Canadian Pacific Ltd Unlocking Shareholder Value In A Conglomerate Case Study Solution and Analysis
Intro
Canadian Pacific Ltd Unlocking Shareholder Value In A Conglomerate Case Study Analysis is the biggest publishing company with a greatest market share in the China's book retail market. CMP has become a specialized details service provider and a large thorough Science and Technology publishing business through the integration of print media, audio-visual media and the network media.
Important Issues
CMP has invested its 60 years journey smoothly, being an effective publishing home, however, the altering macro market patterns and forces bring certain difficulties to the publishing industry in basic and Canadian Pacific Ltd Unlocking Shareholder Value In A Conglomerate Case Study Analysis in specific. These elements include;
• Entrance of the new publishing companies in the market.
• Decreasing development of the publishing market.
• Market saturation.
• Introduction of digital publishing methods
• Enhancement of science and innovation.
The improvement of the macro markets have raised several questions to the management at CPM that what could be the future of CMP in this circumstance? Do the long important experience, technical resources and the abilities of the company could be utilized 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
Canadian Pacific Ltd Unlocking Shareholder Value In A Conglomerate Case Study Solution has specific strengths that can be made use of to decrease the risks, conquer the weakness and get the opportunities. Strengths of CMP are provided as follows;
• The long term experience of Canadian Pacific Ltd Unlocking Shareholder Value In A Conglomerate Case Study Analysis in the publishing industry i.e. 60 years permits the company to supply high quality products at a lower cost using its prior experiences.
• The technical resources and capabilities created by its successful journey provide a competitive benefit to CMP.
• Huge item portfolioof CMP helps it to diversify its risk and offer high worth to its consumers.
• Strong financial position permits the company to consider a number of development chances without any worry of raising fund externally.
Weaknesses
In addition to the strengths, the company has particular weak points which could increase restraints for the company in implementing its development program. The weak points of Canadian Pacific Ltd Unlocking Shareholder Value In A Conglomerate Case Study Analysis are offered as follows;
• Despite of being a science and technology publishing company, 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 development. It must propose certain growth strategies to avoid its reliance over the Chinese markets to achieve long term growth.
Opportunities
The growth of the publishing market is declining since 2008, affecting Canadian Pacific Ltd Unlocking Shareholder Value In A Conglomerate Case Study Solution as well, however the growth might be restored by availing specific opportunities presented in the market. The marketplace opportunities for CMP include;
• The company might also introduce Digital Publishing by using its long term technical experience and a strong customer acknowledgment in the market.
• CMP could think about an advancement program through the growth towards foreign markets in order to decrease its reliance over Chinese markets by using its huge funds.
Threats
The changing macro patterns in the market and increasing competition in the publishing market has actually positioned specific hazards to Canadian Pacific Ltd Unlocking Shareholder Value In A Conglomerate Case Study Help including;( Gurel, 2017).
• Intro of digital publishing i.e. virtual libraries might lead to declining market share of Canadian Pacific Ltd Unlocking Shareholder Value In A Conglomerate Case Study Solution due to the consumer shift towards virtual libraries.
• The presence of large number of rivals in the publishing industry increase the threat for CMP to lose its competitive position in the market, as competitors can gain a strong customer base by using specific strategies like aggressive promo, quality items, and so on
• Entrance of brand-new publishing companies in the industry along with presence of high competitors increases the threat of losing the client base.
Financial Analysis.
The company has a rather competitive financial performance. Due to lack of data, the monetary ratios of CMP could not be calculated. Nevertheless, the overall monetary efficiency of the business might be evaluated by using 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, showing that the yearly demand of the products of Canadian Pacific Ltd Unlocking Shareholder Value In A Conglomerate Case Study Solution is growing and the business is rather efficient in attracting a large number of clients at a potential rate.
Along with it, the second chart which reveals the yearly growth in the Canadian Pacific Ltd Unlocking Shareholder Value In A Conglomerate Case Study Solution total assets, shows that the company is rather efficient in including worth to its properties through its profits. The growth in properties shows that the overall value of the firm is also increasing with increasing the total earnings. (Unknown, 2013).
Another monetary analysis of the company utilizing the offered information might be the analysis concerning the circulation of overall profits of the business. Huge part of the revenues of CMP comes from the sales of its published books i.e. 64% as shown in the Case Appendix V. The company might move towards other company sectors with a possible development to achieve its future advancement objective.
PESTEL Analysis
PESTEL analysis could be conducted to find out the different external forces impacting the performance of the business and the recent trends in the external environment of the business. A quick PESTEL analysis of the business is provided as follows; (Alanzi, 2018).
Political.
As the publishing sector could have a considerable influence on the state of mind of individuals about the communist ideology of the government, therefore, the publishing sector is highly supervised and assisted by the Publicity Department of the Communist Celebration of China. It might be said that the general political forces impacting CMP company are high. The government policies regarding the publishing sector are likewise increasing with the passage of time.
Affordable.
Economic forces affecting the publishing sector in general and the CMP in specific includesthe costs of paper, the earnings level of customers, the inflation rate, and the overall GDP development of the nation. All these forces combine impact the demand for the publishing market.
Social and Demographical.
