Dividend Payout Decision Case Study Solution and Analysis
Dividend Payout Decision Case Study Solution is the biggest publishing business with a highest market share in the China's book retail market. CMP offers a number of services including; gathering info, processing details and interaction services. Major organisation segments of the company include; books, regulars, consultancy and circulation. The business has a huge item portfolio and its significant items consist of books, periodicals, online media, exhibits, research reports and so on. Dividend Payout Decision Case Study Analysis has ended up being a specialized information service provider and a big extensive Science and Technology publishing business through the combination of print media, audio-visual media and the network media.
CMP has actually spent its 60 years journey efficiently, being a successful publishing home, nevertheless, the changing macro market patterns and forces bring specific obstacles to the publishing market in basic and Dividend Payout Decision Case Study Analysis in specific. These factors consist of;
• Entrance of the new publishing firms in the industry.
• Decreasing development of the publishing market.
• Market saturation.
• Introduction of digital publishing techniques
• Enhancement of science and technology.
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 capabilities of the business could be utilized to pursue the future development unceasingly? How could the business sustain its long term competitive position in future?
Dividend Payout Decision Case Study Solution has specific strengths that can be used to minimize the dangers, get rid of the weak point and obtain the chances. Strengths of CMP are given as follows;
• The long term experience of Dividend Payout Decision Case Study Analysis in the publishing industry i.e. 60 years permits the business to provide high quality products at a lower expense using its previous experiences.
• The technical resources and capabilities produced by its effective journey supply a competitive advantage to CMP.
• Large item portfolioof CMP helps it to diversify its risk and offer high value to its clients.
• Strong monetary position allows the business to think about a number of development opportunities with no fear of raising fund externally.
Together with the strengths, the company has specific weaknesses which could increase constraints for the company in implementing its development program. The weaknesses of Dividend Payout Decision Case Study Help are offered as follows;
• Despite of being a science and innovation 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 development. It should propose certain growth strategies to avoid its dependence over the Chinese markets to attain long term growth.
Although, the development of the publishing market is decreasing because 2008, affecting Dividend Payout Decision Case Study Help as well, however the development could be restored by availing specific chances provided in the market. The marketplace opportunities for CMP consist of;
• The company could likewise present Digital Publishing by using its long term technical experience and a strong client acknowledgment in the market.
• CMP might think about an advancement program through the growth towards foreign markets in order to decrease its dependence over Chinese markets by utilizing its large financial resources.
The altering macro trends in the market and increasing competitors in the publishing industry has actually positioned certain dangers to Dividend Payout Decision Case Study Analysis including;( Gurel, 2017).
• Introduction of digital publishing i.e. digital libraries might lead to declining market share of Dividend Payout Decision Case Study Solution due to the consumer shift towards digital libraries.
• The existence of large number of rivals 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 utilizing certain methods like aggressive promotion, quality items, and so on
• Entryway of new publishing companies in the industry in addition to presence of high competitors increases the risk of losing the consumer base.
Due to lack of data, the financial ratios of CMP could not be calculated. It could be evaluated from the Appendix III that the yearly total earnings of Dividend Payout Decision Case Study Analysis throughout the duration 2000-2012 are growing at a high growth rate, showing that the annual need of the products of CMP is growing and the business is rather effective in drawing in a large number of consumers at a prospective price.
Along with it, the 2nd graph which shows the yearly growth in the Dividend Payout Decision Case Study Analysis overall properties, reveals that the business is rather effective in including worth to its possessions through its profits. The growth in possessions shows that the overall worth of the firm is likewise increasing with increasing the total incomes. (Unknown, 2013).
Another monetary analysis of the business using the offered data could be the analysis regarding the distribution of total earnings of the company. Huge part of the profits of CMP originates from the sales of its released books i.e. 64% as displayed in the Case Appendix V. The company could move towards other business segments with a prospective development to achieve its future development objective.
PESTEL analysis might be performed to find out the various external forces affecting the efficiency of the company and the recent trends in the external environment of the company. A quick PESTEL analysis of the business is offered as follows; (Alanzi, 2018).
As the publishing sector could have a substantial impact on the mindset of individuals about the communist ideology of the federal government, therefore, the publishing sector is extremely monitored and assisted by the Promotion Department of the Communist Party of China. Therefore, it could be said that the general political forces affecting Dividend Payout Decision Case Study Analysis service are high. The government policies concerning the publishing sector are also increasing with the passage of time.
Economic forces affecting the publishing sector in general and the Dividend Payout Decision Case Study Help in particular includesthe prices of paper, the income level of customers, the inflation rate, and the general GDP development of the country. All these forces integrate effect the demand for the publishing market. Together with it, the economic policies connected to the import of books impact the overall business at CPM. China's financial conditions are rather favorable for CMP with high GDP growth and consumer income level.
