Identify The Industry Analysis Of Financial Statements Case Study Solution and Analysis
Intro
Identify The Industry Analysis Of Financial Statements Case Study Analysis is the largest publishing company with a greatest market share in the China's book retail market. CMP has actually become a specialized information provider and a large thorough Science and Technology publishing company through the integration of print media, audio-visual media and the network media.
Crucial Problems
Although, Identify The Industry Analysis Of Financial Statements Case Study Solution has invested its 60 years journey efficiently, being an effective publishing house, however, the changing macro market patterns and forces bring specific challenges to the publishing market in general and CMP in specific. These factors include;
• Entryway of the brand-new publishing firms in the market.
• Decreasing development of the publishing market.
• Market saturation.
• Introduction of digital publishing methods
• Improvement of science and innovation.
The transformation of the macro markets have raised a number of concerns to the management at CPM that what could be the future of CMP in this scenario? Do the long valuable experience, technical resources and the abilities 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
Identify The Industry Analysis Of Financial Statements Case Study Solution has certain strengths that can be made use of to reduce the hazards, overcome the weak point and obtain the chances. Strengths of CMP are given as follows;
• The long term experience of Identify The Industry Analysis Of Financial Statements Case Study Help in the publishing industry i.e. 60 years enables the company to offer high quality products at a lower expense utilizing its previous experiences.
• The technical resources and abilities produced by its successful journey supply a competitive benefit to CMP.
• Vast product portfolioof CMP helps it to diversify its threat and offer high value to its customers.
• Strong monetary position allows the company to think about numerous development opportunities with no fear of raising fund externally.
Weaknesses
In addition to the strengths, the business has particular weaknesses which could increase restraints for the business in executing its development program. The weaknesses of Identify The Industry Analysis Of Financial Statements Case Study Analysis are offered as follows;
• Despite of being a science and technology publishing firm, the business still has conventional methods ofpublishing which are not suitable with the growing technological shift.
• CMP highly relies over the Chinese markets for its growth. It must propose particular expansion strategies to prevent its reliance over the Chinese markets to attain long term growth.
Opportunities
The growth of the publishing industry is declining because 2008, impacting Identify The Industry Analysis Of Financial Statements Case Study Solution as well, however the development could be restored by availing particular chances presented in the market. The marketplace chances for CMP include;
• The company might likewise 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 utilizing its huge financial resources.
Threats
The altering macro trends in the market and increasing competitors in the publishing market has posed certain hazards to Identify The Industry Analysis Of Financial Statements Case Study Analysis including;( Gurel, 2017).
• Introduction of digital publishing i.e. digital libraries could result in declining market share of Identify The Industry Analysis Of Financial Statements Case Study Analysis due to the customer shift towards virtual 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 competitors can acquire a strong customer base by utilizing certain strategies like aggressive promo, quality products, and so on
• Entryway of new publishing firms in the market in addition to presence of high competition increases the risk of losing the client base.
Financial Analysis.
The company has a rather competitive financial performance. Due to absence of information, the monetary ratios of CMP could not be calculated. Nevertheless, the overall monetary efficiency of the business could be examined by using the graphs given in the case Appendices. It might be evaluated from the Appendix III that the annual overall earnings of CMP during the period 2000-2012 are growing at a high growth rate, revealing that the annual demand of the items of Identify The Industry Analysis Of Financial Statements Case Study Help is growing and the business is quite efficient in bring in a a great deal of clients at a prospective price.
Along with it, the 2nd graph which shows the yearly growth in the Identify The Industry Analysis Of Financial Statements Case Study Solution overall assets, shows that the company is rather efficient in adding value to its properties through its incomes. The development in properties reveals that the total value of the company is likewise increasing with increasing the overall profits. (Unknown, 2013).
Another monetary analysis of the company utilizing the given information could be the analysis relating to the circulation of overall earnings of the company. Huge part of the incomes 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 segments with a potential growth to achieve its future development objective.
PESTEL Analysis
PESTEL analysis might be performed to learn the different external forces impacting the efficiency of the company and the current trends in the external environment of the business. A short PESTEL analysis of the business is provided as follows; (Alanzi, 2018).
Political.
As the publishing sector might have a substantial effect on the frame of mind of individuals about the communist ideology of the federal government, for that reason, the publishing sector is highly supervised and assisted by the Publicity Department of the Communist Party of China. It might be said that the overall political forces impacting CMP business are high. The government policies concerning the publishing sector are also increasing with the passage of time.
Cost-effective.
Financial forces impacting the publishing sector in general and the Identify The Industry Analysis Of Financial Statements Case Study Solution in specific includesthe rates of paper, the earnings level of consumers, the inflation rate, and the general GDP growth of the country. All these forces integrate impact the need for the publishing market. Along with it, the financial policies related to the import of books affect the general company at CPM. China's financial conditions are quite favorable for CMP with high GDP development and consumer income level.
Social and Demographical.
