Edward Wood Steel Stockholders A Cash Flow Exercise Case Study Solution and Analysis
Edward Wood Steel Stockholders A Cash Flow Exercise Case Study Solution is the largest publishing company with a greatest market share in the China's book retail market. CMP has actually ended up being a specialized details company and a big detailed Science and Innovation publishing company through the integration of print media, audio-visual media and the network media.
Although, Edward Wood Steel Stockholders A Cash Flow Exercise Case Study Analysis has actually spent its 60 years journey efficiently, being an effective publishing house, however, the changing macro market patterns and forces bring particular obstacles to the publishing market in general and CMP in specific. These factors consist of;
• Entrance of the brand-new publishing companies in the industry.
• Declining growth of the publishing market.
• Market saturation.
• Intro of digital publishing techniques
• Enhancement of science and innovation.
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 situation? Do the long important experience, technical resources and the capabilities of the business could be made use of to strive for the future advancement unceasingly? How could the company sustain its long term competitive position in future?
Edward Wood Steel Stockholders A Cash Flow Exercise Case Study Analysis has specific strengths that can be used to lower the risks, get rid of the weakness and avail the chances. Strengths of CMP are provided as follows;
• The long term experience of Edward Wood Steel Stockholders A Cash Flow Exercise Case Study Analysis in the publishing market i.e. 60 years allows the company to provide high quality products at a lower cost using its prior experiences.
• The technical resources and capabilities generated by its effective journey supply a competitive advantage to CMP.
• Huge product portfolioof CMP helps it to diversify its danger and provide high value to its consumers.
• Strong monetary position allows the business to consider a number of advancement opportunities without any fear of raising fund externally.
In addition to the strengths, the business has specific weaknesses which could increase restrictions for the business in executing its advancement program. The weak points of Edward Wood Steel Stockholders A Cash Flow Exercise Case Study Solution are given as follows;
• Despite of being a science and innovation publishing company, the company still has standard ways ofpublishing which are not suitable with the growing technological shift.
• CMP extremely relies over the Chinese markets for its growth. It ought to propose specific expansion strategies to avoid its dependence over the Chinese markets to accomplish long term development.
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 could be restored by availing certain opportunities presented in the market. The market chances for CMP consist of;
• The business could also introduce Digital Publishing by utilizing its long term technical experience and a strong consumer recognition in the market.
• CMP might consider a development program through the growth towards foreign markets in order to reduce its dependence over Chinese markets by using its large funds.
The altering macro trends in the market and increasing competitors in the publishing industry has positioned certain hazards to Edward Wood Steel Stockholders A Cash Flow Exercise Case Study Solution consisting of;( Gurel, 2017).
• Introduction of digital publishing i.e. virtual libraries might cause decreasing market share of Edward Wood Steel Stockholders A Cash Flow Exercise Case Study Solution due to the customer shift towards digital libraries.
• The presence of a great deal of competitors in the publishing industry increase the danger for CMP to lose its competitive position in the market, as rivals can get a strong consumer base by using particular methods like aggressive promotion, quality items, and so on
• Entryway of new publishing companies in the market along with presence of high competitors increases the danger of losing the client base.
Due to lack of information, the financial ratios of CMP could not be determined. It might be examined from the Appendix III that the yearly overall profits of Edward Wood Steel Stockholders A Cash Flow Exercise Case Study Solution throughout the period 2000-2012 are growing at a high development rate, revealing that the annual need of the items of CMP is growing and the company is rather efficient in attracting a large number of clients at a prospective rate.
In addition to it, the second chart which reveals the yearly growth in the Edward Wood Steel Stockholders A Cash Flow Exercise Case Study Solution total assets, shows that the business is rather effective in including worth to its properties through its earnings. The development in properties reveals that the total worth of the company is likewise increasing with increasing the total incomes. (Unidentified, 2013).
Another financial analysis of the business utilizing the offered information might be the analysis regarding the circulation of overall incomes of the business. Major 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 business might move towards other business segments with a possible growth to accomplish its future advancement objective.
PESTEL analysis could be conducted to find out the different external forces impacting the performance of the business and the recent trends in the external environment of the company. A quick PESTEL analysis of the business is provided as follows; (Alanzi, 2018).
As the publishing sector could have a substantial effect on the mindset of individuals about the communist ideology of the federal government, for that reason, the publishing sector is extremely supervised and assisted by the Publicity Department of the Communist Celebration of China. It could be said that the overall political forces affecting CMP organisation are high. The government policies regarding the publishing sector are likewise increasing with the passage of time.
Financial forces affecting the publishing sector in general and the Edward Wood Steel Stockholders A Cash Flow Exercise Case Study Analysis in particular includesthe prices of paper, the income level of customers, the inflation rate, and the total GDP development of the nation. All these forces combine effect the demand for the publishing market. Along with it, the economic policies connected to the import of books affect the total service at CPM. China's economic conditions are quite beneficial for CMP with high GDP development and customer earnings level.