Social and Demographical.
Social and demographical forces include the population growth, the customer's preferences towards checking out helpful materials etc. China has the greatest population worldwide with a high population growth, showing the increasing number of customers of the Dividend Payout Decision Case Study Help. Nevertheless, the consumer preferences are shifting towards digital publishing instead of the traditional was of publishing. In this regard, CMP should focus on digital publishing to meet the altering customer preferences.
Technological forces impacting the CMP include the technological improvement in the reading methods etc. Improvement of science and innovation in addition to the increase of digital publishing could minimize the need for the CMP products, if particular actions would not be taken soon.
Ecological forces affecting Dividend Payout Decision Case Study Solution consists of the issues of ecological neighborhoods over the use of paper in publishing books. The paper utilized in the books while publishing is required to be disposable and the ink utilized while publishing should not be harmful for the environment.
Legal guidelines for the publishing sector at whole are high. Publishing Ordinance 1997 requires the publishers to be approved initially by the Government to be entered in the publishing market.
Market Analysis (Porter's Five Forces Model).
Porter's Five Forces Model could be utilized to evaluate the attractiveness of the publishing market China. A quick analysis of the Porter's Five Forces is provided as follows;.
Risk of New Entrants.
Hazards of new entrants in the Chinese Publishing Industry is moderate. The potential development in the market tends to bring in brand-new entrants to the publishing industry. However, the existence of extreme competition and the requirement of substantial capital tends to demotivate brand-new entrants to enter in the marketplace.
Threat of Alternative.
Threat of Alternative is high for the Chinese Publishing Market. The alternative items for the released documents is the documents presented in the virtual libraries on particular sites. The altering consumer preferences towards digital knowing increase the risk of replacement for the market.
Competitive rivalry in the publishing industry is high. The existence of large number of consumers in the Chinese Publishing Market like CIP, PTP etc. tends to produce high competitive rivalry for CMP. In addition to it, brand-new entrants are also entering into the marketplace increasing the competition for CMP.
Bargaining Power of Supplier.
The significant providers of the Dividend Payout Decision Case Study Help include 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 supplier for CMP is low.
Bargaining Power of Purchaser.
Negotiating power of buyer in the publishing market is high. Due to the presence of a large number of publishers in the Chinese market and the marketplace saturation, the buyers requires high quality documents at competitive prices.
CMP runs in a highly competitive market with the existence of a great deal of competitors. Nevertheless, the business has a competitive position in the market with the highest market share in the Chinese publishing market. Significant rivals of Dividend Payout Decision Case Study Analysis include;.
• Chemical Industry Press (CIP).
• Posts and telecommunication Press (PTP).
Chemical Market Press (CIP).
CIPis one of the close rivals of CMP. Established in the same duration, CIP releases comparable type of books. For a large time period, CIP held the largest market share, and still ranks 2nd and third in different market sectors, with a major 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 might wean the market share of Dividend Payout Decision Case Study Help easily in the existing market scenario.
Posts and telecommunication Press (PTP).
Another close competitor of CMP is PTP. It was also established in the exact same period as CMP and CIP. It ranks 6th in the state-owned publishers in regards to company scale. It is likewise among the popular gamers in the publishing industry with a yearly total earnings of RMB 550 million in 2010.
Alternative-1: Expand towards New Markets
• Lowering dependence over the Chinese markets.
• Increasing variety of Consumers
• Growth opportunities.
• Avoiding the effect of market saturation in the Chinese publishing industry.
• Usage of possible resources in expansion.
• Threat of failure in new markets.
• Time consuming.
Alernative-2: Introduce Digital Publishing
• Sustaining consumer base.
• Approaching new markets.
• Easy to introduce utilizing present abilities.
• Low risk of Failure.
• Low requirement for funds.
• Increased product portfolio offers high worth to customers.
• Competition in the market by CIP, who has prior focus on the digital publishing.
• Shift of focus from the core organisation sectors to the brand-new one can lead the company to lose demand of its products in the market.
With the deep analysis of the external and internal environment of the business together with the market analysis and the competitor analysis, Alternative 2 is suggested to CMP to attain its future advancement. As the preferences are moving towards digital publishing and the company require an instant option to prevent the declining industry growth. Therefore, intro of digital publishing could prove to be an instant solution with low quantity of risk for the business. However, the business could also think about the growth program after the success of its digital publishing program.
In order to present digital publishing in its product portfolio, the business needs to initially collects the information related to the customer demand, the possible markets, the government regulations and the data related to the rivals provided in the market. If the initial offering proves a success, the company ought to go for the other markets. In this method the company would be able to implement its digital publishing program.
Although, the development of the publishing market is declining considering that 2008, showing a hazard to the company's long term existence, however the situation can be managed by considering a development plan 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 risk of failure for entrance in the new markets.