Avon Company Financials Statement Analysis Case Study Solution and Analysis
Avon Company Financials Statement Analysis Case Study Solution is the biggest publishing business with a greatest market share in the China's book retail market. CMP offers a number of services including; collecting info, processing information and communication services. Significant company sections of the business consist of; books, periodicals, consultancy and distribution. The company has a large product portfolio and its major items include books, periodicals, online media, exhibits, research reports and so on. Avon Company Financials Statement Analysis Case Study Solution has actually ended up being a specialized details provider and a big extensive Science and Technology publishing company through the integration of print media, audio-visual media and the network media.
Although, Avon Company Financials Statement Analysis Case Study Analysis has actually spent its 60 years journey smoothly, being a successful publishing house, nevertheless, the altering macro market patterns and forces bring certain difficulties to the publishing market in basic and CMP in specific. These factors consist of;
• Entryway of the new publishing firms in the market.
• Decreasing growth of the publishing market.
• Market saturation.
• Intro of digital publishing methods
• Enhancement of science and innovation.
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 important experience, technical resources and the capabilities of the company could be made use of to pursue the future development unceasingly? How could the company sustain its long term competitive position in future?
Avon Company Financials Statement Analysis Case Study Help has certain strengths that can be used to minimize the dangers, overcome the weakness and get the opportunities. 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 allows the company to supply high quality products at a lower cost utilizing its previous experiences.
• The technical resources and capabilities produced by its effective journey offer a competitive benefit to CMP.
• Vast item portfolioof CMP helps it to diversify its risk and supply high worth to its customers.
• Strong monetary position permits the business to think about several development chances with no fear of raising fund externally.
In addition to the strengths, the company has certain weaknesses which could increase restrictions for the company in executing its advancement program. The weak points of Avon Company Financials Statement Analysis Case Study Help are given as follows;
• Despite of being a science and technology 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 should propose particular growth plans to prevent its reliance over the Chinese markets to accomplish long term development.
Although, the development of the publishing market is declining considering that 2008, impacting Avon Company Financials Statement Analysis Case Study Solution as well, but the development might be restored by availing specific chances provided in the market. The market opportunities for CMP include;
• The business could likewise introduce Digital Publishing by using its long term technical experience and a strong client recognition in the market.
• CMP might think about an advancement program through the expansion towards foreign markets in order to decrease its reliance over Chinese markets by utilizing its large funds.
The changing macro trends in the market and increasing competition in the publishing industry has presented specific hazards to Avon Company Financials Statement Analysis Case Study Analysis consisting of;( Gurel, 2017).
• Introduction of digital publishing i.e. virtual libraries could cause decreasing market share of Avon Company Financials Statement Analysis Case Study Help due to the consumer shift towards digital libraries.
• The presence of a great deal of competitors in the publishing industry increase the danger for CMP to lose its competitive position in the market, as competitors can gain a strong consumer base by utilizing certain techniques like aggressive promo, quality products, and so on
• Entryway of new publishing firms in the industry along with existence of high competitors increases the risk of losing the consumer base.
The company has a rather competitive monetary efficiency. Due to absence of data, the financial ratios of CMP might not be calculated. The total financial performance of the business might be analyzed by using the graphs provided in the case Appendices. It might be evaluated from the Appendix III that the yearly total revenues of CMP throughout the period 2000-2012 are growing at a high development rate, showing that the annual need of the items of Avon Company Financials Statement Analysis Case Study Help is growing and the company is quite efficient in attracting a large number of consumers at a prospective cost.
In addition to it, the second chart which reveals the annual development in the Avon Company Financials Statement Analysis Case Study Help total possessions, reveals that the company is rather effective in adding worth to its properties through its revenues. The development in assets reveals that the overall worth of the firm is also increasing with increasing the total earnings. (Unknown, 2013).
Another monetary analysis of the business using the given data might be the analysis concerning the distribution of overall earnings of the company. Huge part of the profits of CMP originates from the sales of its published books i.e. 64% as displayed in the Case Appendix V. The company could move towards other organisation segments with a prospective development to achieve its future advancement goal.
PESTEL analysis might be carried out to find out the numerous external forces impacting the performance of the company and the recent patterns in the external environment of the company. A short PESTEL analysis of the company is provided as follows; (Alanzi, 2018).
As the publishing sector could have a significant effect on the mindset of individuals about the communist ideology of the government, for that reason, the publishing sector is highly supervised and guided by the Promotion Department of the Communist Party of China. For that reason, it could be stated that the overall political forces affecting Avon Company Financials Statement Analysis Case Study Analysis company are high. The government policies regarding the publishing sector are likewise increasing with the passage of time.
Financial forces impacting the publishing sector in basic and the Avon Company Financials Statement Analysis Case Study Help in specific includesthe prices of paper, the earnings level of customers, the inflation rate, and the general GDP growth of the country. All these forces integrate effect the need for the publishing market. Together with it, the financial policies associated with the import of books impact the total organisation at CPM. Nevertheless, China's economic conditions are rather beneficial for CMP with high GDP growth and consumer earnings level.
