Assessing A Companys Future Financial Health Case Study Solution and Analysis
Assessing A Companys Future Financial Health Case Study Analysis is the largest publishing company with a greatest market share in the China's book retail market. CMP has actually become a specialized information service provider and a large extensive Science and Innovation publishing company through the combination of print media, audio-visual media and the network media.
Although, Assessing A Companys Future Financial Health Case Study Analysis has invested its 60 years journey efficiently, being an effective publishing house, nevertheless, the changing macro market patterns and forces bring specific challenges to the publishing market in basic and CMP in particular. These aspects include;
• Entryway of the brand-new publishing firms in the industry.
• Declining development of the publishing market.
• Market saturation.
• Introduction of digital publishing techniques
• Enhancement of science and technology.
The improvement of the macro markets have raised a number of 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 abilities of the business could be made use of to pursue the future advancement unceasingly? How could the business sustain its long term competitive position in future?
Assessing A Companys Future Financial Health Case Study Analysis has particular strengths that can be used to minimize the risks, overcome the weakness and get the chances. Strengths of CMP are offered as follows;
• The long term experience of Assessing A Companys Future Financial Health Case Study Help in the publishing industry i.e. 60 years allows the company to provide high quality items at a lower expense using its previous experiences.
• The technical resources and capabilities generated by its successful journey supply a competitive advantage to CMP.
• Large product portfolioof CMP assists it to diversify its risk and supply high value to its consumers.
• Strong financial position enables the business to think about several development chances without any worry of raising fund externally.
In addition to the strengths, the company has specific weak points which could increase constraints for the company in implementing its advancement program. The weak points of Assessing A Companys Future Financial Health Case Study Help are given as follows;
• Despite of being a science and technology publishing firm, the company 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 ought to propose certain growth plans to avoid its dependence over the Chinese markets to achieve long term growth.
Although, the development of the publishing industry is declining since 2008, affecting Assessing A Companys Future Financial Health Case Study Solution also, however the growth could be restored by availing particular opportunities provided in the market. The market opportunities for CMP include;
• The company might likewise present Digital Publishing by using its long term technical experience and a strong customer acknowledgment in the market.
• CMP might think about an advancement program through the growth towards foreign markets in order to decrease its reliance over Chinese markets by utilizing its huge financial resources.
The changing macro trends in the market and increasing competition in the publishing market has posed specific dangers to Assessing A Companys Future Financial Health Case Study Analysis consisting of;( Gurel, 2017).
• Introduction of digital publishing i.e. digital libraries could lead to decreasing market share of Assessing A Companys Future Financial Health Case Study Help due to the customer shift towards digital libraries.
• The presence of a great deal of competitors in the publishing market increase the hazard for CMP to lose its competitive position in the market, as competitors can acquire a strong consumer base by using specific techniques like aggressive promotion, quality products, and so on
• Entryway of brand-new publishing firms in the industry along with existence of high competition increases the hazard of losing the customer base.
The company has a quite competitive monetary efficiency. Due to lack of information, the monetary ratios of CMP could not be calculated. The overall financial efficiency of the company could be evaluated by utilizing the graphs given in the case Appendices. It might be analyzed from the Appendix III that the yearly overall profits of CMP during the period 2000-2012 are growing at a high development rate, revealing that the yearly demand of the products of Assessing A Companys Future Financial Health Case Study Solution is growing and the company is quite efficient in drawing in a large number of consumers at a potential price.
Together with it, the 2nd graph which reveals the yearly growth in the Assessing A Companys Future Financial Health Case Study Solution overall possessions, shows that the company is rather efficient in including worth to its properties through its earnings. The development in assets reveals that the total value of the firm is also increasing with increasing the overall revenues. (Unknown, 2013).
Another monetary analysis of the company using the provided data could be the analysis concerning the distribution of overall earnings of the company. Huge part of the incomes of CMP originates from the sales of its published books i.e. 64% as displayed in the Case Appendix V. The company might move towards other organisation sectors with a prospective development to achieve its future development goal.
PESTEL analysis might be carried out to discover the various external forces affecting the performance of the business and the current patterns in the external environment of the business. A brief PESTEL analysis of the business is provided as follows; (Alanzi, 2018).
As the publishing sector could have a significant influence on the state of mind of individuals about the communist ideology of the government, therefore, the publishing sector is highly supervised and guided by the Publicity Department of the Communist Party of China. For that reason, it could be stated that the general political forces affecting Assessing A Companys Future Financial Health Case Study Solution service are high. The government policies concerning the publishing sector are also increasing with the passage of time.
