Dragon Soup And Earnings Management A Case Study Solution and Analysis
Intro
Dragon Soup And Earnings Management A Case Study Analysis 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 information, processing information and communication services. Significant service sectors of the business include; books, regulars, consultancy and distribution. The company has a huge product portfolio and its significant products consist of books, regulars, online media, exhibits, research reports etc. Dragon Soup And Earnings Management A Case Study Solution has ended up being a specialized info supplier and a large comprehensive Science and Innovation publishing business through the combination of print media, audio-visual media and the network media.
Crucial Problems
Although, Dragon Soup And Earnings Management A Case Study Help has actually spent its 60 years journey efficiently, being a successful publishing home, nevertheless, the altering macro market trends and forces bring certain challenges to the publishing industry in basic and CMP in specific. These factors include;
• Entryway of the brand-new publishing companies in the market.
• Decreasing development of the publishing market.
• Market saturation.
• Intro of digital publishing strategies
• Improvement of science and innovation.
The improvement of the macro markets have raised numerous 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 capabilities of the business could be utilized to strive for the future advancement 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 Solution has certain strengths that can be utilized to minimize the hazards, get rid of the weakness and obtain the opportunities. Strengths of CMP are provided as follows;
• The long term experience of Dragon Soup And Earnings Management A Case Study Analysis in the publishing industry i.e. 60 years permits the company to offer high quality products at a lower cost utilizing its previous experiences.
• The technical resources and capabilities created by its successful journey offer a competitive advantage to CMP.
• Large item portfolioof CMP assists it to diversify its danger and provide high value to its customers.
• Strong financial position allows the business 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 particular weak points which could increase restrictions 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 innovation publishing firm, the business still has standard methods ofpublishing which are not compatible with the growing technological shift.
• CMP extremely relies over the Chinese markets for its development. It should propose particular expansion strategies to prevent its reliance over the Chinese markets to accomplish long term growth.
Opportunities
Although, the growth of the publishing industry is declining because 2008, impacting Dragon Soup And Earnings Management A Case Study Help also, however the development might be revived by availing specific opportunities presented in the market. The market opportunities for CMP consist of;
• The business might likewise present Digital Publishing by utilizing its long term technical experience and a strong consumer recognition in the market.
• CMP could consider an advancement program through the growth towards foreign markets in order to minimize its dependence over Chinese markets by utilizing its vast financial resources.
Dangers
The changing macro trends in the market and increasing competition in the publishing market has postured certain risks to Dragon Soup And Earnings Management A Case Study Analysis including;( Gurel, 2017).
• Intro of digital publishing i.e. digital libraries might lead to decreasing market share of Dragon Soup And Earnings Management A Case Study Solution due to the consumer shift towards digital libraries.
• The presence of a great deal of competitors in the publishing market increase the risk for CMP to lose its competitive position in the market, as competitors can acquire a strong customer base by using specific techniques like aggressive promotion, quality products, and so on
• Entrance of brand-new publishing companies in the market together with existence of high competition increases the hazard of losing the customer base.
Monetary Analysis.
The company has a quite competitive monetary performance. Due to absence of data, the financial ratios of CMP could not be determined. Nevertheless, the general monetary performance of the company could be evaluated by utilizing the charts given up the case Appendices. It might be analyzed from the Appendix III that the yearly total earnings of CMP during the period 2000-2012 are growing at a high development rate, revealing that the yearly demand of the products of Dragon Soup And Earnings Management A Case Study Help is growing and the business is rather effective in attracting a a great deal of customers at a possible price.
Along with it, the second graph which reveals the annual development in the Dragon Soup And Earnings Management A Case Study Help overall assets, reveals that the business is rather effective in adding value to its assets through its earnings. The growth in possessions shows that the overall worth of the company is likewise increasing with increasing the total revenues. (Unknown, 2013).
Another monetary analysis of the company using the provided data could be the analysis concerning the circulation of overall incomes of the business. Major part of the incomes of CMP originates from the sales of its released books i.e. 64% as shown in the Case Appendix V. The company could move towards other service sectors with a potential growth to attain its future development goal.
PESTEL Analysis
PESTEL analysis might be conducted to discover the various external forces impacting the performance of the company and the current patterns in the external environment of the business. A brief PESTEL analysis of the company is offered as follows; (Alanzi, 2018).
Political.
As the publishing sector could have a substantial influence on the state of mind of the people about the communist ideology of the government, therefore, the publishing sector is extremely monitored and guided by the Publicity Department of the Communist Party of China. It might be stated that the total political forces affecting CMP organisation are high. The federal government policies relating to the publishing sector are likewise increasing with the passage of time.
Economical.