Social and demographical forces consist of the population development, the consumer's preferences towards reading helpful products and so on. China has the highest population in the world with a high population development, showing the increasing number of consumers of the Identify The Industry Analysis Of Financial Statements Case Study Analysis. However, the consumer choices are moving towards digital publishing rather than the standard was of publishing. In this regard, CMP should concentrate on digital publishing to satisfy the changing consumer choices.
Technological.
Technological forces affecting the CMP consist of the technological development in the reading strategies and so on. Enhancement of science and innovation in addition to the increase of digital publishing might lower the need for the CMP products, if specific actions would not be taken quickly.
Environmental.
Environmental forces affecting Identify The Industry Analysis Of Financial Statements Case Study Help includes the concerns of ecological communities over the use of paper in publishing books. The paper utilized in the books while publishing is needed to be non reusable and the ink used while publishing ought to not be harmful for the environment.
Legal.
Legal guidelines for the publishing sector at whole are high. The legal regulations regarding the publishing sector is controlled by the General Administration of Press and Publication. Publishing Regulation 1997 requires the publishers to be approved initially by the Government to be entered in the publishing market. The regulation prohibits direct involvement of foreign entities and people in the publishing sector.
Industry Analysis (Porter's Five Forces Model).
Porter's Five Forces Design might be used to analyze the appearance of the publishing market China. A brief analysis of the Porter's 5 Forces is offered as follows;.
Hazard of New Entrants.
Hazards of brand-new entrants in the Chinese Publishing Industry is moderate. The possible development in the market tends to bring in new entrants to the publishing industry. Nevertheless, the presence of intense competitors and the requirement of substantial capital tends to demotivate brand-new entrants to go into in the marketplace.
Danger of Substitution.
Hazard of Substitution is high for the Chinese Publishing Market. The alternative items for the published files is the documents provided in the digital libraries on specific sites. The altering customer preferences towards digital knowing increase the hazard of alternative for the market.
Competitive Rivalry.
Competitive competition 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. Together with it, brand-new entrants are likewise participating in the marketplace increasing the competition for CMP.
Bargaining Power of Provider.
The major suppliers of the Identify The Industry Analysis Of Financial Statements Case Study Help include the suppliers 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 supplier for CMP is low.
Bargaining Power of Buyer.
Negotiating 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 files at competitive costs.
Competitors Analysis.
CMP runs in a highly competitive industry with the existence of a great deal of rivals. Nevertheless, the company has a competitive position in the market with the greatest market share in the Chinese publishing market. Major rivals of Identify The Industry Analysis Of Financial Statements Case Study Analysis consist of;.
• Chemical Industry Press (CIP).
• Posts and telecommunication Press (PTP).
Chemical Market Press (CIP).
CIP acts as a threat for CMP as it might wean its market share due to its long term competitive background. CIP is focused on digital publishing and could wean the market share of CMP easily in the existing market circumstance.
Posts and telecommunication Press (PTP).
Another close rival of CMP is PTP. It was likewise founded in the same period as CMP and CIP. It ranks sixth in the state-owned publishers in regards to company scale. It is likewise one of the prominent gamers in the publishing industry with an annual total profits of RMB 550 million in 2010.
Alternatives
Alternative-1: Broaden towards New Markets
Pros
• Lowering reliance over the Chinese markets.
• Increasing number of Clients
• Growth chances.
• Avoiding the impact of market saturation in the Chinese publishing market.
Cons
• Usage of possible resources in expansion.
• Risk of failure in brand-new markets.
• Time consuming.
Alernative-2: Present Digital Publishing
Pros
• Sustaining customer base.
• Approaching brand-new markets.
• Easy to present using existing capabilities.
• Low risk of Failure.
• Low requirement for funds.
• Increased item portfolio provides 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 segments to the new one can lead the company to lose need of its items in the market.
Suggestions
With the deep analysis of the external and internal environment of the company together with the market analysis and the competitor analysis, Alternative 2 is suggested to CMP to attain its future advancement. As the choices are moving towards digital publishing and the business require an instant option to prevent the decreasing market growth. For that reason, introduction of digital publishing might show to be an instant option with low amount of threat for the business. The company might also consider the growth program after the success of its digital publishing program.
Application
In order to introduce digital publishing in its item portfolio, the company needs to first gathers the information connected to the customer demand, the potential markets, the federal government policies and the information related to the rivals provided in the market. After that, the business ought to decide one prospective segment for its initial offering. It ought to collect research study that how it could separate its digital publishing from the existing competitors' products. After all the actions above the business should opt for the preliminary offering. The business needs to go for the other markets if the initial offering proves a success. In this way the business would be able to execute its digital publishing program.
Conclusion
Although, the growth of the publishing industry is declining considering that 2008, revealing a hazard to the company's long term presence, but the situation can be managed by considering an advancement plan in the future. The business could think about introducing digital publishingin its existing market to implement its development program at immediate basis and to avoid the threat of failure for entryway in the new markets.
