Ipo Recommendation To The Alibaba Group Case Study Solution and Analysis
Ipo Recommendation To The Alibaba Group Case Study Help is the largest publishing business with a greatest market share in the China's book retail market. CMP supplies a variety of services including; collecting details, processing details and communication services. Major company sections of the company include; books, regulars, consultancy and circulation. The company has a large item portfolio and its major products consist of books, periodicals, online media, exhibits, research reports etc. Ipo Recommendation To The Alibaba Group Case Study Analysis has ended up being a specialized information company and a large thorough Science and Technology publishing business through the integration of print media, audio-visual media and the network media.
Although, Ipo Recommendation To The Alibaba Group Case Study Analysis has actually invested its 60 years journey smoothly, being an effective publishing house, nevertheless, the altering macro market patterns and forces bring specific obstacles to the publishing market in general and CMP in specific. These elements consist of;
• Entryway of the new publishing firms in the industry.
• Declining growth of the publishing market.
• Market saturation.
• Introduction of digital publishing techniques
• Improvement of science and innovation.
The change of the macro markets have raised several questions to the management at CPM that what could be the future of CMP in this circumstance? Do the long valuable experience, technical resources and the abilities of the company could be utilized to pursue the future advancement unceasingly? How could the company sustain its long term competitive position in future?
Ipo Recommendation To The Alibaba Group Case Study Analysis has particular strengths that can be made use of to lower the risks, conquer the weak point and obtain the chances. Strengths of CMP are provided as follows;
• The long term experience of Ipo Recommendation To The Alibaba Group Case Study Analysis in the publishing market i.e. 60 years permits the company to offer high quality products at a lower expense utilizing its prior experiences.
• The technical resources and abilities generated by its effective journey supply a competitive advantage to CMP.
• Huge product portfolioof CMP assists it to diversify its danger and offer high value to its consumers.
• Strong monetary position allows the company to consider numerous development opportunities with no fear of raising fund externally.
In addition to the strengths, the company has particular weak points 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 provided as follows;
• Despite of being a science and innovation publishing firm, the company still has traditional methods ofpublishing which are not suitable with the growing technological shift.
• CMP highly relies over the Chinese markets for its growth. It must propose specific expansion plans to prevent its reliance over the Chinese markets to achieve long term development.
Although, the growth of the publishing market is decreasing since 2008, impacting Ipo Recommendation To The Alibaba Group Case Study Analysis also, but the development could be revived by availing specific opportunities provided in the market. The market chances for CMP include;
• 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 minimize its dependence over Chinese markets by utilizing its vast financial resources.
The altering macro trends in the market and increasing competition in the publishing market has presented specific threats to Ipo Recommendation To The Alibaba Group Case Study Analysis consisting of;( Gurel, 2017).
• Introduction of digital publishing i.e. digital libraries could lead to declining market share of Ipo Recommendation To The Alibaba Group Case Study Solution due to the consumer shift towards virtual libraries.
• The presence of a great deal of rivals in the publishing industry increase the danger for CMP to lose its competitive position in the market, as rivals can get a strong customer base by utilizing specific strategies like aggressive promotion, quality items, and so on
• Entrance of new publishing firms in the industry in addition to presence of high competitors increases the threat of losing the customer base.
The company has a quite competitive financial efficiency. Due to lack of information, the financial ratios of CMP could not be computed. Nevertheless, the total monetary performance of the company might be analyzed by using the charts given in the case Appendices. It might be evaluated from the Appendix III that the annual overall profits of CMP during the duration 2000-2012 are growing at a high growth rate, showing that the yearly demand of the products of Ipo Recommendation To The Alibaba Group Case Study Solution is growing and the company is rather effective in attracting a a great deal of consumers at a prospective cost.
Along with it, the second graph which shows the yearly growth in the Ipo Recommendation To The Alibaba Group Case Study Solution total assets, reveals that the business is quite efficient in adding worth to its assets through its profits. The growth in assets shows that the overall worth of the company is also increasing with increasing the total revenues. (Unidentified, 2013).
Another monetary analysis of the business using the given data could be the analysis relating to the distribution of total profits of the business. Huge part of the earnings of CMP comes from the sales of its released books i.e. 64% as displayed in the Case Appendix V. The business could move towards other company segments with a prospective development to attain its future advancement objective.
PESTEL analysis could be conducted to learn the various external forces impacting the performance of the company and the recent patterns in the external environment of the company. A quick PESTEL analysis of the company is given as follows; (Alanzi, 2018).
As the publishing sector might have a significant effect on the frame of mind of individuals about the communist ideology of the federal government, therefore, the publishing sector is extremely monitored and assisted 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 Solution business are high. The federal government policies concerning the publishing sector are also increasing with the passage of time.
