Avon Company Financials Statement Analysis Case Study Solution and Analysis
Intro
Avon Company Financials Statement Analysis Case Study Help is the largest publishing business with a greatest market share in the China's book retail market. CMP provides a variety of services consisting of; gathering info, processing information and communication services. Major service sections of the company consist of; books, periodicals, consultancy and circulation. The business has a large product portfolio and its significant products consist of books, periodicals, online media, exhibitions, research study reports and so on. Avon Company Financials Statement Analysis Case Study Analysis has become a specialized information service provider and a large 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 a successful publishing house, however, the altering macro market trends and forces bring certain difficulties to the publishing market in general and Avon Company Financials Statement Analysis Case Study Analysis in particular. These aspects include;
• Entrance of the brand-new publishing firms in the industry.
• Decreasing growth of the publishing market.
• Market saturation.
• Introduction of digital publishing strategies
• Enhancement of science and innovation.
The transformation 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 valuable experience, technical resources and the capabilities of the business could be made use of to strive for the future development unceasingly? How could the business sustain its long term competitive position in future?
Situational Analysis
Internal Analysis
SWOT Analysis
Strengths
Avon Company Financials Statement Analysis Case Study Help has particular strengths that can be used to lower the hazards, get rid of the weak point and get the chances. Strengths of CMP are given as follows;
• The long term experience of Avon Company Financials Statement Analysis Case Study Solution in the publishing market i.e. 60 years enables the company to provide high quality products at a lower expense using its prior experiences.
• The technical resources and capabilities produced by its successful journey provide a competitive benefit to CMP.
• Huge item portfolioof CMP helps it to diversify its risk and supply high worth to its customers.
• Strong monetary position permits the business to consider several advancement chances with no fear of raising fund externally.
Weak points
In addition to the strengths, the business has particular weak points which could increase restrictions for the business in executing its development program. The weaknesses of Avon Company Financials Statement Analysis Case Study Solution are given as follows;
• Despite of being a science and innovation publishing firm, the business still has conventional ways ofpublishing which are not suitable with the growing technological shift.
• CMP extremely relies over the Chinese markets for its growth. It ought to propose particular expansion plans to avoid its dependence over the Chinese markets to accomplish long term development.
Opportunities
The development of the publishing industry is decreasing considering that 2008, impacting Avon Company Financials Statement Analysis Case Study Analysis as well, however the development could be revived by availing certain chances presented in the market. The marketplace opportunities for CMP include;
• The company could likewise present Digital Publishing by utilizing its long term technical experience and a strong client 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 huge financial resources.
Dangers
The altering macro trends in the market and increasing competitors in the publishing market has postured certain risks to Avon Company Financials Statement Analysis Case Study Solution consisting of;( Gurel, 2017).
• Introduction of digital publishing i.e. virtual libraries could cause declining market share of Avon Company Financials Statement Analysis Case Study Analysis due to the customer shift towards virtual libraries.
• The presence of large number of competitors in the publishing industry increase the danger for CMP to lose its competitive position in the market, as rivals can acquire a strong customer base by utilizing specific strategies like aggressive promo, quality items, etc.
• Entryway of brand-new publishing companies in the market along with existence of high competition increases the risk of losing the consumer base.
Monetary Analysis.
The company has a rather competitive monetary efficiency. Due to absence of information, the financial ratios of CMP could not be calculated. However, the general financial performance of the company could be examined by using the graphs given in the case Appendices. It could be analyzed from the Appendix III that the annual overall earnings of CMP during the duration 2000-2012 are growing at a high development rate, showing that the yearly need of the items of Avon Company Financials Statement Analysis Case Study Solution is growing and the business is rather efficient in drawing in a a great deal of clients at a possible price.
Together with it, the second graph which shows the annual growth in the Avon Company Financials Statement Analysis Case Study Help total assets, shows that the company is quite efficient in adding value to its assets through its revenues. The growth in properties reveals that the overall value of the firm is also increasing with increasing the total profits. (Unidentified, 2013).
Another monetary analysis of the business using the offered information might be the analysis regarding the circulation of total earnings of the business. Major part of the profits of CMP comes from the sales of its published books i.e. 64% as displayed in the Case Appendix V. The company might move towards other company sectors with a potential development to achieve its future advancement goal.
PESTEL Analysis
PESTEL analysis might be carried out to discover the various 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 offered as follows; (Alanzi, 2018).
Political.
As the publishing sector could have a significant influence on the state of mind of the people about the communist ideology of the government, for that reason, the publishing sector is highly monitored and guided by the Publicity Department of the Communist Celebration of China. It might be said that the total political forces affecting CMP company are high. The government policies concerning the publishing sector are also increasing with the passage of time.
Cost-effective.
Financial forces impacting the publishing sector in basic and the CMP in specific includesthe costs of paper, the income level of customers, the inflation rate, and the total GDP growth of the nation. All these forces combine effect the need for the publishing market.
Social and Demographical.
The consumer preferences are moving towards digital publishing rather than the traditional was of publishing. In this regard, CMP must focus on digital publishing to meet the changing customer preferences.
