Can This Merger Be Saved Case Study Solution and Analysis
Introduction
Can This Merger Be Saved 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 including; collecting info, processing information and interaction services. Major company sections of the business include; books, regulars, consultancy and distribution. The business has a vast product portfolio and its major items include books, regulars, online media, exhibitions, research reports and so on. Can This Merger Be Saved Case Study Help has actually become a specialized information supplier and a large detailed Science and Technology publishing business through the combination of print media, audio-visual media and the network media.
Vital Concerns
CMP has actually invested its 60 years journey efficiently, being a successful publishing house, nevertheless, the changing macro market trends and forces bring specific obstacles to the publishing market in general and Can This Merger Be Saved Case Study Help in particular. These aspects include;
• Entryway of the brand-new publishing firms in the market.
• Declining development of the publishing market.
• Market saturation.
• Introduction of digital publishing strategies
• Enhancement of science and technology.
The change 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 made use of 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
Can This Merger Be Saved Case Study Analysis has specific strengths that can be used to minimize the risks, overcome the weak point and get the opportunities. Strengths of CMP are offered as follows;
• The long term experience of Can This Merger Be Saved Case Study Help in the publishing industry i.e. 60 years permits the business to offer high quality items at a lower expense using its previous experiences.
• The technical resources and capabilities produced by its successful journey offer a competitive benefit to CMP.
• Large product portfolioof CMP assists it to diversify its threat and supply high value to its clients.
• Strong monetary position enables the business to think about numerous advancement opportunities without any worry of raising fund externally.
Weaknesses
Along with the strengths, the company has particular weaknesses which might increase restraints for the business in executing its development program. The weaknesses of Can This Merger Be Saved Case Study Solution are offered as follows;
• Despite of being a science and technology publishing firm, the company still has conventional ways ofpublishing which are not suitable with the growing technological shift.
• CMP highly relies over the Chinese markets for its growth. It ought to propose specific growth plans to prevent its dependence over the Chinese markets to accomplish long term development.
Opportunities
The growth of the publishing market is declining considering that 2008, impacting Can This Merger Be Saved Case Study Help as well, but the growth could be revived by availing certain opportunities presented in the market. The market opportunities for CMP consist of;
• The company could also present Digital Publishing by utilizing its long term technical experience and a strong customer acknowledgment in the market.
• CMP might consider an advancement program through the growth towards foreign markets in order to decrease its dependence over Chinese markets by using its vast funds.
Threats
The altering macro trends in the market and increasing competition in the publishing market has actually postured specific threats to Can This Merger Be Saved Case Study Solution including;( Gurel, 2017).
• Introduction of digital publishing i.e. virtual libraries might result in declining market share of Can This Merger Be Saved Case Study Solution due to the consumer shift towards digital libraries.
• The presence of large number of competitors in the publishing industry increase the risk for CMP to lose its competitive position in the market, as rivals can acquire a strong consumer base by using certain strategies like aggressive promo, quality items, and so on
• Entrance of new publishing companies in the market in addition to existence of high competitors increases the hazard of losing the client base.
Financial Analysis.
Due to absence of data, the financial ratios of CMP could not be calculated. It could be evaluated from the Appendix III that the annual total profits of Can This Merger Be Saved Case Study Help during the duration 2000-2012 are growing at a high growth rate, showing that the yearly need of the items of CMP is growing and the business is rather effective in attracting a big number of consumers at a possible cost.
Together with it, the second graph which reveals the annual development in the Can This Merger Be Saved Case Study Analysis overall assets, shows that the business is rather effective in adding value to its possessions through its revenues. The growth in possessions shows that the total value of the company is likewise increasing with increasing the total revenues. (Unknown, 2013).
Another financial analysis of the business utilizing the provided data could be the analysis concerning the distribution of total revenues of the company. Huge part of the earnings of CMP originates from the sales of its released books i.e. 64% as shown in the Case Appendix V. The business could move towards other business segments with a possible growth to achieve its future development goal.
PESTEL Analysis
PESTEL analysis might be conducted to discover the various external forces affecting the efficiency of the company and the current patterns in the external environment of the company. A brief PESTEL analysis of the company is given as follows; (Alanzi, 2018).
Political.
As the publishing sector might have a significant effect on the frame of mind of individuals about the communist ideology of the federal government, for that reason, the publishing sector is highly supervised and directed by the Publicity Department of the Communist Celebration of China. It could be stated that the overall political forces impacting CMP company are high. The government policies regarding the publishing sector are likewise increasing with the passage of time.
