Hewlett Packard Compaq The Merger Decision Case Study Solution and Analysis
Hewlett Packard Compaq The Merger Decision Case Study Help is the biggest publishing business with a highest market share in the China's book retail market. CMP has become a specialized info provider and a big detailed Science and Innovation publishing business through the combination of print media, audio-visual media and the network media.
Although, Hewlett Packard Compaq The Merger Decision Case Study Analysis has actually invested its 60 years journey smoothly, being a successful publishing home, however, the changing macro market trends and forces bring specific obstacles to the publishing market in basic and CMP in particular. These elements include;
• Entryway of the new publishing companies in the market.
• Declining growth of the publishing market.
• Market saturation.
• Intro of digital publishing methods
• Improvement 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 scenario? Do the long important experience, technical resources and the capabilities of the business could be utilized to pursue the future development unceasingly? How could the business sustain its long term competitive position in future?
Hewlett Packard Compaq The Merger Decision Case Study Solution has particular strengths that can be utilized to minimize the dangers, conquer the weak point and get the opportunities. Strengths of CMP are given as follows;
• The long term experience of Hewlett Packard Compaq The Merger Decision Case Study Help in the publishing market i.e. 60 years enables the business to offer high quality products at a lower cost utilizing its prior experiences.
• The technical resources and abilities created by its successful journey supply a competitive advantage to CMP.
• Vast item portfolioof CMP helps it to diversify its risk and supply high worth to its consumers.
• Strong monetary position permits the company to consider several advancement opportunities without any worry of raising fund externally.
In addition to the strengths, the business has particular weak points which could increase restraints for the business in executing its development program. The weak points of Hewlett Packard Compaq The Merger Decision Case Study Solution are offered as follows;
• Despite of being a science and technology 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 needs to propose certain expansion strategies to avoid its dependence over the Chinese markets to accomplish long term growth.
Although, the development of the publishing industry is declining since 2008, affecting Hewlett Packard Compaq The Merger Decision Case Study Help too, however the growth could be restored by availing certain opportunities provided in the market. The marketplace opportunities for CMP consist of;
• The business might also introduce Digital Publishing by utilizing its long term technical experience and a strong customer recognition in the market.
• CMP could consider a development program through the expansion towards foreign markets in order to lower its dependence over Chinese markets by using its huge financial resources.
The altering macro trends in the market and increasing competition in the publishing industry has actually postured specific hazards to Hewlett Packard Compaq The Merger Decision Case Study Help consisting of;( Gurel, 2017).
• Introduction of digital publishing i.e. virtual libraries might cause declining market share of Hewlett Packard Compaq The Merger Decision Case Study Solution due to the customer shift towards digital libraries.
• The existence of a great deal of competitors in the publishing market increase the threat for CMP to lose its competitive position in the market, as rivals can gain a strong customer base by using certain strategies like aggressive promo, quality products, and so on
• Entryway of new publishing companies in the industry in addition to existence of high competition increases the hazard of losing the customer base.
Due to lack of information, the monetary ratios of CMP might not be calculated. It might be examined from the Appendix III that the yearly total earnings of Hewlett Packard Compaq The Merger Decision Case Study Solution during the period 2000-2012 are growing at a high growth rate, showing that the yearly demand of the products of CMP is growing and the company is quite effective in bring in a big number of customers at a prospective rate.
Along with it, the second graph which reveals the yearly growth in the Hewlett Packard Compaq The Merger Decision Case Study Analysis total possessions, reveals that the company is quite efficient in including worth to its properties through its profits. The development in possessions reveals that the overall value of the firm is likewise increasing with increasing the total revenues. (Unidentified, 2013).
Another financial analysis of the company utilizing the provided information might be the analysis regarding the distribution of overall profits of the business. 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 company might move towards other organisation sections with a prospective growth to attain its future development objective.
PESTEL analysis might be performed to learn the numerous external forces affecting the performance of the business and the recent trends in the external environment of the business. A short PESTEL analysis of the business is offered as follows; (Alanzi, 2018).
As the publishing sector could have a considerable impact on the state of mind of individuals about the communist ideology of the federal government, for that reason, the publishing sector is extremely supervised and directed by the Promotion Department of the Communist Celebration of China. For that reason, it might be stated that the total political forces impacting Hewlett Packard Compaq The Merger Decision Case Study Solution service are high. The federal government policies concerning the publishing sector are likewise increasing with the passage of time.
Economic forces impacting the publishing sector in general and the CMP in specific includesthe rates of paper, the income level of customers, the inflation rate, and the total GDP development of the nation. All these forces combine effect the need for the publishing market.
Social and Demographical.
Social and demographical forces include the population development, the customer's choices towards checking out informative products and so on. China has the greatest population in the world with a high population development, revealing the increasing variety of consumers of the Hewlett Packard Compaq The Merger Decision Case Study Analysis. The customer choices are shifting towards digital publishing rather than the traditional was of publishing. In this regard, CMP must concentrate on digital publishing to fulfill the altering consumer choices.
