Western Company In China Guangzhou Case Study Solution and Analysis
Introduction
Western Company In China Guangzhou Case Study Analysis is the biggest publishing company with a greatest market share in the China's book retail market. CMP has ended up being a specialized information provider and a big detailed Science and Technology publishing business through the integration of print media, audio-visual media and the network media.
Important Concerns
CMP has invested its 60 years journey efficiently, being a successful publishing home, nevertheless, the altering macro market trends and forces bring particular difficulties to the publishing industry in basic and Western Company In China Guangzhou Case Study Help in particular. These factors consist of;
• Entrance of the new publishing companies in the market.
• Decreasing development of the publishing market.
• Market saturation.
• Introduction of digital publishing techniques
• Improvement of science and innovation.
The transformation of the macro markets have raised numerous concerns to the management at CPM that what could be the future of CMP in this circumstance? Do the long important experience, technical resources and the capabilities of the company could be utilized 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
Western Company In China Guangzhou Case Study Solution has particular strengths that can be made use of to reduce the hazards, overcome the weak point and get the chances. Strengths of CMP are provided as follows;
• The long term experience of Western Company In China Guangzhou Case Study Analysis in the publishing industry i.e. 60 years allows the company to supply 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.
• Vast product portfolioof CMP assists it to diversify its threat and offer high worth to its customers.
• Strong monetary position allows the business to think about a number of advancement chances with no fear of raising fund externally.
Weaknesses
In addition to the strengths, the business has particular weaknesses which could increase restrictions for the business in executing its development program. The weak points of Western Company In China Guangzhou Case Study Help are provided as follows;
• Despite of being a science and technology publishing firm, the business still has conventional methods ofpublishing which are not suitable with the growing technological shift.
• CMP extremely relies over the Chinese markets for its growth. It should propose certain growth strategies to prevent its reliance over the Chinese markets to achieve long term development.
Opportunities
The growth of the publishing market is decreasing considering that 2008, impacting Western Company In China Guangzhou Case Study Analysis as well, however the growth might be restored by availing particular chances presented in the market. The marketplace opportunities for CMP consist of;
• The business could 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 growth towards foreign markets in order to minimize its dependence over Chinese markets by using its vast funds.
Risks
The altering macro patterns in the market and increasing competitors in the publishing industry has actually postured specific risks to Western Company In China Guangzhou Case Study Solution including;( Gurel, 2017).
• Introduction of digital publishing i.e. virtual libraries could lead to declining market share of Western Company In China Guangzhou Case Study Help due to the customer shift towards virtual libraries.
• The existence of large number of rivals in the publishing industry increase the hazard for CMP to lose its competitive position in the market, as competitors can get a strong customer base by utilizing certain strategies like aggressive promotion, quality items, etc.
• Entrance of new publishing firms in the industry along with existence of high competition increases the danger of losing the consumer base.
Monetary Analysis.
Due to absence of information, the monetary ratios of CMP could not be calculated. It might be examined from the Appendix III that the yearly total incomes of Western Company In China Guangzhou Case Study Analysis throughout the duration 2000-2012 are growing at a high development rate, revealing that the yearly need of the items of CMP is growing and the company is rather efficient in drawing in a large number of customers at a potential cost.
In addition to it, the second graph which shows the annual development in the Western Company In China Guangzhou Case Study Help overall assets, reveals that the business is quite efficient in adding worth to its assets through its incomes. The development in properties shows that the total worth of the firm is likewise increasing with increasing the total incomes. (Unidentified, 2013).
Another monetary analysis of the company utilizing the offered data could be the analysis regarding the distribution of overall profits of the company. Huge part of the earnings of CMP comes from the sales of its released books i.e. 64% as displayed in the Case Appendix V. The company could move towards other service segments with a potential development to attain its future advancement goal.
PESTEL Analysis
PESTEL analysis might be conducted to find out the different external forces affecting the performance of the company and the recent trends in the external environment of the business. A short PESTEL analysis of the company is provided as follows; (Alanzi, 2018).
Political.
As the publishing sector might have a substantial impact on the frame of mind of individuals about the communist ideology of the federal government, for that reason, the publishing sector is extremely monitored and directed by the Promotion Department of the Communist Celebration of China. Therefore, it might be said that the total political forces impacting Western Company In China Guangzhou Case Study Analysis company are high. The government policies regarding the publishing sector are also increasing with the passage of time.
Affordable.
Financial forces impacting the publishing sector in basic and the CMP in particular includesthe rates of paper, the earnings level of consumers, the inflation rate, and the overall GDP development of the nation. All these forces integrate impact the need for the publishing market.
Social and Demographical.
