Hedging Currency Risks At Aifs 4 Case Study Solution and Analysis
Intro
Hedging Currency Risks At Aifs 4 Case Study Analysis is the biggest publishing company with a highest market share in the China's book retail market. CMP offers a variety of services consisting of; collecting info, processing information and communication services. Significant company sectors of the company include; books, periodicals, consultancy and circulation. The company has a vast product portfolio and its major items include books, regulars, online media, exhibits, research reports etc. Hedging Currency Risks At Aifs 4 Case Study Solution has become a specialized info company and a large detailed Science and Innovation publishing business through the combination of print media, audio-visual media and the network media.
Important Issues
Although, Hedging Currency Risks At Aifs 4 Case Study Analysis has spent its 60 years journey smoothly, being an effective publishing home, however, the changing macro market patterns and forces bring specific obstacles to the publishing industry in general and CMP in particular. These factors include;
• Entryway of the new publishing firms in the industry.
• Declining growth of the publishing market.
• Market saturation.
• Introduction of digital publishing methods
• Enhancement of science and technology.
The improvement of the macro markets have raised several concerns 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 made use of to strive for the future development unceasingly? How could the business sustain its long term competitive position in future?
Situational Analysis
Internal Analysis
SWOT Analysis
Strengths
Hedging Currency Risks At Aifs 4 Case Study Analysis has particular strengths that can be made use of to minimize the dangers, overcome the weakness and obtain the opportunities. Strengths of CMP are provided as follows;
• The long term experience of Hedging Currency Risks At Aifs 4 Case Study Solution in the publishing market i.e. 60 years enables the business to provide high quality products at a lower cost utilizing its prior experiences.
• The technical resources and capabilities generated by its successful journey supply a competitive benefit to CMP.
• Vast item portfolioof CMP assists it to diversify its risk and supply high worth to its customers.
• Strong financial position permits the business to consider numerous development chances with no worry of raising fund externally.
Weak points
In addition to the strengths, the business has specific weaknesses which might increase restraints for the business in executing its advancement program. The weaknesses of Hedging Currency Risks At Aifs 4 Case Study Help are offered as follows;
• Despite of being a science and innovation publishing company, the company 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 ought to propose certain growth strategies to avoid its dependence over the Chinese markets to achieve long term development.
Opportunities
Although, the development of the publishing market is decreasing because 2008, impacting Hedging Currency Risks At Aifs 4 Case Study Help too, however the development might be revived by availing particular opportunities presented in the market. The market chances for CMP include;
• The business might also introduce Digital Publishing by using its long term technical experience and a strong client acknowledgment in the market.
• CMP might consider an advancement program through the expansion towards foreign markets in order to reduce its reliance over Chinese markets by using its large funds.
Risks
The altering macro patterns in the market and increasing competitors in the publishing industry has positioned specific dangers to Hedging Currency Risks At Aifs 4 Case Study Help including;( Gurel, 2017).
• Intro of digital publishing i.e. virtual libraries might lead to decreasing market share of Hedging Currency Risks At Aifs 4 Case Study Analysis due to the consumer shift towards digital libraries.
• The presence of a great deal of competitors in the publishing market increase the threat for CMP to lose its competitive position in the market, as competitors can gain a strong customer base by using certain techniques like aggressive promo, quality products, and so on
• Entrance of new publishing firms in the market in addition to presence of high competition increases the risk of losing the client base.
Monetary Analysis.
The company has a rather competitive monetary performance. Due to lack of data, the financial ratios of CMP might not be determined. The general monetary efficiency of the company could be examined by utilizing the charts offered in the case Appendices. It might be analyzed from the Appendix III that the yearly overall earnings of CMP during the period 2000-2012 are growing at a high development rate, revealing that the yearly need of the items of Hedging Currency Risks At Aifs 4 Case Study Help is growing and the company is rather efficient in drawing in a large number of customers at a potential cost.
Along with it, the 2nd graph which reveals the annual development in the Hedging Currency Risks At Aifs 4 Case Study Solution overall possessions, reveals that the company is quite efficient in adding worth to its possessions through its incomes. The growth in properties shows that the total worth of the firm is also increasing with increasing the total profits. (Unidentified, 2013).
Another monetary analysis of the business utilizing the offered information could be the analysis concerning the circulation of total profits of the company. Major part of the incomes of CMP comes from the sales of its released books i.e. 64% as displayed in the Case Appendix V. The business might move towards other service segments with a prospective development to achieve its future advancement objective.
PESTEL Analysis
PESTEL analysis might be carried out to find out the various external forces impacting the performance of the company and the current trends in the external environment of the business. A short PESTEL analysis of the business is given as follows; (Alanzi, 2018).
Political.
As the publishing sector might have a considerable impact on the mindset of individuals about the communist ideology of the government, therefore, the publishing sector is extremely supervised and guided by the Publicity Department of the Communist Party of China. Therefore, it might be stated that the general political forces affecting Hedging Currency Risks At Aifs 4 Case Study Analysis company are high. The government policies relating to the publishing sector are likewise increasing with the passage of time.
