Ipo Recommendation To The Alibaba Group Case Study Solution and Analysis
Introduction
Ipo Recommendation To The Alibaba Group Case Study Help is the largest publishing business with a highest market share in the China's book retail market. CMP has ended up being a specialized details service provider and a large thorough Science and Technology publishing company through the combination of print media, audio-visual media and the network media.
Vital Issues
CMP has invested its 60 years journey efficiently, being an effective publishing house, nevertheless, the altering macro market trends and forces bring certain challenges to the publishing industry in general and Ipo Recommendation To The Alibaba Group Case Study Solution in particular. These aspects include;
• Entryway of the brand-new publishing companies in the market.
• Declining development of the publishing market.
• Market saturation.
• Introduction of digital publishing techniques
• Improvement of science and innovation.
The transformation of the macro markets have raised numerous concerns 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 used to strive for the future advancement unceasingly? How could the company sustain its long term competitive position in future?
Situational Analysis
Internal Analysis
SWOT Analysis
Strengths
Ipo Recommendation To The Alibaba Group Case Study Help has certain strengths that can be made use of to reduce the risks, conquer the weak point and get the opportunities. Strengths of CMP are provided as follows;
• The long term experience of Ipo Recommendation To The Alibaba Group Case Study Solution in the publishing industry i.e. 60 years allows the business to offer high quality products at a lower cost utilizing its previous experiences.
• The technical resources and capabilities generated by its effective journey supply a competitive advantage to CMP.
• Vast product portfolioof CMP helps it to diversify its danger and provide high value to its customers.
• Strong monetary position enables the company to think about a number of development opportunities without any worry of raising fund externally.
Weaknesses
In addition to the strengths, the business has certain weaknesses which might increase restrictions for the company in implementing its advancement program. The weaknesses of Ipo Recommendation To The Alibaba Group Case Study Solution are offered as follows;
• Despite of being a science and technology publishing firm, the business still has standard ways ofpublishing which are not compatible with the growing technological shift.
• CMP extremely relies over the Chinese markets for its growth. It ought to propose certain growth plans to avoid its reliance over the Chinese markets to accomplish long term growth.
Opportunities
The growth of the publishing industry is declining given that 2008, affecting Ipo Recommendation To The Alibaba Group Case Study Help as well, but the growth could be restored by availing specific opportunities provided 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 client recognition in the market.
• CMP could consider an advancement program through the growth towards foreign markets in order to minimize its reliance over Chinese markets by using its large funds.
Dangers
The altering macro trends in the market and increasing competitors in the publishing industry has posed particular dangers to Ipo Recommendation To The Alibaba Group Case Study Analysis including;( Gurel, 2017).
• Introduction of digital publishing i.e. virtual libraries could cause decreasing market share of Ipo Recommendation To The Alibaba Group Case Study Help due to the consumer shift towards digital libraries.
• The existence of a great deal of competitors in the publishing market increase the danger for CMP to lose its competitive position in the market, as competitors can get a strong consumer base by utilizing specific techniques like aggressive promo, quality items, etc.
• Entryway of brand-new publishing companies in the industry together with presence of high competitors increases the hazard of losing the consumer base.
Financial Analysis.
The company has a rather competitive monetary efficiency. Due to lack of data, the monetary ratios of CMP could not be calculated. However, the overall financial efficiency of the business could be examined by utilizing the graphs given in the case Appendices. It could be analyzed from the Appendix III that the yearly total incomes of CMP throughout the period 2000-2012 are growing at a high growth rate, showing that the annual need of the products of Ipo Recommendation To The Alibaba Group Case Study Solution is growing and the company is quite effective in drawing in a a great deal of customers at a potential price.
Together with it, the 2nd graph which shows the annual growth in the Ipo Recommendation To The Alibaba Group Case Study Help total properties, reveals that the business is quite effective in adding value to its properties through its incomes. The development in properties shows that the total value of the company is also increasing with increasing the total profits. (Unknown, 2013).
Another financial analysis of the business using the provided information might be the analysis relating to the distribution of total profits of the company. Huge 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 sectors with a potential development to accomplish its future advancement goal.
PESTEL Analysis
PESTEL analysis could be carried out to find out the different 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 business is offered as follows; (Alanzi, 2018).
Political.
As the publishing sector could have a substantial effect on the frame of mind of individuals about the communist ideology of the federal government, therefore, the publishing sector is extremely supervised and guided by the Publicity Department of the Communist Celebration of China. Therefore, it might be stated that the overall political forces affecting Ipo Recommendation To The Alibaba Group Case Study Help organisation are high. The federal government policies regarding the publishing sector are likewise increasing with the passage of time.
Economical.
Economic forces affecting the publishing sector in general and the CMP in particular includesthe rates of paper, the earnings level of consumers, the inflation rate, and the total GDP growth of the country. All these forces integrate impact the need for the publishing market.