Social and demographical forces consist of the population development, the consumer's choices towards checking out informative materials and so on. China has the highest population worldwide with a high population development, revealing the increasing variety of customers of the Western Company In China Guangzhou Case Study Analysis. Nevertheless, the consumer choices are moving towards digital publishing rather than the standard was of publishing. In this regard, CMP ought to focus on digital publishing to satisfy the altering customer choices.
Technological.
Technological forces affecting the CMP consist of the technological improvement in the reading strategies etc. Improvement of science and technology together with the increase of digital publishing could lower the demand for the CMP products, if particular actions would not be taken quickly.
Environmental.
Environmental forces impacting Western Company In China Guangzhou Case Study Solution includes the issues of environmental neighborhoods over the usage of paper in publishing books. The paper utilized in the books while publishing is required to be non reusable and the ink utilized while publishing should not be harmful for the environment.
Legal.
Legal policies for the publishing sector at whole are high. Publishing Ordinance 1997 needs the publishers to be authorized initially by the Government to be gone into in the publishing market.
Industry Analysis (Porter's 5 Forces Model).
Porter's 5 Forces Model could be used to evaluate the beauty of the publishing industry China. A brief analysis of the Porter's 5 Forces is given as follows;.
Hazard of New Entrants.
Risks of new entrants in the Chinese Publishing Industry is moderate. The potential development in the industry tends to attract new entrants to the publishing industry. The presence of intense competitors and the requirement of substantial capital tends to demotivate brand-new entrants to enter in the market.
Hazard of Alternative.
Hazard of Alternative is high for the Chinese Publishing Industry. The replacement items for the published files is the documents presented in the virtual libraries on specific sites. The changing customer preferences towards digital knowing increase the hazard of substitution for the industry.
Competitive Competition.
Competitive competition in the publishing market is high. The presence of large number of customers in the Chinese Publishing Market like CIP, PTP etc. 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 Supplier.
The major suppliers of the Western Company In China Guangzhou Case Study Analysis consist of the providers of the paper for releasing documents. As CMP is the biggest publisher in the Chinese Publishing Market, for that reason the overall bargaining power of provider for CMP is low.
Bargaining Power of Buyer.
Negotiating power of buyer in the publishing market is high. Due to the existence of a a great deal of publishers in the Chinese market and the marketplace saturation, the purchasers needs high quality documents at competitive rates.
Competitors Analysis.
CMP operates in a highly competitive industry with the presence of a great deal 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 Western Company In China Guangzhou Case Study Help consist of;.
• Chemical Industry Press (CIP).
• Posts and telecommunication Press (PTP).
Chemical Market Press (CIP).
CIPis among the close rivals of CMP. Founded in the same duration, CIP publishes similar kind of books. For a large time period, CIP held the largest market share, and still ranks 2nd and 3rd in different market segments, with a major focus on instructional publications. CIP serves 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 marketplace share of Western Company In China Guangzhou Case Study Solution quickly in the current market situation.
Posts and telecommunication Press (PTP).
Another close rival of CMP is PTP. It was likewise established in the very same period as CMP and CIP. It ranks 6th in the state-owned publishers in terms of organisation scale. It is likewise one of the popular gamers in the publishing market with an annual overall profits of RMB 550 million in 2010.
Alternatives
Alternative-1: Expand towards New Markets
Pros
• Lowering dependence over the Chinese markets.
• Increasing variety of Customers
• Growth opportunities.
• Avoiding the effect of market saturation in the Chinese publishing industry.
Cons
• Use of prospective resources in expansion.
• Threat of failure in brand-new markets.
• Time consuming.
Alernative-2: Introduce Digital Publishing
Pros
• Sustaining customer base.
• Approaching new markets.
• Easy to present using existing capabilities.
• Low danger of Failure.
• Low requirement for funds.
• Increased item portfolio supplies high worth to clients.
Cons
• Competitors in the market by CIP, who has prior focus on the digital publishing.
• Shift of focus from the core company segments to the new one can lead the company to lose need of its products in the market.
Suggestions
With the deep analysis of the external and internal environment of the business in addition to the market analysis and the rival analysis, Alternative 2 is recommended to CMP to achieve its future development. As the preferences are shifting towards digital publishing and the business need an instant service to prevent the decreasing market development. Introduction of digital publishing might show to be an immediate option with low quantity of risk for the company. However, the business could likewise think about 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 collects the data related to the consumer need, the possible markets, the government policies and the data related to the rivals provided in the market. If the preliminary offering shows a success, the business ought to go for the other markets. In this way the company would be able to implement its digital publishing program.
Conclusion
The development of the publishing market is declining since 2008, showing a risk to the business's long term existence, however the scenario can be controlled by considering an advancement strategy in the future. The company might consider introducing digital publishingin its existing market to implement its development program at immediate basis and to avoid the risk of failure for entrance in the new markets.