Social and Demographical.
The consumer preferences are shifting towards digital publishing rather than the standard was of publishing. In this regard, CMP ought to focus on digital publishing to fulfill the altering customer preferences.
Technological forces impacting the CMP include the technological development in the reading strategies and so on. Improvement of science and technology in addition to the increase of digital publishing might decrease the demand for the CMP items, if specific actions would not be taken quickly.
Ecological forces affecting Avon Company Financials Statement Analysis Case Study Solution consists of the concerns of environmental communities over the usage of paper in publishing books. The paper used in the books while publishing is needed to be disposable and the ink utilized while publishing needs to not be damaging for the environment.
Legal guidelines for the publishing sector at whole are high. Publishing Regulation 1997 needs the publishers to be authorized initially by the Government to be entered in the publishing market.
Industry Analysis (Porter's Five Forces Design).
Porter's 5 Forces Model could be used to evaluate the beauty of the publishing industry China. A brief analysis of the Porter's 5 Forces is provided as follows;.
Danger of New Entrants.
Risks of new entrants in the Chinese Publishing Industry is moderate. The prospective development in the market tends to bring in new entrants to the publishing industry. However, the presence of extreme competition and the requirement of substantial capital tends to demotivate new entrants to go into in the marketplace.
Hazard of Substitution.
Risk of Alternative is high for the Chinese Publishing Market. The replacement items for the published files is the files presented in the virtual libraries on specific websites. The altering consumer choices towards digital knowing increase the danger of substitution for the industry.
Competitive rivalry in the publishing market is high. The existence of a great deal of consumers in the Chinese Publishing Market like CIP, PTP and so on tends to produce high competitive rivalry for CMP. Together with it, new entrants are also entering into the marketplace increasing the competitors for CMP.
Bargaining Power of Supplier.
The significant providers of the Avon Company Financials Statement Analysis Case Study Analysis include the providers of the paper for releasing files. As CMP is the largest publisher in the Chinese Publishing Market, therefore the general bargaining power of supplier for CMP is low.
Bargaining Power of Buyer.
Negotiating power of buyer in the publishing market is high. Due to the existence of a large number of publishers in the Chinese market and the marketplace saturation, the purchasers requires high quality documents at competitive prices.
CMP operates in an extremely competitive industry with the existence of large number of competitors. The company has a competitive position in the market with the highest market share in the Chinese publishing market. Major rivals of Avon Company Financials Statement Analysis Case Study Solution include;.
• Chemical Market Press (CIP).
• Posts and telecommunication Press (PTP).
Chemical Industry Press (CIP).
CIPis one of the close rivals of CMP. Founded in the same period, CIP releases comparable kind of books. For a big time period, CIP held the biggest market share, and still ranks 2nd and third in numerous market sections, with a major concentrate on educational publications. CIP functions as a danger for CMP as it could 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 Solution quickly in the current market situation.
Posts and telecommunication Press (PTP).
Another close competitor of CMP is PTP. It was likewise established in the exact same period as CMP and CIP. It ranks sixth in the state-owned publishers in terms of service scale. It is also among the popular gamers in the publishing market with an annual total profits of RMB 550 million in 2010.
Alternative-1: Broaden towards New Markets
• Decreasing dependence over the Chinese markets.
• Increasing variety of Customers
• Growth chances.
• Avoiding the effect of market saturation in the Chinese publishing market.
• Usage of possible resources in expansion.
• Danger of failure in brand-new markets.
• Time consuming.
Alernative-2: Introduce Digital Publishing
• Sustaining consumer base.
• Approaching new markets.
• Easy to present utilizing existing capabilities.
• Low risk of Failure.
• Low requirement for funds.
• Increased item portfolio supplies high value to customers.
• Competition in the market by CIP, who has prior focus on the digital publishing.
• Shift of focus from the core company segments to the brand-new one can lead the company to lose demand of its items in the market.
As the choices are shifting towards digital publishing and the company require an instant solution to prevent the declining market development. The business could also consider the expansion program after the success of its digital publishing program.
In order to introduce digital publishing in its item portfolio, the business needs to initially gathers the information associated with the consumer need, the potential markets, the federal government guidelines and the information associated with the rivals provided in the market. After that, the company ought to choose one prospective segment for its initial offering. It should gather research that how it might separate its digital publishing from the existing competitors' products. The steps above the company need to go for the initial offering. If the initial offering proves a success, the business ought to go for the other markets. In this way the business would be able to execute its digital publishing program.
The growth of the publishing industry is decreasing because 2008, showing a danger to the business's long term existence, but the scenario can be managed by thinking about a development plan in the future. The business might think about introducing digital publishingin its existing market to execute its advancement program at immediate basis and to prevent the threat of failure for entrance in the brand-new markets.