Assessing A Companys Future Financial Health Case Study Solution and Analysis
Introduction
Assessing A Companys Future Financial Health Case Study Analysis is the largest publishing company with a highest market share in the China's book retail market. CMP provides a variety of services consisting of; collecting details, processing info and interaction services. Significant service sectors of the company include; books, periodicals, consultancy and circulation. The business has a huge item portfolio and its major items include books, regulars, online media, exhibits, research study reports etc. Assessing A Companys Future Financial Health Case Study Analysis has actually ended up being a specialized details service provider and a big detailed Science and Innovation publishing business through the integration of print media, audio-visual media and the network media.
Vital Issues
CMP has spent its 60 years journey smoothly, being a successful publishing home, nevertheless, the changing macro market trends and forces bring specific obstacles to the publishing industry in basic and Assessing A Companys Future Financial Health Case Study Help in particular. These elements include;
• Entrance of the brand-new publishing firms in the industry.
• Decreasing development of the publishing market.
• Market saturation.
• Intro of digital publishing strategies
• Enhancement of science and innovation.
The transformation of the macro markets have raised several 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 capabilities of the business could be used 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
Assessing A Companys Future Financial Health Case Study Solution has specific strengths that can be used to reduce the threats, get rid of the weakness and get the opportunities. Strengths of CMP are given as follows;
• The long term experience of Assessing A Companys Future Financial Health Case Study Solution in the publishing industry i.e. 60 years enables the business to supply high quality products at a lower cost using its prior experiences.
• The technical resources and capabilities produced by its successful journey offer a competitive benefit to CMP.
• Vast item portfolioof CMP helps it to diversify its threat and supply high value to its clients.
• Strong monetary position permits the company to think about a number of development opportunities without any fear of raising fund externally.
Weaknesses
In addition to the strengths, the company has particular weaknesses which could increase constraints for the company in implementing its development program. The weaknesses of Assessing A Companys Future Financial Health Case Study Analysis are given as follows;
• Despite of being a science and innovation publishing company, the company still has traditional ways ofpublishing which are not compatible with the growing technological shift.
• CMP extremely relies over the Chinese markets for its growth. It must propose certain expansion plans to prevent its dependence over the Chinese markets to accomplish long term development.
Opportunities
Although, the development of the publishing market is declining considering that 2008, affecting Assessing A Companys Future Financial Health Case Study Help as well, however the growth could be revived by availing certain chances provided in the market. The marketplace chances for CMP include;
• The company could also present Digital Publishing by using its long term technical experience and a strong customer acknowledgment in the market.
• CMP might think about a development program through the growth towards foreign markets in order to lower its dependence over Chinese markets by utilizing its huge financial resources.
Dangers
The changing macro trends in the market and increasing competitors in the publishing industry has posed particular hazards to Assessing A Companys Future Financial Health Case Study Solution consisting of;( Gurel, 2017).
• Intro of digital publishing i.e. digital libraries could result in declining market share of Assessing A Companys Future Financial Health Case Study Help due to the consumer shift towards digital 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 rivals can gain a strong customer base by utilizing particular techniques like aggressive promo, quality products, etc.
• Entryway of new publishing companies in the industry along with presence of high competitors increases the risk of losing the customer base.
Financial Analysis.
Due to lack of information, the monetary ratios of CMP could not be calculated. It might be examined from the Appendix III that the annual total revenues of Assessing A Companys Future Financial Health Case Study Solution during the duration 2000-2012 are growing at a high development rate, showing that the yearly need of the items of CMP is growing and the company is rather effective in attracting a large number of customers at a potential rate.
Along with it, the second chart which reveals the annual development in the Assessing A Companys Future Financial Health Case Study Help overall possessions, reveals that the business is quite efficient in including worth to its properties through its profits. The development in properties reveals that the overall worth of the firm is likewise increasing with increasing the total earnings. (Unknown, 2013).
Another financial analysis of the company utilizing the given data might be the analysis regarding the distribution of overall earnings of the business. Huge part of the earnings of CMP comes from the sales of its published books i.e. 64% as displayed in the Case Appendix V. The business could move towards other service sectors with a possible growth to achieve its future development goal.
PESTEL Analysis
PESTEL analysis might be carried out to find out the numerous external forces affecting the efficiency 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 considerable effect on the mindset of individuals about the communist ideology of the federal government, therefore, the publishing sector is highly supervised and directed by the Publicity Department of the Communist Party of China. It might be said that the overall political forces affecting CMP service are high. The federal government policies relating to the publishing sector are likewise increasing with the passage of time.
Affordable.
Financial forces affecting the publishing sector in basic and the Assessing A Companys Future Financial Health Case Study Solution in specific includesthe costs of paper, the earnings level of consumers, the inflation rate, and the total GDP development of the nation. All these forces combine impact the need for the publishing market. Together with it, the economic policies associated with the import of books impact the general business at CPM. Nevertheless, China's economic conditions are quite beneficial for CMP with high GDP development and customer income level.
