Finance Project 2 Case Study Solution and Analysis
Intro
Finance Project 2 Case Study Analysis is the biggest publishing business with a greatest market share in the China's book retail market. CMP has become a specialized info provider and a big detailed Science and Technology publishing company through the integration of print media, audio-visual media and the network media.
Important Issues
Although, Finance Project 2 Case Study Analysis has spent its 60 years journey smoothly, being an effective publishing home, nevertheless, the changing macro market trends and forces bring certain challenges to the publishing market in basic and CMP in specific. These aspects include;
• Entrance of the new publishing companies in the industry.
• Decreasing growth of the publishing market.
• Market saturation.
• Introduction of digital publishing strategies
• Improvement of science and innovation.
The change of the macro markets have raised numerous questions to the management at CPM that what could be the future of CMP in this situation? Do the long valuable experience, technical resources and the capabilities of the business could be made use of to strive for the future development unceasingly? How could the business sustain its long term competitive position in future?
Situational Analysis
Internal Analysis
SWOT Analysis
Strengths
Finance Project 2 Case Study Analysis has certain strengths that can be utilized to decrease the risks, conquer the weak point and avail the opportunities. Strengths of CMP are given as follows;
• The long term experience of Finance Project 2 Case Study Analysis in the publishing industry i.e. 60 years enables the company to offer high quality products at a lower expense using its prior experiences.
• The technical resources and capabilities produced by its effective journey offer a competitive benefit to CMP.
• Huge item portfolioof CMP helps it to diversify its danger and provide high value to its consumers.
• Strong financial position permits the company to consider several development opportunities with no fear of raising fund externally.
Weaknesses
Along with the strengths, the business has specific weaknesses which might increase restrictions for the business in executing its advancement program. The weak points of Finance Project 2 Case Study Solution are provided as follows;
• Despite of being a science and innovation publishing company, the company still has standard ways ofpublishing which are not compatible with the growing technological shift.
• CMP highly relies over the Chinese markets for its development. It should propose particular expansion strategies to prevent its dependence over the Chinese markets to attain long term growth.
Opportunities
The development of the publishing industry is decreasing considering that 2008, impacting Finance Project 2 Case Study Help as well, however the growth might be restored by availing particular chances presented in the market. The marketplace chances for CMP include;
• The company might likewise introduce Digital Publishing by utilizing its long term technical experience and a strong consumer acknowledgment in the market.
• CMP might think about an advancement program through the growth towards foreign markets in order to lower its dependence over Chinese markets by using its huge financial resources.
Risks
The changing macro patterns in the market and increasing competitors in the publishing market has postured certain hazards to Finance Project 2 Case Study Analysis consisting of;( Gurel, 2017).
• Introduction of digital publishing i.e. virtual libraries could lead to declining market share of Finance Project 2 Case Study Help due to the consumer shift towards virtual libraries.
• The existence of large number of competitors in the publishing market increase the hazard for CMP to lose its competitive position in the market, as rivals can get a strong customer base by using particular strategies like aggressive promo, quality products, etc.
• Entryway of brand-new publishing companies in the market along with existence of high competition increases the danger of losing the customer base.
Financial Analysis.
Due to absence of information, the financial ratios of CMP could not be computed. It could be analyzed from the Appendix III that the annual total earnings of Finance Project 2 Case Study Analysis during the duration 2000-2012 are growing at a high growth rate, revealing that the annual need of the items of CMP is growing and the company is quite effective in bring in a big number of consumers at a prospective rate.
Along with it, the second graph which reveals the annual growth in the Finance Project 2 Case Study Analysis total assets, reveals that the company is quite efficient in including value to its properties through its profits. The growth in possessions reveals that the overall value of the company is likewise increasing with increasing the overall earnings. (Unknown, 2013).
Another monetary analysis of the company using the provided information might be the analysis regarding the circulation of total earnings of the company. Huge part of the profits of CMP originates from the sales of its published books i.e. 64% as shown in the Case Appendix V. The company might move towards other organisation sectors with a prospective growth to attain its future advancement goal.
PESTEL Analysis
PESTEL analysis could be performed to find out the different external forces affecting the performance of the company and the current trends in the external environment of the company. A short PESTEL analysis of the business is provided as follows; (Alanzi, 2018).
Political.
As the publishing sector might have a considerable impact on the state of mind of individuals about the communist ideology of the government, for that reason, the publishing sector is highly monitored and assisted by the Publicity Department of the Communist Party of China. Therefore, it might be said that the total political forces affecting Finance Project 2 Case Study Help company are high. The federal government policies concerning the publishing sector are likewise increasing with the passage of time.
