Virgin Group Finding New Avenues For Growth Case Study Solution and Analysis
Virgin Group Finding New Avenues For Growth Case Study Help is the biggest publishing business with a highest market share in the China's book retail market. CMP has ended up being a specialized details supplier and a large detailed Science and Technology publishing business through the combination of print media, audio-visual media and the network media.
Although, Virgin Group Finding New Avenues For Growth Case Study Solution has actually spent its 60 years journey smoothly, being a successful publishing home, however, the altering macro market trends and forces bring specific obstacles to the publishing market in general and CMP in specific. These elements consist of;
• Entryway of the brand-new publishing firms in the industry.
• Decreasing growth of the publishing market.
• Market saturation.
• Intro of digital publishing methods
• Enhancement of science and technology.
The transformation of the macro markets have raised a number of 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 abilities of the company could be used to strive for the future development unceasingly? How could the company sustain its long term competitive position in future?
Virgin Group Finding New Avenues For Growth Case Study Analysis has specific strengths that can be made use of to reduce the hazards, conquer the weak point and get the opportunities. Strengths of CMP are offered as follows;
• The long term experience of Virgin Group Finding New Avenues For Growth Case Study Help in the publishing market i.e. 60 years allows the company to offer high quality products at a lower expense using its previous experiences.
• The technical resources and capabilities generated by its successful journey provide a competitive benefit to CMP.
• Large product portfolioof CMP helps it to diversify its threat and supply high value to its consumers.
• Strong monetary position enables the business to think about several advancement chances with no fear of raising fund externally.
In addition to the strengths, the company has certain weak points which could increase restraints for the business in implementing its advancement program. The weak points 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 business still has traditional ways ofpublishing which are not compatible with the growing technological shift.
• CMP extremely relies over the Chinese markets for its growth. It needs to propose specific growth strategies to avoid its reliance over the Chinese markets to achieve long term development.
The growth of the publishing market is declining considering that 2008, impacting Virgin Group Finding New Avenues For Growth Case Study Analysis as well, however the development could be revived by availing particular opportunities provided in the market. The marketplace chances for CMP consist of;
• The business might also present Digital Publishing by utilizing its long term technical experience and a strong client acknowledgment in the market.
• CMP might think about an advancement program through the growth towards foreign markets in order to decrease its dependence over Chinese markets by utilizing its huge financial resources.
The altering macro trends in the market and increasing competition in the publishing industry has posed particular hazards to Virgin Group Finding New Avenues For Growth Case Study Solution consisting of;( Gurel, 2017).
• Intro of digital publishing i.e. digital libraries could lead to declining market share of Virgin Group Finding New Avenues For Growth Case Study Help due to the consumer shift towards virtual libraries.
• The existence of a great deal of competitors in the publishing industry increase the danger for CMP to lose its competitive position in the market, as rivals can get a strong consumer base by using specific strategies like aggressive promotion, quality items, etc.
• Entrance of brand-new publishing firms in the industry along with presence of high competition increases the hazard of losing the customer base.
The business has a quite competitive financial performance. Due to absence of data, the monetary ratios of CMP could not be determined. The total monetary efficiency 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 total revenues of CMP during the period 2000-2012 are growing at a high growth rate, showing that the yearly demand of the products of Virgin Group Finding New Avenues For Growth Case Study Help is growing and the company is quite efficient in bring in a a great deal of consumers at a potential cost.
Along with it, the second chart which shows the annual growth in the Virgin Group Finding New Avenues For Growth Case Study Analysis overall assets, shows that the company is quite effective in including worth to its possessions through its profits. The growth in possessions shows that the overall value of the firm is also increasing with increasing the overall revenues. (Unidentified, 2013).
Another monetary analysis of the company utilizing the given information might be the analysis regarding the distribution of overall revenues of the business. Major part of the profits of CMP comes from the sales of its published books i.e. 64% as displayed in the Case Appendix V. The company could move towards other business sectors with a possible growth to attain its future development goal.
PESTEL analysis could be carried out to learn the various external forces impacting the performance of the business and the current patterns in the external environment of the business. A quick PESTEL analysis of the company is provided as follows; (Alanzi, 2018).
As the publishing sector might have a significant effect on the state of mind of the people about the communist ideology of the government, therefore, the publishing sector is highly supervised and assisted by the Publicity Department of the Communist Party of China. For that reason, it could be stated that the overall political forces impacting Virgin Group Finding New Avenues For Growth Case Study Analysis business are high. The federal government policies relating to the publishing sector are also increasing with the passage of time.
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 total GDP growth of the nation. All these forces integrate effect the demand for the publishing market.
Social and Demographical.
