Headquarters Overhead Cost Allocation At Korea Auto Insurance Co Inc Case Study Solution and Analysis
Introduction
Headquarters Overhead Cost Allocation At Korea Auto Insurance Co Inc Case Study Solution is the largest publishing business with a greatest market share in the China's book retail market. CMP has 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.
Vital Concerns
Although, Headquarters Overhead Cost Allocation At Korea Auto Insurance Co Inc Case Study Help has actually spent its 60 years journey efficiently, being an effective publishing home, however, the altering macro market trends and forces bring certain obstacles to the publishing market in general and CMP in specific. These factors include;
• Entryway of the brand-new publishing companies in the market.
• Declining development of the publishing market.
• Market saturation.
• Introduction of digital publishing strategies
• Enhancement of science and innovation.
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 important experience, technical resources and the abilities of the business could be made use of 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
Headquarters Overhead Cost Allocation At Korea Auto Insurance Co Inc Case Study Help has particular strengths that can be used to minimize the hazards, overcome the weakness and get the opportunities. Strengths of CMP are provided as follows;
• The long term experience of Headquarters Overhead Cost Allocation At Korea Auto Insurance Co Inc Case Study Solution in the publishing industry i.e. 60 years enables the business to provide high quality items at a lower cost utilizing its previous experiences.
• The technical resources and abilities generated by its effective journey provide a competitive advantage to CMP.
• Huge item portfolioof CMP helps it to diversify its danger and supply high value to its customers.
• Strong monetary position allows the company to consider a number of development chances with no worry of raising fund externally.
Weak points
Together with the strengths, the company has specific weak points which could increase restrictions for the business in implementing its advancement program. The weak points of Headquarters Overhead Cost Allocation At Korea Auto Insurance Co Inc Case Study Help are provided as follows;
• Despite of being a science and innovation publishing company, the business still has conventional ways ofpublishing which are not suitable with the growing technological shift.
• CMP highly relies over the Chinese markets for its growth. It must propose certain expansion plans to avoid its reliance over the Chinese markets to accomplish long term growth.
Opportunities
Although, the growth of the publishing market is decreasing because 2008, impacting Headquarters Overhead Cost Allocation At Korea Auto Insurance Co Inc Case Study Help too, but the development could be restored by availing certain chances presented in the market. The marketplace chances for CMP include;
• The company could also introduce Digital Publishing by utilizing its long term technical experience and a strong client acknowledgment in the market.
• CMP could think about an advancement program through the growth towards foreign markets in order to lower its dependence over Chinese markets by utilizing its vast funds.
Risks
The altering macro patterns in the market and increasing competition in the publishing industry has actually positioned particular hazards to Headquarters Overhead Cost Allocation At Korea Auto Insurance Co Inc Case Study Analysis including;( Gurel, 2017).
• Intro of digital publishing i.e. virtual libraries might lead to declining market share of Headquarters Overhead Cost Allocation At Korea Auto Insurance Co Inc Case Study Solution due to the consumer shift towards digital libraries.
• The presence of a great deal of competitors in the publishing market increase the danger for CMP to lose its competitive position in the market, as rivals can gain a strong consumer base by utilizing particular strategies like aggressive promo, quality products, and so on
• Entryway of new publishing firms in the industry together with existence of high competition increases the danger of losing the customer base.
Monetary Analysis.
The company has a rather competitive financial performance. Due to absence of information, the financial ratios of CMP might not be calculated. The overall financial efficiency of the business might be analyzed by utilizing the charts provided in the case Appendices. It could be analyzed from the Appendix III that the yearly overall revenues of CMP throughout the period 2000-2012 are growing at a high growth rate, showing that the yearly need of the products of Headquarters Overhead Cost Allocation At Korea Auto Insurance Co Inc Case Study Analysis is growing and the business is rather efficient in attracting a a great deal of consumers at a potential cost.
In addition to it, the second chart which shows the annual growth in the Headquarters Overhead Cost Allocation At Korea Auto Insurance Co Inc Case Study Analysis total properties, shows that the business is rather efficient in including worth to its properties through its earnings. The growth in possessions reveals that the total value of the firm is also increasing with increasing the overall earnings. (Unknown, 2013).
Another monetary analysis of the business using the given information might be the analysis concerning the distribution of overall earnings of the company. Major part of the revenues of CMP comes from the sales of its published books i.e. 64% as displayed in the Case Appendix V. The business could move towards other company sectors with a potential development to attain its future development objective.
PESTEL Analysis
PESTEL analysis could be carried out to find out the various external forces affecting the performance of the business and the recent trends in the external environment of the company. A brief PESTEL analysis of the business is provided as follows; (Alanzi, 2018).
Political.
As the publishing sector could have a considerable effect on the mindset of individuals about the communist ideology of the government, for that reason, the publishing sector is extremely supervised and assisted by the Promotion Department of the Communist Party of China. It might be said that the overall political forces affecting CMP company are high. The government policies relating to the publishing sector are also increasing with the passage of time.
Cost-effective.
