Financial Management Case Study Solution and Analysis
Financial Management Case Study Analysis is the largest publishing company with a greatest market share in the China's book retail market. CMP provides a variety of services consisting of; gathering info, processing info and interaction services. Significant service segments of the company include; books, periodicals, consultancy and distribution. The company has a large product portfolio and its major items include books, periodicals, online media, exhibits, research reports and so on. Financial Management Case Study Analysis has become a specialized details service provider and a big comprehensive Science and Technology publishing business through the combination of print media, audio-visual media and the network media.
Although, Financial Management Case Study Analysis has spent its 60 years journey efficiently, being a successful publishing home, however, the changing macro market trends and forces bring specific difficulties to the publishing industry in general and CMP in specific. These elements include;
• Entryway of the brand-new publishing firms in the market.
• Decreasing growth of the publishing market.
• Market saturation.
• Intro of digital publishing techniques
• Enhancement of science and technology.
The change of the macro markets have raised a number of questions to the management at CPM that what could be the future of CMP in this scenario? Do the long valuable experience, technical resources and the abilities of the business could be utilized to pursue the future development unceasingly? How could the company sustain its long term competitive position in future?
Financial Management Case Study Analysis has certain strengths that can be used to reduce the dangers, conquer the weak point and obtain the opportunities. Strengths of CMP are provided as follows;
• The long term experience of Financial Management Case Study Solution in the publishing market i.e. 60 years permits the business to supply high quality products at a lower expense utilizing its previous experiences.
• The technical resources and capabilities created by its successful journey offer a competitive benefit to CMP.
• Vast item portfolioof CMP assists it to diversify its danger and supply high value to its consumers.
• Strong financial position permits the company to think about numerous advancement opportunities without any worry of raising fund externally.
Together with the strengths, the business has particular weaknesses which could increase restrictions for the business in executing its advancement program. The weaknesses of Financial Management Case Study Help are given as follows;
• Despite of being a science and technology publishing firm, the business still has traditional ways ofpublishing which are not suitable with the growing technological shift.
• CMP highly relies over the Chinese markets for its growth. It should propose certain growth plans to avoid its dependence over the Chinese markets to attain long term growth.
The development of the publishing industry is declining given that 2008, impacting Financial Management Case Study Solution as well, but the growth could be restored by availing specific opportunities presented in the market. The marketplace opportunities for CMP include;
• The company could likewise present 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 expansion towards foreign markets in order to decrease its reliance over Chinese markets by utilizing its large funds.
The changing macro trends in the market and increasing competitors in the publishing industry has actually presented particular threats to Financial Management Case Study Help consisting of;( Gurel, 2017).
• Intro of digital publishing i.e. virtual libraries might cause decreasing market share of Financial Management Case Study Solution due to the customer shift towards virtual libraries.
• The presence of large number of competitors in the publishing industry increase the danger for CMP to lose its competitive position in the market, as competitors can acquire a strong customer base by utilizing particular strategies like aggressive promotion, quality items, and so on
• Entryway of new publishing companies in the market along with presence of high competitors increases the threat of losing the client base.
Due to absence of data, the financial ratios of CMP might not be computed. It could be analyzed from the Appendix III that the annual overall profits of Financial Management Case Study Help during the duration 2000-2012 are growing at a high development rate, revealing that the annual demand of the items of CMP is growing and the company is rather efficient in bring in a large number of consumers at a prospective price.
Along with it, the second graph which shows the annual development in the Financial Management Case Study Solution total properties, shows that the company is rather efficient in adding worth to its assets through its incomes. The growth in assets reveals that the total worth of the firm is likewise increasing with increasing the overall earnings. (Unknown, 2013).
Another financial analysis of the business utilizing the provided information might be the analysis regarding the distribution of total earnings of the company. Major part of the revenues 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 service segments with a possible development to achieve its future development goal.
PESTEL analysis might be carried out to learn the different external forces impacting the efficiency of the company and the recent patterns in the external environment of the business. A brief PESTEL analysis of the business is given as follows; (Alanzi, 2018).
As the publishing sector might have a significant effect on the state of mind of the people about the communist ideology of the government, therefore, the publishing sector is highly supervised and directed by the Publicity Department of the Communist Celebration of China. Therefore, it might be stated that the general political forces affecting Financial Management Case Study Solution company are high. The government policies relating to the publishing sector are likewise increasing with the passage of time.
Financial forces impacting the publishing sector in general and the Financial Management Case Study Analysis in specific includesthe prices of paper, the income level of customers, the inflation rate, and the overall GDP development of the country. All these forces integrate impact the demand for the publishing market. Along with it, the economic policies associated with the import of books impact the total service at CPM. China's financial conditions are rather beneficial for CMP with high GDP growth and consumer earnings level.