The customer choices are shifting towards digital publishing rather than the standard was of publishing. In this regard, CMP must focus on digital publishing to meet the altering customer choices.
Technological forces affecting the CMP consist of the technological advancement in the reading methods and so on. Improvement of science and technology in addition to the increase of digital publishing could decrease the need for the CMP products, if certain actions would not be taken soon.
Environmental forces impacting Virgin Group Finding New Avenues For Growth Case Study Analysis includes the concerns of environmental neighborhoods over the usage of paper in publishing books. The paper used in the books while publishing is needed to be disposable and the ink used while publishing needs to not be harmful for the environment.
Legal policies for the publishing sector at whole are high. Publishing Ordinance 1997 requires the publishers to be approved first by the Federal government to be entered in the publishing market.
Industry Analysis (Porter's Five Forces Model).
Porter's 5 Forces Model might be utilized to evaluate the beauty of the publishing industry China. A short analysis of the Porter's 5 Forces is given as follows;.
Risk of New Entrants.
Dangers of new entrants in the Chinese Publishing Market is moderate. The prospective growth in the industry tends to draw in brand-new entrants to the publishing industry. However, the presence of extreme competition and the requirement of substantial capital tends to demotivate new entrants to enter in the market.
Risk of Substitution.
Risk of Substitution is high for the Chinese Publishing Market. The substitute products for the published documents is the documents presented in the virtual libraries on specific websites. The altering customer choices towards digital learning increase the danger of replacement for the industry.
Competitive rivalry in the publishing market is high. The presence of large number of consumers in the Chinese Publishing Market like CIP, PTP and so on tends to produce high competitive competition for CMP. In addition to it, new entrants are also entering into the market increasing the competition for CMP.
Bargaining Power of Provider.
The major providers of the Virgin Group Finding New Avenues For Growth Case Study Solution consist of the providers of the paper for publishing documents. As CMP is the biggest publisher in the Chinese Publishing Market, therefore the general 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 a great deal of publishers in the Chinese market and the market saturation, the purchasers requires high quality files at competitive rates.
CMP operates in a highly competitive market with the presence of large number of rivals. The company has a competitive position in the market with the highest market share in the Chinese publishing market. Major competitors of Virgin Group Finding New Avenues For Growth Case Study Analysis include;.
• Chemical Industry Press (CIP).
• Posts and telecommunication Press (PTP).
Chemical Market Press (CIP).
CIPis one of the close competitors of CMP. Founded in the exact same period, CIP publishes comparable type of books. For a big period, CIP held the biggest market share, and still ranks third and 2nd in numerous market sections, with a major concentrate on academic publications. CIP acts as a danger for CMP as it could wean its market share due to its long term competitive background. CIP is concentrated on digital publishing and could wean the market share of Virgin Group Finding New Avenues For Growth Case Study Solution quickly in the current market scenario.
Posts and telecommunication Press (PTP).
Another close competitor of CMP is PTP. It was also established in the same duration as CMP and CIP. It ranks sixth in the state-owned publishers in terms of service scale. It is also one of the prominent gamers in the publishing market with a yearly overall incomes of RMB 550 million in 2010.
Alternative-1: Broaden towards New Markets
• Minimizing dependence over the Chinese markets.
• Increasing variety of Customers
• Development chances.
• Preventing the impact of market saturation in the Chinese publishing market.
• Usage of prospective resources in growth.
• Risk of failure in brand-new markets.
• Time consuming.
Alernative-2: Present Digital Publishing
• Sustaining consumer base.
• Approaching brand-new markets.
• Easy to introduce using existing abilities.
• Low threat of Failure.
• Low requirement for funds.
• Increased product portfolio supplies high value to consumers.
• Competitors in the market by CIP, who has prior concentrate on the digital publishing.
• Shift of focus from the core service segments to the brand-new one can lead the business to lose need of its items in the market.
With the deep analysis of the external and internal environment of the business together with the industry analysis and the competitor analysis, Alternative 2 is advised to CMP to attain its future development. As the preferences are moving towards digital publishing and the company require an instant option to avoid the declining market growth. Intro of digital publishing might show to be an immediate service with low quantity of threat for the company. The company could also consider the expansion program after the success of its digital publishing program.
In order to present digital publishing in its item portfolio, the company ought to initially gathers the information related to the consumer demand, the prospective markets, the government regulations and the data related to the competitors provided in the market. If the preliminary offering proves a success, the business should go for the other markets. In this way the company would be able to execute its digital publishing program.
The growth of the publishing market is decreasing because 2008, revealing a threat to the company's long term presence, but the scenario can be controlled by considering a development strategy in the future. The business might think about introducing digital publishingin its existing market to execute its development program at instant basis and to avoid the threat of failure for entrance in the new markets.