Hewlett Packard Compaq The Merger Decision Case Study Solution and Analysis
Intro
Hewlett Packard Compaq The Merger Decision Case Study Analysis is the biggest publishing business with a highest market share in the China's book retail market. CMP has actually become a specialized information company and a big detailed Science and Technology publishing company through the combination of print media, audio-visual media and the network media.
Important Issues
Although, Hewlett Packard Compaq The Merger Decision Case Study Solution has spent its 60 years journey smoothly, being a successful publishing home, however, the altering macro market trends and forces bring particular challenges to the publishing market in basic and CMP in specific. These aspects consist of;
• Entryway of the brand-new publishing companies in the industry.
• Decreasing development of the publishing market.
• Market saturation.
• Introduction of digital publishing techniques
• Enhancement of science and technology.
The change of the macro markets have raised a number of 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 capabilities of the company could be made use of 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
Hewlett Packard Compaq The Merger Decision Case Study Solution has specific strengths that can be made use of to lower the risks, get rid of the weak point and get the chances. Strengths of CMP are offered as follows;
• The long term experience of Hewlett Packard Compaq The Merger Decision Case Study Analysis in the publishing market i.e. 60 years allows the company to offer high quality items at a lower cost utilizing its previous experiences.
• The technical resources and abilities produced by its successful journey provide a competitive advantage to CMP.
• Large item portfolioof CMP helps it to diversify its risk and supply high value to its customers.
• Strong monetary position permits the business to think about a number of development opportunities without any worry of raising fund externally.
Weaknesses
Together with the strengths, the business has certain weak points which could increase restraints for the business in executing its advancement program. The weaknesses of Hewlett Packard Compaq The Merger Decision Case Study Solution are offered as follows;
• Despite of being a science and technology publishing firm, 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 growth. It ought to propose specific growth plans to prevent its dependence over the Chinese markets to attain long term development.
Opportunities
The development of the publishing market is decreasing considering that 2008, impacting Hewlett Packard Compaq The Merger Decision Case Study Help as well, however the development might be restored by availing certain opportunities presented in the market. The marketplace opportunities for CMP include;
• The business could likewise present Digital Publishing by utilizing 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 minimize its reliance over Chinese markets by using its vast financial resources.
Risks
The altering macro patterns in the market and increasing competition in the publishing market has posed specific risks to Hewlett Packard Compaq The Merger Decision Case Study Solution including;( Gurel, 2017).
• Intro of digital publishing i.e. digital libraries might lead to declining market share of Hewlett Packard Compaq The Merger Decision Case Study Solution due to the consumer shift towards virtual libraries.
• The existence of large number of competitors in the publishing industry increase the danger for CMP to lose its competitive position in the market, as competitors can get a strong consumer base by using certain techniques like aggressive promo, quality products, and so on
• Entrance of brand-new publishing companies in the industry along with presence of high competitors increases the risk of losing the client base.
Financial Analysis.
Due to absence of data, the financial ratios of CMP could not be determined. It could be evaluated from the Appendix III that the annual total revenues of Hewlett Packard Compaq The Merger Decision Case Study Solution throughout the period 2000-2012 are growing at a high development rate, revealing that the annual need of the items of CMP is growing and the company is quite effective in bring in a large number of consumers at a potential price.
Together with it, the 2nd chart which shows the annual development in the Hewlett Packard Compaq The Merger Decision Case Study Help total properties, shows that the business is quite effective in adding worth to its assets through its earnings. The growth in assets shows that the overall worth of the company is also increasing with increasing the total revenues. (Unidentified, 2013).
Another financial analysis of the company utilizing the provided information could be the analysis regarding the circulation of total revenues of the business. Major part of the earnings 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 business segments with a prospective growth to achieve its future development objective.
PESTEL Analysis
PESTEL analysis could be performed to learn the different external forces impacting the efficiency of the company and the recent trends in the external environment of the business. A brief PESTEL analysis of the company is provided as follows; (Alanzi, 2018).
Political.
As the publishing sector might have a considerable influence on the state of mind of individuals about the communist ideology of the federal government, for that reason, the publishing sector is highly monitored and guided by the Promotion Department of the Communist Party of China. For that reason, it could be stated that the total political forces affecting Hewlett Packard Compaq The Merger Decision Case Study Analysis service are high. The federal government policies relating to the publishing sector are also increasing with the passage of time.
Economical.
Financial forces impacting the publishing sector in basic and the CMP in particular includesthe costs of paper, the earnings level of consumers, the inflation rate, and the overall GDP development of the nation. All these forces integrate impact the demand for the publishing market.
Social and Demographical.
