Internal Controls Internal Audit Risk Management And Compliance Case Study Solution and Analysis
Introduction
Internal Controls Internal Audit Risk Management And Compliance Case Study Help is the biggest publishing company with a greatest market share in the China's book retail market. CMP has actually ended up being a specialized info company and a big thorough Science and Innovation publishing company through the combination of print media, audio-visual media and the network media.
Crucial Issues
CMP has spent its 60 years journey efficiently, being a successful publishing home, nevertheless, the altering macro market trends and forces bring particular obstacles to the publishing industry in general and Internal Controls Internal Audit Risk Management And Compliance Case Study Analysis in specific. These elements consist of;
• Entrance of the new publishing companies in the industry.
• Declining development of the publishing market.
• Market saturation.
• Intro of digital publishing methods
• Enhancement of science and innovation.
The transformation 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 abilities of the business could be utilized to pursue the future development unceasingly? How could the company sustain its long term competitive position in future?
Situational Analysis
Internal Analysis
SWOT Analysis
Strengths
Internal Controls Internal Audit Risk Management And Compliance Case Study Solution has particular strengths that can be made use of to reduce the threats, overcome the weak point and get the chances. Strengths of CMP are offered as follows;
• The long term experience of Internal Controls Internal Audit Risk Management And Compliance Case Study Help in the publishing industry i.e. 60 years allows the business to provide high quality products at a lower cost utilizing its previous experiences.
• The technical resources and abilities created by its successful journey provide a competitive benefit to CMP.
• Vast item portfolioof CMP assists it to diversify its risk and provide high worth to its customers.
• Strong monetary position permits the business to consider a number of advancement chances with no worry of raising fund externally.
Weaknesses
In addition to the strengths, the company has particular weaknesses which might increase restrictions for the business in implementing its development program. The weak points of Internal Controls Internal Audit Risk Management And Compliance Case Study Help are provided as follows;
• Despite of being a science and innovation publishing firm, the business still has standard methods ofpublishing which are not compatible with the growing technological shift.
• CMP extremely relies over the Chinese markets for its growth. It ought to propose specific growth plans to avoid its reliance over the Chinese markets to achieve long term growth.
Opportunities
Although, the growth of the publishing market is decreasing considering that 2008, affecting Internal Controls Internal Audit Risk Management And Compliance Case Study Analysis as well, but the development might be restored by availing particular chances presented in the market. The market opportunities for CMP consist of;
• The business could likewise present Digital Publishing by using its long term technical experience and a strong customer recognition in the market.
• CMP might think about an advancement program through the expansion towards foreign markets in order to decrease its dependence over Chinese markets by using its vast funds.
Dangers
The changing macro trends in the market and increasing competitors in the publishing industry has posed specific risks to Internal Controls Internal Audit Risk Management And Compliance Case Study Help including;( Gurel, 2017).
• Introduction of digital publishing i.e. digital libraries might result in declining market share of Internal Controls Internal Audit Risk Management And Compliance Case Study Help due to the consumer shift towards digital libraries.
• The presence of large number of rivals in the publishing industry increase the hazard for CMP to lose its competitive position in the market, as rivals can gain a strong customer base by utilizing particular techniques like aggressive promotion, quality products, and so on
• Entryway of new publishing companies in the market in addition to existence of high competitors increases the risk of losing the customer base.
Financial Analysis.
The company has a quite competitive financial performance. Due to lack of data, the monetary ratios of CMP could not be determined. Nevertheless, the general financial performance of the company could be examined by utilizing the charts given in the case Appendices. It might be analyzed from the Appendix III that the annual overall profits of CMP during the period 2000-2012 are growing at a high growth rate, revealing that the yearly demand of the items of Internal Controls Internal Audit Risk Management And Compliance Case Study Solution is growing and the business is quite effective in attracting a a great deal of customers at a prospective cost.
Together with it, the second graph which shows the annual development in the Internal Controls Internal Audit Risk Management And Compliance Case Study Analysis overall assets, reveals that the business is quite effective in adding value to its assets through its incomes. The growth in assets shows that the total worth of the company is likewise increasing with increasing the overall profits. (Unknown, 2013).
Another financial analysis of the company utilizing the offered data could be the analysis relating to the circulation of overall incomes of the company. Major part of the incomes of CMP comes from the sales of its released books i.e. 64% as shown in the Case Appendix V. The company could move towards other business sections with a possible development to attain its future advancement goal.
PESTEL Analysis
PESTEL analysis could be carried out to find out the numerous external forces impacting the performance of the business and the current patterns in the external environment of the business. A quick PESTEL analysis of the company is offered as follows; (Alanzi, 2018).
Political.
As the publishing sector could have a significant influence on the state of mind of the people about the communist ideology of the government, for that reason, the publishing sector is highly monitored and directed by the Promotion Department of the Communist Celebration of China. For that reason, it might be said that the overall political forces affecting Internal Controls Internal Audit Risk Management And Compliance Case Study Analysis organisation are high. The government policies regarding the publishing sector are also increasing with the passage of time.
Affordable.
