Financial Engineering Case Study Solution and Analysis
Intro
Financial Engineering Case Study Analysis is the largest publishing company with a greatest market share in the China's book retail market. CMP has become a specialized info company and a large comprehensive Science and Technology publishing company through the integration of print media, audio-visual media and the network media.
Crucial Concerns
Although, Financial Engineering Case Study Analysis has invested its 60 years journey smoothly, being an effective publishing home, nevertheless, the changing macro market trends and forces bring certain difficulties to the publishing market in general and CMP in specific. These aspects consist of;
• Entrance of the new publishing firms in the industry.
• Declining growth of the publishing market.
• Market saturation.
• Introduction of digital publishing methods
• Improvement of science and innovation.
The transformation of the macro markets have raised several concerns to the management at CPM that what could be the future of CMP in this situation? Do the long important experience, technical resources and the abilities of the business could be used to pursue the future advancement unceasingly? How could the business sustain its long term competitive position in future?
Situational Analysis
Internal Analysis
SWOT Analysis
Strengths
Financial Engineering Case Study Solution has particular strengths that can be utilized to reduce the dangers, get rid of the weak point and avail the opportunities. Strengths of CMP are offered as follows;
• The long term experience of Financial Engineering Case Study Analysis in the publishing market i.e. 60 years enables the company to provide high quality products at a lower expense utilizing its previous experiences.
• The technical resources and capabilities produced by its successful journey offer a competitive advantage to CMP.
• Huge product portfolioof CMP assists it to diversify its risk and offer high value to its consumers.
• Strong financial position enables the business to think about several development opportunities without any fear of raising fund externally.
Weak points
In addition to the strengths, the business has certain weaknesses which might increase constraints for the company in executing its development program. The weaknesses of Financial Engineering Case Study Help are offered 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 growth. It must propose certain expansion plans to avoid its reliance over the Chinese markets to attain long term development.
Opportunities
The growth of the publishing industry is decreasing given that 2008, impacting Financial Engineering Case Study Analysis as well, but the growth could be revived by availing particular opportunities provided in the market. The market chances for CMP include;
• The company could likewise introduce Digital Publishing by using its long term technical experience and a strong consumer acknowledgment in the market.
• CMP might consider a development program through the growth towards foreign markets in order to lower its dependence over Chinese markets by using its large funds.
Threats
The changing macro patterns in the market and increasing competition in the publishing industry has actually posed particular risks to Financial Engineering Case Study Help consisting of;( Gurel, 2017).
• Intro of digital publishing i.e. virtual libraries could cause decreasing market share of Financial Engineering Case Study Help 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 acquire a strong customer base by utilizing specific strategies like aggressive promo, quality items, etc.
• Entrance of brand-new publishing firms in the market in addition to existence of high competitors increases the threat of losing the client base.
Monetary Analysis.
Due to lack of information, the monetary ratios of CMP might not be determined. It might be evaluated from the Appendix III that the annual total incomes of Financial Engineering Case Study Help during the duration 2000-2012 are growing at a high growth rate, revealing that the annual demand of the items of CMP is growing and the company is quite efficient in attracting a big number of consumers at a possible price.
Together with it, the second chart which reveals the yearly growth in the Financial Engineering Case Study Analysis total assets, reveals that the company is rather efficient in including worth to its assets through its revenues. The growth in assets shows that the overall worth of the firm is also increasing with increasing the overall revenues. (Unknown, 2013).
Another financial analysis of the business using the given data could be the analysis concerning the circulation of total profits of the business. Major 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 could move towards other organisation sections with a prospective development to attain its future advancement goal.
PESTEL Analysis
PESTEL analysis might be carried out to find out the various external forces affecting the efficiency of the business and the recent trends in the external environment of the business. A short PESTEL analysis of the company is given as follows; (Alanzi, 2018).
Political.
As the publishing sector might have a considerable effect on the mindset of the people about the communist ideology of the government, for that reason, the publishing sector is extremely monitored and directed by the Promotion Department of the Communist Party of China. It might be said that the overall political forces affecting CMP company are high. The federal government policies concerning the publishing sector are likewise increasing with the passage of time.
Affordable.
Financial forces impacting the publishing sector in basic and the CMP in specific includesthe prices of paper, the earnings level of consumers, the inflation rate, and the overall GDP growth of the nation. All these forces combine effect the demand for the publishing market.
Social and Demographical.
The consumer preferences are moving towards digital publishing rather than the standard was of publishing. In this regard, CMP ought to focus on digital publishing to satisfy the changing customer preferences.
Technological.
