Hong Kong Dragon Airlines Limited A Determining The Cost Of Capital Case Study Solution and Analysis
Introduction
Hong Kong Dragon Airlines Limited A Determining The Cost Of Capital Case Study Solution is the largest publishing business with a highest market share in the China's book retail market. CMP provides a variety of services including; gathering information, processing details and communication services. Significant service sectors of the company include; books, regulars, consultancy and circulation. The company has a huge product portfolio and its significant products include books, periodicals, online media, exhibits, research reports and so on. Hong Kong Dragon Airlines Limited A Determining The Cost Of Capital Case Study Solution has actually ended up being a specialized details supplier and a big extensive Science and Technology publishing company through the integration of print media, audio-visual media and the network media.
Vital Issues
CMP has actually invested its 60 years journey smoothly, being an effective publishing home, nevertheless, the changing macro market trends and forces bring specific challenges to the publishing market in general and Hong Kong Dragon Airlines Limited A Determining The Cost Of Capital Case Study Help in particular. These aspects include;
• Entryway of the brand-new publishing companies in the market.
• Declining growth of the publishing market.
• Market saturation.
• Introduction of digital publishing strategies
• Enhancement of science and innovation.
The transformation of the macro markets have raised numerous questions 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 utilized to pursue the future advancement unceasingly? How could the company sustain its long term competitive position in future?
Situational Analysis
Internal Analysis
SWOT Analysis
Strengths
Hong Kong Dragon Airlines Limited A Determining The Cost Of Capital Case Study Analysis has specific strengths that can be used to minimize the hazards, conquer the weak point and avail the chances. Strengths of CMP are offered as follows;
• The long term experience of Hong Kong Dragon Airlines Limited A Determining The Cost Of Capital Case Study Analysis in the publishing market i.e. 60 years allows the business to supply high quality products at a lower cost utilizing its prior experiences.
• The technical resources and capabilities generated by its successful journey provide a competitive advantage to CMP.
• Large product portfolioof CMP helps it to diversify its risk and offer high worth to its clients.
• Strong financial position permits the business to think about numerous advancement opportunities with no worry of raising fund externally.
Weaknesses
Along with the strengths, the business has specific weaknesses which might increase restraints for the business in implementing its advancement program. The weak points of Hong Kong Dragon Airlines Limited A Determining The Cost Of Capital Case Study Analysis are offered as follows;
• Despite of being a science and technology publishing company, the company still has traditional ways ofpublishing which are not suitable with the growing technological shift.
• CMP highly relies over the Chinese markets for its development. It should propose particular growth plans to avoid its dependence over the Chinese markets to attain long term growth.
Opportunities
The development of the publishing market is declining since 2008, impacting Hong Kong Dragon Airlines Limited A Determining The Cost Of Capital Case Study Analysis as well, however the development might be restored by availing particular chances provided in the market. The marketplace opportunities for CMP consist of;
• The business might also introduce Digital Publishing by using its long term technical experience and a strong consumer recognition in the market.
• CMP might consider a development program through the expansion towards foreign markets in order to lower its reliance over Chinese markets by utilizing its vast financial resources.
Threats
The changing macro trends in the market and increasing competitors in the publishing industry has positioned particular risks to Hong Kong Dragon Airlines Limited A Determining The Cost Of Capital Case Study Solution consisting of;( Gurel, 2017).
• Introduction of digital publishing i.e. virtual libraries could lead to declining market share of Hong Kong Dragon Airlines Limited A Determining The Cost Of Capital Case Study Analysis due to the customer shift towards digital libraries.
• The presence of large number of competitors in the publishing industry increase the threat for CMP to lose its competitive position in the market, as competitors can gain a strong consumer base by utilizing specific strategies like aggressive promotion, quality items, etc.
• Entryway of new publishing firms in the market along with existence of high competitors increases the danger of losing the client base.
Financial Analysis.
The company has a rather competitive monetary performance. Due to absence of information, the financial ratios of CMP might not be computed. The general financial efficiency of the company might be examined by utilizing the graphs given in the case Appendices. It could be evaluated from the Appendix III that the yearly total earnings of CMP during the period 2000-2012 are growing at a high development rate, revealing that the yearly need of the products of Hong Kong Dragon Airlines Limited A Determining The Cost Of Capital Case Study Solution is growing and the company is quite efficient in attracting a a great deal of customers at a prospective rate.
Along with it, the second chart which shows the yearly growth in the Hong Kong Dragon Airlines Limited A Determining The Cost Of Capital Case Study Analysis overall assets, reveals that the company is quite efficient in including value to its properties through its profits. The development in possessions reveals that the total value of the firm is likewise increasing with increasing the overall profits. (Unidentified, 2013).
Another financial analysis of the company using the provided information could be the analysis relating to the circulation of total revenues of the company. Huge part of the incomes of CMP originates from the sales of its released books i.e. 64% as shown in the Case Appendix V. The business might move towards other organisation sectors with a potential development to accomplish its future development objective.
PESTEL Analysis
PESTEL analysis could be conducted to discover the different external forces impacting the efficiency of the business and the recent patterns in the external environment of the company. A short PESTEL analysis of the business is provided as follows; (Alanzi, 2018).
Political.
As the publishing sector could have a considerable influence on the frame of mind of individuals about the communist ideology of the federal government, for that reason, the publishing sector is extremely supervised and assisted by the Promotion Department of the Communist Celebration of China. Therefore, it could be said that the overall political forces impacting Hong Kong Dragon Airlines Limited A Determining The Cost Of Capital Case Study Analysis company are high. The federal government policies regarding the publishing sector are also increasing with the passage of time.