Economic forces affecting the publishing sector in general and the Headquarters Overhead Cost Allocation At Korea Auto Insurance Co Inc Case Study Help in specific includesthe costs of paper, the earnings level of consumers, the inflation rate, and the overall GDP growth of the nation. All these forces integrate effect the demand for the publishing market. Along with it, the financial policies associated with the import of books affect the total organisation at CPM. China's financial conditions are quite beneficial for CMP with high GDP development and customer income level.
Social and Demographical.
Social and demographical forces consist of the population development, the customer's choices towards checking out useful products and so on. China has the highest population worldwide with a high population growth, revealing the increasing variety of consumers of the Headquarters Overhead Cost Allocation At Korea Auto Insurance Co Inc Case Study Analysis. The customer choices are moving towards digital publishing rather than the conventional was of publishing. In this regard, CMP ought to focus on digital publishing to satisfy the altering consumer choices.
Technological.
Technological forces impacting the CMP include the technological development in the reading techniques and so on. Enhancement of science and technology along with the rise of digital publishing could minimize the demand for the CMP products, if certain actions would not be taken soon.
Environmental.
Environmental forces impacting Headquarters Overhead Cost Allocation At Korea Auto Insurance Co Inc 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 required to be non reusable and the ink utilized while publishing should not be harmful for the environment.
Legal.
Legal regulations for the publishing sector at whole are high. Publishing Regulation 1997 requires the publishers to be authorized initially by the Government to be entered in the publishing market.
Market Analysis (Porter's Five Forces Design).
Porter's Five Forces Model might be used to examine the attractiveness of the publishing market China. A brief analysis of the Porter's Five Forces is provided as follows;.
Danger of New Entrants.
Dangers of new entrants in the Chinese Publishing Industry is moderate. The potential development in the market tends to draw in new entrants to the publishing market. Nevertheless, the presence of intense competitors and the requirement of big capital tends to demotivate brand-new entrants to go into in the marketplace.
Hazard of Substitution.
Threat of Replacement is high for the Chinese Publishing Industry. The substitute products for the published documents is the documents presented in the digital libraries on specific websites. The changing consumer choices towards digital learning increase the hazard of alternative for the market.
Competitive Rivalry.
Competitive competition in the publishing market is high. The presence of a great deal of customers in the Chinese Publishing Market like CIP, PTP and so on tends to produce high competitive competition for CMP. Along with it, brand-new entrants are also participating in the marketplace increasing the competition for CMP.
Bargaining Power of Supplier.
The significant suppliers of the Headquarters Overhead Cost Allocation At Korea Auto Insurance Co Inc Case Study Solution include the suppliers of the paper for publishing documents. As CMP is the biggest publisher in the Chinese Publishing Market, for that reason the general bargaining power of provider for CMP is low.
Bargaining Power of Buyer.
Haggling power of buyer in the publishing market 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 documents at competitive prices.
Rivals Analysis.
CMP operates in an extremely competitive industry with the existence of a great deal of competitors. The business has a competitive position in the market with the highest market share in the Chinese publishing market. Significant competitors of Headquarters Overhead Cost Allocation At Korea Auto Insurance Co Inc Case Study Help include;.
• Chemical Industry Press (CIP).
• Posts and telecommunication Press (PTP).
Chemical Market Press (CIP).
CIPis among the close rivals of CMP. Founded in the very same period, CIP publishes comparable kind of books. For a large time period, CIP held the largest market share, and still ranks 3rd and second in numerous market sectors, with a major focus on instructional publications. CIP serves as a risk 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 Headquarters Overhead Cost Allocation At Korea Auto Insurance Co Inc Case Study Help quickly in the current market scenario.
Posts and telecommunication Press (PTP).
It was also established in the exact same duration as Headquarters Overhead Cost Allocation At Korea Auto Insurance Co Inc Case Study Help and CIP. It is also one of the prominent players in the publishing industry with a yearly total revenues of RMB 550 million in 2010.
Alternatives
Alternative-1: Broaden towards New Markets
Pros
• Reducing dependence over the Chinese markets.
• Increasing variety of Consumers
• Development chances.
• Preventing the impact of market saturation in the Chinese publishing market.
Cons
• Use of potential resources in growth.
• Threat of failure in brand-new markets.
• Time consuming.
Alernative-2: Present Digital Publishing
Pros
• Sustaining consumer base.
• Approaching new markets.
• Easy to introduce utilizing existing capabilities.
• Low risk of Failure.
• Low requirement for funds.
• Increased item portfolio offers high worth to clients.
Cons
• Competitors in the market by CIP, who has prior concentrate on the digital publishing.
• Shift of focus from the core service sections to the new one can lead the company to lose need of its items in the market.
Recommendations
As the preferences are moving towards digital publishing and the company require an immediate option to prevent the declining industry growth. The business could likewise think about the growth program after the success of its digital publishing program.
Implementation
In order to introduce digital publishing in its item portfolio, the company needs to initially gathers the information related to the customer need, the prospective markets, the government regulations and the data related to the competitors provided in the market. If the preliminary offering shows a success, the company must go for the other markets. In this way the company would be able to execute its digital publishing program.
Conclusion
The growth of the publishing market is declining since 2008, showing a threat to the company's long term existence, however the scenario can be managed by thinking about an advancement plan in the future. The business might consider presenting digital publishingin its existing market to implement its development program at instant basis and to prevent the risk of failure for entryway in the brand-new markets.
