Why The Highest Price Isnt The Best Price 2 Case Study Solution and Analysis
Intro
Why The Highest Price Isnt The Best Price 2 Case Study Solution is the largest publishing company with a highest market share in the China's book retail market. CMP has become a specialized details company and a big comprehensive Science and Technology publishing business through the integration of print media, audio-visual media and the network media.
Crucial Problems
CMP has actually invested its 60 years journey smoothly, being a successful publishing house, nevertheless, the altering macro market trends and forces bring specific challenges to the publishing market in general and Why The Highest Price Isnt The Best Price 2 Case Study Solution in particular. These aspects consist of;
• Entryway of the new publishing companies in the market.
• Declining development of the publishing market.
• Market saturation.
• Introduction of digital publishing methods
• Enhancement of science and technology.
The improvement 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 circumstance? Do the long valuable experience, technical resources and the capabilities of the business could be made use of to strive for the future development unceasingly? How could the company sustain its long term competitive position in future?
Situational Analysis
Internal Analysis
SWOT Analysis
Strengths
Why The Highest Price Isnt The Best Price 2 Case Study Analysis has particular strengths that can be used to reduce the dangers, get rid of the weak point and avail the opportunities. Strengths of CMP are provided as follows;
• The long term experience of Why The Highest Price Isnt The Best Price 2 Case Study Solution in the publishing market i.e. 60 years allows the business to offer high quality products at a lower expense utilizing its previous experiences.
• The technical resources and capabilities produced by its successful journey supply a competitive benefit to CMP.
• Large item portfolioof CMP assists it to diversify its danger and supply high value to its customers.
• Strong financial position enables the company to think about numerous advancement opportunities with no fear of raising fund externally.
Weak points
Along with the strengths, the company has particular weaknesses which could increase restrictions for the company in executing its advancement program. The weaknesses of Why The Highest Price Isnt The Best Price 2 Case Study Solution are provided as follows;
• Despite of being a science and technology publishing company, the business still has conventional 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 growth strategies to avoid its reliance over the Chinese markets to accomplish long term growth.
Opportunities
Although, the development of the publishing industry is declining because 2008, impacting Why The Highest Price Isnt The Best Price 2 Case Study Analysis too, but the growth could be revived by availing particular chances provided in the market. The marketplace chances for CMP include;
• The business might likewise introduce Digital Publishing by using its long term technical experience and a strong client recognition in the market.
• CMP might think about a development program through the expansion towards foreign markets in order to decrease its dependence over Chinese markets by using its huge financial resources.
Threats
The altering macro trends in the market and increasing competitors in the publishing industry has actually postured certain dangers to Why The Highest Price Isnt The Best Price 2 Case Study Analysis including;( Gurel, 2017).
• Intro of digital publishing i.e. virtual libraries might lead to declining market share of Why The Highest Price Isnt The Best Price 2 Case Study Solution due to the customer shift towards virtual libraries.
• The presence of a great deal of rivals in the publishing market increase the threat for CMP to lose its competitive position in the market, as rivals can acquire a strong customer base by utilizing particular methods like aggressive promotion, quality items, and so on
• Entryway of new publishing companies in the market in addition to existence of high competition increases the danger of losing the client base.
Financial Analysis.
The business has a rather competitive monetary efficiency. Due to lack of information, the monetary ratios of CMP could not be computed. The total monetary efficiency of the company might be examined by using the charts offered in the case Appendices. It could be analyzed from the Appendix III that the annual total incomes of CMP during the duration 2000-2012 are growing at a high development rate, revealing that the annual demand of the products of Why The Highest Price Isnt The Best Price 2 Case Study Help is growing and the company is rather effective in bring in a large number of clients at a possible cost.
In addition to it, the second graph which shows the yearly development in the Why The Highest Price Isnt The Best Price 2 Case Study Solution overall possessions, shows that the business is rather effective in adding worth to its possessions through its earnings. The development in properties shows that the overall worth of the company is also increasing with increasing the total profits. (Unknown, 2013).
Another monetary analysis of the business using the given information might be the analysis relating to the circulation of total revenues of the business. Major part of the earnings of CMP comes from the sales of its published books i.e. 64% as shown in the Case Appendix V. The company might move towards other service sections with a prospective growth to achieve its future advancement goal.
PESTEL Analysis
PESTEL analysis might be conducted to find out the various external forces affecting the performance of the company and the current patterns in the external environment of the company. A short PESTEL analysis of the company is given as follows; (Alanzi, 2018).
Political.
As the publishing sector might have a significant effect on the state of mind of the people about the communist ideology of the federal government, for that reason, the publishing sector is extremely monitored and guided by the Promotion Department of the Communist Celebration of China. It might be stated that the overall political forces impacting CMP company are high. The federal government policies regarding the publishing sector are also increasing with the passage of time.
Affordable.
Financial forces affecting the publishing sector in general and the CMP in specific includesthe prices of paper, the earnings level of consumers, the inflation rate, and the overall GDP growth of the nation. All these forces combine effect the need for the publishing market.
Social and Demographical.
