Financial Crisis 3 Case Study Solution and Analysis
Financial Crisis 3 Case Study Analysis is the largest publishing company with a highest market share in the China's book retail market. CMP provides a variety of services including; collecting info, processing details and communication services. Significant service sections of the business include; books, regulars, consultancy and distribution. The company has a vast product portfolio and its major items include books, regulars, online media, exhibitions, research study reports and so on. Financial Crisis 3 Case Study Help has ended up being a specialized info supplier and a large extensive Science and Technology publishing business 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 particular difficulties to the publishing industry in basic and Financial Crisis 3 Case Study Analysis in specific. These elements include;
• Entrance of the brand-new publishing companies in the industry.
• Declining growth of the publishing market.
• Market saturation.
• Intro of digital publishing methods
• Improvement 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 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 company sustain its long term competitive position in future?
Financial Crisis 3 Case Study Analysis has specific strengths that can be utilized to reduce the risks, conquer the weakness and obtain the opportunities. Strengths of CMP are given as follows;
• The long term experience of Financial Crisis 3 Case Study Solution in the publishing industry i.e. 60 years allows the company to offer high quality items at a lower cost utilizing its previous experiences.
• The technical resources and abilities produced by its effective journey supply a competitive benefit to CMP.
• Huge item portfolioof CMP assists it to diversify its threat and provide high value to its customers.
• Strong financial position permits the business to think about several development opportunities with no fear of raising fund externally.
Together with the strengths, the company has particular weaknesses which could increase restrictions for the company in implementing its advancement program. The weaknesses of Financial Crisis 3 Case Study Analysis are offered as follows;
• Despite of being a science and innovation publishing firm, the company still has traditional methods ofpublishing which are not compatible with the growing technological shift.
• CMP extremely relies over the Chinese markets for its growth. It must propose particular growth strategies to prevent its dependence over the Chinese markets to achieve long term development.
Although, the development of the publishing industry is declining since 2008, impacting Financial Crisis 3 Case Study Analysis as well, however the growth could be restored by availing particular opportunities provided in the market. The market opportunities for CMP consist of;
• The business could also introduce Digital Publishing by utilizing its long term technical experience and a strong customer recognition in the market.
• CMP might think about a development program through the expansion towards foreign markets in order to lower its reliance over Chinese markets by using its huge financial resources.
The changing macro patterns in the market and increasing competition in the publishing market has actually presented specific threats to Financial Crisis 3 Case Study Analysis consisting of;( Gurel, 2017).
• Introduction of digital publishing i.e. virtual libraries might lead to declining market share of Financial Crisis 3 Case Study Analysis due to the customer shift towards digital libraries.
• The presence of large number of competitors in the publishing market increase the hazard for CMP to lose its competitive position in the market, as competitors can gain a strong consumer base by utilizing specific techniques like aggressive promo, quality items, and so on
• Entrance of new publishing firms in the industry together with presence of high competitors increases the threat of losing the client base.
The company has a quite competitive financial efficiency. Due to absence of information, the monetary ratios of CMP might not be computed. Nevertheless, the overall financial efficiency of the business could be evaluated by utilizing the charts given in the case Appendices. It might be evaluated from the Appendix III that the annual overall earnings of CMP during the duration 2000-2012 are growing at a high development rate, revealing that the yearly need of the products of Financial Crisis 3 Case Study Analysis is growing and the company is quite efficient in drawing in a large number of clients at a potential price.
Along with it, the 2nd graph which reveals the yearly development in the Financial Crisis 3 Case Study Analysis overall possessions, reveals that the company is quite effective in adding value to its assets through its earnings. The development in properties reveals that the total value of the company is also increasing with increasing the total incomes. (Unidentified, 2013).
Another financial analysis of the business utilizing the offered information might be the analysis relating to the circulation of total revenues of the business. Huge part of the earnings of CMP originates from the sales of its published books i.e. 64% as displayed in the Case Appendix V. The company could move towards other service segments with a possible development to achieve its future development objective.
PESTEL analysis might be performed to learn 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 company is provided as follows; (Alanzi, 2018).
As the publishing sector could have a considerable impact on the frame of mind of the people about the communist ideology of the government, therefore, the publishing sector is highly monitored and directed by the Promotion Department of the Communist Party of China. It could be said that the overall political forces affecting CMP company are high. The government policies relating to the publishing sector are likewise increasing with the passage of time.
Economic forces affecting the publishing sector in basic and the Financial Crisis 3 Case Study Analysis in specific includesthe costs of paper, the income level of customers, the inflation rate, and the total GDP development of the country. All these forces combine effect the need for the publishing market. In addition to it, the financial policies associated with the import of books impact the overall service at CPM. China's financial conditions are rather beneficial for CMP with high GDP growth and consumer earnings level.
