Jiuding Capital Private Equity Firm With Chinese Characteristics Case Study Solution and Analysis
Jiuding Capital Private Equity Firm With Chinese Characteristics Case Study Solution is the largest publishing company with a greatest market share in the China's book retail market. CMP has actually ended up being a specialized details company and a big detailed Science and Innovation publishing company through the integration of print media, audio-visual media and the network media.
CMP has actually invested its 60 years journey smoothly, being an effective publishing home, however, the changing macro market patterns and forces bring specific challenges to the publishing market in basic and Jiuding Capital Private Equity Firm With Chinese Characteristics Case Study Analysis in specific. These elements include;
• Entryway of the brand-new publishing companies in the market.
• Declining growth of the publishing market.
• Market saturation.
• Intro of digital publishing strategies
• Enhancement 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 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?
Jiuding Capital Private Equity Firm With Chinese Characteristics Case Study Solution has specific strengths that can be made use of to lower the hazards, get rid of the weakness and obtain the chances. Strengths of CMP are offered as follows;
• The long term experience of Jiuding Capital Private Equity Firm With Chinese Characteristics Case Study Help in the publishing market i.e. 60 years allows the company to supply high quality items at a lower cost using its prior experiences.
• The technical resources and abilities produced by its successful journey provide a competitive benefit to CMP.
• Huge item portfolioof CMP assists it to diversify its threat and supply high worth to its clients.
• Strong financial position allows the company to think about a number of advancement chances without any fear of raising fund externally.
In addition to the strengths, the business has certain weak points which could increase restraints for the business in implementing its advancement program. The weak points of Jiuding Capital Private Equity Firm With Chinese Characteristics Case Study Analysis are offered as follows;
• Despite of being a science and innovation publishing company, the business still has traditional methods ofpublishing which are not suitable with the growing technological shift.
• CMP highly relies over the Chinese markets for its development. It needs to propose certain growth strategies to prevent its reliance over the Chinese markets to achieve long term growth.
Although, the growth of the publishing industry is declining since 2008, affecting Jiuding Capital Private Equity Firm With Chinese Characteristics Case Study Help also, however the development could be restored by availing certain opportunities provided in the market. The market chances for CMP include;
• The business might likewise introduce Digital Publishing by utilizing its long term technical experience and a strong customer acknowledgment in the market.
• CMP might think about an advancement program through the expansion towards foreign markets in order to reduce its reliance over Chinese markets by using its vast funds.
The altering macro patterns in the market and increasing competition in the publishing market has positioned particular risks to Jiuding Capital Private Equity Firm With Chinese Characteristics Case Study Help including;( Gurel, 2017).
• Introduction of digital publishing i.e. virtual libraries could lead to declining market share of Jiuding Capital Private Equity Firm With Chinese Characteristics Case Study Help due to the customer shift towards digital libraries.
• The existence of a great deal of competitors in the publishing industry increase the threat for CMP to lose its competitive position in the market, as rivals can gain a strong consumer base by utilizing certain methods like aggressive promotion, quality items, etc.
• Entrance of brand-new publishing companies in the industry together with existence of high competitors increases the risk of losing the consumer base.
The company has a quite competitive monetary efficiency. Due to lack of information, the financial ratios of CMP could not be computed. The total monetary performance of the business could be evaluated by utilizing the charts offered in the case Appendices. It might be analyzed from the Appendix III that the yearly total revenues of CMP during the period 2000-2012 are growing at a high growth rate, showing that the yearly need of the products of Jiuding Capital Private Equity Firm With Chinese Characteristics Case Study Solution is growing and the company is quite efficient in attracting a a great deal of clients at a possible price.
In addition to it, the second chart which reveals the annual growth in the Jiuding Capital Private Equity Firm With Chinese Characteristics Case Study Help total assets, shows that the company is quite effective in including worth to its assets through its revenues. The development in possessions shows that the overall value of the firm is likewise increasing with increasing the overall profits. (Unidentified, 2013).
Another monetary analysis of the company utilizing the given information could be the analysis regarding the circulation of total incomes of the business. Huge part of the earnings of CMP originates from the sales of its released books i.e. 64% as displayed in the Case Appendix V. The company could move towards other organisation sectors with a prospective growth to attain its future development goal.
PESTEL analysis might be conducted to discover the different external forces affecting the efficiency of the company and the recent patterns in the external environment of the company. A brief PESTEL analysis of the company is given as follows; (Alanzi, 2018).
As the publishing sector could have a considerable effect on the state of mind of individuals about the communist ideology of the government, for that reason, the publishing sector is extremely supervised and directed by the Promotion Department of the Communist Party of China. It might be said that the general political forces affecting CMP business are high. The federal government policies relating to the publishing sector are likewise increasing with the passage of time.