The customer choices are shifting towards digital publishing rather than the standard was of publishing. In this regard, CMP should focus on digital publishing to fulfill the altering customer preferences.
Technological.
Technological forces impacting the CMP include the technological development in the reading methods and so on. Improvement of science and technology along with the increase of digital publishing might reduce the demand for the CMP products, if specific actions would not be taken quickly.
Environmental.
Environmental forces affecting Hewlett Packard Compaq The Merger Decision Case Study Analysis includes the issues of environmental neighborhoods over the usage of paper in publishing books. The paper used in the books while publishing is required to be disposable and the ink utilized while publishing should not be harmful for the environment.
Legal.
Legal guidelines for the publishing sector at whole are high. Publishing Ordinance 1997 requires the publishers to be authorized initially by the Government to be gone into in the publishing market.
Market Analysis (Porter's Five Forces Design).
Porter's Five Forces Model could be utilized to analyze the appearance of the publishing market China. A short analysis of the Porter's Five Forces is offered as follows;.
Hazard of New Entrants.
Hazards of new entrants in the Chinese Publishing Industry is moderate. The possible development in the market tends to attract new entrants to the publishing industry. Nevertheless, the presence of intense competition and the requirement of big capital tends to demotivate brand-new entrants to enter in the marketplace.
Risk of Replacement.
Hazard of Substitution is high for the Chinese Publishing Market. The replacement products for the published documents is the files provided in the virtual libraries on specific websites. The altering consumer preferences towards digital knowing increase the threat of replacement for the industry.
Competitive Competition.
Competitive competition in the publishing market is high. The existence 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. Together with it, brand-new entrants are likewise entering into the market increasing the competition for CMP.
Bargaining Power of Supplier.
The significant providers of the Hewlett Packard Compaq The Merger Decision Case Study Help include the providers of the paper for releasing files. 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 Purchaser.
Haggling power of buyer in the publishing industry is high. Due to the presence of a large number of publishers in the Chinese market and the marketplace saturation, the purchasers requires high quality documents at competitive prices.
Competitors Analysis.
CMP runs in a highly competitive industry with the existence of a great deal of rivals. However, the business has a competitive position in the market with the highest market share in the Chinese publishing market. Significant rivals of Hewlett Packard Compaq The Merger Decision Case Study Solution consist of;.
• Chemical Market Press (CIP).
• Posts and telecommunication Press (PTP).
Chemical Industry Press (CIP).
CIPis among the close competitors of CMP. Founded in the exact same period, CIP releases similar kind of books. For a large time period, CIP held the biggest market share, and still ranks 3rd and second in different market sections, with a significant concentrate on instructional publications. CIP acts as a danger 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 Hewlett Packard Compaq The Merger Decision Case Study Solution easily in the current market situation.
Posts and telecommunication Press (PTP).
It was likewise established in the very same period as Hewlett Packard Compaq The Merger Decision Case Study Help and CIP. It is likewise one of the prominent gamers in the publishing industry with an annual total incomes of RMB 550 million in 2010.
Alternatives
Alternative-1: Broaden towards New Markets
Pros
• Lowering reliance over the Chinese markets.
• Increasing variety of Customers
• Development opportunities.
• Preventing the impact of market saturation in the Chinese publishing industry.
Cons
• Usage of potential resources in expansion.
• Danger of failure in new markets.
• Time consuming.
Alernative-2: Present Digital Publishing
Pros
• Sustaining consumer base.
• Approaching brand-new markets.
• Easy to present utilizing current capabilities.
• Low risk of Failure.
• Low requirement for funds.
• Increased product portfolio offers high worth to clients.
Cons
• Competition in the market by CIP, who has prior focus on the digital publishing.
• Shift of focus from the core organisation sectors to the new one can lead the company to lose demand of its products in the market.
Recommendations
With the deep analysis of the internal and external environment of the business along with the market analysis and the rival analysis, Alternative 2 is suggested to CMP to attain its future advancement. As the preferences are shifting towards digital publishing and the business need an instant service to prevent the declining market development. For that reason, introduction of digital publishing might show to be an immediate service with low amount of danger for the business. However, the company could also consider the expansion program after the success of its digital publishing program.
Implementation
In order to introduce digital publishing in its product portfolio, the business needs to first collects the data related to the customer need, the potential markets, the government guidelines and the data related to the competitors presented in the market. If the initial offering proves a success, the company needs to go for the other markets. In this method the business would be able to implement its digital publishing program.
Conclusion
The growth of the publishing market is decreasing since 2008, revealing a threat to the company's long term presence, but the circumstance can be managed by thinking about an advancement plan in the future. The company might think about presenting digital publishingin its existing market to implement its advancement program at instant basis and to avoid the threat of failure for entryway in the brand-new markets.
