Vitalia Franchise Case Study Solution and Analysis
Introduction
Vitalia Franchise Case Study Help is the largest publishing company with a greatest market share in the China's book retail market. CMP provides a variety of services consisting of; collecting info, processing information and interaction services. Major organisation sections of the business consist of; books, periodicals, consultancy and circulation. The company has a huge item portfolio and its major items consist of books, periodicals, online media, exhibits, research study reports and so on. Vitalia Franchise Case Study Analysis has actually become a specialized info service provider and a large comprehensive Science and Technology publishing business through the combination of print media, audio-visual media and the network media.
Vital Issues
CMP has invested its 60 years journey efficiently, being an effective publishing house, however, the changing macro market trends and forces bring specific difficulties to the publishing industry in general and Vitalia Franchise Case Study Analysis in specific. These aspects consist of;
• Entrance of the brand-new publishing companies in the industry.
• Declining growth of the publishing market.
• Market saturation.
• Intro of digital publishing strategies
• Improvement of science and technology.
The improvement 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 company could be utilized to pursue the future development unceasingly? How could the company sustain its long term competitive position in future?
Situational Analysis
Internal Analysis
SWOT Analysis
Strengths
Vitalia Franchise Case Study Solution has particular strengths that can be utilized to decrease the threats, overcome the weak point and obtain the opportunities. Strengths of CMP are offered as follows;
• The long term experience of Vitalia Franchise Case Study Analysis in the publishing industry i.e. 60 years permits the business to provide high quality items at a lower cost utilizing its prior experiences.
• The technical resources and capabilities generated by its effective journey supply a competitive advantage to CMP.
• Vast product portfolioof CMP helps it to diversify its threat and supply high value to its clients.
• Strong financial position enables the business to think about numerous advancement chances without any fear of raising fund externally.
Weak points
In addition to the strengths, the company has certain weaknesses which could increase restraints for the company in executing its development program. The weak points of Vitalia Franchise Case Study Analysis are provided as follows;
• Despite of being a science and technology publishing company, the business still has traditional methods ofpublishing which are not suitable with the growing technological shift.
• CMP highly relies over the Chinese markets for its growth. It should propose particular expansion strategies to prevent its dependence over the Chinese markets to achieve long term growth.
Opportunities
The growth of the publishing industry is decreasing since 2008, affecting Vitalia Franchise Case Study Solution as well, but the growth could be restored by availing certain opportunities provided in the market. The market chances for CMP include;
• The company might likewise present Digital Publishing by using its long term technical experience and a strong client recognition in the market.
• CMP could think about an advancement program through the expansion towards foreign markets in order to decrease its dependence over Chinese markets by utilizing its vast financial resources.
Threats
The changing macro trends in the market and increasing competitors in the publishing industry has positioned specific threats to Vitalia Franchise Case Study Analysis consisting of;( Gurel, 2017).
• Introduction of digital publishing i.e. virtual libraries might result in declining market share of Vitalia Franchise Case Study Solution due to the customer shift towards virtual libraries.
• The presence of a great deal of competitors in the publishing industry increase the threat for CMP to lose its competitive position in the market, as competitors can acquire a strong consumer base by utilizing certain techniques like aggressive promo, quality products, etc.
• Entrance of new publishing companies in the industry in addition to existence of high competition increases the hazard of losing the client base.
Financial Analysis.
Due to lack of information, the monetary ratios of CMP could not be computed. It might be analyzed from the Appendix III that the annual total incomes of Vitalia Franchise Case Study Analysis during the period 2000-2012 are growing at a high development rate, revealing that the annual demand of the products of CMP is growing and the business is rather efficient in drawing in a large number of customers at a possible rate.
In addition to it, the 2nd chart which reveals the yearly development in the Vitalia Franchise Case Study Solution total assets, reveals that the company is rather efficient in adding value to its possessions through its revenues. The development in possessions reveals that the total worth of the firm is also increasing with increasing the total profits. (Unknown, 2013).
Another financial analysis of the business using the given data could be the analysis regarding the circulation of total earnings of the company. Huge part of the revenues of CMP originates from the sales of its published books i.e. 64% as shown in the Case Appendix V. The company could move towards other service sectors with a potential development to accomplish its future advancement goal.
PESTEL Analysis
PESTEL analysis might be performed to find out the numerous external forces impacting the performance of the company and the recent patterns in the external environment of the company. A quick PESTEL analysis of the company is given as follows; (Alanzi, 2018).
Political.
As the publishing sector might have a considerable influence on the state of mind of individuals about the communist ideology of the federal government, therefore, the publishing sector is extremely monitored and directed by the Publicity Department of the Communist Party of China. It could be stated that the total political forces impacting CMP business are high. The federal government policies concerning the publishing sector are also increasing with the passage of time.
Affordable.
Economic forces affecting the publishing sector in general and the CMP in particular includesthe prices of paper, the income level of customers, the inflation rate, and the general GDP growth of the nation. All these forces combine effect the demand for the publishing market.
