Exit Strategy A Case Study Solution and Analysis
Exit Strategy A Case Study Analysis is the biggest publishing company with a greatest market share in the China's book retail market. CMP has ended up being a specialized info company and a large thorough Science and Innovation publishing company through the combination of print media, audio-visual media and the network media.
CMP has spent its 60 years journey efficiently, being an effective publishing house, however, the changing macro market patterns and forces bring certain obstacles to the publishing market in basic and Exit Strategy A Case Study Solution in specific. These elements consist of;
• Entrance of the new publishing companies in the market.
• Decreasing growth of the publishing market.
• Market saturation.
• Intro of digital publishing techniques
• Enhancement of science and technology.
The improvement of the macro markets have raised a number of 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 abilities of the company could be utilized to strive for the future development unceasingly? How could the business sustain its long term competitive position in future?
Exit Strategy A Case Study Help has certain strengths that can be used to decrease the threats, overcome the weak point and avail the chances. Strengths of CMP are offered as follows;
• The long term experience of Exit Strategy A Case Study Help in the publishing industry i.e. 60 years allows the business to offer high quality products at a lower expense using its previous experiences.
• The technical resources and capabilities produced by its effective journey offer a competitive benefit to CMP.
• Huge product portfolioof CMP helps it to diversify its risk and supply high worth to its consumers.
• Strong financial position allows the company to think about several advancement opportunities without any fear of raising fund externally.
Together with the strengths, the company has certain weaknesses which might increase restrictions for the business in executing its advancement program. The weak points of Exit Strategy A Case Study Help are given as follows;
• Despite of being a science and technology publishing company, the company still has conventional ways ofpublishing which are not suitable with the growing technological shift.
• CMP extremely relies over the Chinese markets for its development. It should propose certain growth strategies to prevent its reliance over the Chinese markets to attain long term growth.
The development of the publishing industry is declining since 2008, affecting Exit Strategy A Case Study Solution as well, but the development might be restored by availing specific chances provided in the market. The market chances for CMP include;
• The company might likewise introduce Digital Publishing by using its long term technical experience and a strong consumer acknowledgment in the market.
• CMP could think about an advancement program through the growth towards foreign markets in order to lower its dependence over Chinese markets by utilizing its huge financial resources.
The altering macro trends in the market and increasing competition in the publishing industry has posed particular dangers to Exit Strategy A Case Study Help consisting of;( Gurel, 2017).
• Introduction of digital publishing i.e. digital libraries could lead to decreasing market share of Exit Strategy A Case Study Help due to the consumer shift towards digital libraries.
• The existence of a great deal 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 consumer base by utilizing certain methods like aggressive promo, quality products, and so on
• Entrance of brand-new publishing companies in the market along with existence of high competitors increases the risk of losing the consumer base.
Due to lack of information, the financial ratios of CMP might not be calculated. It might be examined from the Appendix III that the annual total revenues of Exit Strategy A Case Study Help throughout the duration 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 quite efficient in drawing in a big number of consumers at a potential cost.
In addition to it, the 2nd chart which shows the yearly development in the Exit Strategy A Case Study Solution overall assets, reveals that the business is rather effective in adding value to its assets through its revenues. The development in properties reveals that the total worth of the firm is also increasing with increasing the overall incomes. (Unidentified, 2013).
Another financial analysis of the company utilizing the given data could be the analysis regarding the circulation of overall earnings of the company. Huge part of the earnings of CMP comes from the sales of its published books i.e. 64% as shown in the Case Appendix V. The business might move towards other service sectors with a prospective growth to accomplish its future development objective.
PESTEL analysis might be carried out to find out the various external forces impacting the performance of the company and the recent trends in the external environment of the company. A quick PESTEL analysis of the company is given as follows; (Alanzi, 2018).
As the publishing sector might have a considerable effect on the frame of mind of individuals about the communist ideology of the federal government, therefore, the publishing sector is highly monitored and assisted by the Promotion Department of the Communist Party of China. It could be stated that the general political forces affecting CMP service are high. The federal government policies regarding the publishing sector are also increasing with the passage of time.
Economic forces impacting the publishing sector in general and the Exit Strategy A Case Study Solution in particular includesthe prices of paper, the income level of consumers, the inflation rate, and the general GDP growth of the nation. All these forces combine effect the need for the publishing market. Together with it, the financial policies connected to the import of books affect the total service at CPM. China's financial conditions are rather beneficial for CMP with high GDP growth and consumer income level.
Social and Demographical.
