Dragon Soup And Earnings Management B Case Study Solution and Analysis
Intro
Dragon Soup And Earnings Management B Case Study Solution is the largest publishing business with a highest market share in the China's book retail market. CMP has become a specialized details company and a large detailed Science and Technology publishing business through the combination of print media, audio-visual media and the network media.
Important Problems
Although, Dragon Soup And Earnings Management B Case Study Analysis has spent its 60 years journey efficiently, being an effective publishing house, however, the changing macro market trends and forces bring particular difficulties to the publishing market in general and CMP in particular. These elements consist of;
• Entrance of the brand-new publishing firms in the industry.
• Declining growth of the publishing market.
• Market saturation.
• Intro of digital publishing methods
• Enhancement of science and technology.
The change 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 valuable experience, technical resources and the capabilities of the business could be utilized to pursue the future development unceasingly? How could the company sustain its long term competitive position in future?
Situational Analysis
Internal Analysis
SWOT Analysis
Strengths
Dragon Soup And Earnings Management B Case Study Solution has certain strengths that can be used to minimize the threats, get rid of the weak point and get the opportunities. Strengths of CMP are offered as follows;
• The long term experience of Dragon Soup And Earnings Management B Case Study Solution in the publishing industry i.e. 60 years allows the company to offer high quality products at a lower expense utilizing its previous experiences.
• The technical resources and abilities produced by its successful journey supply a competitive benefit to CMP.
• Huge product portfolioof CMP assists it to diversify its threat and supply high value to its customers.
• Strong monetary position permits the company to think about a number of advancement opportunities with no worry of raising fund externally.
Weak points
Along with the strengths, the business has certain weaknesses which could increase restrictions for the company in executing its advancement program. The weak points of Dragon Soup And Earnings Management B Case Study Analysis are provided as follows;
• Despite of being a science and technology publishing company, the company still has traditional ways ofpublishing which are not suitable with the growing technological shift.
• CMP highly relies over the Chinese markets for its growth. It ought to propose certain expansion strategies to prevent its dependence over the Chinese markets to accomplish long term development.
Opportunities
The development of the publishing industry is decreasing because 2008, impacting Dragon Soup And Earnings Management B Case Study Solution as well, however the development could be restored by availing certain opportunities provided 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 acknowledgment in the market.
• CMP might consider an advancement program through the expansion towards foreign markets in order to decrease its reliance over Chinese markets by using its huge funds.
Hazards
The altering macro patterns in the market and increasing competitors in the publishing market has posed particular dangers to Dragon Soup And Earnings Management B Case Study Help consisting of;( Gurel, 2017).
• Introduction of digital publishing i.e. virtual libraries might result in declining market share of Dragon Soup And Earnings Management B Case Study Analysis due to the consumer shift towards digital libraries.
• The presence of large number of rivals in the publishing market increase the danger for CMP to lose its competitive position in the market, as competitors can acquire a strong customer base by utilizing specific methods like aggressive promotion, quality items, and so on
• Entrance of brand-new publishing firms in the market together with presence of high competitors increases the hazard of losing the consumer base.
Financial Analysis.
The company has a quite competitive monetary efficiency. Due to absence of information, the financial ratios of CMP could not be determined. The general financial performance of the company could be evaluated by using the charts provided in the case Appendices. It could be analyzed from the Appendix III that the annual overall revenues of CMP throughout the duration 2000-2012 are growing at a high development rate, revealing that the annual demand of the products of Dragon Soup And Earnings Management B Case Study Analysis is growing and the business is rather efficient in drawing in a large number of clients at a prospective rate.
Together with it, the 2nd chart which reveals the annual development in the Dragon Soup And Earnings Management B Case Study Analysis total possessions, shows that the company is rather effective in including value to its possessions through its incomes. The development in assets reveals that the total worth of the company is also increasing with increasing the overall revenues. (Unknown, 2013).
Another financial analysis of the business utilizing the provided information could be the analysis regarding the distribution of total earnings of the business. Major part of the revenues of CMP comes from the sales of its released books i.e. 64% as displayed in the Case Appendix V. The company might move towards other business sections with a possible development to attain its future development goal.
PESTEL Analysis
PESTEL analysis could be performed to find out the different external forces affecting the performance of the company and the recent patterns in the external environment of the company. A brief PESTEL analysis of the business is provided as follows; (Alanzi, 2018).
Political.
As the publishing sector might have a substantial influence on the state of mind of individuals about the communist ideology of the federal government, for that reason, the publishing sector is extremely monitored and guided by the Publicity Department of the Communist Party of China. Therefore, it might be stated that the general political forces impacting Dragon Soup And Earnings Management B Case Study Analysis organisation are high. The federal government policies regarding the publishing sector are also increasing with the passage of time.