Technological forces impacting the CMP include the technological development in the reading methods etc. Enhancement of science and innovation along with the rise of digital publishing could minimize the need for the CMP products, if certain actions would not be taken quickly.
Ecological forces affecting Hewlett Packard Compaq The Merger Decision Case Study Solution consists of the concerns of environmental communities over the usage of paper in publishing books. The paper utilized in the books while publishing is required to be disposable and the ink utilized while publishing must not be harmful for the environment.
Legal regulations for the publishing sector at whole are high. The legal guidelines relating to the publishing sector is managed by the General Administration of Press and Publication. Publishing Regulation 1997 requires the publishers to be authorized first by the Government to be entered in the publishing market. The ordinance prohibits direct participation of foreign entities and people in the publishing sector.
Industry Analysis (Porter's Five Forces Design).
Porter's Five Forces Design might be utilized to evaluate the appearance of the publishing market China. A quick analysis of the Porter's Five Forces is offered as follows;.
Risk of New Entrants.
Hazards of new entrants in the Chinese Publishing Industry is moderate. The prospective growth in the industry tends to draw in new entrants to the publishing industry. The presence of extreme competitors and the requirement of huge capital tends to demotivate new entrants to enter in the market.
Hazard of Substitution.
Danger of Alternative is high for the Chinese Publishing Industry. The alternative products for the released documents is the files presented in the digital libraries on specific websites. The changing consumer choices towards digital knowing increase the hazard of alternative for the market.
Competitive competition in the publishing market is high. The presence of large number of consumers in the Chinese Publishing Market like CIP, PTP etc. tends to produce high competitive competition for CMP. In addition to it, brand-new entrants are also participating in the marketplace increasing the competitors for CMP.
Bargaining Power of Provider.
The major suppliers of the Hewlett Packard Compaq The Merger Decision Case Study Analysis consist of the providers of the paper for releasing documents. As CMP is the largest publisher in the Chinese Publishing Market, for that reason the total bargaining power of supplier for CMP is low.
Bargaining Power of Purchaser.
Bargaining power of purchaser in the publishing industry is high. Due to the existence of a a great deal of publishers in the Chinese market and the marketplace saturation, the purchasers needs high quality files at competitive prices.
CMP operates in a highly competitive industry with the existence of large number of rivals. Nevertheless, the company has a competitive position in the market with the greatest market share in the Chinese publishing market. Significant rivals of Hewlett Packard Compaq The Merger Decision Case Study Help include;.
• Chemical Industry Press (CIP).
• Posts and telecommunication Press (PTP).
Chemical Industry Press (CIP).
CIPis one of the close competitors of CMP. Established in the very same duration, CIP publishes comparable type of books. For a large time period, CIP held the biggest market share, and still ranks 3rd and 2nd in numerous market segments, with a major concentrate on academic publications. CIP serves as a threat 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 Hewlett Packard Compaq The Merger Decision Case Study Analysis easily in the current market scenario.
Posts and telecommunication Press (PTP).
Another close rival of CMP is PTP. It was likewise founded in the same duration as CMP and CIP. It ranks sixth in the state-owned publishers in terms of business scale. It is also among the popular gamers in the publishing market with an annual overall earnings of RMB 550 million in 2010.
Alternative-1: Expand towards New Markets
• Lowering dependence over the Chinese markets.
• Increasing variety of Consumers
• Growth chances.
• Avoiding the impact of market saturation in the Chinese publishing industry.
• Use of prospective resources in expansion.
• Threat of failure in new markets.
• Time consuming.
Alernative-2: Introduce Digital Publishing
• Sustaining customer base.
• Approaching brand-new markets.
• Easy to present using present abilities.
• Low threat of Failure.
• Low requirement for funds.
• Increased item portfolio supplies high worth to customers.
• Competition in the market by CIP, who has prior concentrate on the digital publishing.
• Shift of focus from the core service sectors to the new one can lead the business to lose demand of its items in the market.
As the preferences are shifting towards digital publishing and the company need an instant solution to avoid the decreasing industry growth. The company might likewise think about the expansion program after the success of its digital publishing program.
In order to introduce digital publishing in its product portfolio, the business needs to initially gathers the information related to the consumer demand, the potential markets, the federal government guidelines and the data related to the rivals provided in the market. If the initial offering shows a success, the company must go for the other markets. In this method the business would be able to execute its digital publishing program.
The growth of the publishing market is decreasing considering that 2008, showing a threat to the business's long term presence, but the situation can be managed by considering an advancement strategy in the future. The business could think about introducing digital publishingin its existing market to implement its advancement program at instant basis and to avoid the risk of failure for entrance in the new markets.