Financial forces affecting the publishing sector in basic and the Internal Controls Internal Audit Risk Management And Compliance Case Study Analysis in particular includesthe costs of paper, the earnings level of consumers, the inflation rate, and the overall GDP growth of the country. All these forces combine effect the demand for the publishing market. In addition to it, the economic policies connected to the import of books affect the general company at CPM. China's economic conditions are quite favorable for CMP with high GDP growth and customer earnings level.
Social and Demographical.
Social and demographical forces consist of the population growth, the customer's preferences towards checking out helpful products and so on. China has the greatest population on the planet with a high population development, showing the increasing number of customers of the Internal Controls Internal Audit Risk Management And Compliance Case Study Help. Nevertheless, the customer preferences are moving towards digital publishing rather than the standard was of publishing. In this regard, CMP should concentrate on digital publishing to meet the altering customer choices.
Technological.
Technological forces impacting the CMP consist of the technological improvement in the reading strategies etc. Enhancement of science and technology in addition to the rise of digital publishing might minimize the need for the CMP items, if specific actions would not be taken quickly.
Environmental.
Ecological forces impacting Internal Controls Internal Audit Risk Management And Compliance Case Study Help includes the issues of ecological neighborhoods over the use of paper in publishing books. The paper utilized in the books while publishing is needed to be disposable 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. Publishing Regulation 1997 needs the publishers to be authorized first by the Government to be entered in the publishing market.
Industry Analysis (Porter's 5 Forces Model).
Porter's 5 Forces Model could be utilized to examine the attractiveness of the publishing industry China. A quick analysis of the Porter's 5 Forces is provided as follows;.
Danger of New Entrants.
Hazards of new entrants in the Chinese Publishing Industry is moderate. The potential development in the industry tends to bring in brand-new entrants to the publishing market. Nevertheless, the presence of extreme competitors and the requirement of big capital tends to demotivate brand-new entrants to enter in the market.
Risk of Substitution.
Threat of Alternative is high for the Chinese Publishing Industry. The substitute products for the published documents is the documents presented in the virtual libraries on certain sites. The altering customer choices towards digital learning increase the risk of replacement for the market.
Competitive Competition.
Competitive rivalry in the publishing market is high. The presence of a great deal of customers in the Chinese Publishing Industry like CIP, PTP etc. tends to produce high competitive competition for CMP. In addition to it, new entrants are likewise entering into the marketplace increasing the competition for CMP.
Bargaining Power of Supplier.
The significant providers of the Internal Controls Internal Audit Risk Management And Compliance Case Study Solution consist of the suppliers of the paper for publishing files. As CMP is the biggest publisher in the Chinese Publishing Market, therefore the general bargaining power of supplier for CMP is low.
Bargaining Power of Buyer.
Bargaining power of buyer 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.
Rivals Analysis.
CMP operates in a highly competitive industry with the presence 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 competitors of Internal Controls Internal Audit Risk Management And Compliance Case Study Analysis include;.
• Chemical Industry Press (CIP).
• Posts and telecommunication Press (PTP).
Chemical Industry Press (CIP).
CIP acts as a threat for CMP as it could wean its market share due to its long term competitive background. CIP is focused on digital publishing and might wean the market share of CMP quickly in the current market situation.
Posts and telecommunication Press (PTP).
Another close rival of CMP is PTP. It was likewise established in the exact same period as CMP and CIP. It ranks sixth in the state-owned publishers in terms of organisation scale. It is also one of the prominent gamers in the publishing market with an annual overall incomes of RMB 550 million in 2010.
Alternatives
Alternative-1: Expand towards New Markets
Pros
• Lowering dependence over the Chinese markets.
• Increasing number of Customers
• Development opportunities.
• Preventing the effect of market saturation in the Chinese publishing industry.
Cons
• Usage of potential resources in growth.
• Threat of failure in brand-new markets.
• Time consuming.
Alernative-2: Present Digital Publishing
Pros
• Sustaining consumer base.
• Approaching brand-new markets.
• Easy to introduce utilizing present capabilities.
• Low threat of Failure.
• Low requirement for funds.
• Increased product portfolio supplies high value to clients.
Cons
• Competitors in the market by CIP, who has prior focus on the digital publishing.
• Shift of focus from the core company segments to the new one can lead the business to lose need of its items in the market.
Recommendations
With the deep analysis of the internal and external environment of the business together with the industry 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 require an immediate service to avoid the decreasing industry development. For that reason, introduction of digital publishing might prove to be an immediate service with low quantity of danger for the business. However, the business could likewise think about the expansion program after the success of its digital publishing program.
Execution
In order to introduce digital publishing in its product portfolio, the company should initially collects the data related to the consumer demand, the prospective markets, the federal government regulations and the information related to the competitors provided in the market. If the initial offering shows a success, the business must go for the other markets. In this method the business would be able to execute its digital publishing program.
Conclusion
Although, the growth of the publishing industry is declining considering that 2008, showing a risk to the company's long term existence, however the situation can be managed by thinking about an advancement strategy 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 danger of failure for entrance in the brand-new markets.