Cost-effective.
Economic forces impacting the publishing sector in basic and the Finance Project 2 Case Study Solution in particular includesthe prices of paper, the earnings level of customers, the inflation rate, and the total GDP development of the country. All these forces combine impact the demand for the publishing market. In addition to it, the economic policies connected to the import of books affect the total company at CPM. However, China's financial conditions are rather favorable for CMP with high GDP growth and customer income level.
Social and Demographical.
The consumer preferences are shifting towards digital publishing rather than the traditional was of publishing. In this regard, CMP should focus on digital publishing to meet the altering consumer choices.
Technological.
Technological forces affecting the CMP consist of the technological advancement in the reading strategies and so on. Improvement of science and innovation in addition to the rise of digital publishing could reduce the demand for the CMP products, if specific actions would not be taken soon.
Environmental.
Ecological forces affecting Finance Project 2 Case Study Analysis consists of the concerns of environmental neighborhoods 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 needs to not be hazardous for the environment.
Legal.
Legal regulations for the publishing sector at whole are high. Publishing Regulation 1997 requires the publishers to be authorized first by the Government to be entered in the publishing market.
Market Analysis (Porter's Five Forces Design).
Porter's 5 Forces Design could be utilized to evaluate the appearance of the publishing industry China. A quick analysis of the Porter's Five Forces is offered as follows;.
Threat of New Entrants.
Dangers of 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 industry. However, the existence of extreme competition and the requirement of big capital tends to demotivate brand-new entrants to go into in the marketplace.
Danger of Substitution.
Risk of Substitution is high for the Chinese Publishing Industry. The replacement items for the released documents is the files provided in the virtual libraries on specific sites. The changing customer choices towards digital knowing increase the danger of substitution for the industry.
Competitive Competition.
Competitive rivalry in the publishing industry is high. The existence of large number of consumers in the Chinese Publishing Market like CIP, PTP and so on tends to produce high competitive rivalry for CMP. In addition to it, new entrants are likewise entering into the market increasing the competition for CMP.
Bargaining Power of Supplier.
The significant providers of the Finance Project 2 Case Study Solution include the providers of the paper for publishing files. As CMP is the largest publisher in the Chinese Publishing Market, therefore the total 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 large number of publishers in the Chinese market and the marketplace saturation, the buyers requires high quality documents at competitive prices.
Competitors Analysis.
CMP operates in a highly competitive market with the existence of a great deal of rivals. Nevertheless, the company has a competitive position in the market with the greatest market share in the Chinese publishing market. Major rivals of Finance Project 2 Case Study Analysis include;.
• Chemical Market Press (CIP).
• Posts and telecommunication Press (PTP).
Chemical Market Press (CIP).
CIP acts as a risk 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).
Another close competitor 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 company scale. It is likewise one of the popular gamers in the publishing industry with an annual total revenues of RMB 550 million in 2010.
Alternatives
Alternative-1: Expand towards New Markets
Pros
• Lowering reliance over the Chinese markets.
• Increasing number of Customers
• Growth opportunities.
• Avoiding the effect of market saturation in the Chinese publishing market.
Cons
• Use of prospective resources in growth.
• Risk of failure in brand-new markets.
• Time consuming.
Alernative-2: Present Digital Publishing
Pros
• Sustaining consumer base.
• Approaching brand-new markets.
• Easy to introduce utilizing existing abilities.
• Low risk of Failure.
• Low requirement for funds.
• Increased product portfolio supplies high value to consumers.
Cons
• Competitors in the market by CIP, who has prior concentrate on the digital publishing.
• Shift of focus from the core organisation segments to the brand-new one can lead the business to lose need of its products in the market.
Suggestions
With the deep analysis of the external and internal environment of the company in addition to the market analysis and the competitor analysis, Alternative 2 is advised to CMP to attain its future development. As the choices are shifting towards digital publishing and the business need an immediate option to avoid the declining industry growth. For that reason, introduction of digital publishing might prove to be an instant solution with low amount of threat for the business. The business might also think about the expansion program after the success of its digital publishing program.
Implementation
In order to present digital publishing in its product portfolio, the company should first gathers the information related to the consumer need, the prospective markets, the federal government regulations and the information related to the rivals presented in the market. If the preliminary offering shows a success, the business must go for the other markets. In this method the business 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, but the circumstance can be controlled by considering a development strategy in the future. The business could think about presenting digital publishingin its existing market to implement its development program at instant basis and to avoid the risk of failure for entrance in the brand-new markets.
