Exit Strategy A Case Study Solution and Analysis
Exit Strategy A Case Study Help is the largest publishing company with a highest market share in the China's book retail market. CMP has become a specialized info supplier and a large extensive Science and Innovation publishing company through the integration of print media, audio-visual media and the network media.
CMP has invested its 60 years journey smoothly, being a successful publishing house, however, the altering macro market trends and forces bring certain obstacles to the publishing market in general and Exit Strategy A Case Study Analysis in particular. These aspects consist of;
• Entryway of the brand-new publishing companies in the market.
• Declining growth of the publishing market.
• Market saturation.
• Introduction of digital publishing strategies
• Improvement of science and innovation.
The improvement of the macro markets have raised several questions 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 made use of to pursue the future development unceasingly? How could the business sustain its long term competitive position in future?
Exit Strategy A Case Study Analysis has specific strengths that can be used to lower the dangers, conquer the weak point and get the opportunities. Strengths of CMP are provided as follows;
• The long term experience of Exit Strategy A Case Study Solution in the publishing industry i.e. 60 years enables the business to supply high quality products at a lower cost utilizing its previous experiences.
• The technical resources and capabilities generated by its effective journey offer a competitive advantage to CMP.
• Huge item portfolioof CMP assists it to diversify its risk and provide high value to its clients.
• Strong financial position permits the business to think about several advancement opportunities with no worry of raising fund externally.
In addition to the strengths, the company has certain weaknesses which could increase constraints for the company in executing its development program. The weaknesses of Exit Strategy A Case Study Help are given as follows;
• Despite of being a science and innovation publishing firm, the business still has standard ways ofpublishing which are not suitable with the growing technological shift.
• CMP extremely relies over the Chinese markets for its development. It ought to propose particular growth strategies to prevent its dependence over the Chinese markets to achieve long term growth.
The growth of the publishing industry is decreasing given that 2008, affecting Exit Strategy A Case Study Solution as well, however the development could be revived by availing certain chances provided in the market. The marketplace opportunities for CMP include;
• The company could likewise introduce Digital Publishing by using its long term technical experience and a strong consumer recognition in the market.
• CMP could think about a development program through the growth towards foreign markets in order to lower its reliance over Chinese markets by using its huge financial resources.
The altering macro patterns in the market and increasing competition in the publishing market has posed certain dangers to Exit Strategy A Case Study Help including;( Gurel, 2017).
• Intro of digital publishing i.e. virtual libraries could result in declining market share of Exit Strategy A Case Study Analysis due to the consumer shift towards digital libraries.
• The presence of a great deal of rivals in the publishing industry increase the threat for CMP to lose its competitive position in the market, as rivals can gain a strong consumer base by using specific methods like aggressive promo, quality items, etc.
• Entryway of new publishing companies in the industry together with existence of high competition increases the risk of losing the client base.
The business has a quite competitive financial performance. Due to lack of data, the financial ratios of CMP might not be calculated. Nevertheless, the general financial performance of the company might be analyzed by using the graphs given in the case Appendices. It could be evaluated from the Appendix III that the annual overall revenues of CMP throughout the duration 2000-2012 are growing at a high growth rate, showing that the annual need of the products of Exit Strategy A Case Study Help is growing and the company is rather efficient in attracting a a great deal of consumers at a prospective cost.
Together with it, the 2nd chart which shows the yearly growth in the Exit Strategy A Case Study Analysis total assets, shows that the company is quite efficient in adding worth to its properties through its earnings. The growth in properties shows that the overall worth of the company is likewise increasing with increasing the overall revenues. (Unknown, 2013).
Another monetary analysis of the business utilizing the given information could be the analysis regarding the distribution of overall profits of the business. Huge part of the profits 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 segments with a potential development to achieve its future advancement objective.
PESTEL analysis could be carried out to find out the numerous external forces affecting the performance of the business and the recent trends in the external environment of the company. A quick PESTEL analysis of the company is offered as follows; (Alanzi, 2018).
As the publishing sector might have a significant influence on the state of mind of individuals about the communist ideology of the federal government, therefore, the publishing sector is extremely supervised and directed by the Promotion Department of the Communist Celebration of China. It could be said that the general political forces impacting CMP organisation are high. The government policies relating to the publishing sector are likewise increasing with the passage of time.
Financial forces impacting the publishing sector in general and the Exit Strategy A Case Study Analysis in specific includesthe rates of paper, the earnings level of customers, the inflation rate, and the overall GDP growth of the country. All these forces combine impact the demand for the publishing market. Together with it, the financial policies related to the import of books affect the overall service at CPM. China's financial conditions are rather beneficial for CMP with high GDP growth and customer income level.
Social and Demographical.
