Cost Accounting For Astel Computers Case Study Solution and Analysis
Introduction
Cost Accounting For Astel Computers Case Study Solution is the biggest publishing company with a highest market share in the China's book retail market. CMP supplies a variety of services consisting of; collecting information, processing details and interaction services. Major business segments of the company include; books, regulars, consultancy and distribution. The business has a huge item portfolio and its significant products consist of books, periodicals, online media, exhibitions, research study reports etc. Cost Accounting For Astel Computers Case Study Solution has become a specialized details service provider and a large comprehensive Science and Technology publishing business through the integration of print media, audio-visual media and the network media.
Crucial Issues
Although, Cost Accounting For Astel Computers Case Study Analysis has actually spent its 60 years journey efficiently, being an effective publishing house, nevertheless, the altering macro market patterns and forces bring particular obstacles to the publishing market in basic and CMP in particular. These factors consist of;
• Entryway of the brand-new publishing firms in the industry.
• Decreasing 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 questions to the management at CPM that what could be the future of CMP in this scenario? Do the long valuable experience, technical resources and the abilities of the business 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
Cost Accounting For Astel Computers Case Study Help has particular strengths that can be used to lower the dangers, overcome the weak point and obtain the opportunities. Strengths of CMP are provided as follows;
• The long term experience of Cost Accounting For Astel Computers Case Study Solution in the publishing industry i.e. 60 years allows the business to provide high quality products at a lower cost using its prior experiences.
• The technical resources and capabilities produced by its effective journey offer a competitive advantage to CMP.
• Vast item portfolioof CMP helps it to diversify its risk and supply high worth to its customers.
• Strong monetary position permits the company to think about a number of advancement opportunities without any fear of raising fund externally.
Weak points
In addition to the strengths, the company has specific weak points which could increase restrictions for the business in executing its development program. The weak points of Cost Accounting For Astel Computers Case Study Solution are given as follows;
• Despite of being a science and innovation publishing firm, the business still has conventional methods 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 strategies to prevent its reliance over the Chinese markets to achieve long term development.
Opportunities
Although, the growth of the publishing industry is declining given that 2008, affecting Cost Accounting For Astel Computers Case Study Solution as well, but the development might be revived by availing specific opportunities presented in the market. The market chances 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 think about an advancement program through the expansion towards foreign markets in order to reduce its dependence over Chinese markets by utilizing its vast financial resources.
Dangers
The altering macro patterns in the market and increasing competition in the publishing market has actually postured specific hazards to Cost Accounting For Astel Computers Case Study Help including;( Gurel, 2017).
• Intro of digital publishing i.e. digital libraries might lead to decreasing market share of Cost Accounting For Astel Computers Case Study Solution due to the customer shift towards digital libraries.
• The existence of large number of competitors in the publishing industry increase the hazard for CMP to lose its competitive position in the market, as rivals can gain a strong customer base by utilizing specific strategies like aggressive promo, quality products, and so on
• Entryway of brand-new publishing firms in the industry along with existence of high competition increases the threat of losing the consumer base.
Financial Analysis.
The company has a rather competitive monetary performance. Due to absence of data, the monetary ratios of CMP could not be calculated. However, the overall financial performance of the company might be evaluated by using the charts given in the case Appendices. It could be evaluated from the Appendix III that the yearly total incomes of CMP throughout the period 2000-2012 are growing at a high growth rate, revealing that the annual need of the products of Cost Accounting For Astel Computers Case Study Analysis is growing and the business is rather efficient in drawing in a large number of clients at a possible price.
Together with it, the 2nd chart which reveals the annual growth in the Cost Accounting For Astel Computers Case Study Analysis overall properties, shows that the business is quite efficient in including worth to its possessions through its profits. The development in possessions shows that the total value of the company is likewise increasing with increasing the total incomes. (Unknown, 2013).
Another financial analysis of the business utilizing the provided data could be the analysis regarding the circulation of total profits of the company. Huge 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 business might move towards other service sections with a prospective growth to accomplish its future development objective.
PESTEL Analysis
PESTEL analysis could be conducted to learn the numerous external forces affecting the efficiency of the company and the recent trends in the external environment of the company. A short PESTEL analysis of the business is provided as follows; (Alanzi, 2018).
Political.
As the publishing sector might have a considerable influence on the state of mind of the people about the communist ideology of the government, therefore, the publishing sector is extremely supervised and assisted by the Promotion Department of the Communist Party of China. It could be stated that the total political forces impacting CMP business are high. The government policies relating to the publishing sector are also increasing with the passage of time.
Cost-effective.