The consumer preferences are shifting towards digital publishing rather than the traditional was of publishing. In this regard, CMP must focus on digital publishing to satisfy the changing customer choices.
Technological forces impacting the CMP include the technological advancement in the reading strategies and so on. Enhancement of science and innovation together with the increase of digital publishing might reduce the demand for the CMP items, if certain actions would not be taken soon.
Environmental forces impacting Exit Strategy A Case Study Solution includes the issues of environmental communities over the usage 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 hazardous for the environment.
Legal regulations for the publishing sector at whole are high. The legal guidelines regarding the publishing sector is managed by the General Administration of Press and Publication. Publishing Ordinance 1997 needs the publishers to be approved first by the Government to be gone into in the publishing market. The ordinance forbids direct participation of foreign entities and individuals in the publishing sector.
Industry Analysis (Porter's Five Forces Design).
Porter's 5 Forces Design could be used to evaluate the beauty of the publishing industry China. A short analysis of the Porter's Five Forces is provided as follows;.
Danger of New Entrants.
Threats of brand-new entrants in the Chinese Publishing Market is moderate. The prospective growth in the industry tends to bring in brand-new entrants to the publishing industry. Nevertheless, the presence of intense competitors and the requirement of substantial capital tends to demotivate new entrants to go into in the market.
Risk of Substitution.
Hazard of Replacement is high for the Chinese Publishing Industry. The substitute items for the released documents is the files provided in the digital libraries on particular websites. The altering consumer preferences towards digital knowing increase the hazard of substitution for the market.
Competitive competition in the publishing industry is high. The presence of a great deal of consumers in the Chinese Publishing Industry like CIP, PTP etc. tends to produce high competitive rivalry for CMP. In addition to it, new entrants are also entering into the marketplace increasing the competitors for CMP.
Bargaining Power of Supplier.
The significant providers of the Exit Strategy A Case Study Solution consist of the suppliers of the paper for releasing documents. As CMP is the largest publisher in the Chinese Publishing Market, for that reason the overall bargaining power of provider for CMP is low.
Bargaining Power of Buyer.
Haggling power of purchaser in the publishing industry is high. Due to the presence of a large number of publishers in the Chinese market and the marketplace saturation, the purchasers needs high quality documents at competitive rates.
CMP operates in an extremely competitive market with the existence of a great deal of competitors. The company has a competitive position in the market with the highest market share in the Chinese publishing market. Significant rivals of Exit Strategy A Case Study Solution consist of;.
• Chemical Market Press (CIP).
• Posts and telecommunication Press (PTP).
Chemical Market Press (CIP).
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 might wean the market share of CMP quickly in the present market situation.
Posts and telecommunication Press (PTP).
It was likewise established in the very same period as Exit Strategy A Case Study Solution and CIP. It is likewise one of the prominent players in the publishing market with an annual total revenues of RMB 550 million in 2010.
Alternative-1: Broaden towards New Markets
• Lowering reliance over the Chinese markets.
• Increasing variety of Consumers
• Development chances.
• Avoiding the effect of market saturation in the Chinese publishing market.
• Usage of possible resources in growth.
• Danger of failure in new markets.
• Time consuming.
Alernative-2: Introduce Digital Publishing
• Sustaining customer base.
• Approaching brand-new markets.
• Easy to introduce using existing abilities.
• Low danger of Failure.
• Low requirement for funds.
• Increased product portfolio supplies high value to consumers.
• Competitors in the market by CIP, who has prior focus on the digital publishing.
• Shift of focus from the core company segments to the new one can lead the company to lose demand of its products in the market.
As the preferences are shifting towards digital publishing and the business need an instant solution to prevent the declining market growth. The company might also think about the growth program after the success of its digital publishing program.
In order to introduce digital publishing in its product portfolio, the business needs to initially collects the information associated with the customer need, the potential markets, the federal government regulations and the information related to the competitors provided in the market. After that, the company ought to choose one potential sector for its preliminary offering. It must collect research study that how it could differentiate its digital publishing from the existing competitors' items. After all the steps above the company must choose the initial offering. If the preliminary offering proves a success, the company should opt for the other markets. In this method the company would have the ability to execute its digital publishing program.
Although, the growth of the publishing market is decreasing since 2008, revealing a threat to the company's long term existence, but the situation can be controlled by thinking about a development strategy in the future. The business could think about introducing digital publishingin its existing market to execute its advancement program at immediate basis and to avoid the risk of failure for entryway in the new markets.