American International Group Inc The Financial Crisis Case Study Solution and Analysis
American International Group Inc The Financial Crisis Case Study Analysis is the largest publishing company with a highest market share in the China's book retail market. CMP supplies a variety of services consisting of; collecting details, processing details and communication services. Significant business sections of the company include; books, regulars, consultancy and distribution. The business has a vast item portfolio and its major products consist of books, regulars, online media, exhibits, research reports and so on. American International Group Inc The Financial Crisis Case Study Solution has ended up being a specialized details provider and a big extensive Science and Technology publishing business through the combination of print media, audio-visual media and the network media.
Although, American International Group Inc The Financial Crisis Case Study Solution has spent its 60 years journey efficiently, being an effective publishing house, nevertheless, the altering macro market patterns and forces bring specific difficulties to the publishing industry in basic and CMP in specific. These elements include;
• Entryway of the new publishing firms in the industry.
• Declining growth of the publishing market.
• Market saturation.
• Intro of digital publishing techniques
• Enhancement of science and innovation.
The change of the macro markets have raised numerous questions to the management at CPM that what could be the future of CMP in this scenario? Do the long valuable experience, technical resources and the capabilities of the company could be used to pursue the future advancement unceasingly? How could the business sustain its long term competitive position in future?
American International Group Inc The Financial Crisis Case Study Help has specific strengths that can be used to decrease the risks, conquer the weak point and get the opportunities. Strengths of CMP are offered as follows;
• The long term experience of American International Group Inc The Financial Crisis Case Study Help in the publishing industry i.e. 60 years enables the business to provide high quality products at a lower cost utilizing its previous experiences.
• The technical resources and abilities generated by its effective journey supply a competitive benefit to CMP.
• Vast item portfolioof CMP assists it to diversify its threat and provide high value to its consumers.
• Strong monetary position enables the company to consider several development chances without any worry of raising fund externally.
Along with the strengths, the company has specific weaknesses which could increase restraints for the business in implementing its advancement program. The weak points of American International Group Inc The Financial Crisis Case Study Help are offered as follows;
• Despite of being a science and innovation publishing firm, the business still has traditional ways ofpublishing which are not suitable with the growing technological shift.
• CMP highly relies over the Chinese markets for its growth. It must propose certain growth plans to avoid its dependence over the Chinese markets to accomplish long term growth.
Although, the growth of the publishing industry is declining since 2008, impacting American International Group Inc The Financial Crisis Case Study Solution as well, but the development might be revived by availing certain chances presented in the market. The marketplace chances for CMP include;
• The company might also introduce Digital Publishing by using its long term technical experience and a strong customer recognition in the market.
• CMP could think about a development program through the growth towards foreign markets in order to minimize its dependence over Chinese markets by utilizing its vast financial resources.
The altering macro patterns in the market and increasing competition in the publishing industry has presented certain threats to American International Group Inc The Financial Crisis Case Study Help consisting of;( Gurel, 2017).
• Intro of digital publishing i.e. digital libraries could result in declining market share of American International Group Inc The Financial Crisis Case Study Solution due to the customer shift towards digital libraries.
• The presence of large number of competitors in the publishing industry increase the risk for CMP to lose its competitive position in the market, as rivals can acquire a strong customer base by using particular strategies like aggressive promotion, quality products, and so on
• Entrance of new publishing companies in the market along with presence of high competition increases the hazard of losing the consumer base.
The business has a quite competitive monetary performance. Due to absence of data, the financial ratios of CMP could not be calculated. However, the total monetary efficiency of the company could be analyzed by using the graphs given in the case Appendices. It might be evaluated from the Appendix III that the yearly overall earnings of CMP throughout the duration 2000-2012 are growing at a high growth rate, showing that the yearly demand of the items of American International Group Inc The Financial Crisis Case Study Analysis is growing and the company is rather efficient in drawing in a a great deal of customers at a prospective price.
In addition to it, the second chart which reveals the annual development in the American International Group Inc The Financial Crisis Case Study Solution total assets, shows that the business is rather effective in adding value to its assets through its earnings. The growth in possessions reveals that the total worth of the company is likewise increasing with increasing the total earnings. (Unidentified, 2013).
Another financial analysis of the business using the offered information might be the analysis relating to the distribution of overall revenues of the company. Major part of the revenues of CMP comes from the sales of its published books i.e. 64% as displayed in the Case Appendix V. The business might move towards other organisation sectors with a potential growth to accomplish its future advancement goal.
PESTEL analysis could be conducted to learn the various external forces impacting the performance of the company and the recent trends in the external environment of the company. A quick PESTEL analysis of the company is offered as follows; (Alanzi, 2018).