Economic forces affecting the publishing sector in general and the Dragon Soup And Earnings Management A Case Study Solution in particular includesthe costs of paper, the earnings level of customers, the inflation rate, and the overall GDP development of the nation. All these forces integrate impact the demand for the publishing market. Along with it, the economic policies connected to the import of books affect the total business at CPM. Nevertheless, China's economic conditions are rather beneficial for CMP with high GDP growth and consumer income level.
Social and Demographical.
Social and demographical forces consist of the population development, the consumer's choices towards reading helpful materials etc. China has the highest population worldwide with a high population growth, revealing the increasing variety of customers of the Dragon Soup And Earnings Management A Case Study Solution. The customer preferences are shifting towards digital publishing rather than the conventional was of publishing. In this regard, CMP should focus on digital publishing to fulfill the altering customer choices.
Technological.
Technological forces affecting the CMP include the technological improvement in the reading techniques etc. Enhancement of science and innovation in addition to the increase of digital publishing might minimize the need for the CMP items, if certain actions would not be taken soon.
Environmental.
Ecological forces affecting Dragon Soup And Earnings Management A Case Study Help includes the concerns of environmental communities over the use 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 needs to not be hazardous for the environment.
Legal.
Legal guidelines for the publishing sector at whole are high. Publishing Ordinance 1997 needs the publishers to be authorized initially by the Government to be entered in the publishing market.
Market Analysis (Porter's Five Forces Design).
Porter's 5 Forces Model could be utilized to examine the beauty of the publishing industry China. A brief analysis of the Porter's Five Forces is offered as follows;.
Risk of New Entrants.
Dangers of new entrants in the Chinese Publishing Industry is moderate. The possible development in the industry tends to draw in new entrants to the publishing market. The existence of intense competition and the requirement of big capital tends to demotivate new entrants to enter in the market.
Threat of Substitution.
Risk of Substitution is high for the Chinese Publishing Market. The replacement items for the published files is the files provided in the virtual libraries on particular websites. The changing customer preferences towards digital learning increase the hazard of substitution for the market.
Competitive Competition.
Competitive competition in the publishing industry is high. The existence of a great deal of consumers in the Chinese Publishing Industry like CIP, PTP etc. tends to produce high competitive competition for CMP. In addition to it, new entrants are also participating in the market increasing the competitors for CMP.
Bargaining Power of Provider.
The significant providers of the Dragon Soup And Earnings Management A Case Study Help include the suppliers of the paper for releasing documents. As CMP is the largest publisher in the Chinese Publishing Market, therefore the general bargaining power of supplier for CMP is low.
Bargaining Power of Buyer.
Haggling power of purchaser in the publishing market is high. Due to the presence of a a great deal of publishers in the Chinese market and the market saturation, the buyers requires high quality documents at competitive prices.
Rivals Analysis.
CMP runs in a highly competitive industry 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. Significant competitors of Dragon Soup And Earnings Management A Case Study Analysis include;.
• Chemical Industry 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 could wean the market share of CMP easily in the existing market situation.
Posts and telecommunication Press (PTP).
Another close competitor of CMP is PTP. It was likewise established in the same duration as CMP and CIP. It ranks sixth in the state-owned publishers in regards to service scale. It is also among the popular gamers in the publishing market with an annual overall earnings of RMB 550 million in 2010.
Alternatives
Alternative-1: Expand towards New Markets
Pros
• Reducing reliance over the Chinese markets.
• Increasing number of Clients
• Growth chances.
• Preventing the impact of market saturation in the Chinese publishing industry.
Cons
• Usage 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 current capabilities.
• Low danger of Failure.
• Low requirement for funds.
• Increased product portfolio supplies high worth to consumers.
Cons
• Competitors in the market by CIP, who has prior focus on the digital publishing.
• Shift of focus from the core business sections to the new one can lead the company to lose need of its items in the market.
Suggestions
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 recommended to CMP to accomplish its future development. As the preferences are shifting towards digital publishing and the company require an instant solution to avoid the decreasing industry growth. Therefore, introduction of digital publishing could show to be an immediate solution with low amount of threat for the business. Nevertheless, the business might likewise think about the expansion program after the success of its digital publishing program.
Implementation
In order to present digital publishing in its item portfolio, the company must initially collects the data related to the consumer need, the possible markets, the government guidelines and the data related to the rivals provided in the market. If the preliminary offering proves a success, the company must go for the other markets. In this way the business would be able to execute its digital publishing program.
Conclusion
The growth of the publishing industry is decreasing given that 2008, showing a danger to the business's long term existence, but the circumstance can be controlled by thinking about an advancement plan in the future. The business could consider introducing digital publishingin its existing market to implement its development program at instant basis and to avoid the risk of failure for entryway in the brand-new markets.
