Accounting Assignment 2 Case Study Solution and Analysis
Accounting Assignment 2 Case Study Analysis is the largest publishing company with a greatest market share in the China's book retail market. CMP has become a specialized information supplier and a large comprehensive Science and Innovation publishing business through the integration of print media, audio-visual media and the network media.
Although, Accounting Assignment 2 Case Study Solution has invested its 60 years journey smoothly, being an effective publishing home, nevertheless, the changing macro market trends and forces bring particular difficulties to the publishing market in basic and CMP in specific. These factors consist of;
• Entryway of the new publishing firms in the industry.
• Declining development of the publishing market.
• Market saturation.
• Introduction of digital publishing strategies
• Enhancement of science and technology.
The transformation of the macro markets have raised a number of concerns to the management at CPM that what could be the future of CMP in this situation? Do the long important experience, technical resources and the abilities of the company could be made use of to pursue the future advancement unceasingly? How could the business sustain its long term competitive position in future?
Accounting Assignment 2 Case Study Help has particular strengths that can be used to reduce the hazards, get rid of the weakness and get the opportunities. Strengths of CMP are offered as follows;
• The long term experience of Accounting Assignment 2 Case Study Solution in the publishing industry i.e. 60 years enables the company to provide high quality products at a lower expense utilizing its prior experiences.
• The technical resources and abilities generated by its successful journey supply a competitive benefit to CMP.
• Large product portfolioof CMP helps it to diversify its threat and offer high worth to its consumers.
• Strong monetary position permits the company to think about numerous development chances without any fear of raising fund externally.
Along with the strengths, the business has specific weak points which might increase constraints for the company in implementing its advancement program. The weak points of Accounting Assignment 2 Case Study Solution are provided as follows;
• Despite of being a science and innovation publishing company, the company still has conventional ways ofpublishing which are not suitable with the growing technological shift.
• CMP extremely relies over the Chinese markets for its growth. It should propose particular expansion strategies to avoid its reliance over the Chinese markets to achieve long term growth.
The growth of the publishing market is decreasing because 2008, affecting Accounting Assignment 2 Case Study Help as well, but the development might be revived by availing certain opportunities provided in the market. The market chances for CMP consist of;
• The business could also present Digital Publishing by utilizing its long term technical experience and a strong consumer acknowledgment in the market.
• CMP could consider an advancement program through the growth towards foreign markets in order to reduce its reliance over Chinese markets by utilizing its huge funds.
The altering macro trends in the market and increasing competition in the publishing market has presented specific threats to Accounting Assignment 2 Case Study Help consisting of;( Gurel, 2017).
• Intro of digital publishing i.e. digital libraries could result in decreasing market share of Accounting Assignment 2 Case Study Solution due to the customer shift towards virtual libraries.
• The presence of large number of competitors in the publishing industry increase the threat for CMP to lose its competitive position in the market, as rivals can gain a strong customer base by utilizing certain methods like aggressive promo, quality products, and so on
• Entryway of brand-new publishing companies in the market along with presence of high competition increases the hazard of losing the customer base.
Due to absence of information, the monetary ratios of CMP might not be determined. It could be evaluated from the Appendix III that the annual total profits of Accounting Assignment 2 Case Study Solution during the duration 2000-2012 are growing at a high growth rate, showing that the yearly need of the products of CMP is growing and the company is rather effective in drawing in a big number of consumers at a prospective cost.
Along with it, the 2nd chart which shows the yearly development in the Accounting Assignment 2 Case Study Analysis total assets, shows that the business is quite effective in including value to its assets through its revenues. The growth in possessions reveals that the overall value of the company is likewise increasing with increasing the total incomes. (Unidentified, 2013).
Another financial analysis of the business using the given data might be the analysis regarding the circulation of total profits of the company. 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 organisation sectors with a possible growth to attain its future advancement goal.
PESTEL analysis might be carried out to find out the different external forces affecting the performance of the business and the recent trends in the external environment of the company. A brief PESTEL analysis of the company is given as follows; (Alanzi, 2018).