As the publishing sector might have a considerable impact on the state of mind of individuals about the communist ideology of the government, for that reason, the publishing sector is extremely monitored and assisted by the Promotion Department of the Communist Party of China. For that reason, it might be stated that the general political forces impacting American International Group Inc The Financial Crisis Case Study Solution business are high. The government policies regarding the publishing sector are also increasing with the passage of time.
Economic forces impacting the publishing sector in basic and the CMP in particular includesthe costs of paper, the income level of customers, the inflation rate, and the overall GDP development of the country. All these forces combine impact the demand for the publishing market.
Social and Demographical.
The customer choices are moving towards digital publishing rather than the conventional was of publishing. In this regard, CMP must focus on digital publishing to fulfill the altering customer choices.
Technological forces impacting the CMP include the technological development in the reading techniques etc. Improvement of science and technology along with the increase of digital publishing might reduce the need for the CMP items, if certain actions would not be taken quickly.
Environmental forces affecting American International Group Inc The Financial Crisis Case Study Analysis consists of the issues of ecological communities over the usage 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 should not be damaging for the environment.
Legal policies for the publishing sector at whole are high. Publishing Regulation 1997 requires the publishers to be authorized first by the Government to be gone into in the publishing market.
Industry Analysis (Porter's Five Forces Model).
Porter's Five Forces Model might be used to examine the appearance of the publishing market China. A short analysis of the Porter's 5 Forces is given as follows;.
Risk of New Entrants.
Hazards of brand-new entrants in the Chinese Publishing Market is moderate. The possible growth in the industry tends to attract new entrants to the publishing industry. The presence of intense competitors and the requirement of big capital tends to demotivate brand-new entrants to enter in the market.
Danger of Replacement.
Hazard of Alternative is high for the Chinese Publishing Industry. The replacement items for the published documents is the documents provided in the virtual libraries on particular sites. The altering customer preferences towards digital learning increase the danger of alternative for the industry.
Competitive rivalry in the publishing industry is high. The existence of a great deal of consumers in the Chinese Publishing Industry like CIP, PTP etc. tends to produce high competitive competition for CMP. In addition to it, brand-new entrants are also entering into the market increasing the competitors for CMP.
Bargaining Power of Supplier.
The major providers of the American International Group Inc The Financial Crisis Case Study Help consist of the providers of the paper for publishing files. As CMP is the biggest publisher in the Chinese Publishing Market, therefore the overall bargaining power of supplier for CMP is low.
Bargaining Power of Buyer.
Bargaining power of buyer in the publishing market is high. Due to the presence of a a great deal of publishers in the Chinese market and the market saturation, the purchasers requires high quality documents at competitive costs.
CMP operates in a highly competitive industry with the presence of large number of rivals. The company has a competitive position in the market with the greatest market share in the Chinese publishing market. Major rivals of American International Group Inc The Financial Crisis Case Study Solution include;.
• Chemical Industry Press (CIP).
• Posts and telecommunication Press (PTP).
Chemical Market Press (CIP).
CIP acts as a hazard for CMP as it might 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 easily in the current market circumstance.
Posts and telecommunication Press (PTP).
It was likewise established in the very same period as American International Group Inc The Financial Crisis Case Study Help and CIP. It is likewise one of the prominent players in the publishing industry with an annual total revenues of RMB 550 million in 2010.
Alternative-1: Broaden towards New Markets
• Minimizing dependence over the Chinese markets.
• Increasing variety of Customers
• Growth chances.
• Avoiding the effect of market saturation in the Chinese publishing industry.
• Usage of potential resources in expansion.
• Danger of failure in brand-new markets.
• Time consuming.
Alernative-2: Introduce Digital Publishing
• Sustaining customer base.
• Approaching new markets.
• Easy to present utilizing existing abilities.
• Low danger of Failure.
• Low requirement for funds.
• Increased item portfolio offers high worth to clients.
• Competitors in the market by CIP, who has prior concentrate 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.
With the deep analysis of the internal and external environment of the company along with the industry analysis and the rival analysis, Alternative 2 is recommended to CMP to achieve its future advancement. As the preferences are moving towards digital publishing and the business need an immediate option to prevent the declining market development. Therefore, intro of digital publishing could prove to be an instant service with low amount of risk for the business. Nevertheless, the business could also consider the growth program after the success of its digital publishing program.
In order to introduce digital publishing in its item portfolio, the business needs to first collects the data related to the consumer demand, the potential markets, the federal government guidelines and the information related to the rivals provided in the market. If the preliminary offering proves a success, the company needs to go for the other markets. In this way the business would be able to implement its digital publishing program.
The development of the publishing market is declining since 2008, showing a threat to the business's long term presence, but the situation can be controlled by thinking about an advancement strategy in the future. The company might consider introducing digital publishingin its existing market to implement its advancement program at immediate basis and to prevent the threat of failure for entrance in the brand-new markets.