Social and demographical forces include the population development, the customer's preferences towards checking out informative materials and so on. China has the greatest population on the planet with a high population growth, showing the increasing variety of customers of the Why The Highest Price Isnt The Best Price 2 Case Study Help. However, the consumer preferences are shifting towards digital publishing rather than the traditional was of publishing. In this regard, CMP ought to focus on digital publishing to satisfy the changing consumer choices.
Technological.
Technological forces impacting the CMP include the technological development in the reading strategies etc. Enhancement of science and innovation along with the rise of digital publishing could reduce the need for the CMP items, if specific actions would not be taken quickly.
Environmental.
Environmental forces impacting Why The Highest Price Isnt The Best Price 2 Case Study Analysis consists of the concerns of environmental communities over the use of paper in publishing books. The paper used in the books while publishing is needed to be disposable and the ink used while publishing ought to not be harmful for the environment.
Legal.
Legal policies for the publishing sector at whole are high. Publishing Regulation 1997 requires the publishers to be approved first by the Federal government to be gone into in the publishing market.
Industry Analysis (Porter's 5 Forces Design).
Porter's Five Forces Design could be utilized to evaluate the attractiveness of the publishing market China. A quick analysis of the Porter's Five Forces is given as follows;.
Hazard of New Entrants.
Risks of brand-new entrants in the Chinese Publishing Industry is moderate. The potential development in the industry tends to draw in brand-new entrants to the publishing industry. The presence of extreme competitors and the requirement of huge capital tends to demotivate brand-new entrants to go into in the market.
Hazard of Alternative.
Threat of Alternative is high for the Chinese Publishing Industry. The alternative items for the released documents is the files presented in the digital libraries on particular websites. The altering consumer choices towards digital knowing increase the threat of replacement for the market.
Competitive Rivalry.
Competitive competition in the publishing industry is high. The presence of a great deal of customers in the Chinese Publishing Market like CIP, PTP and so on tends to produce high competitive competition for CMP. In addition to it, brand-new entrants are also entering into the marketplace increasing the competitors for CMP.
Bargaining Power of Provider.
The significant providers of the Why The Highest Price Isnt The Best Price 2 Case Study Analysis include the providers of the paper for publishing documents. As CMP is the largest publisher in the Chinese Publishing Market, therefore the total bargaining power of supplier for CMP is low.
Bargaining Power of Buyer.
Negotiating power of purchaser in the publishing industry is high. Due to the existence of a a great deal of publishers in the Chinese market and the market saturation, the buyers needs high quality documents at competitive rates.
Competitors Analysis.
CMP runs in an extremely competitive market with the presence of large number of rivals. Nevertheless, the business has a competitive position in the market with the greatest market share in the Chinese publishing market. Major competitors of Why The Highest Price Isnt The Best Price 2 Case Study Help include;.
• Chemical Market Press (CIP).
• Posts and telecommunication Press (PTP).
Chemical Industry Press (CIP).
CIPis among the close competitors of CMP. Founded in the exact same duration, CIP releases similar kind of books. For a large time period, CIP held the biggest market share, and still ranks third and second in different market sections, with a significant focus on educational publications. CIP serves as a risk 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 Why The Highest Price Isnt The Best Price 2 Case Study Solution quickly in the existing market scenario.
Posts and telecommunication Press (PTP).
Another close competitor of CMP is PTP. It was also founded in the exact same period as CMP and CIP. It ranks 6th in the state-owned publishers in terms of service scale. It is likewise among the popular gamers in the publishing market with a yearly overall revenues of RMB 550 million in 2010.
Alternatives
Alternative-1: Expand towards New Markets
Pros
• Reducing reliance over the Chinese markets.
• Increasing variety of Clients
• Development opportunities.
• Preventing the impact of market saturation in the Chinese publishing industry.
Cons
• Use of potential resources in expansion.
• Danger of failure in brand-new markets.
• Time consuming.
Alernative-2: Present Digital Publishing
Pros
• Sustaining consumer base.
• Approaching brand-new markets.
• Easy to introduce utilizing current abilities.
• Low risk of Failure.
• Low requirement for funds.
• Increased product portfolio provides high value to clients.
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 items in the market.
Recommendations
As the preferences are moving towards digital publishing and the business require an immediate option to avoid the declining market growth. The business could also consider the growth program after the success of its digital publishing program.
Execution
In order to present digital publishing in its item portfolio, the company needs to initially collects the data associated with the consumer demand, the possible markets, the federal government guidelines and the information associated with the competitors presented in the market. After that, the business needs to decide one potential section for its preliminary offering. It must collect research study that how it might distinguish its digital publishing from the existing competitors' products. After all the actions above the company ought to go for the preliminary offering. If the initial offering shows a success, the business ought to go for the other markets. In this way the business would be able to execute its digital publishing program.
Conclusion
The growth of the publishing market is declining since 2008, revealing a hazard to the company's long term presence, however the circumstance can be controlled by thinking about an advancement plan in the future. The business could think about presenting digital publishingin its existing market to implement its development program at immediate basis and to prevent the risk of failure for entrance in the new markets.