Social and demographical forces include the population growth, the customer's choices towards checking out helpful products etc. China has the highest population in the world with a high population growth, showing the increasing number of customers of the Canadian Pacific Ltd Unlocking Shareholder Value In A Conglomerate Case Study Solution. Nevertheless, the customer preferences are moving towards digital publishing instead of the standard was of publishing. In this regard, CMP must focus on digital publishing to meet the changing consumer choices.
Technological.
Technological forces impacting the CMP include the technological development in the reading methods and so on. Enhancement of science and innovation in addition to the increase of digital publishing could decrease the demand for the CMP items, if particular actions would not be taken quickly.
Environmental.
Environmental forces impacting Canadian Pacific Ltd Unlocking Shareholder Value In A Conglomerate Case Study Analysis consists of the concerns of environmental communities over the usage of paper in publishing books. The paper used in the books while publishing is required to be disposable and the ink utilized while publishing should not be damaging for the environment.
Legal.
Legal policies for the publishing sector at whole are high. Publishing Ordinance 1997 requires the publishers to be approved first by the Government to be entered in the publishing market.
Market Analysis (Porter's Five Forces Model).
Porter's Five Forces Design might be used to examine the appearance of the publishing market China. A quick analysis of the Porter's 5 Forces is provided 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. However, the presence of intense competitors and the requirement of big capital tends to demotivate new entrants to go into in the marketplace.
Risk of Substitution.
Threat of Replacement is high for the Chinese Publishing Industry. The replacement items for the released documents is the files provided in the virtual libraries on certain sites. The altering consumer preferences towards digital learning increase the hazard of alternative for the industry.
Competitive Competition.
Competitive rivalry in the publishing industry is high. The presence of large number of customers in the Chinese Publishing Industry like CIP, PTP and so on tends to produce high competitive competition for CMP. Along with it, brand-new entrants are also entering into the market increasing the competition for CMP.
Bargaining Power of Supplier.
The significant providers of the Canadian Pacific Ltd Unlocking Shareholder Value In A Conglomerate Case Study Solution consist of the providers of the paper for publishing files. As CMP is the biggest publisher in the Chinese Publishing Market, for that reason the general bargaining power of provider for CMP is low.
Bargaining Power of Buyer.
Negotiating power of purchaser in the publishing industry 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 rates.
Rivals Analysis.
CMP operates in a highly competitive market with the presence of a great deal of rivals. The business has a competitive position in the market with the highest market share in the Chinese publishing market. Significant competitors of Canadian Pacific Ltd Unlocking Shareholder Value In A Conglomerate Case Study Help include;.
• Chemical Industry Press (CIP).
• Posts and telecommunication Press (PTP).
Chemical Industry Press (CIP).
CIPis among the close competitors of CMP. Founded in the very same duration, CIP releases comparable kind of books. For a large time period, CIP held the largest market share, and still ranks 2nd and third in numerous market segments, with a significant concentrate on educational publications. CIP serves as a risk for CMP as it might wean its market share due to its long term competitive background. CIP is concentrated on digital publishing and could wean the market share of Canadian Pacific Ltd Unlocking Shareholder Value In A Conglomerate Case Study Analysis easily in the existing market scenario.
Posts and telecommunication Press (PTP).
It was likewise founded in the exact same period as Canadian Pacific Ltd Unlocking Shareholder Value In A Conglomerate Case Study Analysis and CIP. It is also one of the popular gamers in the publishing market with an annual overall revenues of RMB 550 million in 2010.
Alternatives
Alternative-1: Broaden towards New Markets
Pros
• Minimizing reliance over the Chinese markets.
• Increasing number of Customers
• Growth opportunities.
• Avoiding the effect of market saturation in the Chinese publishing market.
Cons
• Use of potential resources in expansion.
• Threat of failure in brand-new markets.
• Time consuming.
Alernative-2: Present Digital Publishing
Pros
• Sustaining customer base.
• Approaching brand-new markets.
• Easy to present using current abilities.
• Low danger of Failure.
• Low requirement for funds.
• Increased item portfolio supplies high worth to customers.
Cons
• Competition in the market by CIP, who has prior concentrate on the digital publishing.
• Shift of focus from the core company sections to the brand-new one can lead the business to lose demand of its items in the market.
Suggestions
As the choices are moving towards digital publishing and the company require an immediate service to prevent the decreasing industry development. The company could also consider the expansion program after the success of its digital publishing program.
Application
In order to present digital publishing in its item portfolio, the company needs to initially collects the data associated with the consumer demand, the possible markets, the federal government guidelines and the information associated with the competitors provided in the market. After that, the company needs to decide one prospective sector for its preliminary offering. It ought to gather research study that how it might separate its digital publishing from the existing competitors' products. The steps above the business must go for the initial offering. The business should go for the other markets if the initial offering proves a success. In this way the business would be able to execute its digital publishing program.
Conclusion
Although, the growth of the publishing industry is decreasing since 2008, showing a risk to the company's long term existence, but the situation can be controlled by considering a development plan in the future. The business might think about presenting digital publishingin its existing market to execute its advancement program at instant basis and to prevent the threat of failure for entryway in the new markets.