Social and Demographical.
The consumer preferences are moving towards digital publishing rather than the traditional was of publishing. In this regard, CMP ought to focus on digital publishing to satisfy the altering customer preferences.
Technological forces impacting the CMP consist of the technological advancement in the reading strategies etc. Improvement 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.
Ecological forces impacting Financial Crisis 3 Case Study Help includes the issues of environmental communities over the use of paper in publishing books. The paper used in the books while publishing is needed to be disposable and the ink utilized while publishing must not be damaging for the environment.
Legal guidelines for the publishing sector at whole are high. Publishing Regulation 1997 needs the publishers to be approved first by the Federal government to be entered in the publishing market.
Market Analysis (Porter's 5 Forces Design).
Porter's 5 Forces Model might be utilized to examine the appearance of the publishing market China. A quick analysis of the Porter's 5 Forces is provided as follows;.
Danger of New Entrants.
Hazards of brand-new entrants in the Chinese Publishing Industry is moderate. The possible growth in the market tends to attract new entrants to the publishing industry. The presence of extreme competition and the requirement of substantial capital tends to demotivate new entrants to go into in the market.
Threat of Substitution.
Danger of Replacement is high for the Chinese Publishing Industry. The replacement products for the released documents is the documents provided in the digital libraries on certain websites. The changing customer choices towards digital learning increase the hazard of alternative for the industry.
Competitive competition in the publishing market is high. The presence of a great deal of customers in the Chinese Publishing Market like CIP, PTP etc. tends to produce high competitive competition for CMP. In addition to it, brand-new entrants are also participating in the market increasing the competition for CMP.
Bargaining Power of Provider.
The major suppliers of the Financial Crisis 3 Case Study Analysis consist of the providers of the paper for releasing documents. As CMP is the largest publisher in the Chinese Publishing Market, for that reason the general 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 presence of a large number of publishers in the Chinese market and the marketplace saturation, the buyers requires high quality documents at competitive prices.
CMP runs in a highly competitive market with the presence of a great deal 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 Financial Crisis 3 Case Study Solution include;.
• Chemical Market Press (CIP).
• Posts and telecommunication Press (PTP).
Chemical Market Press (CIP).
CIPis one of the close competitors of CMP. Established in the same period, CIP releases similar kind of books. For a big period, CIP held the biggest market share, and still ranks 3rd and second in different market sectors, with a significant concentrate on academic publications. CIP functions as a threat for CMP as it might wean its market share due to its long term competitive background. CIP is concentrated on digital publishing and might wean the marketplace share of Financial Crisis 3 Case Study Help easily in the existing market situation.
Posts and telecommunication Press (PTP).
Another close competitor of CMP is PTP. It was also founded in the very same period as CMP and CIP. It ranks 6th in the state-owned publishers in regards to company scale. It is also among the prominent gamers in the publishing industry with a yearly total incomes of RMB 550 million in 2010.
Alternative-1: Expand towards New Markets
• Decreasing dependence over the Chinese markets.
• Increasing variety of Customers
• Development opportunities.
• Avoiding the impact of market saturation in the Chinese publishing market.
• Use of potential resources in expansion.
• Risk of failure in new markets.
• Time consuming.
Alernative-2: Introduce Digital Publishing
• Sustaining consumer base.
• Approaching new markets.
• Easy to introduce using current abilities.
• Low danger of Failure.
• Low requirement for funds.
• Increased item portfolio supplies high worth to consumers.
• Competition 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 company to lose demand of its products in the market.
With the deep analysis of the internal and external environment of the business together with the industry analysis and the rival analysis, Alternative 2 is suggested to CMP to accomplish its future development. As the preferences are shifting towards digital publishing and the company require an instant option to prevent the declining market growth. Intro of digital publishing could prove to be an instant option with low amount of risk for the business. The business could also think about the growth program after the success of its digital publishing program.
In order to present digital publishing in its item portfolio, the company must first collects the data related to the consumer demand, the potential markets, the government guidelines and the data related to the rivals presented in the market. After that, the company must choose one prospective segment for its initial offering. It must collect research that how it could separate its digital publishing from the existing rivals' products. After all the steps above the company ought to opt for the initial offering. The business ought to go for the other markets if the preliminary offering shows a success. In this method the company would be able to execute its digital publishing program.
The development of the publishing market is decreasing since 2008, showing a danger to the company's long term existence, however the scenario can be managed by considering an advancement plan in the future. The company could consider presenting digital publishingin its existing market to execute its advancement program at instant basis and to avoid the danger of failure for entrance in the brand-new markets.