Frozen Food Products Cost Of Capital Case Study Solution and Analysis
Intro
Frozen Food Products Cost Of Capital Case Study Help is the largest publishing company with a greatest market share in the China's book retail market. CMP offers a number of services consisting of; collecting information, processing information and communication services. Major business sections of the business include; books, periodicals, consultancy and circulation. The business has a vast item portfolio and its significant products consist of books, periodicals, online media, exhibits, research study reports etc. Frozen Food Products Cost Of Capital Case Study Help has actually ended up being a specialized details company and a big detailed Science and Innovation publishing business through the combination of print media, audio-visual media and the network media.
Important Problems
Although, Frozen Food Products Cost Of Capital Case Study Solution has actually invested its 60 years journey efficiently, being an effective publishing house, nevertheless, the altering macro market trends and forces bring particular challenges to the publishing market in basic and CMP in specific. These elements consist of;
• Entryway of the brand-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 transformation of the macro markets have raised several questions to the management at CPM that what could be the future of CMP in this circumstance? Do the long important experience, technical resources and the abilities of the company could be used 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
Frozen Food Products Cost Of Capital Case Study Help has certain strengths that can be made use of to reduce the risks, conquer the weakness and avail the chances. Strengths of CMP are provided as follows;
• The long term experience of Frozen Food Products Cost Of Capital Case Study Solution in the publishing market i.e. 60 years allows the business to supply high quality products at a lower expense using its prior experiences.
• The technical resources and abilities generated by its successful journey supply a competitive advantage to CMP.
• Vast product portfolioof CMP helps it to diversify its threat and offer high worth to its clients.
• Strong financial position enables the business to consider several development opportunities with no fear of raising fund externally.
Weak points
Together with the strengths, the business has specific weak points which might increase restrictions for the business in implementing its development program. The weaknesses of Frozen Food Products Cost Of Capital Case Study Help are provided as follows;
• Despite of being a science and technology publishing company, the company still has standard ways ofpublishing which are not compatible with the growing technological shift.
• CMP extremely relies over the Chinese markets for its development. It ought to propose specific expansion plans to prevent its dependence over the Chinese markets to accomplish long term growth.
Opportunities
The development of the publishing market is declining because 2008, affecting Frozen Food Products Cost Of Capital Case Study Analysis as well, however the development could be restored by availing certain chances provided in the market. The marketplace chances for CMP consist of;
• The business might also introduce 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 growth towards foreign markets in order to decrease its dependence over Chinese markets by using its vast funds.
Risks
The changing macro patterns in the market and increasing competitors in the publishing industry has actually posed particular threats to Frozen Food Products Cost Of Capital Case Study Help including;( Gurel, 2017).
• Introduction of digital publishing i.e. digital libraries might lead to declining market share of Frozen Food Products Cost Of Capital Case Study Analysis due to the consumer shift towards virtual libraries.
• The presence of large number of rivals in the publishing market increase the threat for CMP to lose its competitive position in the market, as competitors can acquire a strong consumer base by utilizing particular strategies like aggressive promo, quality items, etc.
• Entrance of brand-new publishing firms in the industry along with existence of high competition increases the danger of losing the customer base.
Monetary Analysis.
The business has a rather competitive monetary performance. Due to absence of data, the monetary ratios of CMP could not be computed. However, the overall monetary efficiency of the business might be evaluated by using the charts given up the case Appendices. It might be analyzed from the Appendix III that the yearly total profits of CMP throughout the period 2000-2012 are growing at a high growth rate, showing that the yearly demand of the items of Frozen Food Products Cost Of Capital Case Study Solution is growing and the business is rather efficient in attracting a large number of consumers at a potential price.
Along with it, the second chart which shows the yearly growth in the Frozen Food Products Cost Of Capital Case Study Solution total possessions, reveals that the company is rather efficient in adding value to its properties through its incomes. The growth in possessions shows that the overall worth of the firm is likewise increasing with increasing the total profits. (Unidentified, 2013).
Another financial analysis of the company using the offered information might be the analysis relating to the distribution of overall incomes of the company. Major part of the profits of CMP originates from the sales of its published books i.e. 64% as displayed in the Case Appendix V. The business might move towards other business segments with a prospective growth to attain its future advancement goal.
PESTEL Analysis
PESTEL analysis could be performed to learn the numerous external forces impacting the efficiency of the company and the recent trends in the external environment of the company. A brief PESTEL analysis of the business is given as follows; (Alanzi, 2018).
Political.
As the publishing sector could have a significant impact on the mindset of individuals about the communist ideology of the federal government, for that reason, the publishing sector is extremely supervised and guided by the Promotion Department of the Communist Party of China. It might be stated that the total political forces impacting CMP organisation are high. The government policies concerning the publishing sector are also increasing with the passage of time.
Economical.
Economic forces affecting the publishing sector in basic and the CMP in particular includesthe rates of paper, the income level of consumers, the inflation rate, and the total GDP development of the nation. All these forces combine impact the demand for the publishing market.
Social and Demographical.