Financial forces impacting the publishing sector in general and the Jiuding Capital Private Equity Firm With Chinese Characteristics Case Study Solution in specific includesthe prices of paper, the income level of consumers, the inflation rate, and the overall GDP growth of the nation. All these forces combine impact the need for the publishing market. Together with it, the economic policies connected to the import of books impact the total business at CPM. China's financial conditions are rather favorable for CMP with high GDP growth and consumer earnings level.
Social and Demographical.
The consumer preferences are moving towards digital publishing rather than the standard was of publishing. In this regard, CMP ought to focus on digital publishing to satisfy the altering consumer preferences.
Technological forces impacting the CMP consist of the technological improvement in the reading methods and so on. Improvement of science and innovation along with the increase of digital publishing could reduce the need for the CMP products, if specific actions would not be taken soon.
Environmental forces affecting Jiuding Capital Private Equity Firm With Chinese Characteristics Case Study Solution 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 ought to not be damaging for the environment.
Legal regulations for the publishing sector at whole are high. The legal guidelines concerning the publishing sector is controlled by the General Administration of Press and Publication. Publishing Ordinance 1997 requires the publishers to be approved initially by the Government to be entered in the publishing market. The regulation prohibits direct participation of foreign entities and people in the publishing sector.
Industry Analysis (Porter's Five Forces Model).
Porter's Five Forces Model might be utilized to analyze the beauty of the publishing industry China. A short analysis of the Porter's 5 Forces is given as follows;.
Hazard of New Entrants.
Dangers of new entrants in the Chinese Publishing Market is moderate. The possible growth in the market tends to bring in new entrants to the publishing industry. The presence of extreme competition and the requirement of huge 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 replacement products for the released documents is the documents presented in the digital libraries on specific sites. The changing customer preferences towards digital knowing increase the danger of replacement for the industry.
Competitive competition in the publishing industry is high. The existence of large number of customers in the Chinese Publishing Industry like CIP, PTP etc. tends to produce high competitive competition for CMP. Together with it, new entrants are likewise participating in the market increasing the competition for CMP.
Bargaining Power of Provider.
The significant providers of the Jiuding Capital Private Equity Firm With Chinese Characteristics Case Study Solution consist of the providers of the paper for publishing files. As CMP is the largest publisher in the Chinese Publishing Market, for that reason the overall bargaining power of supplier for CMP is low.
Bargaining Power of Buyer.
Haggling power of purchaser in the publishing market is high. Due to the presence of a a great deal of publishers in the Chinese market and the marketplace saturation, the buyers needs high quality documents at competitive costs.
CMP operates in an extremely competitive market with the existence of large number of competitors. Nevertheless, the company has a competitive position in the market with the highest market share in the Chinese publishing market. Major competitors of Jiuding Capital Private Equity Firm With Chinese Characteristics Case Study Solution consist of;.
• Chemical Industry Press (CIP).
• Posts and telecommunication Press (PTP).
Chemical Market 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 could wean the market share of CMP easily in the present market circumstance.
Posts and telecommunication Press (PTP).
Another close competitor of CMP is PTP. It was likewise founded in the same period as CMP and CIP. It ranks 6th in the state-owned publishers in terms of organisation scale. It is also among the popular players in the publishing market with a yearly total profits of RMB 550 million in 2010.
Alternative-1: Broaden towards New Markets
• Lowering dependence over the Chinese markets.
• Increasing variety of Customers
• Development chances.
• Preventing the impact of market saturation in the Chinese publishing market.
• Usage of potential resources in expansion.
• Danger of failure in new markets.
• Time consuming.
Alernative-2: Present Digital Publishing
• Sustaining customer base.
• Approaching new markets.
• Easy to introduce utilizing current capabilities.
• Low threat of Failure.
• Low requirement for funds.
• Increased product portfolio offers high worth to consumers.
• Competition in the market by CIP, who has prior concentrate on the digital publishing.
• Shift of focus from the core business sectors to the brand-new one can lead the company to lose demand of its products in the market.
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 advised to CMP to accomplish its future advancement. As the choices are shifting towards digital publishing and the company need an immediate solution to prevent the declining industry development. Intro of digital publishing might show to be an instant option with low amount of danger for the company. Nevertheless, the company might also think about the growth program after the success of its digital publishing program.
In order to introduce digital publishing in its item portfolio, the company must first gathers the data related to the customer demand, the prospective markets, the government guidelines and the information related to the rivals presented in the market. If the initial offering shows a success, the business needs to go for the other markets. In this method the business would be able to execute its digital publishing program.
Although, the development of the publishing market is declining since 2008, revealing a danger to the business's long term presence, however the scenario can be managed by considering a development plan in the future. The business might consider introducing digital publishingin its existing market to execute its development program at immediate basis and to avoid the danger of failure for entryway in the brand-new markets.