Affordable.
Economic forces affecting the publishing sector in general and the Hong Kong Dragon Airlines Limited A Determining The Cost Of Capital Case Study Analysis in specific includesthe prices of paper, the income level of consumers, the inflation rate, and the overall GDP development of the country. All these forces combine impact the need for the publishing market. In addition to it, the economic policies connected to the import of books impact the general business at CPM. China's financial conditions are quite favorable for CMP with high GDP development and consumer income level.
Social and Demographical.
The customer choices are moving towards digital publishing rather than the conventional was of publishing. In this regard, CMP needs to focus on digital publishing to fulfill the changing consumer choices.
Technological.
Technological forces affecting the CMP consist of the technological development in the reading methods and so on. Enhancement of science and technology along with the rise of digital publishing could reduce the demand for the CMP products, if certain actions would not be taken soon.
Environmental.
Ecological forces affecting Hong Kong Dragon Airlines Limited A Determining The Cost Of Capital Case Study Help includes the issues of environmental communities 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 must not be harmful for the environment.
Legal.
Legal guidelines 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 Ordinance 1997 requires the publishers to be authorized initially by the Federal government to be entered in the publishing market. The regulation prohibits direct involvement of foreign entities and individuals in the publishing sector.
Industry Analysis (Porter's 5 Forces Design).
Porter's Five Forces Design could be utilized to analyze the attractiveness of the publishing market China. A brief analysis of the Porter's Five Forces is given as follows;.
Hazard of New Entrants.
Threats of new entrants in the Chinese Publishing Industry is moderate. The possible growth in the industry tends to attract brand-new entrants to the publishing market. The presence of extreme competitors and the requirement of big capital tends to demotivate new entrants to enter in the market.
Hazard of Replacement.
Threat of Substitution is high for the Chinese Publishing Market. The substitute items for the released files is the documents provided in the virtual libraries on certain websites. The altering customer preferences towards digital knowing increase the hazard of substitution for the industry.
Competitive Competition.
Competitive competition in the publishing industry is high. The presence of large number of consumers in the Chinese Publishing Industry like CIP, PTP and so on tends to produce high competitive rivalry for CMP. Together with it, brand-new entrants are also participating in the marketplace increasing the competitors for CMP.
Bargaining Power of Supplier.
The major suppliers of the Hong Kong Dragon Airlines Limited A Determining The Cost Of Capital 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 total bargaining power of provider for CMP is low.
Bargaining Power of Buyer.
Haggling power of purchaser in the publishing market is high. Due to the existence of a large number of publishers in the Chinese market and the marketplace saturation, the purchasers needs high quality files at competitive prices.
Rivals Analysis.
CMP operates in a highly competitive market with the existence of large number of competitors. Nevertheless, the business has a competitive position in the market with the greatest market share in the Chinese publishing market. Significant rivals of Hong Kong Dragon Airlines Limited A Determining The Cost Of Capital Case Study Solution consist of;.
• Chemical Market Press (CIP).
• Posts and telecommunication Press (PTP).
Chemical Market Press (CIP).
CIPis among the close competitors of CMP. Established in the very same period, CIP releases comparable kind of books. For a large period, CIP held the largest market share, and still ranks second and third in numerous market segments, with a significant concentrate on instructional publications. CIP functions 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 could wean the market share of Hong Kong Dragon Airlines Limited A Determining The Cost Of Capital Case Study Analysis easily in the present market circumstance.
Posts and telecommunication Press (PTP).
Another close competitor of CMP is PTP. It was also established in the same duration as CMP and CIP. It ranks 6th in the state-owned publishers in terms of service scale. It is also among the prominent gamers in the publishing industry with an annual overall profits of RMB 550 million in 2010.
Alternatives
Alternative-1: Expand towards New Markets
Pros
• Minimizing dependence over the Chinese markets.
• Increasing number of Customers
• Growth opportunities.
• Avoiding the impact of market saturation in the Chinese publishing market.
Cons
• Usage of possible resources in growth.
• Risk of failure in brand-new markets.
• Time consuming.
Alernative-2: Introduce Digital Publishing
Pros
• Sustaining customer base.
• Approaching brand-new markets.
• Easy to introduce utilizing current abilities.
• Low threat of Failure.
• Low requirement for funds.
• Increased item portfolio supplies high value to customers.
Cons
• Competition in the market by CIP, who has prior concentrate on the digital publishing.
• Shift of focus from the core organisation sections to the brand-new one can lead the company to lose need of its products in the market.
Suggestions
As the preferences are shifting towards digital publishing and the company need an immediate solution to avoid the decreasing industry development. The company might likewise consider the growth program after the success of its digital publishing program.
Implementation
In order to present digital publishing in its item portfolio, the business should first collects the data related to the customer demand, the potential markets, the government policies and the information related to the competitors provided in the market. After that, the business ought to decide one prospective sector for its initial offering. It needs to gather research that how it could distinguish its digital publishing from the existing competitors' items. After all the actions above the business should opt for the initial offering. The company ought to go for the other markets if the preliminary offering shows a success. In this way the business would have the ability to implement its digital publishing program.
Conclusion
The growth of the publishing market is decreasing because 2008, revealing a hazard to the company's long term presence, but the situation can be managed by considering an advancement strategy in the future. The company could consider presenting digital publishingin its existing market to execute its advancement program at immediate basis and to prevent the threat of failure for entryway in the new markets.