Social and Demographical.
The customer preferences are moving towards digital publishing rather than the conventional was of publishing. In this regard, CMP needs to focus on digital publishing to meet the changing customer choices.
Technological.
Technological forces affecting the CMP consist of the technological improvement in the reading techniques etc. Improvement of science and innovation together with the increase of digital publishing might minimize the need for the CMP products, if specific actions would not be taken quickly.
Environmental.
Environmental forces impacting Vitalia Franchise Case Study Analysis consists of the issues of ecological 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 should not be hazardous for the environment.
Legal.
Legal policies for the publishing sector at whole are high. Publishing Regulation 1997 requires the publishers to be authorized first by the Government to be gone into in the publishing market.
Market Analysis (Porter's Five Forces Model).
Porter's Five Forces Model could be utilized to evaluate the beauty of the publishing market China. A quick analysis of the Porter's Five Forces is provided as follows;.
Risk of New Entrants.
Dangers of brand-new entrants in the Chinese Publishing Industry is moderate. The prospective growth in the market tends to bring in brand-new entrants to the publishing industry. Nevertheless, the existence of intense competition and the requirement of huge capital tends to demotivate new entrants to enter in the market.
Danger of Alternative.
Threat of Replacement is high for the Chinese Publishing Market. The replacement items for the released documents is the documents presented in the virtual libraries on specific websites. The altering consumer choices towards digital learning increase the threat of alternative for the industry.
Competitive Rivalry.
Competitive rivalry in the publishing market is high. The existence of a great deal of customers in the Chinese Publishing Market like CIP, PTP and so on tends to produce high competitive rivalry for CMP. In addition to it, brand-new entrants are likewise entering into the market increasing the competition for CMP.
Bargaining Power of Provider.
The major suppliers of the Vitalia Franchise Case Study Solution include the suppliers of the paper for publishing documents. As CMP is the largest publisher in the Chinese Publishing Market, therefore the general bargaining power of supplier for CMP is low.
Bargaining Power of Buyer.
Bargaining 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 market saturation, the purchasers needs high quality documents at competitive rates.
Competitors Analysis.
CMP operates in an extremely competitive market with the presence of large number of competitors. Nevertheless, the company has a competitive position in the market with the highest market share in the Chinese publishing market. Major rivals of Vitalia Franchise Case Study Solution consist of;.
• Chemical Market Press (CIP).
• Posts and telecommunication Press (PTP).
Chemical Industry Press (CIP).
CIPis among the close competitors of CMP. Established in the exact same period, CIP releases comparable type of books. For a large period, CIP held the largest market share, and still ranks 2nd and 3rd in different market sectors, with a major concentrate on educational publications. CIP acts as a risk 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 Vitalia Franchise Case Study Help quickly in the existing market scenario.
Posts and telecommunication Press (PTP).
Another close rival of CMP is PTP. It was likewise founded in the very same duration as CMP and CIP. It ranks sixth in the state-owned publishers in regards to organisation scale. It is also one of the prominent players in the publishing market with a yearly overall revenues of RMB 550 million in 2010.
Alternatives
Alternative-1: Broaden towards New Markets
Pros
• Reducing dependence over the Chinese markets.
• Increasing number of Customers
• Development chances.
• Avoiding the impact of market saturation in the Chinese publishing industry.
Cons
• Use of prospective resources in expansion.
• Risk of failure in brand-new markets.
• Time consuming.
Alernative-2: Present Digital Publishing
Pros
• Sustaining consumer base.
• Approaching new markets.
• Easy to present utilizing existing abilities.
• Low risk of Failure.
• Low requirement for funds.
• Increased product portfolio provides high worth to consumers.
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 company to lose need of its products in the market.
Recommendations
With the deep analysis of the internal and external environment of the company together with the industry analysis and the rival analysis, Alternative 2 is advised to CMP to accomplish its future advancement. As the preferences are shifting towards digital publishing and the business need an instant service to prevent the decreasing industry development. Introduction of digital publishing might show to be an instant service with low amount of threat for the business. The company could likewise consider the growth program after the success of its digital publishing program.
Implementation
In order to introduce digital publishing in its product portfolio, the company needs to initially gathers the data connected to the customer demand, the potential markets, the government policies and the data related to the competitors provided in the market. After that, the company ought to decide one prospective section for its preliminary offering. It must collect research that how it could distinguish its digital publishing from the existing rivals' products. After all the steps above the company must go for the preliminary offering. The company ought to go for the other markets if the initial offering proves a success. In this method the company would have the ability to execute its digital publishing program.
Conclusion
Although, the growth of the publishing industry is decreasing given that 2008, revealing a risk to the business's long term existence, but the scenario can be managed by thinking about an advancement plan in the future. The company might think about introducing digital publishingin its existing market to implement its advancement program at instant basis and to prevent the threat of failure for entryway in the new markets.