Economic forces impacting the publishing sector in general and the CMP in particular includesthe rates of paper, the earnings level of consumers, the inflation rate, and the general GDP growth of the country. All these forces combine effect the demand for the publishing market.
Social and Demographical.
Social and demographical forces consist of the population growth, the customer's choices towards reading informative products etc. China has the highest population worldwide with a high population development, revealing the increasing number of consumers of the Ipo Recommendation To The Alibaba Group Case Study Help. The consumer preferences are moving towards digital publishing rather than the standard was of publishing. In this regard, CMP should focus on digital publishing to meet the changing customer preferences.
Technological forces impacting the CMP include the technological improvement in the reading methods and so on. Enhancement of science and technology along with the increase of digital publishing might reduce the demand for the CMP products, if specific actions would not be taken quickly.
Environmental forces impacting Ipo Recommendation To The Alibaba Group Case Study Help consists of 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 guidelines for the publishing sector at whole are high. Publishing Regulation 1997 needs the publishers to be approved first by the Government to be gone into in the publishing market.
Industry Analysis (Porter's 5 Forces Model).
Porter's 5 Forces Model might be utilized to examine the appearance of the publishing market China. A brief analysis of the Porter's Five Forces is given as follows;.
Hazard of New Entrants.
Threats of brand-new entrants in the Chinese Publishing Industry is moderate. The possible development in the market tends to draw in brand-new entrants to the publishing industry. The existence of intense competitors and the requirement of huge capital tends to demotivate new entrants to enter in the market.
Danger of Replacement.
Threat of Alternative is high for the Chinese Publishing Market. The substitute products for the published documents is the files provided in the digital libraries on specific websites. The altering customer choices towards digital learning increase the danger of replacement for the industry.
Competitive rivalry in the publishing industry is high. The presence of a great deal of customers in the Chinese Publishing Market like CIP, PTP and so on tends to produce high competitive competition for CMP. In addition to it, brand-new entrants are likewise entering into the marketplace increasing the competition for CMP.
Bargaining Power of Provider.
The significant providers of the Ipo Recommendation To The Alibaba Group Case Study Analysis include the providers of the paper for releasing files. 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 Purchaser.
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 needs high quality files at competitive costs.
CMP operates in a highly competitive market with the existence of large number of rivals. The business has a competitive position in the market with the highest market share in the Chinese publishing market. Major competitors of Ipo Recommendation To The Alibaba Group Case Study Solution include;.
• Chemical Market Press (CIP).
• Posts and telecommunication Press (PTP).
Chemical Industry Press (CIP).
CIP acts as a risk for CMP as it might 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 easily in the current market circumstance.
Posts and telecommunication Press (PTP).
It was likewise established in the exact same duration as Ipo Recommendation To The Alibaba Group Case Study Solution and CIP. It is likewise one of the popular players in the publishing industry with a yearly total earnings of RMB 550 million in 2010.
Alternative-1: Expand towards New Markets
• Decreasing reliance over the Chinese markets.
• Increasing number of Consumers
• Development chances.
• Preventing the effect of market saturation in the Chinese publishing market.
• Usage of prospective resources in expansion.
• Risk of failure in brand-new markets.
• Time consuming.
Alernative-2: Introduce Digital Publishing
• Sustaining customer base.
• Approaching brand-new markets.
• Easy to introduce utilizing present abilities.
• Low danger of Failure.
• Low requirement for funds.
• Increased product portfolio offers high value to customers.
• Competition in the market by CIP, who has prior focus on the digital publishing.
• Shift of focus from the core company sectors to the brand-new one can lead the company to lose need of its products in the market.
With the deep analysis of the internal and external environment of the business together with the market analysis and the competitor analysis, Alternative 2 is recommended to CMP to attain its future advancement. As the preferences are moving towards digital publishing and the company require an instant solution to prevent the decreasing industry development. Introduction of digital publishing might prove to be an instant solution with low quantity of threat for the company. However, the company might likewise consider the expansion program after the success of its digital publishing program.
In order to present digital publishing in its product portfolio, the company needs to first gathers the data associated with the customer demand, the prospective markets, the government guidelines and the data associated with the rivals provided in the market. After that, the business should decide one prospective section for its initial offering. It needs to collect research that how it could differentiate its digital publishing from the existing rivals' items. The actions above the company should go for the preliminary offering. If the initial offering proves a success, the company ought to opt for the other markets. In this method the company would have the ability to implement its digital publishing program.
The development of the publishing industry is decreasing since 2008, revealing a risk to the company's long term presence, however the scenario can be managed by considering a development plan in the future. The business could think about presenting digital publishingin its existing market to implement its development program at immediate basis and to avoid the risk of failure for entryway in the new markets.