Affordable.
Economic forces impacting the publishing sector in general and the Hedging Currency Risks At Aifs 4 Case Study Help in specific includesthe costs of paper, the earnings level of consumers, the inflation rate, and the general GDP growth of the country. All these forces integrate effect the need for the publishing market. Along with it, the economic policies connected to the import of books impact the total company at CPM. China's financial conditions are rather beneficial for CMP with high GDP development and customer income level.
Social and Demographical.
Social and demographical forces include the population development, the consumer's choices towards reading helpful products etc. China has the highest population worldwide with a high population development, showing the increasing number of customers of the Hedging Currency Risks At Aifs 4 Case Study Analysis. The customer preferences are shifting towards digital publishing rather than the traditional was of publishing. In this regard, CMP ought to focus on digital publishing to satisfy the altering customer preferences.
Technological.
Technological forces affecting the CMP include the technological improvement in the reading techniques etc. Improvement of science and technology in addition to the increase of digital publishing might minimize the need for the CMP products, if specific actions would not be taken soon.
Environmental.
Environmental forces impacting Hedging Currency Risks At Aifs 4 Case Study Analysis includes the concerns of ecological neighborhoods over the use of paper in publishing books. The paper used in the books while publishing is required to be non reusable and the ink utilized while publishing ought to 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 initially by the Federal government to be gone into in the publishing market.
Market Analysis (Porter's 5 Forces Model).
Porter's Five Forces Design might be utilized to analyze the beauty of the publishing industry China. A quick analysis of the Porter's Five Forces is given as follows;.
Threat of New Entrants.
Risks of new entrants in the Chinese Publishing Market is moderate. The possible growth in the industry tends to draw in new entrants to the publishing industry. The existence of intense competition and the requirement of big capital tends to demotivate brand-new entrants to go into in the market.
Danger of Substitution.
Hazard of Substitution is high for the Chinese Publishing Industry. The substitute products for the released files is the documents presented in the digital libraries on particular sites. The changing customer preferences towards digital learning increase the risk of replacement for the market.
Competitive Rivalry.
Competitive rivalry in the publishing market is high. The existence of a great deal of consumers 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 also participating in the marketplace increasing the competition for CMP.
Bargaining Power of Supplier.
The significant suppliers of the Hedging Currency Risks At Aifs 4 Case Study Solution include the providers of the paper for publishing documents. As CMP is the largest publisher in the Chinese Publishing Market, therefore the overall bargaining power of provider for CMP is low.
Bargaining Power of Purchaser.
Bargaining 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 needs high quality files at competitive prices.
Rivals Analysis.
CMP runs in an extremely competitive market 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. Major competitors of Hedging Currency Risks At Aifs 4 Case Study Analysis include;.
• Chemical Industry Press (CIP).
• Posts and telecommunication Press (PTP).
Chemical Market Press (CIP).
CIPis one of the close competitors of CMP. Founded in the same period, CIP releases similar kind of books. For a big time period, CIP held the largest market share, and still ranks second and 3rd in various market sectors, with a major focus on educational publications. CIP functions as a hazard 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 market share of Hedging Currency Risks At Aifs 4 Case Study Solution quickly in the current market situation.
Posts and telecommunication Press (PTP).
It was likewise founded in the exact same period as Hedging Currency Risks At Aifs 4 Case Study Solution and CIP. It is likewise one of the prominent players in the publishing industry with an annual total earnings of RMB 550 million in 2010.
Alternatives
Alternative-1: Expand towards New Markets
Pros
• Lowering dependence over the Chinese markets.
• Increasing number of Clients
• Development chances.
• Avoiding the impact 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 customer base.
• Approaching brand-new markets.
• Easy to introduce using present capabilities.
• Low threat of Failure.
• Low requirement for funds.
• Increased product 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 business sections to the brand-new one can lead the business to lose need of its products in the market.
Recommendations
As the preferences are shifting towards digital publishing and the business require an immediate option to avoid the declining market growth. The company might likewise think about the expansion program after the success of its digital publishing program.
Application
In order to present digital publishing in its product portfolio, the business must first collects the information connected to the consumer need, the possible markets, the government regulations and the information related to the rivals provided in the market. After that, the company ought to choose one potential sector for its preliminary offering. It needs to gather research that how it might differentiate its digital publishing from the existing competitors' products. After all the actions above the company should opt for the initial offering. The company ought to go for the other markets if the initial offering shows a success. In this way the business would have the ability to execute its digital publishing program.
Conclusion
The growth of the publishing market is decreasing considering that 2008, showing a danger to the company's long term presence, but the situation can be controlled by thinking about a development plan in the future. The business might consider presenting digital publishingin its existing market to implement its advancement program at instant basis and to avoid the risk of failure for entrance in the brand-new markets.
