Edward Wood Steel Stockholders A Cash Flow Exercise Case Study Solution and Analysis
Introduction
Edward Wood Steel Stockholders A Cash Flow Exercise Case Study Solution is the biggest publishing business with a highest market share in the China's book retail market. CMP has actually ended up being a specialized details supplier and a large detailed Science and Technology publishing business through the integration of print media, audio-visual media and the network media.
Vital Problems
Although, Edward Wood Steel Stockholders A Cash Flow Exercise Case Study Help has spent its 60 years journey smoothly, being a successful publishing home, nevertheless, the altering macro market trends and forces bring certain obstacles to the publishing industry in general and CMP in specific. These aspects include;
• Entrance of the brand-new publishing firms in the market.
• Decreasing growth of the publishing market.
• Market saturation.
• Introduction of digital publishing methods
• Improvement of science and innovation.
The transformation of the macro markets have raised a number of 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 pursue the future development unceasingly? How could the company sustain its long term competitive position in future?
Situational Analysis
Internal Analysis
SWOT Analysis
Strengths
Edward Wood Steel Stockholders A Cash Flow Exercise Case Study Analysis has certain strengths that can be made use of to decrease the hazards, get rid of the weakness and avail the opportunities. Strengths of CMP are offered as follows;
• The long term experience of Edward Wood Steel Stockholders A Cash Flow Exercise Case Study Help in the publishing industry i.e. 60 years allows the company to provide high quality items at a lower cost utilizing its previous experiences.
• The technical resources and abilities produced by its successful journey offer a competitive benefit to CMP.
• Vast item portfolioof CMP helps it to diversify its threat and supply high worth to its customers.
• Strong financial position allows the company to think about a number of development opportunities without any fear of raising fund externally.
Weak points
Along with the strengths, the business has specific weak points which might increase constraints for the company in executing its advancement program. The weaknesses of Edward Wood Steel Stockholders A Cash Flow Exercise Case Study Analysis are offered as follows;
• Despite of being a science and technology publishing company, the company 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 needs to propose specific expansion plans to avoid its reliance over the Chinese markets to attain long term development.
Opportunities
The development of the publishing market is decreasing given that 2008, impacting Edward Wood Steel Stockholders A Cash Flow Exercise Case Study Analysis as well, however the growth might be restored by availing specific opportunities provided in the market. The marketplace chances for CMP consist of;
• The company could likewise introduce Digital Publishing by using its long term technical experience and a strong client recognition in the market.
• CMP might consider a development program through the growth towards foreign markets in order to reduce its reliance over Chinese markets by utilizing its large funds.
Hazards
The altering macro trends in the market and increasing competitors in the publishing industry has posed specific hazards to Edward Wood Steel Stockholders A Cash Flow Exercise Case Study Analysis consisting of;( Gurel, 2017).
• Intro of digital publishing i.e. virtual libraries might cause decreasing market share of Edward Wood Steel Stockholders A Cash Flow Exercise Case Study Analysis due to the customer shift towards digital libraries.
• The existence of a great deal of competitors in the publishing market increase the hazard for CMP to lose its competitive position in the market, as rivals can gain a strong customer base by using certain methods like aggressive promo, quality products, etc.
• Entrance of brand-new publishing companies in the industry together with existence of high competition increases the risk of losing the customer base.
Monetary Analysis.
Due to lack of information, the financial ratios of CMP could not be determined. It might be evaluated from the Appendix III that the yearly overall incomes of Edward Wood Steel Stockholders A Cash Flow Exercise Case Study Solution during the period 2000-2012 are growing at a high development rate, showing that the annual demand of the products of CMP is growing and the company is rather effective in drawing in a large number of consumers at a potential price.
Together with it, the 2nd graph which shows the annual growth in the Edward Wood Steel Stockholders A Cash Flow Exercise Case Study Solution overall possessions, reveals that the company is rather effective in adding worth to its possessions through its earnings. The growth in properties reveals that the overall worth of the firm is also increasing with increasing the overall earnings. (Unidentified, 2013).
Another financial analysis of the business using the given data could be the analysis concerning the distribution of total incomes of the business. Major part of the revenues of CMP originates from the sales of its released books i.e. 64% as shown in the Case Appendix V. The business might move towards other business segments with a potential growth to attain its future development goal.
PESTEL Analysis
PESTEL analysis could be performed to discover the numerous external forces affecting the efficiency of the company and the recent trends in the external environment of the business. A brief PESTEL analysis of the business is offered as follows; (Alanzi, 2018).
Political.
As the publishing sector could have a substantial effect on the state of mind of individuals about the communist ideology of the government, therefore, the publishing sector is extremely supervised and directed by the Promotion Department of the Communist Celebration of China. It might be stated that the general political forces impacting CMP organisation are high. The government policies regarding the publishing sector are also increasing with the passage of time.
Affordable.
Financial forces affecting the publishing sector in basic and the CMP in specific includesthe costs 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.
Social and Demographical.
