Classic Pen Co Absorption Costing Method Case Study Solution and Analysis
Introduction
Classic Pen Co Absorption Costing Method Case Study Help is the biggest publishing company with a highest market share in the China's book retail market. CMP provides a variety of services consisting of; gathering information, processing details and interaction services. Significant business sectors of the company consist of; books, regulars, consultancy and distribution. The company has a vast item portfolio and its significant products include books, periodicals, online media, exhibits, research reports and so on. Classic Pen Co Absorption Costing Method Case Study Analysis has actually become a specialized details service provider and a big thorough Science and Innovation publishing business through the combination of print media, audio-visual media and the network media.
Crucial Concerns
CMP has actually invested its 60 years journey efficiently, being an effective publishing home, nevertheless, the altering macro market patterns and forces bring certain obstacles to the publishing market in general and Classic Pen Co Absorption Costing Method Case Study Analysis in specific. These elements consist of;
• Entrance of the brand-new publishing firms in the industry.
• Declining development of the publishing market.
• Market saturation.
• Introduction of digital publishing strategies
• Improvement of science and innovation.
The change of the macro markets have raised a number of concerns 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 pursue the future advancement unceasingly? How could the business sustain its long term competitive position in future?
Situational Analysis
Internal Analysis
SWOT Analysis
Strengths
Classic Pen Co Absorption Costing Method Case Study Solution has certain strengths that can be made use of to minimize the threats, get rid of the weakness and obtain the opportunities. Strengths of CMP are given as follows;
• The long term experience of Classic Pen Co Absorption Costing Method Case Study Analysis in the publishing industry i.e. 60 years allows the business to provide high quality items at a lower cost utilizing its previous experiences.
• The technical resources and abilities generated by its effective journey supply a competitive advantage to CMP.
• Huge item portfolioof CMP helps it to diversify its danger and offer high value to its clients.
• Strong monetary position enables the company to consider several advancement opportunities without any worry of raising fund externally.
Weak points
In addition to the strengths, the company has certain weaknesses which might increase constraints for the company in executing its advancement program. The weak points of Classic Pen Co Absorption Costing Method Case Study Analysis are given as follows;
• Despite of being a science and innovation publishing company, the business still has standard ways ofpublishing which are not compatible with the growing technological shift.
• CMP highly relies over the Chinese markets for its growth. It needs to propose certain expansion strategies to avoid its dependence over the Chinese markets to accomplish long term development.
Opportunities
Although, the growth of the publishing market is decreasing since 2008, impacting Classic Pen Co Absorption Costing Method Case Study Analysis also, but the development could be restored by availing specific 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 consumer acknowledgment in the market.
• CMP might think about an advancement program through the expansion towards foreign markets in order to decrease its dependence over Chinese markets by utilizing its vast financial resources.
Risks
The changing macro patterns in the market and increasing competitors in the publishing industry has positioned specific hazards to Classic Pen Co Absorption Costing Method Case Study Help consisting of;( Gurel, 2017).
• Intro of digital publishing i.e. digital libraries could cause decreasing market share of Classic Pen Co Absorption Costing Method Case Study Analysis 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 rivals can get a strong customer base by using particular techniques like aggressive promo, quality products, etc.
• Entrance of brand-new publishing companies in the market along with existence of high competition increases the threat of losing the consumer base.
Financial Analysis.
Due to lack of information, the monetary ratios of CMP might not be computed. It might be evaluated from the Appendix III that the annual total incomes of Classic Pen Co Absorption Costing Method Case Study Help during the period 2000-2012 are growing at a high growth rate, showing that the annual need of the items of CMP is growing and the company is quite efficient in bring in a large number of clients at a prospective price.
Along with it, the second graph which shows the yearly growth in the Classic Pen Co Absorption Costing Method Case Study Solution overall possessions, reveals that the company is rather efficient in adding value to its properties through its profits. The development in properties reveals that the total value of the company is likewise increasing with increasing the overall revenues. (Unknown, 2013).
Another monetary analysis of the company using the offered data could be the analysis relating to the circulation of overall revenues of the company. Major 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 business could move towards other company sections with a potential growth to achieve its future development objective.
PESTEL Analysis
PESTEL analysis might be carried out to discover the different external forces affecting the efficiency of the company and the recent trends in the external environment of the business. A brief PESTEL analysis of the company is given as follows; (Alanzi, 2018).
Political.
As the publishing sector could have a substantial influence on the state of mind of individuals about the communist ideology of the government, for that reason, the publishing sector is extremely supervised and guided by the Publicity Department of the Communist Celebration of China. It could be stated that the general political forces affecting CMP service are high. The federal government policies concerning the publishing sector are also increasing with the passage of time.
