American International Group 2010 Case Study Solution and Analysis
Intro
American International Group 2010 Case Study Help is the biggest publishing company with a highest market share in the China's book retail market. CMP has ended up being a specialized info provider and a big thorough Science and Technology publishing business through the combination of print media, audio-visual media and the network media.
Critical Problems
CMP has actually invested its 60 years journey smoothly, being an effective publishing house, nevertheless, the changing macro market trends and forces bring certain obstacles to the publishing market in basic and American International Group 2010 Case Study Solution in specific. These aspects consist of;
• Entryway of the new publishing companies in the market.
• Declining growth of the publishing market.
• Market saturation.
• Introduction of digital publishing strategies
• Improvement of science and innovation.
The improvement 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 pursue the future advancement unceasingly? How could the company sustain its long term competitive position in future?
Situational Analysis
Internal Analysis
SWOT Analysis
Strengths
American International Group 2010 Case Study Solution has specific strengths that can be made use of to minimize the hazards, get rid of the weak point and obtain the chances. Strengths of CMP are provided as follows;
• The long term experience of American International Group 2010 Case Study Analysis in the publishing industry i.e. 60 years enables the business to offer high quality products at a lower cost utilizing its prior experiences.
• The technical resources and capabilities produced by its effective journey offer a competitive advantage to CMP.
• Vast item portfolioof CMP helps it to diversify its risk and supply high value to its consumers.
• Strong monetary position allows the company to consider several advancement opportunities without any worry of raising fund externally.
Weak points
Together with the strengths, the company has certain weaknesses which might increase constraints for the company in implementing its development program. The weak points of American International Group 2010 Case Study Analysis are given as follows;
• Despite of being a science and innovation publishing firm, the business still has conventional methods ofpublishing which are not compatible with the growing technological shift.
• CMP extremely relies over the Chinese markets for its development. It must propose particular growth strategies to prevent its dependence over the Chinese markets to accomplish long term development.
Opportunities
The growth of the publishing industry is declining given that 2008, impacting American International Group 2010 Case Study Help as well, but the development could be restored by availing specific opportunities provided in the market. The market opportunities for CMP include;
• The business might also present Digital Publishing by using its long term technical experience and a strong consumer recognition in the market.
• CMP might consider a development program through the expansion towards foreign markets in order to decrease its dependence over Chinese markets by using its vast financial resources.
Risks
The changing macro trends in the market and increasing competition in the publishing industry has actually positioned certain dangers to American International Group 2010 Case Study Analysis consisting of;( Gurel, 2017).
• Introduction of digital publishing i.e. virtual libraries could cause declining market share of American International Group 2010 Case Study Help due to the customer shift towards virtual libraries.
• The existence of a great deal of rivals in the publishing industry increase the threat for CMP to lose its competitive position in the market, as competitors can get a strong consumer base by utilizing specific methods like aggressive promo, quality products, etc.
• Entrance of new publishing firms in the market in addition to existence of high competition increases the threat of losing the customer base.
Financial Analysis.
The company has a rather competitive monetary performance. Due to lack of information, the financial ratios of CMP might not be computed. However, the general financial performance of the company could be evaluated by using the charts given in the case Appendices. It could be analyzed from the Appendix III that the annual total revenues of CMP during the duration 2000-2012 are growing at a high growth rate, revealing that the annual need of the items of American International Group 2010 Case Study Solution is growing and the company is rather effective in attracting a large number of clients at a prospective rate.
In addition to it, the 2nd chart which reveals the annual development in the American International Group 2010 Case Study Analysis overall assets, reveals that the company is rather effective in adding value to its properties through its earnings. The growth in possessions reveals that the total worth of the firm is also increasing with increasing the total incomes. (Unknown, 2013).
Another financial analysis of the company utilizing the offered data might be the analysis relating to the circulation of overall earnings of the company. Major part of the earnings of CMP comes from the sales of its released books i.e. 64% as shown in the Case Appendix V. The company could move towards other service sectors with a potential growth to achieve its future development goal.
PESTEL Analysis
PESTEL analysis might be carried out to learn the various external forces affecting the performance of the company and the current patterns in the external environment of the business. A short PESTEL analysis of the business is provided as follows; (Alanzi, 2018).
Political.
As the publishing sector could have a considerable impact on the frame of mind of individuals 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 stated that the overall political forces impacting CMP company are high. The government policies concerning the publishing sector are also increasing with the passage of time.
Economical.
Financial forces impacting the publishing sector in basic and the CMP in particular includesthe costs of paper, the income level of consumers, the inflation rate, and the overall GDP growth of the country. 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 useful materials etc. China has the greatest population on the planet with a high population development, revealing the increasing variety of customers of the American International Group 2010 Case Study Help. However, the consumer choices are shifting towards digital publishing instead of the traditional was of publishing. In this regard, CMP needs to concentrate on digital publishing to satisfy the altering customer preferences.
