Financing New Ventures Case Study Solution and Analysis
Intro
Financing New Ventures Case Study Help is the biggest publishing business with a highest market share in the China's book retail market. CMP has actually become a specialized details provider and a big comprehensive Science and Technology publishing business through the combination of print media, audio-visual media and the network media.
Crucial Concerns
CMP has actually spent its 60 years journey efficiently, being a successful publishing home, nevertheless, the changing macro market patterns and forces bring certain difficulties to the publishing market in basic and Financing New Ventures Case Study Analysis in specific. These aspects consist of;
• Entryway of the brand-new publishing companies in the industry.
• Declining development of the publishing market.
• Market saturation.
• Intro of digital publishing strategies
• Improvement of science and innovation.
The transformation 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 situation? Do the long valuable experience, technical resources and the capabilities of the company could be utilized to strive for the future advancement unceasingly? How could the company sustain its long term competitive position in future?
Situational Analysis
Internal Analysis
SWOT Analysis
Strengths
Financing New Ventures Case Study Help has certain strengths that can be made use of to minimize the risks, conquer the weak point and avail the opportunities. Strengths of CMP are offered as follows;
• The long term experience of Financing New Ventures Case Study Solution in the publishing market i.e. 60 years enables the company to provide high quality items at a lower cost utilizing its previous experiences.
• The technical resources and abilities generated by its successful journey offer a competitive benefit to CMP.
• Large item portfolioof CMP assists it to diversify its danger and offer high value to its consumers.
• Strong monetary position allows the business to think about a number of development chances with no worry of raising fund externally.
Weaknesses
In addition to the strengths, the company has particular weak points which might increase restrictions for the business in executing its development program. The weaknesses of Financing New Ventures Case Study Analysis are given as follows;
• Despite of being a science and technology publishing firm, the business 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 growth strategies to avoid its reliance over the Chinese markets to attain long term growth.
Opportunities
Although, the development of the publishing market is declining because 2008, impacting Financing New Ventures Case Study Analysis too, but the development could be revived by availing certain chances provided in the market. The marketplace opportunities for CMP include;
• The business might also present Digital Publishing by utilizing its long term technical experience and a strong consumer recognition in the market.
• CMP might consider a development program through the expansion towards foreign markets in order to reduce its reliance over Chinese markets by utilizing its large funds.
Threats
The altering macro trends in the market and increasing competition in the publishing industry has actually posed particular dangers to Financing New Ventures Case Study Analysis including;( Gurel, 2017).
• Intro of digital publishing i.e. digital libraries could result in declining market share of Financing New Ventures Case Study Solution due to the customer shift towards digital libraries.
• The presence of large number of competitors in the publishing market increase the danger for CMP to lose its competitive position in the market, as competitors can acquire a strong consumer base by using certain strategies like aggressive promo, quality items, etc.
• Entrance of new publishing companies in the market together with presence of high competition increases the danger of losing the consumer base.
Monetary Analysis.
The company has a rather competitive financial performance. Due to absence of data, the financial ratios of CMP could not be computed. However, the general financial efficiency of the company might be evaluated by using the charts given in the case Appendices. It might be analyzed from the Appendix III that the yearly overall earnings of CMP throughout the duration 2000-2012 are growing at a high growth rate, revealing that the yearly demand of the items of Financing New Ventures Case Study Solution is growing and the company is rather efficient in drawing in a a great deal of consumers at a prospective cost.
In addition to it, the second graph which reveals the annual development in the Financing New Ventures Case Study Analysis total properties, shows that the business is quite effective in including worth to its possessions through its incomes. The growth in possessions shows that the overall value of the firm is also increasing with increasing the overall profits. (Unidentified, 2013).
Another monetary analysis of the business using the offered data might be the analysis regarding the distribution of overall incomes of the business. Huge part of the incomes of CMP comes from the sales of its published books i.e. 64% as displayed in the Case Appendix V. The company could move towards other service sectors with a possible growth to achieve its future advancement objective.
PESTEL Analysis
PESTEL analysis might be conducted to learn the different external forces impacting the performance of the company and the current patterns in the external environment of the company. A quick PESTEL analysis of the company is offered as follows; (Alanzi, 2018).
Political.
As the publishing sector might have a considerable effect on the state of mind of individuals about the communist ideology of the federal government, for that reason, the publishing sector is extremely supervised and assisted by the Publicity Department of the Communist Party of China. It could be stated that the overall political forces impacting CMP service are high. The federal government policies concerning the publishing sector are also increasing with the passage of time.
Economical.
Economic forces impacting the publishing sector in general and the CMP in specific includesthe prices of paper, the income level of consumers, the inflation rate, and the overall GDP growth of the country. All these forces integrate impact the demand for the publishing market.
Social and Demographical.