Cost-effective.
Economic forces impacting the publishing sector in basic and the CMP in particular includesthe rates of paper, the income level of customers, the inflation rate, and the general GDP development of the nation. All these forces integrate impact the demand for the publishing market.
Social and Demographical.
The consumer choices are shifting towards digital publishing rather than the standard was of publishing. In this regard, CMP needs to focus on digital publishing to meet the changing customer preferences.
Technological.
Technological forces affecting the CMP include the technological improvement in the reading strategies and so on. Improvement of science and technology along with the rise of digital publishing could reduce the need for the CMP products, if particular actions would not be taken quickly.
Environmental.
Environmental forces impacting Classic Pen Co Absorption Costing Method Case Study Help includes the concerns of environmental neighborhoods over the usage of paper in publishing books. The paper used in the books while publishing is needed to be disposable and the ink used while publishing needs to not be hazardous for the environment.
Legal.
Legal policies for the publishing sector at whole are high. Publishing Regulation 1997 needs the publishers to be authorized initially by the Federal government to be gone into in the publishing market.
Industry Analysis (Porter's Five Forces Design).
Porter's Five Forces Design could be used to evaluate the beauty of the publishing industry China. A quick analysis of the Porter's 5 Forces is offered as follows;.
Threat of New Entrants.
Risks of brand-new entrants in the Chinese Publishing Market is moderate. The prospective growth in the industry tends to bring in new entrants to the publishing industry. The existence of intense competitors and the requirement of big capital tends to demotivate brand-new entrants to enter in the market.
Danger of Replacement.
Risk of Alternative is high for the Chinese Publishing Market. The alternative items for the published documents is the files presented in the virtual libraries on specific sites. The altering consumer preferences towards digital learning increase the danger of replacement for the market.
Competitive Rivalry.
Competitive competition in the publishing market is high. The presence of a great deal of customers in the Chinese Publishing Market like CIP, PTP etc. tends to produce high competitive competition for CMP. Together with it, brand-new entrants are likewise entering into the market increasing the competitors for CMP.
Bargaining Power of Provider.
The significant suppliers of the Classic Pen Co Absorption Costing Method Case Study Solution include the providers of the paper for releasing documents. 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.
Bargaining 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 market saturation, the purchasers requires high quality files at competitive prices.
Rivals Analysis.
CMP runs in an extremely 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. Significant competitors of Classic Pen Co Absorption Costing Method Case Study Solution consist of;.
• Chemical Market Press (CIP).
• Posts and telecommunication Press (PTP).
Chemical Industry Press (CIP).
CIP acts as a risk for CMP as it might 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 current market situation.
Posts and telecommunication Press (PTP).
Another close competitor 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 terms of service scale. It is likewise one of the popular gamers in the publishing industry with an annual total incomes of RMB 550 million in 2010.
Alternatives
Alternative-1: Expand towards New Markets
Pros
• Lowering reliance over the Chinese markets.
• Increasing variety of Consumers
• Development chances.
• Preventing the effect of market saturation in the Chinese publishing industry.
Cons
• Use of possible resources in growth.
• Threat of failure in brand-new markets.
• Time consuming.
Alernative-2: Present Digital Publishing
Pros
• Sustaining consumer base.
• Approaching new markets.
• Easy to present utilizing current capabilities.
• Low risk of Failure.
• Low requirement for funds.
• Increased product portfolio provides high worth to clients.
Cons
• Competition in the market by CIP, who has prior focus on the digital publishing.
• Shift of focus from the core service sections to the new one can lead the business to lose need of its products in the market.
Suggestions
With the deep analysis of the internal and external environment of the business together with the industry analysis and the competitor analysis, Alternative 2 is suggested to CMP to attain its future advancement. As the preferences are shifting towards digital publishing and the company require an instant service to avoid the declining market development. Introduction of digital publishing might show to be an immediate solution with low quantity of risk for the company. The business could likewise think about the growth program after the success of its digital publishing program.
Execution
In order to present digital publishing in its item portfolio, the business must initially gathers the information related to the customer demand, the possible markets, the government regulations and the data connected to the competitors provided in the market. After that, the company needs to decide one possible section for its preliminary offering. It ought to gather research study that how it might differentiate its digital publishing from the existing rivals' products. The actions above the company must go for the preliminary offering. The business ought to go for the other markets if the preliminary offering proves a success. In this way the business would have the ability to implement its digital publishing program.
Conclusion
The growth of the publishing market is decreasing because 2008, revealing a danger to the company's long term presence, but the circumstance can be managed by considering an advancement strategy 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 risk of failure for entryway in the brand-new markets.
