Volkswagen Group 2 Case Study Solution and Analysis
Volkswagen Group 2 Case Study Solution is the biggest publishing business with a greatest market share in the China's book retail market. CMP has become a specialized details company and a large detailed Science and Technology publishing business through the integration of print media, audio-visual media and the network media.
Although, Volkswagen Group 2 Case Study Solution has actually invested its 60 years journey smoothly, being a successful publishing house, nevertheless, the changing macro market patterns and forces bring certain challenges to the publishing market in general and CMP in particular. These aspects consist of;
• Entrance of the brand-new publishing companies in the market.
• 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 business sustain its long term competitive position in future?
Volkswagen Group 2 Case Study Solution has certain strengths that can be used to minimize the hazards, conquer the weak point and obtain the opportunities. Strengths of CMP are given as follows;
• The long term experience of Volkswagen Group 2 Case Study Help in the publishing market i.e. 60 years allows the business to offer high quality items at a lower cost utilizing its prior experiences.
• The technical resources and capabilities produced by its effective journey offer a competitive benefit to CMP.
• Huge item portfolioof CMP helps it to diversify its threat and offer high worth to its consumers.
• Strong monetary position allows the company to consider several development opportunities with no fear of raising fund externally.
Along with the strengths, the company has specific weak points which might increase restraints for the company in implementing its advancement program. The weaknesses of Volkswagen Group 2 Case Study Solution are provided as follows;
• Despite of being a science and technology publishing firm, the business still has conventional ways ofpublishing which are not compatible with the growing technological shift.
• CMP extremely relies over the Chinese markets for its development. It ought to propose particular growth plans to avoid its dependence over the Chinese markets to accomplish long term development.
Although, the growth of the publishing market is decreasing since 2008, impacting Volkswagen Group 2 Case Study Solution also, but the growth might be restored by availing specific chances presented in the market. The marketplace chances for CMP consist of;
• The company might also present Digital Publishing by utilizing its long term technical experience and a strong client acknowledgment in the market.
• CMP might consider an advancement program through the expansion towards foreign markets in order to decrease its dependence over Chinese markets by using its huge funds.
The altering macro trends in the market and increasing competitors in the publishing industry has actually postured certain hazards to Volkswagen Group 2 Case Study Solution consisting of;( Gurel, 2017).
• Introduction of digital publishing i.e. virtual libraries might lead to declining market share of Volkswagen Group 2 Case Study Help due to the customer shift towards digital libraries.
• The existence of large number of competitors in the publishing industry increase the hazard for CMP to lose its competitive position in the market, as rivals can acquire a strong customer base by using specific methods like aggressive promotion, quality items, etc.
• Entryway of new publishing firms in the market in addition to presence of high competitors increases the risk of losing the consumer base.
The business has a rather competitive monetary efficiency. Due to lack of data, the monetary ratios of CMP could not be determined. However, the total financial performance of the business could be examined by using the charts given up the case Appendices. It could be examined from the Appendix III that the yearly overall earnings of CMP throughout the duration 2000-2012 are growing at a high growth rate, revealing that the annual demand of the items of Volkswagen Group 2 Case Study Solution is growing and the business is quite efficient in attracting a large number of clients at a prospective price.
Together with it, the 2nd graph which shows the annual growth in the Volkswagen Group 2 Case Study Analysis overall assets, shows that the business is quite efficient in including worth to its assets through its earnings. The growth in properties reveals that the total value of the firm is also increasing with increasing the overall profits. (Unknown, 2013).
Another monetary analysis of the company using the given data might be the analysis concerning the distribution of total profits of the company. Major part of the earnings of CMP originates from the sales of its released books i.e. 64% as shown in the Case Appendix V. The business might move towards other company segments with a possible development to accomplish its future advancement objective.
PESTEL analysis could be conducted to discover the various external forces affecting the performance of the business and the current trends in the external environment of the business. A quick PESTEL analysis of the business is provided as follows; (Alanzi, 2018).
As the publishing sector could have a significant effect on the frame of mind of the people about the communist ideology of the government, for that reason, the publishing sector is highly monitored and directed by the Publicity Department of the Communist Celebration of China. It could be said that the general political forces affecting CMP business are high. The federal government policies regarding the publishing sector are also increasing with the passage of time.
Financial forces affecting the publishing sector in general and the Volkswagen Group 2 Case Study Analysis in specific includesthe prices of paper, the income level of consumers, the inflation rate, and the total GDP development of the country. All these forces integrate impact the need for the publishing market. In addition to it, the financial policies connected to the import of books impact the general service at CPM. China's financial conditions are rather favorable for CMP with high GDP development and consumer income level.