Technological.
Technological forces affecting the CMP consist of the technological advancement in the reading strategies and so on. Enhancement of science and innovation together with the increase of digital publishing could minimize the demand for the CMP items, if specific actions would not be taken soon.
Environmental.
Ecological forces impacting Avon Company Financials Statement Analysis Case Study Help includes the concerns of ecological communities over the use of paper in publishing books. The paper used in the books while publishing is required to be disposable and the ink used while publishing must not be damaging for the environment.
Legal.
Legal regulations for the publishing sector at whole are high. The legal policies regarding the publishing sector is controlled by the General Administration of Press and Publication. Publishing Ordinance 1997 requires the publishers to be authorized initially by the Government to be entered in the publishing market. The regulation prohibits direct involvement of foreign entities and individuals in the publishing sector.
Market Analysis (Porter's Five Forces Design).
Porter's 5 Forces Model might be utilized to evaluate the appearance of the publishing industry China. A quick analysis of the Porter's Five Forces is offered as follows;.
Threat of New Entrants.
Dangers of new entrants in the Chinese Publishing Industry is moderate. The prospective development in the industry tends to bring in brand-new entrants to the publishing industry. Nevertheless, the existence of extreme competition and the requirement of huge capital tends to demotivate brand-new entrants to go into in the marketplace.
Threat of Substitution.
Hazard of Alternative is high for the Chinese Publishing Market. The replacement items for the released files is the documents presented in the digital libraries on particular sites. The changing consumer preferences towards digital learning increase the danger of replacement for the industry.
Competitive Competition.
Competitive competition in the publishing market is high. The presence 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. In addition to it, brand-new entrants are likewise entering into the marketplace increasing the competitors for CMP.
Bargaining Power of Supplier.
The major providers of the Avon Company Financials Statement Analysis Case Study Analysis consist of the suppliers of the paper for publishing files. As CMP is the biggest publisher in the Chinese Publishing Market, for that reason the overall bargaining power of supplier for CMP is low.
Bargaining Power of Buyer.
Bargaining power of purchaser in the publishing market is high. Due to the presence of a large number of publishers in the Chinese market and the marketplace saturation, the purchasers needs high quality files at competitive prices.
Competitors Analysis.
CMP operates in a highly competitive industry with the existence of large number of competitors. However, the business has a competitive position in the market with the highest market share in the Chinese publishing market. Significant rivals of Avon Company Financials Statement Analysis Case Study Solution consist of;.
• Chemical Industry Press (CIP).
• Posts and telecommunication Press (PTP).
Chemical Market Press (CIP).
CIPis one of the close rivals of CMP. Established in the exact same period, CIP releases comparable kind of books. For a large time period, CIP held the biggest market share, and still ranks third and 2nd in numerous market segments, with a major concentrate on instructional publications. CIP functions as a hazard for CMP as it might wean its market share due to its long term competitive background. CIP is concentrated on digital publishing and might wean the market share of Avon Company Financials Statement Analysis Case Study Analysis easily in the present market situation.
Posts and telecommunication Press (PTP).
Another close rival of CMP is PTP. It was likewise established in the same period as CMP and CIP. It ranks 6th in the state-owned publishers in regards to organisation scale. It is also one of the popular gamers in the publishing market with an annual overall earnings of RMB 550 million in 2010.
Alternatives
Alternative-1: Expand towards New Markets
Pros
• Minimizing dependence over the Chinese markets.
• Increasing number of Clients
• Growth opportunities.
• Avoiding the impact of market saturation in the Chinese publishing industry.
Cons
• Usage of prospective resources in expansion.
• Risk of failure in new markets.
• Time consuming.
Alernative-2: Introduce Digital Publishing
Pros
• Sustaining consumer base.
• Approaching brand-new markets.
• Easy to introduce utilizing present abilities.
• Low danger of Failure.
• Low requirement for funds.
• Increased item portfolio provides high value to customers.
Cons
• Competitors in the market by CIP, who has prior concentrate on the digital publishing.
• Shift of focus from the core business sections to the new one can lead the company to lose demand of its products in the market.
Suggestions
As the choices are shifting towards digital publishing and the business require an instant service to prevent the declining market development. The business might also think about the growth program after the success of its digital publishing program.
Implementation
In order to present digital publishing in its item portfolio, the business needs to first gathers the data connected to the consumer demand, the prospective markets, the federal government policies and the data associated with the competitors provided in the market. After that, the business should decide one prospective segment for its initial offering. It should gather research study that how it might distinguish its digital publishing from the existing competitors' items. After all the steps above the business should opt for the initial offering. If the preliminary offering shows a success, the business ought to opt for the other markets. In this method the business would be able to implement its digital publishing program.
Conclusion
The growth of the publishing market is decreasing because 2008, showing a risk to the business's long term presence, but the circumstance can be controlled by thinking about an advancement strategy in the future. The company could think about introducing digital publishingin its existing market to implement its advancement program at instant basis and to prevent the risk of failure for entrance in the brand-new markets.
