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Dragon Soup And Earnings Management A Case Analysis

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Dragon Soup And Earnings Management A Case Study Solution and Analysis


Introduction

Dragon Soup And Earnings Management A Case Study Analysis is the biggest publishing business with a greatest market share in the China's book retail market. CMP supplies a number of services consisting of; collecting info, processing details and communication services. Significant business sectors of the company consist of; books, regulars, consultancy and distribution. The company has a vast product portfolio and its major products include books, periodicals, online media, exhibitions, research study reports etc. Dragon Soup And Earnings Management A Case Study Solution has actually ended up being a specialized information supplier and a large extensive Science and Technology publishing business through the integration of print media, audio-visual media and the network media.

Important Problems

CMP has invested its 60 years journey efficiently, being an effective publishing house, nevertheless, the altering macro market trends and forces bring certain challenges to the publishing market in basic and Dragon Soup And Earnings Management A Case Study Solution in specific. These factors consist of;

• Entrance of the brand-new publishing firms in the market.
• Decreasing development of the publishing market.
• Market saturation.
• Introduction of digital publishing methods
• Enhancement of science and technology.
Executive Summary
The transformation 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 situation? Do the long valuable experience, technical resources and the capabilities of the business could be used to strive for the future development unceasingly? How could the business sustain its long term competitive position in future?

Situational Analysis
Internal Analysis
SWOT Analysis
Strengths


Dragon Soup And Earnings Management A Case Study Analysis has specific strengths that can be made use of to decrease the threats, conquer the weakness and obtain the chances. Strengths of CMP are provided as follows;

• The long term experience of Dragon Soup And Earnings Management A Case Study Analysis in the publishing market i.e. 60 years permits the company to supply high quality items at a lower expense using its prior experiences.
• The technical resources and capabilities produced by its successful journey supply a competitive benefit to CMP.
• Large product portfolioof CMP helps it to diversify its risk and supply high worth to its clients.
• Strong financial position allows the business to think about a number of development chances with no fear of raising fund externally.

Weak points

Together with the strengths, the business has particular weaknesses which could increase restraints for the business in executing its development program. The weaknesses of Dragon Soup And Earnings Management A Case Study Analysis are provided as follows;

• Despite of being a science and technology publishing company, the business still has conventional ways ofpublishing which are not compatible with the growing technological shift.
• CMP highly relies over the Chinese markets for its development. It must propose certain growth strategies to prevent its reliance over the Chinese markets to accomplish long term development.
Porter's 5 Forces Analysis
Opportunities

The development of the publishing market is declining given that 2008, impacting Dragon Soup And Earnings Management A Case Study Analysis as well, however the growth might be revived by availing specific chances provided in the market. The market opportunities for CMP include;

• The company could also present Digital Publishing by using its long term technical experience and a strong customer recognition in the market.
• CMP could consider a development program through the expansion towards foreign markets in order to minimize its dependence over Chinese markets by utilizing its vast financial resources.

Risks

The changing macro trends in the market and increasing competition in the publishing industry has posed specific dangers to Dragon Soup And Earnings Management A Case Study Analysis consisting of;( Gurel, 2017).

• Intro of digital publishing i.e. virtual libraries could lead to decreasing market share of Dragon Soup And Earnings Management A Case Study Analysis due to the customer shift towards virtual libraries.
• The existence of large number of competitors in the publishing industry increase the danger for CMP to lose its competitive position in the market, as rivals can gain a strong customer base by using particular techniques like aggressive promo, quality products, and so on
• Entrance of new publishing firms in the industry together with existence of high competitors increases the hazard of losing the client base.

Financial Analysis.
Swot Analysis
The business has a rather competitive financial efficiency. Due to absence of information, the financial ratios of CMP could not be determined. However, the general monetary efficiency of the company might be evaluated by using the charts given up the case Appendices. It might be evaluated from the Appendix III that the annual overall revenues of CMP during the period 2000-2012 are growing at a high growth rate, showing that the yearly need of the products of Dragon Soup And Earnings Management A Case Study Help is growing and the company is rather efficient in bring in a a great deal of clients at a potential rate.

In addition to it, the 2nd graph which reveals the annual growth in the Dragon Soup And Earnings Management A Case Study Solution total possessions, reveals that the company is rather effective in including worth to its possessions through its incomes. The development in properties reveals that the overall value of the company is also increasing with increasing the overall revenues. (Unknown, 2013).

Another monetary analysis of the company utilizing the provided data might be the analysis regarding the distribution of overall earnings of the business. Huge part of the earnings of CMP originates from the sales of its released books i.e. 64% as displayed in the Case Appendix V. The business might move towards other company segments with a potential growth to attain its future advancement goal.

PESTEL Analysis

PESTEL analysis might be conducted to find out the numerous external forces impacting the efficiency of the company and the recent trends in the external environment of the business. A short PESTEL analysis of the company is offered as follows; (Alanzi, 2018).

Political.

As the publishing sector could have a considerable influence on the frame of mind of the people about the communist ideology of the federal government, therefore, the publishing sector is highly supervised and directed by the Promotion Department of the Communist Party of China. Therefore, it might be said that the total political forces affecting Dragon Soup And Earnings Management A Case Study Help organisation are high. The government policies relating to the publishing sector are likewise increasing with the passage of time.

Economical.

