Financing New Ventures Case Study Solution and Analysis
Financing New Ventures Case Study Analysis is the biggest publishing business with a highest market share in the China's book retail market. CMP provides a variety of services consisting of; gathering information, processing information and interaction services. Significant business segments of the business consist of; books, regulars, consultancy and distribution. The business has a vast product portfolio and its significant items include books, periodicals, online media, exhibitions, research reports and so on. Financing New Ventures Case Study Help has ended up being a specialized information provider and a big extensive Science and Technology publishing company through the combination of print media, audio-visual media and the network media.
CMP has actually spent its 60 years journey efficiently, being a successful publishing house, nevertheless, the altering macro market trends and forces bring specific difficulties to the publishing industry in basic and Financing New Ventures Case Study Solution in specific. These elements consist of;
• Entrance of the new publishing firms in the market.
• Decreasing growth of the publishing market.
• Market saturation.
• Intro of digital publishing strategies
• Enhancement of science and technology.
The change of the macro markets have raised several 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 capabilities of the business could be utilized to pursue the future advancement unceasingly? How could the business sustain its long term competitive position in future?
Financing New Ventures Case Study Analysis has particular strengths that can be used to lower the threats, conquer the weakness and avail the chances. Strengths of CMP are offered as follows;
• The long term experience of Financing New Ventures Case Study Analysis in the publishing market i.e. 60 years permits the company to supply high quality items at a lower cost utilizing its prior experiences.
• The technical resources and capabilities created by its effective journey provide a competitive benefit to CMP.
• Large item portfolioof CMP assists it to diversify its danger and offer high value to its customers.
• Strong monetary position allows the business to consider a number of advancement opportunities without any fear of raising fund externally.
Along with the strengths, the company has certain weak points which might increase restraints for the business in implementing its advancement program. The weak points of Financing New Ventures Case Study Solution are given as follows;
• Despite of being a science and innovation 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 growth. It ought to propose particular growth strategies to prevent its dependence over the Chinese markets to attain long term growth.
The growth of the publishing industry is decreasing considering that 2008, impacting Financing New Ventures Case Study Help as well, but the growth might be revived by availing certain opportunities presented in the market. The market chances for CMP include;
• The business could also introduce Digital Publishing by using its long term technical experience and a strong customer recognition in the market.
• CMP could consider an advancement program through the growth towards foreign markets in order to reduce its reliance over Chinese markets by utilizing its huge financial resources.
The changing macro patterns in the market and increasing competitors in the publishing industry has presented certain hazards to Financing New Ventures Case Study Analysis including;( Gurel, 2017).
• Intro of digital publishing i.e. digital libraries could cause decreasing market share of Financing New Ventures Case Study Solution due to the consumer shift towards virtual libraries.
• The existence of large number of competitors in the publishing market increase the risk for CMP to lose its competitive position in the market, as rivals can acquire a strong customer base by using specific strategies like aggressive promotion, quality items, etc.
• Entrance of brand-new publishing companies in the industry in addition to existence of high competition increases the risk of losing the consumer base.
The business has a rather competitive financial performance. Due to lack of information, the monetary ratios of CMP might not be calculated. However, the general monetary performance of the business could be evaluated by utilizing the graphs given up the case Appendices. It could be analyzed from the Appendix III that the annual overall revenues of CMP during the duration 2000-2012 are growing at a high growth rate, revealing that the annual need of the products of Financing New Ventures Case Study Solution is growing and the business is rather efficient in attracting a large number of clients at a prospective cost.
Along with it, the 2nd graph which shows the annual growth in the Financing New Ventures Case Study Solution overall properties, shows that the company is quite effective in including worth to its assets through its profits. The growth in possessions shows that the overall worth of the firm is also increasing with increasing the overall revenues. (Unidentified, 2013).
Another monetary analysis of the company using the offered information could be the analysis relating to the distribution of overall profits of the business. Huge part of the revenues of CMP comes from the sales of its published books i.e. 64% as shown in the Case Appendix V. The business might move towards other service sections with a potential development to accomplish its future development objective.
PESTEL analysis might be performed to discover the numerous external forces impacting the performance of the company and the current patterns in the external environment of the company. A short PESTEL analysis of the business is given as follows; (Alanzi, 2018).
As the publishing sector could have a substantial effect on the mindset of individuals about the communist ideology of the government, for that reason, the publishing sector is extremely monitored and assisted by the Publicity Department of the Communist Party of China. It could be said that the overall political forces impacting CMP organisation are high. The federal government policies concerning the publishing sector are likewise increasing with the passage of time.