Social and Demographical.
The customer preferences are shifting towards digital publishing rather than the conventional was of publishing. In this regard, CMP ought to focus on digital publishing to meet the altering consumer preferences.
Technological forces impacting the CMP include the technological improvement in the reading strategies and so on. Improvement of science and innovation together with the rise of digital publishing might minimize the demand for the CMP items, if specific actions would not be taken quickly.
Ecological forces affecting Volkswagen Group 2 Case Study Help includes the concerns of environmental communities over the usage of paper in publishing books. The paper used in the books while publishing is required to be disposable and the ink utilized while publishing should not be harmful for the environment.
Legal guidelines for the publishing sector at whole are high. Publishing Regulation 1997 needs the publishers to be approved initially by the Government to be gone into in the publishing market.
Market Analysis (Porter's Five Forces Model).
Porter's 5 Forces Model could be used to examine the attractiveness of the publishing industry China. A short analysis of the Porter's 5 Forces is provided as follows;.
Hazard of New Entrants.
Dangers of new entrants in the Chinese Publishing Industry is moderate. The possible growth in the industry tends to bring in new entrants to the publishing market. The existence of intense competition and the requirement of big capital tends to demotivate new entrants to enter in the market.
Risk of Replacement.
Hazard of Replacement is high for the Chinese Publishing Industry. The replacement items for the released documents is the documents presented in the virtual libraries on specific sites. The altering consumer preferences towards digital learning increase the risk of replacement for the industry.
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. In addition to it, new entrants are likewise participating in the marketplace increasing the competitors for CMP.
Bargaining Power of Provider.
The major providers of the Volkswagen Group 2 Case Study Analysis consist of the suppliers of the paper for releasing files. As CMP is the largest publisher in the Chinese Publishing Market, therefore the general bargaining power of provider for CMP is low.
Bargaining Power of Purchaser.
Haggling power of purchaser 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 needs high quality files at competitive prices.
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. Major rivals of Volkswagen Group 2 Case Study Analysis consist of;.
• Chemical Industry Press (CIP).
• Posts and telecommunication Press (PTP).
Chemical Industry Press (CIP).
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 CMP quickly in the existing market scenario.
Posts and telecommunication Press (PTP).
Another close competitor of CMP is PTP. It was also established in the exact same period as CMP and CIP. It ranks sixth in the state-owned publishers in regards to company scale. It is also one of the prominent gamers in the publishing market with a yearly total earnings of RMB 550 million in 2010.
Alternative-1: Expand towards New Markets
• Decreasing reliance over the Chinese markets.
• Increasing number of Customers
• Development opportunities.
• Avoiding the effect of market saturation in the Chinese publishing market.
• Use of potential resources in expansion.
• Risk of failure in brand-new markets.
• Time consuming.
Alernative-2: Introduce Digital Publishing
• Sustaining consumer base.
• Approaching brand-new markets.
• Easy to introduce utilizing existing abilities.
• Low threat of Failure.
• Low requirement for funds.
• Increased product portfolio offers high value to customers.
• Competition in the market by CIP, who has prior focus on the digital publishing.
• Shift of focus from the core service segments to the brand-new one can lead the business to lose demand of its items in the market.
With the deep analysis of the internal and external environment of the business in addition to the industry analysis and the competitor analysis, Alternative 2 is advised to CMP to attain its future advancement. As the preferences are shifting towards digital publishing and the company need an immediate solution to prevent the declining industry development. Therefore, intro of digital publishing might prove to be an immediate service with low amount of danger for the company. However, the business might also think about the growth program after the success of its digital publishing program.
In order to introduce digital publishing in its item portfolio, the business should first collects the data associated with the consumer need, the possible markets, the federal government policies and the data related to the rivals provided in the market. After that, the company needs to decide one potential section for its preliminary offering. It must collect research that how it might distinguish its digital publishing from the existing competitors' products. After all the steps above the company must choose the initial offering. If the preliminary offering shows a success, the business needs to opt for the other markets. In this way the company would have the ability to execute its digital publishing program.
The growth of the publishing industry is decreasing because 2008, revealing a risk to the business's long term presence, but the circumstance can be managed by thinking about an advancement strategy in the future. The company could consider presenting digital publishingin its existing market to execute its development program at instant basis and to prevent the risk of failure for entrance in the brand-new markets.