Technological.
Technological forces affecting the CMP consist of the technological improvement in the reading strategies etc. Enhancement of science and innovation along with the increase of digital publishing could decrease the need for the CMP products, if certain actions would not be taken soon.
Environmental.
Environmental forces affecting American International Group 2010 Case Study Help 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 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 needs the publishers to be approved initially by the Federal government to be entered in the publishing market.
Industry Analysis (Porter's 5 Forces Model).
Porter's 5 Forces Design could be used to examine the appearance of the publishing market China. A quick analysis of the Porter's 5 Forces is given as follows;.
Threat of New Entrants.
Dangers of new entrants in the Chinese Publishing Market is moderate. The prospective growth in the market tends to bring in brand-new entrants to the publishing industry. Nevertheless, the existence of extreme competition and the requirement of substantial capital tends to demotivate brand-new entrants to go into in the marketplace.
Danger of Replacement.
Threat of Replacement is high for the Chinese Publishing Industry. The replacement products for the released documents is the files presented in the digital libraries on certain sites. The changing consumer preferences towards digital learning increase the risk of substitution for the industry.
Competitive Rivalry.
Competitive rivalry in the publishing industry is high. The presence of large number of consumers in the Chinese Publishing Industry like CIP, PTP and so on tends to produce high competitive competition for CMP. In addition to it, brand-new entrants are likewise entering into the market increasing the competition for CMP.
Bargaining Power of Supplier.
The major providers of the American International Group 2010 Case Study Help consist of the suppliers of the paper for releasing documents. As CMP is the biggest publisher in the Chinese Publishing Market, for that reason the total bargaining power of supplier for CMP is low.
Bargaining Power of Purchaser.
Haggling 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 purchasers requires high quality documents at competitive prices.
Rivals Analysis.
CMP runs in an extremely competitive market with the existence of a great deal of rivals. The company has a competitive position in the market with the highest market share in the Chinese publishing market. Significant rivals of American International Group 2010 Case Study Analysis consist of;.
• Chemical Industry Press (CIP).
• Posts and telecommunication Press (PTP).
Chemical Industry Press (CIP).
CIPis one of the close rivals of CMP. Established in the very same period, CIP publishes similar type of books. For a large period, CIP held the biggest market share, and still ranks second and third in various market sections, with a significant concentrate on instructional publications. CIP serves as a threat for CMP as it might wean its market share due to its long term competitive background. CIP is focused on digital publishing and might wean the marketplace share of American International Group 2010 Case Study Solution quickly in the present market situation.
Posts and telecommunication Press (PTP).
Another close competitor of CMP is PTP. It was likewise established in the very same duration as CMP and CIP. It ranks sixth in the state-owned publishers in regards to business scale. It is likewise one of the popular players in the publishing market with a yearly total profits of RMB 550 million in 2010.
Alternatives
Alternative-1: Broaden towards New Markets
Pros
• Lowering dependence over the Chinese markets.
• Increasing variety of Consumers
• Development opportunities.
• Avoiding the impact of market saturation in the Chinese publishing industry.
Cons
• Use of potential resources in expansion.
• Threat of failure in brand-new markets.
• Time consuming.
Alernative-2: Present Digital Publishing
Pros
• Sustaining customer base.
• Approaching new markets.
• Easy to present using existing abilities.
• Low risk of Failure.
• Low requirement for funds.
• Increased item portfolio offers high worth to clients.
Cons
• Competition in the market by CIP, who has prior focus on the digital publishing.
• Shift of focus from the core company sections to the new one can lead the business to lose demand of its items in the market.
Recommendations
As the choices are shifting towards digital publishing and the business need an instant option to avoid the decreasing market growth. The business might likewise think about the expansion program after the success of its digital publishing program.
Application
In order to present digital publishing in its item portfolio, the business needs to initially gathers the data related to the customer need, the possible markets, the federal government policies and the data connected to the competitors presented in the market. After that, the company needs to decide one potential sector for its initial offering. It should collect research study that how it might distinguish its digital publishing from the existing competitors' items. After all the steps above the business need to go for the initial offering. The business should go for the other markets if the initial offering proves a success. In this method the business would be able to implement its digital publishing program.
Conclusion
Although, the growth of the publishing industry is decreasing because 2008, revealing a threat to the company's long term presence, however the scenario can be managed by considering a development plan in the future. The company might consider presenting digital publishingin its existing market to implement its advancement program at instant basis and to avoid the risk of failure for entrance in the brand-new markets.
