American International Group Inc The Financial Crisis Case Study Solution and Analysis
Introduction
American International Group Inc The Financial Crisis 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 details company and a big detailed Science and Technology publishing business through the combination of print media, audio-visual media and the network media.
Important Concerns
CMP has actually spent its 60 years journey efficiently, being an effective publishing house, nevertheless, the altering macro market trends and forces bring specific difficulties to the publishing industry in basic and American International Group Inc The Financial Crisis Case Study Analysis in particular. These aspects consist of;
• Entrance of the new publishing firms in the market.
• Decreasing development of the publishing market.
• Market saturation.
• Intro of digital publishing methods
• Improvement of science and innovation.
The improvement of the macro markets have raised numerous questions to the management at CPM that what could be the future of CMP in this situation? Do the long valuable experience, technical resources and the capabilities of the business could be made use of to strive for the future advancement unceasingly? How could the business sustain its long term competitive position in future?
Situational Analysis
Internal Analysis
SWOT Analysis
Strengths
American International Group Inc The Financial Crisis Case Study Analysis has specific strengths that can be used to minimize the dangers, get rid of the weakness and obtain the opportunities. Strengths of CMP are given as follows;
• The long term experience of American International Group Inc The Financial Crisis Case Study Analysis in the publishing industry i.e. 60 years enables the company to supply high quality items at a lower expense utilizing its prior experiences.
• The technical resources and capabilities generated by its effective journey offer a competitive benefit to CMP.
• Huge product portfolioof CMP assists it to diversify its risk and offer high value to its clients.
• Strong financial position enables the company to think about numerous advancement opportunities with no fear of raising fund externally.
Weak points
Together with the strengths, the business has particular weaknesses which might increase restrictions for the business in implementing its development program. The weaknesses of American International Group Inc The Financial Crisis Case Study Analysis are given as follows;
• Despite of being a science and innovation publishing firm, the company still has traditional ways ofpublishing which are not compatible with the growing technological shift.
• CMP highly relies over the Chinese markets for its development. It ought to propose certain growth plans to prevent its reliance over the Chinese markets to accomplish long term growth.
Opportunities
Although, the growth of the publishing market is declining since 2008, impacting American International Group Inc The Financial Crisis Case Study Solution as well, however the growth might be restored by availing particular chances provided in the market. The marketplace opportunities for CMP include;
• The company might likewise introduce Digital Publishing by utilizing its long term technical experience and a strong customer acknowledgment in the market.
• CMP might think about an advancement program through the expansion towards foreign markets in order to reduce its reliance over Chinese markets by using its large funds.
Threats
The altering macro trends in the market and increasing competitors in the publishing market has posed certain threats to American International Group Inc The Financial Crisis Case Study Solution including;( Gurel, 2017).
• Introduction of digital publishing i.e. digital libraries could cause declining market share of American International Group Inc The Financial Crisis Case Study Analysis due to the customer shift towards virtual libraries.
• The existence of a great deal of rivals in the publishing market increase the hazard for CMP to lose its competitive position in the market, as rivals can gain a strong customer base by utilizing specific techniques like aggressive promo, quality items, and so on
• Entryway of new publishing firms in the market along with presence of high competitors increases the risk of losing the customer base.
Monetary Analysis.
The company has a quite competitive monetary efficiency. Due to absence of information, the monetary ratios of CMP might not be computed. However, the overall monetary efficiency of the business could be examined by using the graphs given in the case Appendices. It could be evaluated from the Appendix III that the yearly total incomes of CMP during the period 2000-2012 are growing at a high growth rate, showing that the yearly demand of the products of American International Group Inc The Financial Crisis Case Study Solution is growing and the company is rather effective in bring in a a great deal of consumers at a possible price.
Together with it, the second chart which reveals the yearly growth in the American International Group Inc The Financial Crisis Case Study Help overall properties, reveals that the company is quite efficient in adding worth to its possessions through its profits. The development in assets reveals that the overall value of the company is also increasing with increasing the total revenues. (Unknown, 2013).
Another monetary analysis of the company utilizing the given information could be the analysis relating to the distribution of overall earnings of the company. Huge part of the revenues 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 business sectors with a potential development to attain its future development objective.
PESTEL Analysis
PESTEL analysis might be conducted to find out the various external forces affecting the performance of the company and the recent patterns in the external environment of the business. A short PESTEL analysis of the company is given as follows; (Alanzi, 2018).
Political.
As the publishing sector could have a significant effect on the mindset of individuals about the communist ideology of the federal government, therefore, the publishing sector is extremely supervised and assisted by the Promotion Department of the Communist Celebration of China. For that reason, it might be said that the overall political forces affecting American International Group Inc The Financial Crisis Case Study Analysis organisation are high. The federal government policies relating to the publishing sector are likewise increasing with the passage of time.
Cost-effective.
Financial forces affecting the publishing sector in basic and the American International Group Inc The Financial Crisis Case Study Analysis in particular includesthe prices of paper, the income level of customers, the inflation rate, and the total GDP growth of the nation. All these forces integrate effect the need for the publishing market. Together with it, the economic policies related to the import of books impact the general organisation at CPM. China's financial conditions are quite favorable for CMP with high GDP growth and consumer earnings level.