Technological forces impacting the CMP include the technological advancement in the reading methods and so on. Enhancement of science and technology in addition to the rise of digital publishing could decrease the need for the CMP items, if specific actions would not be taken soon.
Environmental.
Ecological forces impacting Financial Engineering Case Study Solution consists of the concerns of ecological neighborhoods over the use of paper in publishing books. The paper used in the books while publishing is needed to be non reusable and the ink used while publishing ought to not be hazardous for the environment.
Legal.
Legal policies for the publishing sector at whole are high. Publishing Ordinance 1997 requires the publishers to be authorized first by the Government to be entered in the publishing market.
Industry Analysis (Porter's Five Forces Design).
Porter's 5 Forces Design could be utilized to analyze the attractiveness of the publishing industry China. A quick analysis of the Porter's 5 Forces is given as follows;.
Hazard of New Entrants.
Hazards of new entrants in the Chinese Publishing Market is moderate. The potential growth in the market tends to draw in brand-new entrants to the publishing industry. However, the existence of intense competition and the requirement of substantial capital tends to demotivate brand-new entrants to enter in the marketplace.
Threat of Substitution.
Threat of Replacement is high for the Chinese Publishing Industry. The substitute products for the released files is the documents provided in the digital libraries on particular sites. The altering consumer preferences towards digital knowing increase the danger of replacement for the industry.
Competitive Rivalry.
Competitive competition in the publishing market is high. The presence of a great deal of consumers in the Chinese Publishing Industry like CIP, PTP etc. tends to produce high competitive competition for CMP. Together with it, new entrants are likewise entering into the marketplace increasing the competitors for CMP.
Bargaining Power of Supplier.
The significant suppliers of the Financial Engineering Case Study Analysis include the providers of the paper for publishing files. As CMP is the biggest publisher in the Chinese Publishing Market, for that reason the total bargaining power of supplier for CMP is low.
Bargaining Power of Purchaser.
Bargaining power of buyer in the publishing industry is high. Due to the presence of a large number of publishers in the Chinese market and the market saturation, the purchasers requires high quality documents at competitive costs.
Rivals Analysis.
CMP operates in a highly competitive industry with the presence of a great deal of rivals. However, the company has a competitive position in the market with the greatest market share in the Chinese publishing market. Major competitors of Financial Engineering Case Study Help consist of;.
• Chemical Industry Press (CIP).
• Posts and telecommunication Press (PTP).
Chemical Industry Press (CIP).
CIP acts as a threat 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 current market scenario.
Posts and telecommunication Press (PTP).
Another close competitor of CMP is PTP. It was likewise founded in the very same period as CMP and CIP. It ranks sixth in the state-owned publishers in regards to organisation scale. It is likewise one of the prominent gamers in the publishing industry with an annual total incomes of RMB 550 million in 2010.
Alternatives
Alternative-1: Expand towards New Markets
Pros
• Decreasing reliance over the Chinese markets.
• Increasing variety of Customers
• Development opportunities.
• Avoiding the impact of market saturation in the Chinese publishing market.
Cons
• Use of possible resources in expansion.
• Danger of failure in new markets.
• Time consuming.
Alernative-2: Introduce Digital Publishing
Pros
• Sustaining customer base.
• Approaching brand-new markets.
• Easy to introduce utilizing current capabilities.
• Low danger of Failure.
• Low requirement for funds.
• Increased item portfolio provides high value to consumers.
Cons
• Competitors in the market by CIP, who has prior focus on the digital publishing.
• Shift of focus from the core business sectors to the new one can lead the business to lose need of its items in the market.
Recommendations
With the deep analysis of the internal and external environment of the company in addition to the market analysis and the rival analysis, Alternative 2 is advised to CMP to accomplish its future advancement. As the preferences are shifting towards digital publishing and the company require an instant service to prevent the declining industry development. Intro of digital publishing could show to be an immediate option with low quantity of threat for the business. The company could also think about the growth program after the success of its digital publishing program.
Implementation
In order to introduce digital publishing in its item portfolio, the business should initially gathers the data connected to the customer need, the prospective markets, the federal government policies and the information associated with the competitors provided in the market. After that, the company must choose one prospective segment for its preliminary offering. It must gather research study that how it might differentiate its digital publishing from the existing competitors' products. After all the actions above the company should go for the preliminary offering. If the initial offering shows a success, the business ought to choose the other markets. In this way the business would be able to execute its digital publishing program.
Conclusion
The growth of the publishing market is declining considering that 2008, revealing a hazard to the business's long term existence, but the circumstance can be controlled by thinking about a development plan in the future. The company might consider presenting digital publishingin its existing market to execute its advancement program at instant basis and to prevent the risk of failure for entryway in the new markets.
