Freedom Communications Incfamily Enterprise Or Liquidity Case Study Solution and Analysis
Introduction
Freedom Communications Incfamily Enterprise Or Liquidity Case Study Analysis is the biggest publishing company with a greatest market share in the China's book retail market. CMP has ended up being a specialized info supplier and a big detailed Science and Innovation publishing business through the combination of print media, audio-visual media and the network media.
Crucial Concerns
Although, Freedom Communications Incfamily Enterprise Or Liquidity Case Study Analysis has actually invested its 60 years journey efficiently, being a successful publishing house, however, the altering macro market trends and forces bring specific difficulties to the publishing industry in basic and CMP in particular. These factors consist of;
• Entryway of the brand-new publishing firms in the market.
• Declining growth of the publishing market.
• Market saturation.
• Introduction of digital publishing techniques
• Improvement of science and innovation.
The improvement of the macro markets have raised a number of concerns 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 strive for the future advancement unceasingly? How could the business sustain its long term competitive position in future?
Situational Analysis
Internal Analysis
SWOT Analysis
Strengths
Freedom Communications Incfamily Enterprise Or Liquidity Case Study Solution has specific strengths that can be made use of to decrease the hazards, get rid of the weak point and avail the opportunities. Strengths of CMP are given as follows;
• The long term experience of Freedom Communications Incfamily Enterprise Or Liquidity Case Study Solution in the publishing industry i.e. 60 years enables the business to provide high quality products at a lower expense utilizing its prior experiences.
• The technical resources and capabilities generated by its effective journey offer a competitive advantage to CMP.
• Vast item portfolioof CMP helps it to diversify its risk and offer high worth to its consumers.
• Strong monetary position allows the business to think about several development chances without any fear of raising fund externally.
Weaknesses
In addition to the strengths, the company has specific weaknesses which might increase restraints for the company in implementing its development program. The weaknesses of Freedom Communications Incfamily Enterprise Or Liquidity Case Study Analysis are offered as follows;
• Despite of being a science and innovation publishing company, the business still has conventional methods ofpublishing which are not suitable with the growing technological shift.
• CMP extremely relies over the Chinese markets for its development. It should propose certain expansion plans to avoid its reliance over the Chinese markets to achieve long term growth.
Opportunities
The development of the publishing market is declining considering that 2008, affecting Freedom Communications Incfamily Enterprise Or Liquidity Case Study Help as well, but the growth might be restored by availing particular opportunities presented in the market. The marketplace opportunities for CMP consist of;
• The business could also introduce Digital Publishing by utilizing its long term technical experience and a strong consumer recognition in the market.
• CMP might consider an advancement program through the expansion towards foreign markets in order to minimize its reliance over Chinese markets by using its large financial resources.
Threats
The changing macro trends in the market and increasing competition in the publishing market has presented specific threats to Freedom Communications Incfamily Enterprise Or Liquidity Case Study Help including;( Gurel, 2017).
• Introduction of digital publishing i.e. virtual libraries could cause decreasing market share of Freedom Communications Incfamily Enterprise Or Liquidity Case Study Help due to the customer shift towards digital libraries.
• The presence of a great deal of rivals in the publishing market increase the danger for CMP to lose its competitive position in the market, as rivals can acquire a strong consumer base by utilizing certain techniques like aggressive promotion, quality items, etc.
• Entrance of brand-new publishing companies in the industry in addition to presence of high competitors increases the danger of losing the client base.
Monetary Analysis.
The company has a rather competitive monetary performance. Due to lack of information, the financial ratios of CMP could not be computed. The general monetary efficiency of the business could be evaluated by using the charts given in the case Appendices. It might be analyzed from the Appendix III that the yearly total incomes of CMP during the duration 2000-2012 are growing at a high development rate, showing that the yearly need of the products of Freedom Communications Incfamily Enterprise Or Liquidity Case Study Help is growing and the business is rather efficient in bring in a a great deal of consumers at a prospective rate.
Together with it, the second graph which reveals the yearly growth in the Freedom Communications Incfamily Enterprise Or Liquidity Case Study Help total assets, shows that the company is quite efficient in including worth to its assets through its profits. The development in possessions reveals that the total value of the firm is also increasing with increasing the total incomes. (Unidentified, 2013).
Another monetary analysis of the company utilizing the given data might be the analysis concerning the circulation of total profits of the company. Huge part of the revenues of CMP originates from the sales of its released books i.e. 64% as displayed in the Case Appendix V. The business might move towards other organisation segments with a potential development to attain its future advancement objective.
PESTEL Analysis
PESTEL analysis could be conducted to find out the different external forces impacting the efficiency of the business and the recent trends in the external environment of the business. A short PESTEL analysis of the company is offered as follows; (Alanzi, 2018).
Political.
As the publishing sector could have a substantial impact on the frame of mind of the people about the communist ideology of the federal government, therefore, the publishing sector is extremely supervised and assisted by the Publicity Department of the Communist Party of China. It could be said that the total political forces impacting CMP business are high. The federal government policies regarding the publishing sector are likewise increasing with the passage of time.
