Financial Engineering 2 Case Study Solution and Analysis
Intro
Financial Engineering 2 Case Study Solution is the biggest publishing company with a highest market share in the China's book retail market. CMP has actually ended up being a specialized information supplier and a big extensive Science and Innovation publishing company through the integration of print media, audio-visual media and the network media.
Critical Problems
CMP has actually spent its 60 years journey efficiently, being an effective publishing house, however, the changing macro market trends and forces bring certain challenges to the publishing industry in basic and Financial Engineering 2 Case Study Solution in specific. These factors include;
• Entryway of the brand-new publishing firms in the market.
• Decreasing development of the publishing market.
• Market saturation.
• Introduction of digital publishing strategies
• Enhancement of science and innovation.
The change of the macro markets have raised several 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 company could be utilized 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
Financial Engineering 2 Case Study Help has particular strengths that can be made use of to minimize the risks, conquer the weakness and get the opportunities. Strengths of CMP are given as follows;
• The long term experience of Financial Engineering 2 Case Study Help in the publishing market i.e. 60 years enables the company to provide high quality items at a lower expense using its previous experiences.
• The technical resources and abilities produced by its effective journey offer a competitive benefit to CMP.
• Huge product portfolioof CMP assists it to diversify its risk and supply high value to its clients.
• Strong financial position permits the company to think about a number of advancement opportunities with no fear of raising fund externally.
Weaknesses
In addition to the strengths, the company has certain weak points which might increase restraints for the company in executing its development program. The weaknesses of Financial Engineering 2 Case Study Solution are offered as follows;
• Despite of being a science and technology publishing company, the business still has standard methods ofpublishing which are not suitable with the growing technological shift.
• CMP extremely relies over the Chinese markets for its development. It ought to propose specific expansion plans to avoid its reliance over the Chinese markets to accomplish long term development.
Opportunities
Although, the development of the publishing industry is decreasing considering that 2008, impacting Financial Engineering 2 Case Study Analysis also, however the growth could be restored by availing specific opportunities presented in the market. The marketplace opportunities for CMP include;
• The business might also introduce Digital Publishing by utilizing its long term technical experience and a strong customer acknowledgment in the market.
• CMP might think about a development program through the growth towards foreign markets in order to decrease its dependence over Chinese markets by utilizing its huge funds.
Threats
The altering macro trends in the market and increasing competitors in the publishing market has actually presented specific threats to Financial Engineering 2 Case Study Solution consisting of;( Gurel, 2017).
• Introduction of digital publishing i.e. virtual libraries could cause declining market share of Financial Engineering 2 Case Study Analysis due to the consumer shift towards digital libraries.
• The existence of a great deal of competitors in the publishing market increase the threat for CMP to lose its competitive position in the market, as rivals can get a strong consumer base by utilizing certain techniques like aggressive promo, quality items, and so on
• Entrance of new publishing firms in the industry along with existence of high competitors increases the hazard of losing the client base.
Financial Analysis.
The company has a rather competitive financial efficiency. Due to absence of information, the financial ratios of CMP could not be calculated. However, the overall monetary efficiency of the company might be analyzed by utilizing the charts given up the case Appendices. It could be analyzed from the Appendix III that the annual overall earnings of CMP throughout the duration 2000-2012 are growing at a high development rate, showing that the yearly demand of the items of Financial Engineering 2 Case Study Solution is growing and the company is quite efficient in bring in a a great deal of clients at a possible rate.
Together with it, the second graph which shows the yearly development in the Financial Engineering 2 Case Study Solution overall possessions, reveals that the company is rather efficient in including value to its assets through its profits. The growth in assets shows that the overall value of the company is likewise increasing with increasing the total incomes. (Unknown, 2013).
Another financial analysis of the company using the offered data could be the analysis concerning the distribution of overall revenues of the company. Major part of the earnings of CMP originates from the sales of its published books i.e. 64% as shown in the Case Appendix V. The business could move towards other service sections with a potential development to attain its future advancement objective.
PESTEL Analysis
PESTEL analysis could be performed to learn the various external forces affecting the performance of the company and the current trends in the external environment of the business. A short PESTEL analysis of the business is offered as follows; (Alanzi, 2018).
Political.
As the publishing sector might have a considerable impact on the mindset of the people about the communist ideology of the federal government, therefore, the publishing sector is extremely monitored and directed by the Publicity Department of the Communist Celebration of China. Therefore, it could be said that the general political forces affecting Financial Engineering 2 Case Study Analysis company are high. The government policies concerning the publishing sector are likewise increasing with the passage of time.