Social and Demographical.
The customer choices are shifting towards digital publishing rather than the standard was of publishing. In this regard, CMP ought to focus on digital publishing to meet the altering customer preferences.
Technological.
Technological forces affecting the CMP include the technological advancement in the reading methods and so on. Enhancement of science and technology together with the rise of digital publishing might lower the demand for the CMP items, if specific actions would not be taken quickly.
Environmental.
Ecological forces affecting Assessing A Companys Future Financial Health Case Study Solution includes the issues of ecological neighborhoods over the usage of paper in publishing books. The paper used in the books while publishing is required to be non reusable and the ink used while publishing must not be damaging for the environment.
Legal.
Legal guidelines for the publishing sector at whole are high. Publishing Regulation 1997 requires the publishers to be approved initially by the Government to be entered in the publishing market.
Industry Analysis (Porter's Five Forces Design).
Porter's 5 Forces Model might be utilized to analyze the attractiveness of the publishing industry China. A brief analysis of the Porter's Five Forces is given as follows;.
Risk of New Entrants.
Risks of new entrants in the Chinese Publishing Industry is moderate. The potential development in the market tends to attract new entrants to the publishing industry. Nevertheless, the existence of intense competition and the requirement of substantial capital tends to demotivate brand-new entrants to go into in the marketplace.
Danger of Substitution.
Danger of Replacement is high for the Chinese Publishing Industry. The alternative products for the released documents is the documents provided in the digital libraries on particular websites. The changing customer choices towards digital knowing increase the risk of alternative for the market.
Competitive Competition.
Competitive rivalry in the publishing industry is high. The existence of a great deal of customers in the Chinese Publishing Industry like CIP, PTP and so on tends to produce high competitive competition for CMP. Together with it, new entrants are likewise participating in the marketplace increasing the competitors for CMP.
Bargaining Power of Supplier.
The major providers of the Assessing A Companys Future Financial Health Case Study Help include the suppliers of the paper for releasing files. As CMP is the largest publisher in the Chinese Publishing Market, for that reason the general bargaining power of supplier for CMP is low.
Bargaining Power of Purchaser.
Haggling power of purchaser 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 files at competitive costs.
Rivals Analysis.
CMP operates in an extremely competitive market with the presence of large number of competitors. The business has a competitive position in the market with the highest market share in the Chinese publishing market. Major rivals of Assessing A Companys Future Financial Health Case Study Solution include;.
• Chemical Industry Press (CIP).
• Posts and telecommunication Press (PTP).
Chemical Industry Press (CIP).
CIPis among the close rivals of CMP. Founded in the same duration, CIP releases similar type of books. For a large time period, CIP held the biggest market share, and still ranks 2nd and third in different market sectors, with a significant concentrate 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 focused on digital publishing and might wean the market share of Assessing A Companys Future Financial Health Case Study Analysis easily in the current market scenario.
Posts and telecommunication Press (PTP).
It was likewise established in the very same duration as Assessing A Companys Future Financial Health Case Study Help and CIP. It is likewise one of the prominent players in the publishing market with an annual overall profits of RMB 550 million in 2010.
Alternatives
Alternative-1: Expand towards New Markets
Pros
• Minimizing dependence over the Chinese markets.
• Increasing variety of Customers
• Growth chances.
• Avoiding the effect of market saturation in the Chinese publishing market.
Cons
• Usage of prospective resources in growth.
• Threat of failure in brand-new markets.
• Time consuming.
Alernative-2: Introduce Digital Publishing
Pros
• Sustaining consumer base.
• Approaching new markets.
• Easy to present utilizing present abilities.
• Low risk of Failure.
• Low requirement for funds.
• Increased product portfolio provides high value to consumers.
Cons
• Competition in the market by CIP, who has prior concentrate on the digital publishing.
• Shift of focus from the core business segments to the brand-new one can lead the company to lose need of its items in the market.
Suggestions
As the preferences are shifting towards digital publishing and the company need an instant solution to prevent the decreasing market development. The company might also think about the growth program after the success of its digital publishing program.
Implementation
In order to introduce digital publishing in its product portfolio, the company needs to first gathers the data related to the consumer demand, the prospective markets, the government policies and the data related to the rivals provided in the market. If the initial offering shows a success, the company must go for the other markets. In this method the company would be able to implement its digital publishing program.
Conclusion
The growth of the publishing industry is declining because 2008, showing a danger to the company's long term existence, however the situation can be controlled by thinking about an advancement strategy in the future. The business could think about introducing digital publishingin its existing market to execute its development program at instant basis and to prevent the risk of failure for entrance in the brand-new markets.