Social and demographical forces consist of the population growth, the consumer's choices towards checking out informative materials etc. China has the greatest population on the planet with a high population growth, showing the increasing variety of consumers of the Frozen Food Products Cost Of Capital Case Study Analysis. The customer choices are shifting towards digital publishing rather than the standard was of publishing. In this regard, CMP ought to focus on digital publishing to meet the changing customer preferences.
Technological.
Technological forces impacting the CMP consist of the technological advancement in the reading techniques and so on. Enhancement of science and technology in addition to the increase of digital publishing might lower the demand for the CMP items, if certain actions would not be taken soon.
Environmental.
Environmental forces impacting Frozen Food Products Cost Of Capital Case Study Analysis includes the concerns of ecological communities over the use of paper in publishing books. The paper utilized in the books while publishing is required to be disposable and the ink used while publishing must not be harmful for the environment.
Legal.
Legal policies for the publishing sector at whole are high. The legal policies relating to the publishing sector is controlled by the General Administration of Press and Publication. Publishing Regulation 1997 needs the publishers to be authorized initially by the Government to be gone into in the publishing market. The ordinance prohibits direct participation of foreign entities and people in the publishing sector.
Market Analysis (Porter's 5 Forces Model).
Porter's 5 Forces Model might be used to evaluate the beauty of the publishing market China. A quick analysis of the Porter's 5 Forces is provided as follows;.
Risk of New Entrants.
Dangers of new entrants in the Chinese Publishing Market is moderate. The potential growth in the market tends to bring in new entrants to the publishing industry. The existence of intense competition and the requirement of huge capital tends to demotivate brand-new entrants to enter in the market.
Danger of Substitution.
Risk of Alternative is high for the Chinese Publishing Industry. The substitute items for the published documents is the files presented in the virtual libraries on particular sites. The altering consumer preferences towards digital knowing increase the threat of substitution for the industry.
Competitive Rivalry.
Competitive rivalry in the publishing market is high. The existence of a great deal of customers in the Chinese Publishing Industry like CIP, PTP and so on tends to produce high competitive rivalry for CMP. Along with it, brand-new entrants are likewise participating in the marketplace increasing the competitors for CMP.
Bargaining Power of Provider.
The significant providers of the Frozen Food Products Cost Of Capital Case Study Analysis include the providers of the paper for publishing documents. As CMP is the biggest publisher in the Chinese Publishing Market, for that reason the overall bargaining power of provider for CMP is low.
Bargaining Power of Purchaser.
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 buyers needs high quality files at competitive rates.
Competitors Analysis.
CMP runs in a highly competitive industry with the existence of a great deal of rivals. Nevertheless, the company has a competitive position in the market with the greatest market share in the Chinese publishing market. Significant competitors of Frozen Food Products Cost Of Capital Case Study Analysis include;.
• Chemical Industry Press (CIP).
• Posts and telecommunication Press (PTP).
Chemical Industry Press (CIP).
CIPis one of the close rivals of CMP. Founded in the very same duration, CIP publishes similar kind of books. For a big time period, CIP held the largest market share, and still ranks 3rd and 2nd in numerous market sections, with a major focus on academic publications. CIP functions as a threat 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 Frozen Food Products Cost Of Capital Case Study Solution quickly in the present market circumstance.
Posts and telecommunication Press (PTP).
Another close competitor of CMP is PTP. It was likewise established in the very same period as CMP and CIP. It ranks sixth in the state-owned publishers in terms of company scale. It is likewise among the popular players in the publishing industry with a yearly overall profits of RMB 550 million in 2010.
Alternatives
Alternative-1: Broaden towards New Markets
Pros
• Reducing reliance over the Chinese markets.
• Increasing variety of Consumers
• Development opportunities.
• Preventing the impact of market saturation in the Chinese publishing industry.
Cons
• Use of prospective resources in expansion.
• Threat of failure in new markets.
• Time consuming.
Alernative-2: Introduce Digital Publishing
Pros
• Sustaining customer base.
• Approaching new markets.
• Easy to present using present abilities.
• Low risk of Failure.
• Low requirement for funds.
• Increased product portfolio offers high worth to clients.
Cons
• Competitors in the market by CIP, who has prior focus on the digital publishing.
• Shift of focus from the core service sections to the brand-new one can lead the company to lose need of its items in the market.
Suggestions
As the preferences are moving towards digital publishing and the business need an instant solution to prevent the decreasing industry development. The business could likewise think about the growth program after the success of its digital publishing program.
Application
In order to present digital publishing in its product portfolio, the business must initially gathers the information related to the customer need, the prospective markets, the federal government guidelines and the data related to the rivals presented in the market. If the preliminary offering shows a success, the business ought to go for the other markets. In this method the business would be able to implement its digital publishing program.
Conclusion
The development of the publishing industry is decreasing since 2008, showing a danger to the business's long term presence, however the situation can be managed by thinking about a development plan in the future. The company could think about introducing digital publishingin its existing market to execute its advancement program at immediate basis and to prevent the threat of failure for entrance in the brand-new markets.