Social and demographical forces consist of the population growth, the consumer's preferences towards checking out informative products etc. China has the greatest population worldwide with a high population development, revealing the increasing variety of customers of the Financing New Ventures Case Study Solution. However, the customer preferences are shifting towards digital publishing rather than the conventional was of publishing. In this regard, CMP needs to focus on digital publishing to meet the changing customer preferences.
Technological.
Technological forces affecting the CMP include the technological improvement in the reading methods and so on. Enhancement of science and innovation in addition to the rise of digital publishing could reduce the demand for the CMP items, if certain actions would not be taken quickly.
Environmental.
Environmental forces impacting Financing New Ventures Case Study Analysis includes the issues of ecological communities over the use 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 should not be hazardous for the environment.
Legal.
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 gone into in the publishing market.
Industry Analysis (Porter's 5 Forces Model).
Porter's 5 Forces Model could be utilized to analyze the appearance of the publishing market China. A short analysis of the Porter's 5 Forces is provided as follows;.
Hazard of New Entrants.
Threats of brand-new entrants in the Chinese Publishing Market is moderate. The potential development in the industry tends to draw in new entrants to the publishing market. The existence of extreme competition and the requirement of big capital tends to demotivate brand-new entrants to go into in the market.
Threat of Replacement.
Danger of Alternative is high for the Chinese Publishing Market. The substitute products for the published files is the files presented in the digital libraries on particular websites. The changing customer choices towards digital learning increase the risk of alternative for the market.
Competitive Rivalry.
Competitive competition in the publishing industry is high. The presence of large number of customers in the Chinese Publishing Industry like CIP, PTP etc. tends to produce high competitive competition for CMP. Together with it, new entrants are also participating in the marketplace increasing the competition for CMP.
Bargaining Power of Supplier.
The major providers of the Financing New Ventures Case Study Help consist of the providers of the paper for publishing documents. As CMP is the biggest publisher in the Chinese Publishing Market, therefore the total bargaining power of supplier for CMP is low.
Bargaining Power of Buyer.
Negotiating power of buyer in the publishing industry is high. Due to the existence of a large number of publishers in the Chinese market and the marketplace saturation, the purchasers needs high quality files at competitive prices.
Competitors Analysis.
CMP runs in an extremely competitive industry with the presence of large number of competitors. The business has a competitive position in the market with the highest market share in the Chinese publishing market. Major rivals of Financing New Ventures Case Study Solution include;.
• Chemical Market Press (CIP).
• Posts and telecommunication Press (PTP).
Chemical Market Press (CIP).
CIPis among the close competitors of CMP. Established in the very same period, CIP releases comparable kind of books. For a large time period, CIP held the biggest market share, and still ranks second and 3rd in various market sections, with a significant focus on instructional publications. CIP functions as a danger for CMP as it might wean its market share due to its long term competitive background. CIP is concentrated on digital publishing and could wean the market share of Financing New Ventures Case Study Help quickly in the present market situation.
Posts and telecommunication Press (PTP).
Another close rival of CMP is PTP. It was likewise established in the same period as CMP and CIP. It ranks 6th in the state-owned publishers in terms of business scale. It is also among the prominent players in the publishing market with a yearly overall earnings of RMB 550 million in 2010.
Alternatives
Alternative-1: Expand towards New Markets
Pros
• Minimizing reliance over the Chinese markets.
• Increasing variety of Consumers
• Development opportunities.
• Preventing the effect of market saturation in the Chinese publishing industry.
Cons
• Use of prospective resources in growth.
• Threat of failure in new markets.
• Time consuming.
Alernative-2: Introduce Digital Publishing
Pros
• Sustaining consumer base.
• Approaching new markets.
• Easy to introduce utilizing existing abilities.
• Low danger of Failure.
• Low requirement for funds.
• Increased item portfolio offers high value to clients.
Cons
• Competitors in the market by CIP, who has prior concentrate on the digital publishing.
• Shift of focus from the core company segments to the new one can lead the business to lose need of its items in the market.
Recommendations
As the preferences are shifting towards digital publishing and the business need an instant solution to prevent the declining market development. The business could also think about the expansion program after the success of its digital publishing program.
Implementation
In order to introduce digital publishing in its item portfolio, the business ought to initially collects the data associated with the consumer need, the potential markets, the government regulations and the information associated with the rivals presented in the market. After that, the business should decide one potential sector for its initial offering. It must gather research study that how it might separate its digital publishing from the existing competitors' products. The steps above the business must go for the initial offering. If the preliminary offering shows a success, the company should choose the other markets. In this method the business would be able to implement its digital publishing program.
Conclusion
Although, the growth of the publishing market is declining since 2008, revealing a risk to the company's long term existence, however the scenario can be managed by considering a development strategy in the future. The business might consider presenting digital publishingin its existing market to implement its development program at instant basis and to avoid the danger of failure for entryway in the brand-new markets.