As the publishing sector might have a significant impact on the state 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 Promotion Department of the Communist Celebration of China. It could be said that the total political forces impacting CMP company are high. The government policies relating to the publishing sector are also increasing with the passage of time.
Financial 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 development of the nation. All these forces integrate impact the demand for the publishing market.
Social and Demographical.
Social and demographical forces consist of the population growth, the consumer's preferences towards checking out informative products etc. China has the greatest population in the world with a high population development, revealing the increasing number of consumers of the Accounting Assignment 2 Case Study Help. The consumer preferences are shifting towards digital publishing rather than the standard was of publishing. In this regard, CMP must focus on digital publishing to satisfy the altering consumer preferences.
Technological forces affecting the CMP include the technological advancement in the reading methods etc. Improvement of science and innovation together with the rise of digital publishing could reduce the demand for the CMP products, if specific actions would not be taken soon.
Environmental forces affecting Accounting Assignment 2 Case Study Solution 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 Ordinance 1997 needs the publishers to be authorized initially by the Federal government to be entered in the publishing market.
Market Analysis (Porter's Five Forces Model).
Porter's 5 Forces Model could be utilized to analyze the beauty of the publishing market China. A quick 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 prospective development in the market tends to attract brand-new entrants to the publishing market. However, the presence of intense competition and the requirement of substantial capital tends to demotivate new entrants to enter in the market.
Danger of Alternative.
Hazard of Substitution is high for the Chinese Publishing Market. The substitute items for the released documents is the documents presented in the virtual libraries on certain websites. The changing consumer choices towards digital knowing increase the hazard of substitution for the industry.
Competitive competition 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. Along with it, new entrants are likewise participating in the marketplace increasing the competitors for CMP.
Bargaining Power of Provider.
The significant providers of the Accounting Assignment 2 Case Study Help include the suppliers of the paper for publishing documents. As CMP is the biggest 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 marketplace saturation, the purchasers needs high quality files at competitive rates.
CMP operates in an extremely competitive industry with the existence of a great deal of rivals. The company has a competitive position in the market with the greatest market share in the Chinese publishing market. Major rivals of Accounting Assignment 2 Case Study Help include;.
• Chemical Market Press (CIP).
• Posts and telecommunication Press (PTP).
Chemical Industry Press (CIP).
CIP acts as a danger for CMP as it could wean its market share due to its long term competitive background. CIP is focused on digital publishing and might wean the market share of CMP quickly in the present market circumstance.
Posts and telecommunication Press (PTP).
Another close rival of CMP is PTP. It was also founded in the very same duration as CMP and CIP. It ranks sixth in the state-owned publishers in terms of service scale. It is likewise one of the popular players in the publishing industry with an annual overall revenues of RMB 550 million in 2010.
Alternative-1: Expand towards New Markets
• Lowering dependence over the Chinese markets.
• Increasing number of Consumers
• Growth chances.
• Avoiding the impact of market saturation in the Chinese publishing market.
• Use of prospective resources in expansion.
• Risk of failure in brand-new markets.
• Time consuming.
Alernative-2: Present Digital Publishing
• Sustaining consumer base.
• Approaching brand-new markets.
• Easy to present using current capabilities.
• Low danger of Failure.
• Low requirement for funds.
• Increased product portfolio supplies high worth to customers.
• Competitors in the market by CIP, who has prior focus on the digital publishing.
• Shift of focus from the core business sectors to the brand-new one can lead the business to lose demand of its products in the market.
As the preferences are moving towards digital publishing and the company require an immediate option to prevent the decreasing industry development. The business could also consider the expansion program after the success of its digital publishing program.
In order to introduce digital publishing in its item portfolio, the company needs to initially collects the data related to the consumer need, the possible markets, the government regulations and the data related to the competitors provided in the market. If the initial offering shows a success, the company needs to go for the other markets. In this method the business would be able to implement its digital publishing program.
The development of the publishing industry is declining given that 2008, revealing a threat to the company's long term presence, however the circumstance can be controlled by thinking about a development strategy in the future. The company might think about presenting digital publishingin its existing market to implement its development program at immediate basis and to prevent the danger of failure for entrance in the new markets.