Affordable.
Economic forces impacting the publishing sector in general and the CMP in specific includesthe prices of paper, the earnings level of consumers, the inflation rate, and the general GDP development of the nation. All these forces combine impact the need for the publishing market.
Social and Demographical.
Social and demographical forces include the population growth, the customer's choices towards checking out useful products and so on. China has the greatest population in the world with a high population growth, showing the increasing number of customers of the Freedom Communications Incfamily Enterprise Or Liquidity Case Study Help. The consumer choices are shifting towards digital publishing rather than the conventional was of publishing. In this regard, CMP should concentrate on digital publishing to satisfy the altering consumer preferences.
Technological.
Technological forces impacting the CMP consist of the technological advancement in the reading methods etc. Improvement of science and innovation together with the rise of digital publishing might minimize the need for the CMP items, if certain actions would not be taken quickly.
Environmental.
Ecological forces impacting Freedom Communications Incfamily Enterprise Or Liquidity Case Study Help consists of the concerns of ecological communities 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 should not be damaging for the environment.
Legal.
Legal regulations for the publishing sector at whole are high. Publishing Regulation 1997 requires the publishers to be authorized first by the Government to be entered in the publishing market.
Market Analysis (Porter's 5 Forces Model).
Porter's Five Forces Model could be used to evaluate the beauty of the publishing industry China. A brief analysis of the Porter's 5 Forces is given as follows;.
Risk of New Entrants.
Risks of new entrants in the Chinese Publishing Market is moderate. The possible development in the industry tends to draw in brand-new entrants to the publishing market. The presence of intense competitors and the requirement of substantial capital tends to demotivate new entrants to enter in the market.
Danger of Substitution.
Danger of Replacement is high for the Chinese Publishing Market. The substitute items for the released documents is the files presented in the digital libraries on particular sites. The changing customer preferences towards digital knowing increase the hazard of alternative for the industry.
Competitive Rivalry.
Competitive competition in the publishing market is high. The existence of large number of consumers in the Chinese Publishing Industry like CIP, PTP etc. tends to produce high competitive competition for CMP. In addition to it, new entrants are likewise participating in the market increasing the competitors for CMP.
Bargaining Power of Provider.
The major suppliers of the Freedom Communications Incfamily Enterprise Or Liquidity Case Study Analysis include the providers of the paper for publishing files. 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 Buyer.
Negotiating power of purchaser 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 requires high quality files at competitive costs.
Competitors Analysis.
CMP runs in an extremely competitive market with the existence of large number of rivals. The business has a competitive position in the market with the highest market share in the Chinese publishing market. Major rivals of Freedom Communications Incfamily Enterprise Or Liquidity Case Study Help consist of;.
• Chemical Market Press (CIP).
• Posts and telecommunication Press (PTP).
Chemical Industry Press (CIP).
CIPis one of the close rivals of CMP. Founded in the same duration, CIP publishes comparable kind of books. For a large time period, CIP held the largest market share, and still ranks 2nd and 3rd in different market segments, with a major concentrate on educational publications. 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 might wean the market share of Freedom Communications Incfamily Enterprise Or Liquidity Case Study Solution easily in the existing market situation.
Posts and telecommunication Press (PTP).
It was also established in the same duration as Freedom Communications Incfamily Enterprise Or Liquidity Case Study Solution and CIP. It is likewise one of the prominent players in the publishing market with a yearly total incomes of RMB 550 million in 2010.
Alternatives
Alternative-1: Expand towards New Markets
Pros
• Lowering reliance over the Chinese markets.
• Increasing number of Customers
• Growth chances.
• Avoiding the effect of market saturation in the Chinese publishing market.
Cons
• Use of prospective resources in growth.
• Threat of failure in new markets.
• Time consuming.
Alernative-2: Present Digital Publishing
Pros
• Sustaining consumer base.
• Approaching brand-new markets.
• Easy to introduce using current abilities.
• Low risk of Failure.
• Low requirement for funds.
• Increased product portfolio provides high worth to consumers.
Cons
• Competitors in the market by CIP, who has prior concentrate on the digital publishing.
• Shift of focus from the core company sections to the new one can lead the business to lose demand of its products in the market.
Recommendations
With the deep analysis of the external and internal environment of the business along with the market analysis and the competitor analysis, Alternative 2 is recommended to CMP to attain its future advancement. As the preferences are shifting towards digital publishing and the business need an instant solution to prevent the declining industry development. Therefore, introduction of digital publishing might prove to be an immediate service with low amount of threat for the company. Nevertheless, the business might 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 first collects the data related to the customer demand, the potential markets, the government guidelines and the information related to the competitors provided in the market. If the initial offering proves a success, the company ought to go for the other markets. In this way the business would be able to implement its digital publishing program.
Conclusion
Although, the development of the publishing industry is decreasing considering that 2008, revealing a risk to the business's long term presence, but the scenario can be controlled by thinking about a development plan in the future. The company could consider introducing digital publishingin its existing market to execute its development program at instant basis and to avoid the threat of failure for entrance in the brand-new markets.
