publishing market is high. The existence of large number of customers in the Chinese Publishing Industry like CIP, PTP and so on tends to produce high competitive competition for CMP. Together with it, brand-new entrants are likewise entering into the market increasing the competition for CMP.
Bargaining Power of Provider.
The significant providers of the Virgin Group Finding New Avenues For Growth Case Study Analysis consist of the providers of the paper for releasing files. As CMP is the largest publisher in the Chinese Publishing Market, for that reason the total bargaining power of provider for CMP is low.
Bargaining Power of Purchaser.
Haggling power of buyer in the publishing market is high. Due to the presence of a large number of publishers in the Chinese market and the marketplace saturation, the buyers requires high quality files at competitive prices.
Competitors Analysis.
CMP runs in a highly competitive market with the presence of large number of competitors. The business has a competitive position in the market with the highest market share in the Chinese publishing market. Significant competitors of Virgin Group Finding New Avenues For Growth Case Study Solution consist of;.
• Chemical Market Press (CIP).
• Posts and telecommunication Press (PTP).
Chemical Industry Press (CIP).
CIP acts as a threat 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 current market situation.
Posts and telecommunication Press (PTP).
It was likewise established in the very same duration as Virgin Group Finding New Avenues For Growth Case Study Help and CIP. It is likewise one of the popular gamers in the publishing market with an annual total incomes of RMB 550 million in 2010.
Alternatives
Alternative-1: Broaden towards New Markets
Pros
• Reducing reliance over the Chinese markets.
• Increasing number of Clients
• Development opportunities.
• Avoiding the impact of market saturation in the Chinese publishing industry.
Cons
• Use of potential resources in growth.
• Risk of failure in new markets.
• Time consuming.
Alernative-2: Introduce Digital Publishing
Pros
• Sustaining customer base.
• Approaching brand-new markets.
• Easy to introduce using present capabilities.
• Low risk of Failure.
• Low requirement for funds.
• Increased item portfolio supplies high value to customers.
Cons
• Competitors in the market by CIP, who has prior focus on the digital publishing.
• Shift of focus from the core organisation sectors to the brand-new one can lead the business to lose demand of its products in the market.
Recommendations
As the preferences are shifting towards digital publishing and the business require an immediate service to avoid the declining market growth. The company could likewise think about the expansion program after the success of its digital publishing program.
Implementation
In order to present digital publishing in its item portfolio, the company ought to initially gathers the information connected to the consumer demand, the prospective markets, the federal government regulations and the data related to the competitors provided in the market. After that, the business must choose one potential segment for its initial offering. It needs to collect research that how it could differentiate its digital publishing from the existing rivals' items. After all the actions above the company need to go for the preliminary offering. The company needs to go for the other markets if the initial offering proves a success. In this method the company would be able to implement its digital publishing program.
Conclusion
Although, the growth of the publishing market is decreasing considering that 2008, revealing a danger to the company's long term existence, however the scenario can be controlled by considering a development strategy in the future. The business might consider presenting digital publishingin its existing market to implement its development program at immediate basis and to prevent the danger of failure for entrance in the new markets.