Cost-effective.
Economic forces affecting the publishing sector in basic and the Dragon Soup And Earnings Management B Case Study Solution in particular includesthe prices of paper, the earnings level of customers, the inflation rate, and the general GDP growth of the country. All these forces integrate impact the demand for the publishing market. In addition to it, the economic policies connected to the import of books affect the overall service at CPM. Nevertheless, China's economic conditions are rather favorable for CMP with high GDP development and customer income level.
Social and Demographical.
The consumer choices are moving towards digital publishing rather than the conventional was of publishing. In this regard, CMP ought to focus on digital publishing to meet the changing consumer preferences.
Technological.
Technological forces impacting the CMP consist of the technological improvement in the reading strategies etc. Improvement of science and innovation together with the increase of digital publishing might minimize the need for the CMP products, if particular actions would not be taken soon.
Environmental.
Environmental forces affecting Dragon Soup And Earnings Management B Case Study Solution consists of the issues of environmental neighborhoods over the use of paper in publishing books. The paper utilized in the books while publishing is needed to be disposable and the ink utilized while publishing needs to not be harmful for the environment.
Legal.
Legal policies for the publishing sector at whole are high. The legal guidelines concerning the publishing sector is controlled by the General Administration of Press and Publication. Publishing Regulation 1997 requires the publishers to be approved first by the Government to be entered in the publishing market. The regulation forbids direct involvement of foreign entities and individuals in the publishing sector.
Industry Analysis (Porter's Five Forces Model).
Porter's Five Forces Design might be used to examine the beauty of the publishing market China. A brief analysis of the Porter's 5 Forces is given as follows;.
Risk of New Entrants.
Dangers of new entrants in the Chinese Publishing Industry is moderate. The potential development in the market tends to bring in new entrants to the publishing market. The presence of intense competitors and the requirement of huge capital tends to demotivate new entrants to enter in the market.
Threat of Substitution.
Hazard of Substitution is high for the Chinese Publishing Market. The replacement products for the published files is the documents provided in the digital libraries on particular websites. The altering customer choices towards digital knowing increase the hazard of replacement for the market.
Competitive Rivalry.
Competitive rivalry in the publishing market is high. The existence of large number of consumers in the Chinese Publishing Industry like CIP, PTP and so on tends to produce high competitive rivalry for CMP. Along with it, brand-new entrants are likewise entering into the market increasing the competition for CMP.
Bargaining Power of Provider.
The significant suppliers of the Dragon Soup And Earnings Management B Case Study Analysis consist of the suppliers of the paper for releasing documents. As CMP is the biggest publisher in the Chinese Publishing Market, for that reason the general bargaining power of provider for CMP is low.
Bargaining Power of Purchaser.
Negotiating 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 marketplace saturation, the purchasers needs high quality documents at competitive costs.
Rivals Analysis.
CMP runs in an extremely competitive industry with the presence of large number of rivals. 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 B Case Study Analysis include;.
• Chemical Industry Press (CIP).
• Posts and telecommunication Press (PTP).
Chemical Industry Press (CIP).
CIP acts as a danger 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 scenario.
Posts and telecommunication Press (PTP).
It was also established in the very same period as Dragon Soup And Earnings Management B Case Study Solution and CIP. It is likewise one of the prominent gamers in the publishing market with an annual overall incomes of RMB 550 million in 2010.
Alternatives
Alternative-1: Broaden towards New Markets
Pros
• Reducing reliance over the Chinese markets.
• Increasing variety of Customers
• Development chances.
• Avoiding the effect of market saturation in the Chinese publishing market.
Cons
• Usage of prospective resources in expansion.
• Risk of failure in new markets.
• Time consuming.
Alernative-2: Introduce Digital Publishing
Pros
• Sustaining consumer base.
• Approaching new markets.
• Easy to present using current capabilities.
• Low danger of Failure.
• Low requirement for funds.
• Increased product portfolio supplies 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 segments to the brand-new one can lead the business to lose need of its products in the market.
Suggestions
As the preferences are shifting towards digital publishing and the company require an instant solution to prevent the declining industry growth. The company might also consider the expansion program after the success of its digital publishing program.
Execution
In order to present digital publishing in its product portfolio, the business needs to first gathers the data related to the customer need, the possible markets, the government regulations and the information related to the competitors presented in the market. If the initial offering proves a success, the company needs to go for the other markets. In this method the company would be able to execute its digital publishing program.
Conclusion
Although, the growth of the publishing market is declining given that 2008, showing a hazard to the business's long term presence, but the circumstance can be managed by considering an advancement plan in the future. The business could consider introducing digital publishingin its existing market to implement its advancement program at immediate basis and to avoid the risk of failure for entrance in the new markets.