Economic forces affecting the publishing sector in general and the CMP in particular includesthe costs of paper, the income level of customers, the inflation rate, and the total GDP growth of the country. All these forces combine impact the demand for the publishing market.
Social and Demographical.
Social and demographical forces include the population development, the consumer's choices towards reading helpful products and so on. China has the highest population on the planet with a high population growth, showing the increasing variety of customers of the Financing New Ventures Case Study Solution. Nevertheless, the consumer choices are moving towards digital publishing instead of the standard was of publishing. In this regard, CMP should focus on digital publishing to meet the altering customer preferences.
Technological forces impacting the CMP include the technological advancement in the reading methods etc. Improvement of science and innovation together with the increase of digital publishing could minimize the need for the CMP items, if particular actions would not be taken quickly.
Environmental forces impacting Financing New Ventures Case Study Analysis consists of the concerns of ecological neighborhoods over the use 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 ought to not be harmful for the environment.
Legal policies for the publishing sector at whole are high. Publishing Ordinance 1997 needs the publishers to be approved initially by the Federal government to be entered in the publishing market.
Industry Analysis (Porter's Five Forces Design).
Porter's Five Forces Model could be used to examine the attractiveness of the publishing market China. A quick analysis of the Porter's 5 Forces is offered as follows;.
Risk of New Entrants.
Risks of brand-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. The existence of extreme competition and the requirement of huge capital tends to demotivate new entrants to go into in the market.
Risk of Alternative.
Danger of Replacement is high for the Chinese Publishing Industry. The alternative products for the published documents is the files provided in the digital libraries on particular sites. The altering consumer preferences towards digital learning increase the hazard of replacement for the industry.
Competitive rivalry in the publishing market is high. The existence of large number of customers in the Chinese Publishing Market like CIP, PTP etc. tends to produce high competitive rivalry for CMP. Together with it, new entrants are also participating in the market increasing the competitors for CMP.
Bargaining Power of Supplier.
The significant providers of the Financing New Ventures Case Study Solution consist of the suppliers of the paper for publishing documents. As CMP is the largest 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 a great deal of publishers in the Chinese market and the marketplace saturation, the buyers requires high quality documents at competitive costs.
CMP runs in a highly competitive industry with the presence 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. Major competitors of Financing New Ventures Case Study Solution consist of;.
• Chemical Market Press (CIP).
• Posts and telecommunication Press (PTP).
Chemical Industry Press (CIP).
CIP acts as a threat for CMP as it might 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 present market scenario.
Posts and telecommunication Press (PTP).
Another close competitor of CMP is PTP. It was also established in the exact same duration as CMP and CIP. It ranks sixth in the state-owned publishers in terms of business scale. It is also one of the popular gamers in the publishing industry with a yearly total earnings of RMB 550 million in 2010.
Alternative-1: Expand towards New Markets
• Decreasing reliance over the Chinese markets.
• Increasing variety of Clients
• Growth chances.
• Avoiding the effect of market saturation in the Chinese publishing industry.
• Usage of potential resources in growth.
• Threat of failure in brand-new markets.
• Time consuming.
Alernative-2: Introduce Digital Publishing
• Sustaining customer base.
• Approaching new markets.
• Easy to introduce utilizing present capabilities.
• Low threat of Failure.
• Low requirement for funds.
• Increased item portfolio offers high worth to consumers.
• Competition in the market by CIP, who has prior focus on the digital publishing.
• Shift of focus from the core business sections to the brand-new one can lead the business to lose demand of its products in the market.
As the choices are moving towards digital publishing and the business require an immediate service to avoid the declining industry development. The business could likewise consider the expansion program after the success of its digital publishing program.
In order to present digital publishing in its item portfolio, the company needs to initially gathers the data connected to the consumer need, the potential markets, the federal government regulations and the data connected to the competitors presented in the market. After that, the business ought to choose one prospective segment for its initial offering. It ought to gather research that how it could distinguish its digital publishing from the existing competitors' products. The steps above the company should go for the preliminary offering. The business ought to go for the other markets if the preliminary offering proves a success. In this method the company would have the ability to implement its digital publishing program.
Although, the growth of the publishing industry is decreasing considering that 2008, showing a hazard to the company's long term presence, however the scenario can be controlled by thinking about a development plan in the future. The company could consider presenting digital publishingin its existing market to implement its development program at immediate basis and to prevent the danger of failure for entrance in the new markets.