Social and Demographical.
The customer preferences are moving towards digital publishing rather than the traditional was of publishing. In this regard, CMP should focus on digital publishing to fulfill the altering customer choices.
Technological.
Technological forces affecting the CMP include the technological development in the reading strategies and so on. Enhancement of science and technology along with the increase of digital publishing might lower the demand for the CMP products, if specific actions would not be taken soon.
Environmental.
Ecological forces impacting Ipo Recommendation To The Alibaba Group Case Study Solution consists of the concerns of environmental communities over the use of paper in publishing books. The paper utilized in the books while publishing is required to be disposable and the ink utilized while publishing ought to not be hazardous for the environment.
Legal.
Legal policies for the publishing sector at whole are high. Publishing Ordinance 1997 requires the publishers to be approved first by the Federal government to be gone into in the publishing market.
Industry Analysis (Porter's 5 Forces Design).
Porter's Five Forces Design might be utilized to analyze the attractiveness of the publishing industry China. A short analysis of the Porter's 5 Forces is provided as follows;.
Risk of New Entrants.
Risks of brand-new entrants in the Chinese Publishing Industry is moderate. The possible growth in the market tends to draw in brand-new entrants to the publishing market. Nevertheless, the existence of intense competition and the requirement of big capital tends to demotivate brand-new entrants to go into in the marketplace.
Danger of Alternative.
Danger of Replacement is high for the Chinese Publishing Market. The alternative products for the published documents is the documents provided in the virtual libraries on particular sites. The altering customer preferences towards digital knowing increase the threat of alternative for the industry.
Competitive Rivalry.
Competitive competition in the publishing market is high. The existence of large number of consumers in the Chinese Publishing Market like CIP, PTP and so on tends to produce high competitive rivalry for CMP. Along with it, brand-new entrants are also participating in the marketplace increasing the competitors for CMP.
Bargaining Power of Supplier.
The significant providers of the Ipo Recommendation To The Alibaba Group Case Study Help consist of the suppliers of the paper for publishing documents. 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.
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 market saturation, the purchasers requires high quality documents at competitive prices.
Rivals Analysis.
CMP operates in an extremely competitive market with the existence of a great deal of rivals. The business has a competitive position in the market with the highest market share in the Chinese publishing market. Major rivals of Ipo Recommendation To The Alibaba Group Case Study Solution include;.
• Chemical Market Press (CIP).
• Posts and telecommunication Press (PTP).
Chemical Industry Press (CIP).
CIPis among the close rivals of CMP. Established in the same period, CIP publishes comparable kind 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 focus on academic publications. CIP acts as a danger 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 Ipo Recommendation To The Alibaba Group Case Study Analysis quickly in the current market scenario.
Posts and telecommunication Press (PTP).
It was also founded in the exact same duration as Ipo Recommendation To The Alibaba Group Case Study Help and CIP. It is likewise one of the popular gamers in the publishing market with an annual overall earnings of RMB 550 million in 2010.
Alternatives
Alternative-1: Broaden towards New Markets
Pros
• Minimizing dependence over the Chinese markets.
• Increasing variety of Consumers
• Growth chances.
• Avoiding the effect of market saturation in the Chinese publishing market.
Cons
• Usage of potential resources in expansion.
• Threat of failure in new markets.
• Time consuming.
Alernative-2: Introduce Digital Publishing
Pros
• Sustaining consumer base.
• Approaching new markets.
• Easy to introduce utilizing present abilities.
• Low risk of Failure.
• Low requirement for funds.
• Increased product portfolio offers high worth to clients.
Cons
• Competitors in the market by CIP, who has prior focus on the digital publishing.
• Shift of focus from the core service sections to the brand-new one can lead the company to lose need of its items in the market.
Recommendations
With the deep analysis of the external and internal environment of the business together with the market analysis and the rival analysis, Alternative 2 is suggested to CMP to accomplish its future development. As the preferences are moving towards digital publishing and the company require an immediate service to avoid the decreasing industry growth. Intro of digital publishing might show to be an immediate service with low amount of threat for the company. The company could likewise consider the growth program after the success of its digital publishing program.
Execution
In order to present digital publishing in its product portfolio, the business needs to first collects the information related to the consumer demand, the possible markets, the government regulations and the data related to the rivals presented in the market. If the preliminary offering proves a success, the company should go for the other markets. In this method the company would be able to implement its digital publishing program.
Conclusion
The growth of the publishing industry is declining since 2008, showing a risk to the business's long term presence, however the scenario can be controlled by considering an advancement plan in the future. The company might think about presenting digital publishingin its existing market to implement its advancement program at immediate basis and to avoid the threat of failure for entryway in the brand-new markets.
