Facebook Valuation Case Study Solution and Analysis
Facebook Valuation 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 information service provider and a big detailed Science and Technology publishing business through the integration of print media, audio-visual media and the network media.
Although, Facebook Valuation Case Study Analysis has invested its 60 years journey smoothly, being a successful publishing house, nevertheless, the altering macro market patterns and forces bring specific difficulties to the publishing market in general and CMP in particular. These elements consist of;
• Entrance of the new publishing firms in the market.
• Decreasing development of the publishing market.
• Market saturation.
• Introduction of digital publishing methods
• Improvement of science and technology.
The change 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 abilities of the business could be utilized to strive for the future development unceasingly? How could the business sustain its long term competitive position in future?
Facebook Valuation Case Study Solution has particular strengths that can be utilized to decrease the threats, conquer the weakness and obtain the opportunities. Strengths of CMP are provided as follows;
• The long term experience of Facebook Valuation Case Study Solution in the publishing market i.e. 60 years allows the company to supply high quality products at a lower cost using its prior experiences.
• The technical resources and capabilities generated by its effective journey offer a competitive advantage to CMP.
• Large item portfolioof CMP assists it to diversify its danger and provide high worth to its consumers.
• Strong monetary position enables the company to consider several advancement opportunities with no worry of raising fund externally.
Together with the strengths, the business has certain weaknesses which might increase constraints for the business in executing its advancement program. The weak points of Facebook Valuation Case Study Analysis are given as follows;
• Despite of being a science and innovation publishing firm, the company still has traditional ways ofpublishing which are not compatible with the growing technological shift.
• CMP extremely relies over the Chinese markets for its growth. It needs to propose certain expansion plans to prevent its reliance over the Chinese markets to achieve long term growth.
Although, the development of the publishing market is decreasing since 2008, affecting Facebook Valuation Case Study Solution also, but the development could be revived by availing particular chances presented in the market. The market opportunities for CMP consist of;
• The business might also introduce Digital Publishing by using 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 minimize its dependence over Chinese markets by using its large funds.
The changing macro patterns in the market and increasing competition in the publishing market has posed particular threats to Facebook Valuation Case Study Help consisting of;( Gurel, 2017).
• Intro of digital publishing i.e. digital libraries might cause declining market share of Facebook Valuation Case Study Help due to the customer shift towards digital libraries.
• The presence of a great deal of rivals in the publishing market increase the hazard for CMP to lose its competitive position in the market, as competitors can acquire a strong consumer base by utilizing certain strategies like aggressive promotion, quality products, and so on
• Entryway of new publishing firms in the industry along with presence of high competitors increases the danger of losing the consumer base.
Due to absence of information, the financial ratios of CMP could not be calculated. It could be examined from the Appendix III that the yearly total earnings of Facebook Valuation Case Study Analysis during the duration 2000-2012 are growing at a high development rate, showing that the annual need of the items of CMP is growing and the company is rather effective in attracting a large number of clients at a possible rate.
Along with it, the second graph which shows the yearly growth in the Facebook Valuation Case Study Analysis overall properties, reveals that the company is rather effective in including worth to its properties through its earnings. The growth in possessions shows that the overall worth of the company is likewise increasing with increasing the overall earnings. (Unidentified, 2013).
Another monetary analysis of the company using the provided information could be the analysis relating to the circulation of overall profits of the company. Huge 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 company might move towards other business sectors with a potential growth to achieve its future advancement objective.
PESTEL analysis could be carried out to discover the numerous external forces impacting the performance of the business and the recent patterns in the external environment of the business. A quick PESTEL analysis of the business is provided as follows; (Alanzi, 2018).
As the publishing sector could have a substantial impact on the frame of mind of the people about the communist ideology of the government, therefore, the publishing sector is extremely supervised and directed by the Promotion Department of the Communist Party of China. For that reason, it could be stated that the overall political forces affecting Facebook Valuation Case Study Analysis service are high. The federal government policies relating to the publishing sector are likewise increasing with the passage of time.
Economic forces impacting the publishing sector in basic and the Facebook Valuation Case Study Analysis in specific includesthe costs of paper, the earnings level of customers, the inflation rate, and the total GDP development of the country. All these forces integrate impact the demand for the publishing market. Together with it, the economic policies related to the import of books impact the general company 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 preferences 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 customer preferences.