Cost-effective.
Financial forces impacting the publishing sector in general and the CMP in particular includesthe costs of paper, the income level of customers, the inflation rate, and the total GDP development of the country. All these forces combine impact the need for the publishing market.
Social and Demographical.
The consumer choices are moving towards digital publishing rather than the traditional was of publishing. In this regard, CMP must focus on digital publishing to fulfill the altering consumer choices.
Technological.
Technological forces impacting the CMP consist of the technological development in the reading techniques and so on. Enhancement of science and innovation together with the rise of digital publishing might reduce the need for the CMP products, if certain actions would not be taken soon.
Environmental.
Environmental forces affecting Can This Merger Be Saved 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 non reusable and the ink used while publishing ought to not be harmful for the environment.
Legal.
Legal guidelines for the publishing sector at whole are high. The legal regulations concerning the publishing sector is controlled by the General Administration of Press and Publication. Publishing Regulation 1997 needs the publishers to be authorized first by the Federal government to be entered in the publishing market. The regulation prohibits direct participation of foreign entities and people in the publishing sector.
Industry Analysis (Porter's Five Forces Design).
Porter's 5 Forces Design could be utilized to examine the beauty of the publishing industry China. A quick analysis of the Porter's Five Forces is given as follows;.
Danger of New Entrants.
Risks of brand-new entrants in the Chinese Publishing Industry is moderate. The prospective development in the market tends to attract new entrants to the publishing market. The presence of extreme competitors and the requirement of substantial capital tends to demotivate new entrants to go into in the market.
Threat of Alternative.
Hazard of Substitution is high for the Chinese Publishing Market. The alternative items for the released files is the files provided in the virtual libraries on specific sites. 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 presence of large number of consumers in the Chinese Publishing Industry like CIP, PTP etc. tends to produce high competitive competition for CMP. In addition to it, new entrants are likewise entering into the market increasing the competitors for CMP.
Bargaining Power of Provider.
The major providers of the Can This Merger Be Saved Case Study Solution 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 provider for CMP is low.
Bargaining Power of Buyer.
Negotiating power of buyer in the publishing market is high. Due to the presence of a a great deal of publishers in the Chinese market and the marketplace saturation, the purchasers requires high quality files at competitive rates.
Rivals Analysis.
CMP operates in a highly competitive market with the presence of large number of rivals. Nevertheless, the company has a competitive position in the market with the greatest market share in the Chinese publishing market. Major rivals of Can This Merger Be Saved Case Study Analysis include;.
• Chemical Market Press (CIP).
• Posts and telecommunication Press (PTP).
Chemical Market Press (CIP).
CIP acts as a threat for CMP as it could wean its market share due to its long term competitive background. CIP is focused on digital publishing and might wean the market share of CMP easily in the existing market scenario.
Posts and telecommunication Press (PTP).
Another close rival of CMP is PTP. It was likewise established in the very same duration as CMP and CIP. It ranks 6th in the state-owned publishers in regards to organisation scale. It is also among the popular gamers in the publishing industry with an annual overall revenues of RMB 550 million in 2010.
Alternatives
Alternative-1: Broaden towards New Markets
Pros
• Decreasing reliance over the Chinese markets.
• Increasing variety of Clients
• Growth chances.
• Preventing the impact of market saturation in the Chinese publishing industry.
Cons
• Use of possible 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 present using present abilities.
• Low danger of Failure.
• Low requirement for funds.
• Increased product portfolio offers 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 organisation sectors to the brand-new one can lead the business to lose demand of its products in the market.
Suggestions
With the deep analysis of the external and internal environment of the business along with the industry analysis and the rival analysis, Alternative 2 is advised to CMP to achieve its future development. As the preferences are shifting towards digital publishing and the business need an immediate solution to prevent the decreasing market growth. Therefore, intro of digital publishing could prove to be an instant solution with low quantity of risk for the company. Nevertheless, the company might also consider the growth program after the success of its digital publishing program.
Application
In order to introduce digital publishing in its product portfolio, the business should initially collects the information related to the consumer demand, the potential markets, the government policies and the information related to the competitors presented in the market. If the preliminary offering shows a success, the business needs to go for the other markets. In this method the business would be able to execute its digital publishing program.
Conclusion
Although, the growth of the publishing industry is declining considering that 2008, revealing a danger to the company's long term presence, however the scenario can be controlled by considering an advancement strategy in the future. The business might think about presenting digital publishingin its existing market to implement its development program at immediate basis and to avoid the danger of failure for entrance in the new markets.