Social and Demographical.
Social and demographical forces consist of the population development, the consumer's preferences towards checking out useful products and so on. China has the highest population worldwide with a high population development, revealing the increasing variety of customers of the American International Group Inc The Financial Crisis Case Study Help. However, the consumer preferences are moving towards digital publishing instead of the standard was of publishing. In this regard, CMP should focus on digital publishing to satisfy the altering customer preferences.
Technological.
Technological forces impacting the CMP include the technological improvement in the reading techniques etc. Enhancement of science and innovation in addition to the increase of digital publishing might decrease the need for the CMP items, if particular actions would not be taken quickly.
Environmental.
Ecological forces impacting American International Group Inc The Financial Crisis Case Study Analysis includes the issues of environmental neighborhoods over the usage of paper in publishing books. The paper utilized in the books while publishing is needed to be disposable and the ink utilized while publishing needs to not be hazardous for the environment.
Legal.
Legal policies for the publishing sector at whole are high. Publishing Ordinance 1997 requires the publishers to be approved first by the Federal government to be gone into in the publishing market.
Market Analysis (Porter's Five Forces Model).
Porter's Five Forces Model might be used to evaluate the attractiveness of the publishing industry China. A short analysis of the Porter's Five Forces is given as follows;.
Hazard of New Entrants.
Dangers of brand-new entrants in the Chinese Publishing Industry is moderate. The prospective development in the market tends to attract brand-new entrants to the publishing industry. Nevertheless, the presence of intense competition and the requirement of huge capital tends to demotivate brand-new entrants to go into in the marketplace.
Risk of Substitution.
Threat of Alternative is high for the Chinese Publishing Industry. The substitute items for the released documents is the files provided in the digital libraries on specific sites. The altering customer choices towards digital knowing increase the risk of replacement for the industry.
Competitive Rivalry.
Competitive rivalry in the publishing market is high. The presence of large number of consumers in the Chinese Publishing Industry like CIP, PTP etc. tends to produce high competitive competition for CMP. Along with it, new entrants are also entering into the market increasing the competition for CMP.
Bargaining Power of Provider.
The major providers of the American International Group Inc The Financial Crisis Case Study Help consist of the suppliers of the paper for releasing documents. As CMP is the largest publisher in the Chinese Publishing Market, therefore the overall bargaining power of provider for CMP is low.
Bargaining Power of Buyer.
Bargaining power of buyer 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 documents at competitive costs.
Rivals Analysis.
CMP runs in a highly competitive industry with the existence 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 American International Group Inc The Financial Crisis Case Study Solution consist of;.
• Chemical Industry Press (CIP).
• Posts and telecommunication Press (PTP).
Chemical Market Press (CIP).
CIPis one of the close competitors of CMP. Founded in the same period, CIP publishes similar type of books. For a big time period, CIP held the largest market share, and still ranks 2nd and 3rd in different market segments, with a significant focus on instructional publications. CIP acts as a risk for CMP as it might wean its market share due to its long term competitive background. CIP is concentrated on digital publishing and could wean the market share of American International Group Inc The Financial Crisis Case Study Solution easily in the existing market circumstance.
Posts and telecommunication Press (PTP).
It was also founded in the very same duration as American International Group Inc The Financial Crisis Case Study Help and CIP. It is likewise one of the popular gamers in the publishing industry with a yearly total revenues of RMB 550 million in 2010.
Alternatives
Alternative-1: Expand towards New Markets
Pros
• Decreasing dependence over the Chinese markets.
• Increasing variety of Clients
• Growth opportunities.
• Preventing the impact of market saturation in the Chinese publishing industry.
Cons
• Use of possible resources in growth.
• Risk of failure in new markets.
• Time consuming.
Alernative-2: Introduce Digital Publishing
Pros
• Sustaining consumer base.
• Approaching new markets.
• Easy to present using present abilities.
• Low threat of Failure.
• Low requirement for funds.
• Increased product portfolio offers high worth to customers.
Cons
• Competitors in the market by CIP, who has prior focus on the digital publishing.
• Shift of focus from the core business sections to the brand-new one can lead the company to lose need of its products in the market.
Recommendations
As the choices are moving towards digital publishing and the company require an instant option to prevent the decreasing industry development. The business could likewise think about the expansion program after the success of its digital publishing program.
Implementation
In order to present digital publishing in its item portfolio, the company must initially collects the information associated with the consumer need, the potential markets, the government guidelines and the data connected to the competitors presented in the market. After that, the business ought to choose one potential segment for its preliminary offering. It ought to gather research that how it might separate its digital publishing from the existing rivals' products. After all the steps above the company ought to go for the initial offering. The business needs to go for the other markets if the preliminary offering shows a success. In this way the company would have the ability to implement its digital publishing program.
Conclusion
The development of the publishing market is declining given that 2008, showing a danger to the business's long term existence, but the scenario can be managed by considering an advancement plan in the future. The business could think about introducing digital publishingin its existing market to execute its advancement program at instant basis and to avoid the danger of failure for entryway in the brand-new markets.