Technological forces affecting the CMP include the technological advancement in the reading methods and so on. Improvement of science and technology in addition to the increase of digital publishing could lower the need for the CMP items, if particular actions would not be taken soon.
Environmental forces impacting Facebook Valuation Case Study Analysis includes the issues of environmental communities over the usage of paper in publishing books. The paper used in the books while publishing is required to be disposable and the ink utilized while publishing should not be harmful for the environment.
Legal regulations for the publishing sector at whole are high. Publishing Regulation 1997 needs the publishers to be approved initially by the Federal government to be gone into in the publishing market.
Market Analysis (Porter's 5 Forces Model).
Porter's 5 Forces Design might be utilized to evaluate the appearance of the publishing market China. A quick analysis of the Porter's 5 Forces is offered as follows;.
Risk of New Entrants.
Risks of brand-new entrants in the Chinese Publishing Market is moderate. The potential growth in the market tends to bring in brand-new entrants to the publishing market. Nevertheless, the presence of intense competition and the requirement of substantial capital tends to demotivate new entrants to enter in the marketplace.
Danger of Replacement.
Danger of Substitution is high for the Chinese Publishing Industry. The alternative products for the released files is the documents provided in the virtual libraries on certain sites. The changing customer choices towards digital learning increase the danger of substitution for the market.
Competitive rivalry in the publishing industry is high. The existence of a great deal of customers in the Chinese Publishing Market like CIP, PTP etc. tends to produce high competitive rivalry for CMP. Together with it, brand-new entrants are likewise entering into the market increasing the competition for CMP.
Bargaining Power of Supplier.
The major suppliers of the Facebook Valuation Case Study Help include the suppliers of the paper for publishing files. As CMP is the largest publisher in the Chinese Publishing Market, for that reason the overall bargaining power of supplier for CMP is low.
Bargaining Power of Purchaser.
Bargaining power of purchaser in the publishing market is high. Due to the existence of a a great deal of publishers in the Chinese market and the market saturation, the purchasers requires high quality documents at competitive rates.
CMP runs in a highly competitive industry with the existence of large number of rivals. The business has a competitive position in the market with the highest market share in the Chinese publishing market. Major rivals of Facebook Valuation Case Study Solution include;.
• Chemical Market Press (CIP).
• Posts and telecommunication Press (PTP).
Chemical Industry Press (CIP).
CIP acts as a danger for CMP as it could 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 present market circumstance.
Posts and telecommunication Press (PTP).
Another close rival of CMP is PTP. It was likewise founded in the exact same period as CMP and CIP. It ranks sixth in the state-owned publishers in terms of organisation scale. It is also among the popular gamers in the publishing industry with an annual total earnings of RMB 550 million in 2010.
Alternative-1: Broaden towards New Markets
• Minimizing reliance over the Chinese markets.
• Increasing variety of Consumers
• Development opportunities.
• Avoiding the effect of market saturation in the Chinese publishing market.
• Usage of possible resources in expansion.
• Danger of failure in brand-new markets.
• Time consuming.
Alernative-2: Present Digital Publishing
• Sustaining consumer base.
• Approaching brand-new markets.
• Easy to introduce utilizing existing capabilities.
• Low risk of Failure.
• Low requirement for funds.
• Increased product portfolio offers high value to clients.
• Competition in the market by CIP, who has prior concentrate on the digital publishing.
• Shift of focus from the core company sectors to the new one can lead the business to lose demand of its products 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 recommended to CMP to achieve its future advancement. As the choices are moving towards digital publishing and the business require an immediate service to avoid the decreasing industry growth. For that reason, introduction of digital publishing might prove to be an instant option with low amount of threat for the company. The business might also consider the expansion program after the success of its digital publishing program.
In order to present digital publishing in its product portfolio, the business should first gathers the data connected to the consumer demand, the possible markets, the government regulations and the data related to the rivals presented in the market. After that, the company ought to choose one possible section for its preliminary offering. It must collect research that how it might separate its digital publishing from the existing rivals' products. After all the actions above the business must go for the initial offering. If the initial offering proves a success, the business must go for the other markets. In this way the business would have the ability to implement its digital publishing program.
Although, the development of the publishing market is decreasing because 2008, showing a threat to the company's long term presence, but the circumstance can be controlled by considering an advancement strategy in the future. The company might think about introducing digital publishingin its existing market to implement its development program at instant basis and to prevent the risk of failure for entryway in the new markets.