Cost-effective.
Financial forces affecting the publishing sector in basic and the CMP in particular includesthe prices of paper, the earnings level of customers, the inflation rate, and the general GDP development of the country. All these forces combine effect the demand for the publishing market.
Social and Demographical.
The customer preferences are shifting towards digital publishing rather than the standard was of publishing. In this regard, CMP should focus on digital publishing to meet the altering customer preferences.
Technological.
Technological forces impacting the CMP include the technological development in the reading techniques and so on. Enhancement of science and technology along with the increase of digital publishing could reduce the demand for the CMP products, if certain actions would not be taken soon.
Environmental.
Ecological forces impacting Financial Engineering 2 Case Study Analysis consists of 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 needs to not be hazardous for the environment.
Legal.
Legal policies for the publishing sector at whole are high. The legal regulations concerning the publishing sector is managed by the General Administration of Press and Publication. Publishing Regulation 1997 requires 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 people in the publishing sector.
Industry Analysis (Porter's Five Forces Design).
Porter's 5 Forces Model might be utilized to analyze the attractiveness of the publishing market China. A short analysis of the Porter's 5 Forces is given 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 bring in brand-new entrants to the publishing industry. The presence of intense competitors and the requirement of huge capital tends to demotivate brand-new entrants to enter in the market.
Hazard of Substitution.
Risk of Substitution is high for the Chinese Publishing Industry. The replacement items for the published files is the files presented in the digital libraries on particular websites. The changing customer preferences towards digital knowing increase the hazard of substitution for the industry.
Competitive Competition.
Competitive competition in the publishing market is high. The existence of large number of customers in the Chinese Publishing Industry like CIP, PTP and so on tends to produce high competitive rivalry for CMP. Together with it, new entrants are likewise entering into the market increasing the competition for CMP.
Bargaining Power of Supplier.
The major providers of the Financial Engineering 2 Case Study Help include the suppliers of the paper for publishing files. As CMP is the biggest publisher in the Chinese Publishing Market, for that reason the general 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 needs high quality documents at competitive prices.
Competitors Analysis.
CMP runs in a highly competitive market with the existence of a great deal of competitors. The company has a competitive position in the market with the greatest market share in the Chinese publishing market. Significant competitors of Financial Engineering 2 Case Study Analysis include;.
• Chemical Market Press (CIP).
• Posts and telecommunication Press (PTP).
Chemical Market Press (CIP).
CIPis among the close rivals of CMP. Established in the same duration, CIP releases similar kind of books. For a large period, CIP held the largest market share, and still ranks third and 2nd in numerous market sections, with a major focus on academic publications. CIP functions as a danger 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 marketplace share of Financial Engineering 2 Case Study Solution quickly in the existing market circumstance.
Posts and telecommunication Press (PTP).
It was likewise established in the exact same duration as Financial Engineering 2 Case Study Analysis and CIP. It is also one of the prominent gamers in the publishing industry with an annual overall earnings of RMB 550 million in 2010.
Alternatives
Alternative-1: Broaden towards New Markets
Pros
• Minimizing dependence over the Chinese markets.
• Increasing variety of Customers
• Growth chances.
• Preventing the impact of market saturation in the Chinese publishing industry.
Cons
• Use of potential resources in expansion.
• Risk of failure in brand-new markets.
• Time consuming.
Alernative-2: Present Digital Publishing
Pros
• Sustaining customer base.
• Approaching new markets.
• Easy to introduce using existing capabilities.
• Low danger of Failure.
• Low requirement for funds.
• Increased item portfolio provides high value to customers.
Cons
• Competition in the market by CIP, who has prior focus on the digital publishing.
• Shift of focus from the core organisation sectors to the brand-new one can lead the business to lose demand of its items in the market.
Suggestions
As the choices are shifting towards digital publishing and the business need an instant service to avoid the declining market growth. The company might likewise consider the growth program after the success of its digital publishing program.
Implementation
In order to present digital publishing in its product portfolio, the company should initially gathers the information related to the consumer demand, the possible markets, the government guidelines and the information related to the rivals provided in the market. If the preliminary offering proves a success, the company must go for the other markets. In this way the business would be able to execute its digital publishing program.
Conclusion
Although, the growth of the publishing market is decreasing because 2008, showing a threat to the business's long term existence, but the circumstance can be controlled by thinking about an advancement plan in the future. The company might consider presenting digital publishingin its existing market to execute its advancement program at immediate basis and to prevent the risk of failure for entrance in the new markets.