Financial forces impacting the publishing sector in general and the Dragon Soup And Earnings Management A Case Study Help in particular includesthe prices of paper, the earnings level of consumers, the inflation rate, and the general GDP growth of the nation. All these forces combine impact the need for the publishing market. Together with it, the financial policies connected to the import of books affect the general business at CPM. However, China's financial conditions are rather beneficial for CMP with high GDP development and consumer income level.

Social and Demographical.

Social and demographical forces include the population development, the consumer's preferences towards checking out useful materials etc. China has the highest population in the world with a high population growth, revealing the increasing variety of customers of the Dragon Soup And Earnings Management A Case Study Solution. Nevertheless, the customer preferences are shifting towards digital publishing rather than the traditional was of publishing. In this regard, CMP should concentrate on digital publishing to fulfill the changing consumer choices.

Technological.

Technological forces affecting the CMP consist of the technological development in the reading methods etc. Improvement of science and innovation in addition to the increase of digital publishing could reduce the demand for the CMP products, if specific actions would not be taken soon.

Environmental.
Vrio Analysis
Environmental forces impacting Dragon Soup And Earnings Management A Case Study Help includes the issues of ecological neighborhoods over the use of paper in publishing books. The paper used in the books while publishing is needed to be disposable and the ink utilized while publishing should not be harmful for the environment.

Legal.

Legal guidelines for the publishing sector at whole are high. Publishing Regulation 1997 requires the publishers to be approved initially by the Federal government to be gone into in the publishing market.

Industry Analysis (Porter's 5 Forces Design).

Porter's Five Forces Model could be utilized to examine the attractiveness of the publishing industry China. A short analysis of the Porter's Five Forces is offered as follows;.

Hazard of New Entrants.

Dangers of brand-new entrants in the Chinese Publishing Industry is moderate. The possible development in the industry tends to attract new entrants to the publishing industry. Nevertheless, the existence of extreme competition and the requirement of huge capital tends to demotivate new entrants to enter in the market.

Hazard of Replacement.

Danger of Replacement is high for the Chinese Publishing Market. The alternative items for the released documents is the files provided in the digital libraries on certain websites. The altering customer choices towards digital learning increase the danger of alternative for the market.

Competitive Rivalry.

Competitive competition in the publishing market is high. The existence 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, new entrants are also participating in the market increasing the competitors for CMP.

Bargaining Power of Supplier.

The significant providers of the Dragon Soup And Earnings Management A Case Study Help consist of the suppliers of the paper for releasing files. As CMP is the biggest publisher in the Chinese Publishing Market, therefore the total bargaining power of provider for CMP is low.

Bargaining Power of Purchaser.

Bargaining power of purchaser in the publishing industry is high. Due to the presence of a a great deal of publishers in the Chinese market and the market saturation, the buyers needs high quality documents at competitive rates.

Rivals Analysis.

CMP runs in an extremely competitive market with the existence of large number of rivals. However, the business has a competitive position in the market with the highest market share in the Chinese publishing market. Major competitors of Dragon Soup And Earnings Management A Case Study Help consist of;.

• Chemical Industry Press (CIP).
• Posts and telecommunication Press (PTP).

Chemical Market Press (CIP).

CIPis among the close competitors of CMP. Established in the exact same period, CIP publishes comparable type of books. For a big period, CIP held the largest market share, and still ranks second and third in numerous market sections, with a significant focus on academic publications. CIP functions 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 Dragon Soup And Earnings Management A Case Study Analysis quickly in the existing market scenario.

Posts and telecommunication Press (PTP).

Another close rival of CMP is PTP. It was also established in the same duration as CMP and CIP. It ranks 6th in the state-owned publishers in terms of organisation scale. It is likewise one of the prominent gamers in the publishing industry with a yearly total incomes of RMB 550 million in 2010.

Alternatives

Alternative-1: Expand towards New Markets

Pros

• Minimizing reliance over the Chinese markets.
• Increasing number of Customers
• Growth chances.
• Avoiding the effect of market saturation in the Chinese publishing industry.

Cons
Recommendations
• Usage of potential resources in expansion.
• Danger of failure in new markets.
• Time consuming.

Alernative-2: Introduce Digital Publishing

Pros

• Sustaining consumer base.
• Approaching brand-new markets.
• Easy to introduce utilizing existing abilities.
• Low danger of Failure.
• Low requirement for funds.
• Increased product portfolio offers high value to customers.

Cons

• Competitors in the market by CIP, who has prior concentrate on the digital publishing.
• Shift of focus from the core organisation sections to the new one can lead the company to lose demand of its items in the market.

Recommendations

As the choices are moving towards digital publishing and the business need an immediate option to avoid the decreasing market development. The business might also think about the growth program after the success of its digital publishing program.

Application

In order to present digital publishing in its item portfolio, the business ought to first collects the data related to the consumer demand, the possible markets, the federal government regulations and the data related to the competitors provided in the market. If the initial offering shows a success, the business needs to go for the other markets. In this method the company would be able to execute its digital publishing program.

Conclusion

The development of the publishing market is decreasing because 2008, showing a threat to the business's long term presence, however the situation can be managed by thinking about a development plan in the future. The business could consider introducing digital publishingin its existing market to execute its development program at immediate basis and to avoid the danger of failure for entrance in the new markets.

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