Financial forces affecting the publishing sector in general and the Assessing A Companys Future Financial Health Case Study Solution in particular includesthe prices of paper, the earnings level of consumers, the inflation rate, and the overall GDP development of the country. All these forces integrate effect the demand for the publishing market. Along with it, the financial policies connected to the import of books affect the total company at CPM. China's economic conditions are quite beneficial for CMP with high GDP growth and consumer earnings level.
Social and Demographical.
Social and demographical forces consist of the population growth, the consumer's choices towards checking out useful materials etc. China has the greatest population in the world with a high population growth, revealing the increasing number of customers of the Assessing A Companys Future Financial Health Case Study Help. The consumer choices are shifting towards digital publishing rather than the standard was of publishing. In this regard, CMP should concentrate on digital publishing to meet the changing consumer choices.
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 could reduce the need for the CMP items, if certain actions would not be taken soon.
Environmental forces affecting Assessing A Companys Future Financial Health Case Study Analysis includes 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 disposable and the ink utilized while publishing ought to not be harmful for the environment.
Legal regulations for the publishing sector at whole are high. The legal regulations regarding the publishing sector is managed by the General Administration of Press and Publication. Publishing Ordinance 1997 requires the publishers to be authorized initially by the Federal government to be entered in the publishing market. The ordinance prohibits direct participation of foreign entities and individuals in the publishing sector.
Market Analysis (Porter's Five Forces Model).
Porter's Five Forces Design could be utilized to examine the attractiveness of the publishing industry China. A brief 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 potential development in the market tends to bring in brand-new entrants to the publishing market. Nevertheless, the existence of intense competition and the requirement of huge capital tends to demotivate brand-new entrants to enter in the market.
Hazard of Replacement.
Risk of Substitution is high for the Chinese Publishing Market. The alternative products for the published files is the files provided in the virtual libraries on particular sites. The changing consumer choices towards digital knowing increase the threat of alternative for the industry.
Competitive competition in the publishing market is high. The existence of large number of consumers in the Chinese Publishing Industry like CIP, PTP etc. tends to produce high competitive competition for CMP. Together with it, brand-new entrants are likewise entering into the marketplace increasing the competition for CMP.
Bargaining Power of Supplier.
The significant suppliers of the Assessing A Companys Future Financial Health Case Study Help include the suppliers of the paper for publishing files. As CMP is the biggest 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 buyers requires high quality files at competitive prices.
CMP operates in a highly 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 competitors of Assessing A Companys Future Financial Health Case Study Analysis include;.
• Chemical Market Press (CIP).
• Posts and telecommunication Press (PTP).
Chemical Industry Press (CIP).
CIPis among the close competitors of CMP. Founded in the same duration, CIP publishes similar kind of books. For a big period, CIP held the largest market share, and still ranks 2nd and 3rd in various market segments, with a significant focus on academic publications. CIP serves as a danger 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 marketplace share of Assessing A Companys Future Financial Health Case Study Help easily in the existing market circumstance.
Posts and telecommunication Press (PTP).
It was also established in the exact 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 industry with a yearly total earnings of RMB 550 million in 2010.
Alternative-1: Broaden towards New Markets
• Minimizing dependence over the Chinese markets.
• Increasing variety of Clients
• Growth opportunities.
• Avoiding the effect of market saturation in the Chinese publishing industry.
• Usage of possible resources in growth.
• Threat of failure in new markets.
• Time consuming.
Alernative-2: Introduce Digital Publishing
• Sustaining consumer base.
• Approaching brand-new markets.
• Easy to present utilizing present capabilities.
• Low danger of Failure.
• Low requirement for funds.
• Increased item portfolio supplies high value to customers.
• Competitors in the market by CIP, who has prior focus on the digital publishing.
• Shift of focus from the core organisation segments to the new one can lead the business to lose demand of its products in the market.
With the deep analysis of the external and internal environment of the company along with the industry analysis and the competitor analysis, Alternative 2 is suggested to CMP to attain its future development. As the choices are shifting towards digital publishing and the business require an instant option to avoid the declining market growth. Introduction of digital publishing might prove to be an immediate option with low quantity of threat for the business. Nevertheless, the business could likewise think about the expansion program after the success of its digital publishing program.
In order to introduce digital publishing in its item portfolio, the business should first gathers the data connected to the customer need, the prospective markets, the government regulations and the information associated with the rivals provided in the market. After that, the business needs to decide one prospective sector for its preliminary offering. It must collect research study that how it might differentiate its digital publishing from the existing rivals' products. After all the steps above the business ought to choose the initial offering. If the initial offering shows a success, the business needs to go for the other markets. In this way the company would be able to implement its digital publishing program.
Although, the development of the publishing market is declining since 2008, revealing a threat to the company's long term existence, but the scenario can be managed by thinking about an advancement strategy in the future. The business might think about presenting digital publishingin its existing market to execute its development program at immediate basis and to prevent the risk of failure for entryway in the brand-new markets.