Economic forces impacting the publishing sector in general and the Cost Accounting For Astel Computers Case Study Solution in particular includesthe prices of paper, the income level of customers, the inflation rate, and the general GDP growth of the nation. All these forces integrate impact the need for the publishing market. Together with it, the economic policies connected to the import of books impact the overall service at CPM. Nevertheless, China's economic conditions are rather favorable for CMP with high GDP development 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 meet the altering customer preferences.
Technological.
Technological forces affecting the CMP consist of the technological advancement in the reading methods and so on. Enhancement of science and technology in addition to the rise of digital publishing might reduce the need for the CMP items, if certain actions would not be taken soon.
Environmental.
Ecological forces impacting Cost Accounting For Astel Computers Case Study Solution includes the issues of environmental neighborhoods over the usage of paper in publishing books. The paper used in the books while publishing is needed to be non reusable and the ink used 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 authorized first by the Federal government to be gone into in the publishing market.
Industry Analysis (Porter's 5 Forces Model).
Porter's 5 Forces Model might be used to analyze the beauty of the publishing market China. A short analysis of the Porter's 5 Forces is offered as follows;.
Danger of New Entrants.
Threats of brand-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. The existence of extreme competitors and the requirement of substantial capital tends to demotivate brand-new entrants to go into in the market.
Danger of Replacement.
Hazard of Replacement is high for the Chinese Publishing Market. The alternative products for the released files is the files provided in the virtual libraries on specific sites. The changing customer preferences towards digital knowing increase the threat of alternative for the market.
Competitive Competition.
Competitive competition in the publishing industry is high. The existence of a great deal of customers in the Chinese Publishing Market like CIP, PTP and so on tends to produce high competitive competition for CMP. Along with it, new entrants are likewise participating in the market increasing the competitors for CMP.
Bargaining Power of Supplier.
The significant providers of the Cost Accounting For Astel Computers Case Study Solution include the suppliers of the paper for releasing documents. As CMP is the biggest publisher in the Chinese Publishing Market, therefore the overall bargaining power of supplier for CMP is low.
Bargaining Power of Purchaser.
Bargaining power of purchaser in the publishing industry is high. Due to the presence of a large number of publishers in the Chinese market and the market saturation, the purchasers requires high quality files at competitive costs.
Competitors Analysis.
CMP operates in an extremely competitive market with the presence of large number of rivals. Nevertheless, the business has a competitive position in the market with the greatest market share in the Chinese publishing market. Significant competitors of Cost Accounting For Astel Computers Case Study Analysis include;.
• Chemical Market Press (CIP).
• Posts and telecommunication Press (PTP).
Chemical Market 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 quickly in the present market scenario.
Posts and telecommunication Press (PTP).
Another close competitor of CMP is PTP. It was likewise established in the very same period as CMP and CIP. It ranks 6th in the state-owned publishers in regards to company scale. It is also one of the popular players in the publishing industry with a yearly overall earnings of RMB 550 million in 2010.
Alternatives
Alternative-1: Expand towards New Markets
Pros
• Lowering dependence over the Chinese markets.
• Increasing variety of Consumers
• Development opportunities.
• Preventing the impact of market saturation in the Chinese publishing market.
Cons
• Use of potential resources in growth.
• Threat of failure in brand-new markets.
• Time consuming.
Alernative-2: Introduce Digital Publishing
Pros
• Sustaining consumer base.
• Approaching new markets.
• Easy to introduce utilizing existing capabilities.
• Low risk of Failure.
• Low requirement for funds.
• Increased product portfolio offers high worth to clients.
Cons
• Competitors in the market by CIP, who has prior focus on the digital publishing.
• Shift of focus from the core organisation segments to the new one can lead the business to lose need of its products in the market.
Recommendations
With the deep analysis of the internal and external environment of the business together with the market analysis and the rival analysis, Alternative 2 is advised to CMP to achieve its future advancement. As the preferences are moving towards digital publishing and the company need an immediate option to prevent the decreasing market development. Intro of digital publishing might show to be an immediate solution with low quantity of threat for the company. The business might 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 first gathers the data related to the consumer need, the potential markets, the federal government regulations and the data related to the rivals provided in the market. If the initial offering shows a success, the business should go for the other markets. In this method the company would be able to implement its digital publishing program.
Conclusion
Although, the development of the publishing market is declining since 2008, showing a risk to the company's long term existence, but the scenario can be controlled by considering a development plan in the future. The business could consider presenting digital publishingin its existing market to implement its development program at instant basis and to prevent the threat of failure for entryway in the brand-new markets.