Social and demographical forces consist of the population development, the consumer's choices towards reading useful materials and so on. China has the highest population in the world with a high population growth, showing the increasing variety of customers of the Exit Strategy A Case Study Help. However, the consumer preferences are shifting towards digital publishing instead of the traditional was of publishing. In this regard, CMP must focus on digital publishing to meet the changing customer choices.
Technological forces impacting the CMP include the technological improvement in the reading strategies and so on. Improvement of science and technology in addition to the rise of digital publishing could lower the demand for the CMP items, if particular actions would not be taken soon.
Ecological forces affecting Exit Strategy A Case Study Solution consists of the concerns of environmental communities over the usage of paper in publishing books. The paper used in the books while publishing is needed to be non reusable and the ink utilized while publishing must not be hazardous for the environment.
Legal guidelines for the publishing sector at whole are high. Publishing Regulation 1997 requires the publishers to be approved first by the Federal government to be entered in the publishing market.
Industry Analysis (Porter's Five Forces Model).
Porter's Five Forces Model could be utilized to analyze the attractiveness of the publishing market China. A brief analysis of the Porter's Five Forces is provided as follows;.
Threat of New Entrants.
Risks of brand-new entrants in the Chinese Publishing Market is moderate. The possible development in the industry tends to attract new entrants to the publishing market. Nevertheless, the presence of intense competitors and the requirement of huge capital tends to demotivate new entrants to enter in the market.
Risk of Alternative.
Hazard of Replacement is high for the Chinese Publishing Industry. The alternative items for the released documents is the files presented in the virtual libraries on specific sites. The altering consumer choices towards digital learning increase the hazard of replacement for the industry.
Competitive competition in the publishing industry is high. The presence of large number of consumers in the Chinese Publishing Industry like CIP, PTP and so on tends to produce high competitive competition for CMP. Together with it, brand-new entrants are also participating in the marketplace increasing the competition for CMP.
Bargaining Power of Provider.
The major providers of the Exit Strategy A Case Study Help include the suppliers of the paper for releasing 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 Buyer.
Bargaining power of buyer 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 requires high quality files at competitive costs.
CMP operates in an extremely competitive industry with the presence of large number of competitors. The business has a competitive position in the market with the greatest market share in the Chinese publishing market. Significant rivals of Exit Strategy A Case Study Analysis include;.
• Chemical Market Press (CIP).
• Posts and telecommunication Press (PTP).
Chemical Market Press (CIP).
CIPis one of the close rivals of CMP. Established in the very same duration, CIP releases comparable type of books. For a large period, CIP held the biggest market share, and still ranks 2nd and third in various market segments, with a major concentrate on academic publications. CIP acts as a threat for CMP as it could wean its market share due to its long term competitive background. CIP is concentrated on digital publishing and could wean the marketplace share of Exit Strategy A Case Study Solution easily in the existing market scenario.
Posts and telecommunication Press (PTP).
It was likewise founded in the same duration as Exit Strategy A Case Study Help and CIP. It is also one of the popular gamers in the publishing industry with an annual total earnings of RMB 550 million in 2010.
Alternative-1: Expand towards New Markets
• Reducing dependence over the Chinese markets.
• Increasing number of Consumers
• Growth opportunities.
• Avoiding the effect of market saturation in the Chinese publishing market.
• Use of possible resources in growth.
• Risk of failure in new markets.
• Time consuming.
Alernative-2: Introduce Digital Publishing
• Sustaining customer base.
• Approaching brand-new markets.
• Easy to present utilizing existing capabilities.
• Low danger of Failure.
• Low requirement for funds.
• Increased item portfolio supplies high worth to clients.
• Competition in the market by CIP, who has prior concentrate on the digital publishing.
• Shift of focus from the core company sections to the brand-new one can lead the business to lose demand of its items in the market.
With the deep analysis of the internal and external environment of the business in addition to the market analysis and the competitor analysis, Alternative 2 is advised to CMP to accomplish its future development. As the choices are shifting towards digital publishing and the company need an immediate service to avoid the decreasing market growth. For that reason, intro of digital publishing could prove to be an instant solution with low amount of threat for the business. The company could also consider the expansion program after the success of its digital publishing program.
In order to present digital publishing in its item portfolio, the business must first collects the data related to the consumer demand, the possible markets, the federal government guidelines and the information related to the rivals provided in the market. If the initial offering shows a success, the business must go for the other markets. In this way the company would be able to execute its digital publishing program.
The development of the publishing market is decreasing considering that 2008, showing a threat to the company's long term existence, but the scenario can be managed by thinking about an advancement strategy in the future. The business might think about introducing digital publishingin its existing market to implement its advancement program at instant basis and to avoid the danger of failure for entrance in the new markets.