Social and demographical forces consist of the population development, the customer's choices towards reading useful materials etc. China has the greatest population worldwide with a high population growth, showing the increasing number of consumers of the Edward Wood Steel Stockholders A Cash Flow Exercise Case Study Solution. Nevertheless, the customer choices are shifting towards digital publishing instead of the standard was of publishing. In this regard, CMP ought to concentrate on digital publishing to meet the changing consumer choices.
Technological.
Technological forces affecting the CMP include the technological improvement in the reading strategies etc. Improvement of science and technology along with the increase of digital publishing could decrease the need for the CMP products, if particular actions would not be taken quickly.
Environmental.
Environmental forces affecting Edward Wood Steel Stockholders A Cash Flow Exercise Case Study Help consists of the concerns of environmental communities over the use of paper in publishing books. The paper utilized in the books while publishing is required to be disposable and the ink used while publishing ought to not be damaging for the environment.
Legal.
Legal policies for the publishing sector at whole are high. Publishing Regulation 1997 needs the publishers to be approved first by the Federal government to be gone into in the publishing market.
Industry Analysis (Porter's 5 Forces Model).
Porter's Five Forces Model might be used to evaluate the beauty of the publishing market China. A brief analysis of the Porter's 5 Forces is offered as follows;.
Risk of New Entrants.
Hazards of brand-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 market. However, the existence of intense competitors and the requirement of huge capital tends to demotivate new entrants to enter in the market.
Hazard of Substitution.
Threat of Alternative is high for the Chinese Publishing Market. The replacement items for the published documents is the files presented in the virtual libraries on particular sites. The changing consumer preferences towards digital learning increase the danger of substitution for the market.
Competitive Rivalry.
Competitive rivalry in the publishing market 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, brand-new entrants are likewise participating in the marketplace increasing the competitors for CMP.
Bargaining Power of Provider.
The major suppliers of the Edward Wood Steel Stockholders A Cash Flow Exercise Case Study Help include the providers of the paper for releasing files. 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.
Bargaining power of buyer in the publishing market is high. Due to the existence of a a great deal of publishers in the Chinese market and the marketplace saturation, the buyers needs high quality documents at competitive costs.
Rivals Analysis.
CMP operates in an extremely competitive market with the presence of a great deal of competitors. Nevertheless, the company has a competitive position in the market with the greatest market share in the Chinese publishing market. Significant rivals of Edward Wood Steel Stockholders A Cash Flow Exercise Case Study Solution include;.
• Chemical Industry Press (CIP).
• Posts and telecommunication Press (PTP).
Chemical Market Press (CIP).
CIPis among the close rivals of CMP. Established in the same period, CIP publishes similar kind of books. For a large time period, CIP held the biggest market share, and still ranks second and third in numerous market sections, with a major focus on instructional 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 marketplace share of Edward Wood Steel Stockholders A Cash Flow Exercise Case Study Analysis quickly in the present market circumstance.
Posts and telecommunication Press (PTP).
Another close competitor of CMP is PTP. It was also founded in the same duration as CMP and CIP. It ranks sixth in the state-owned publishers in terms of organisation scale. It is likewise among the prominent players in the publishing market with an annual overall profits of RMB 550 million in 2010.
Alternatives
Alternative-1: Broaden towards New Markets
Pros
• Lowering dependence over the Chinese markets.
• Increasing number of Consumers
• Growth chances.
• Preventing the impact of market saturation in the Chinese publishing market.
Cons
• Use of prospective resources in expansion.
• Risk of failure in brand-new markets.
• Time consuming.
Alernative-2: Present Digital Publishing
Pros
• Sustaining customer base.
• Approaching new markets.
• Easy to present using existing capabilities.
• Low risk of Failure.
• Low requirement for funds.
• Increased item portfolio supplies high worth to customers.
Cons
• Competition in the market by CIP, who has prior concentrate on the digital publishing.
• Shift of focus from the core company sectors to the brand-new one can lead the company to lose need of its products in the market.
Recommendations
With the deep analysis of the external and internal environment of the business together with the market analysis and the rival analysis, Alternative 2 is suggested to CMP to attain its future advancement. As the preferences are shifting towards digital publishing and the business need an instant solution to avoid the decreasing industry development. For that reason, intro of digital publishing might show to be an immediate solution with low amount of danger for the company. The company could also think about the growth program after the success of its digital publishing program.
Application
In order to introduce digital publishing in its product portfolio, the business should initially gathers the data associated with the consumer demand, the prospective markets, the federal government policies and the data related to the competitors presented in the market. After that, the business should choose one prospective segment for its initial offering. It needs to collect research study that how it could separate its digital publishing from the existing competitors' products. After all the steps above the business need to go for the preliminary offering. If the initial offering shows a success, the business should choose the other markets. In this way the company would be able to execute its digital publishing program.
Conclusion
The development of the publishing industry is decreasing given that 2008, revealing a danger to the company's long term existence, however the situation can be managed by thinking about a development plan in the future. The business might consider introducing digital publishingin its existing market to implement its development program at immediate basis and to prevent the threat of failure for entrance in the new markets.