Social and Demographical.
The customer choices are moving towards digital publishing rather than the conventional was of publishing. In this regard, CMP needs to focus on digital publishing to meet the changing customer choices.
Technological forces impacting the CMP consist of the technological development in the reading techniques and so on. Improvement of science and innovation together with the rise of digital publishing might reduce the need for the CMP items, if certain actions would not be taken soon.
Environmental forces impacting Edward Wood Steel Stockholders A Cash Flow Exercise Case Study Solution includes the issues of environmental communities over the use of paper in publishing books. The paper utilized in the books while publishing is required to be non reusable and the ink utilized while publishing must not be harmful for the environment.
Legal regulations for the publishing sector at whole are high. Publishing Ordinance 1997 requires the publishers to be authorized first by the Government to be gone into in the publishing market.
Industry Analysis (Porter's Five Forces Design).
Porter's Five Forces Model could be utilized to analyze the attractiveness of the publishing market China. A quick analysis of the Porter's Five Forces is offered as follows;.
Hazard of New Entrants.
Threats of brand-new entrants in the Chinese Publishing Market is moderate. The possible development in the market tends to draw in new entrants to the publishing industry. The presence of intense competitors and the requirement of huge capital tends to demotivate brand-new entrants to go into in the market.
Threat of Replacement.
Risk of Alternative is high for the Chinese Publishing Market. The alternative products for the published documents is the files provided in the digital libraries on particular websites. The altering customer preferences towards digital knowing increase the threat of alternative for the industry.
Competitive rivalry in the publishing industry is high. The presence of a great deal of customers in the Chinese Publishing Industry like CIP, PTP and so on tends to produce high competitive competition for CMP. Along with it, new entrants are likewise entering into 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 Solution include the providers of the paper for publishing documents. As CMP is the biggest publisher in the Chinese Publishing Market, therefore the general bargaining power of supplier for CMP is low.
Bargaining Power of Purchaser.
Haggling power of purchaser in the publishing market is high. Due to the presence of a large number of publishers in the Chinese market and the market saturation, the purchasers requires high quality documents at competitive costs.
CMP runs in an extremely competitive market with the existence of large number of rivals. However, the company has a competitive position in the market with the highest market share in the Chinese publishing market. Major 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 one of the close competitors of CMP. Established in the exact same period, CIP publishes comparable kind of books. For a large time period, CIP held the biggest market share, and still ranks second and third in various market sectors, with a major focus on educational publications. CIP acts as a threat 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 marketplace share of Edward Wood Steel Stockholders A Cash Flow Exercise Case Study Help easily in the current market circumstance.
Posts and telecommunication Press (PTP).
Another close competitor of CMP is PTP. It was likewise founded in the exact same duration as CMP and CIP. It ranks sixth in the state-owned publishers in regards to company scale. It is likewise one of the popular players in the publishing market with a yearly total revenues of RMB 550 million in 2010.
Alternative-1: Expand towards New Markets
• Decreasing reliance over the Chinese markets.
• Increasing variety of Customers
• Growth chances.
• Preventing the effect of market saturation in the Chinese publishing industry.
• Use of prospective resources in growth.
• Risk of failure in brand-new markets.
• Time consuming.
Alernative-2: Introduce Digital Publishing
• Sustaining customer base.
• Approaching brand-new markets.
• Easy to present utilizing present abilities.
• Low danger of Failure.
• Low requirement for funds.
• Increased item portfolio offers high worth to customers.
• Competitors in the market by CIP, who has prior concentrate on the digital publishing.
• Shift of focus from the core business sectors to the brand-new one can lead the business to lose demand of its products in the market.
With the deep analysis of the external and internal environment of the company along with the industry analysis and the rival analysis, Alternative 2 is recommended to CMP to accomplish its future advancement. As the choices are shifting towards digital publishing and the company need an immediate service to prevent the declining industry growth. Intro of digital publishing might prove to be an instant service with low amount of threat for the business. The business could also consider the expansion program after the success of its digital publishing program.
In order to introduce digital publishing in its item portfolio, the business must first gathers the information related to the consumer need, the possible markets, the federal government guidelines and the data related to the rivals provided in the market. If the preliminary offering shows a success, the business needs to go for the other markets. In this method the business would be able to execute its digital publishing program.
Although, the development of the publishing market is declining considering that 2008, revealing a threat to the company's long term existence, however the circumstance can be controlled by considering an advancement plan in the future. The business could consider presenting digital publishingin its existing market to implement its advancement program at instant basis and to avoid the risk of failure for entryway in the new markets.