Social and Demographical.
Social and demographical forces include the population development, the customer's choices towards reading useful products and so on. China has the highest population worldwide with a high population growth, showing the increasing variety of customers of the Financial Management Case Study Solution. However, the consumer preferences are moving towards digital publishing rather than the traditional was of publishing. In this regard, CMP ought to concentrate on digital publishing to fulfill the changing customer choices.
Technological forces impacting the CMP consist of the technological development in the reading techniques etc. Enhancement of science and innovation along with the rise of digital publishing might reduce the need for the CMP products, if specific actions would not be taken soon.
Environmental forces affecting Financial Management Case Study Analysis consists of the issues of environmental neighborhoods over the usage of paper in publishing books. The paper utilized 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 regulations for the publishing sector at whole are high. The legal regulations regarding the publishing sector is managed by the General Administration of Press and Publication. Publishing Regulation 1997 requires the publishers to be authorized first by the Government to be gone into in the publishing market. The regulation prohibits direct participation of foreign entities and individuals in the publishing sector.
Market Analysis (Porter's 5 Forces Design).
Porter's Five Forces Model could be used to analyze the beauty of the publishing industry China. A quick analysis of the Porter's Five Forces is given as follows;.
Danger of New Entrants.
Hazards of new entrants in the Chinese Publishing Market is moderate. The potential growth in the market tends to attract new entrants to the publishing industry. The existence of extreme competitors and the requirement of huge capital tends to demotivate new entrants to go into in the market.
Danger of Alternative.
Threat of Substitution is high for the Chinese Publishing Market. The alternative products for the published files is the files provided in the virtual libraries on particular sites. The altering customer choices towards digital learning increase the danger of alternative for the industry.
Competitive competition in the publishing market 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, brand-new entrants are likewise participating in the market increasing the competition for CMP.
Bargaining Power of Supplier.
The major providers of the Financial Management Case Study Help consist of the providers of the paper for publishing 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.
Negotiating power of purchaser in the publishing industry is high. Due to the presence of a a great deal of publishers in the Chinese market and the market saturation, the purchasers requires high quality files at competitive rates.
CMP operates in an extremely competitive market with the existence of large number of competitors. Nevertheless, the business has a competitive position in the market with the highest market share in the Chinese publishing market. Major competitors of Financial Management Case Study Solution consist of;.
• Chemical Industry Press (CIP).
• Posts and telecommunication Press (PTP).
Chemical Market Press (CIP).
CIPis among the close competitors of CMP. Founded in the same period, CIP publishes similar kind of books. For a big period, CIP held the biggest market share, and still ranks 3rd and 2nd in numerous market sections, with a major focus on academic publications. CIP functions as a hazard for CMP as it could 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 Management Case Study Solution easily in the present market circumstance.
Posts and telecommunication Press (PTP).
Another close competitor of CMP is PTP. It was likewise founded in the very same duration as CMP and CIP. It ranks 6th in the state-owned publishers in regards to organisation scale. It is likewise among the prominent players in the publishing industry with a yearly overall earnings of RMB 550 million in 2010.
Alternative-1: Broaden towards New Markets
• Reducing reliance over the Chinese markets.
• Increasing variety of Customers
• Development opportunities.
• Avoiding the impact of market saturation in the Chinese publishing market.
• Usage of possible resources in growth.
• Threat of failure in new markets.
• Time consuming.
Alernative-2: Present Digital Publishing
• Sustaining customer base.
• Approaching brand-new markets.
• Easy to present utilizing present capabilities.
• Low risk of Failure.
• Low requirement for funds.
• Increased item portfolio provides high worth to clients.
• Competitors in the market by CIP, who has prior concentrate on the digital publishing.
• Shift of focus from the core business segments to the brand-new one can lead the company to lose demand of its products in the market.
As the choices are shifting towards digital publishing and the business need an instant option to prevent the decreasing market development. The company might likewise think about the expansion program after the success of its digital publishing program.
In order to introduce digital publishing in its item portfolio, the company should initially gathers the data related to the consumer demand, the possible markets, the government guidelines and the information related to the competitors presented in the market. If the initial offering shows a success, the business should go for the other markets. In this method the business would be able to execute its digital publishing program.
Although, the growth of the publishing industry is declining given that 2008, showing a hazard to the business's long term existence, but the situation can be managed by thinking about a development plan in the future. The company could consider introducing digital publishingin its existing market to implement its development program at immediate basis and to avoid the risk of failure for entryway in the new markets.