Johnson Family Farm Hedging Decision Case Study Solution and Analysis
Introduction
Johnson Family Farm Hedging Decision Case Study Analysis is the biggest publishing business with a greatest market share in the China's book retail market. CMP has become a specialized information provider and a large comprehensive Science and Innovation publishing business through the combination of print media, audio-visual media and the network media.
Vital Concerns
CMP has spent its 60 years journey efficiently, being an effective publishing house, nevertheless, the changing macro market trends and forces bring certain challenges to the publishing industry in basic and Johnson Family Farm Hedging Decision Case Study Help in particular. These elements consist of;
• Entryway of the new publishing firms in the market.
• Decreasing development of the publishing market.
• Market saturation.
• Intro of digital publishing techniques
• Enhancement of science and innovation.
The improvement of the macro markets have raised several questions 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 business could be utilized to pursue the future advancement unceasingly? How could the business sustain its long term competitive position in future?
Situational Analysis
Internal Analysis
SWOT Analysis
Strengths
Johnson Family Farm Hedging Decision Case Study Help has particular strengths that can be used to lower the risks, get rid of the weak point and obtain the chances. Strengths of CMP are provided as follows;
• The long term experience of Johnson Family Farm Hedging Decision Case Study Analysis in the publishing market i.e. 60 years enables the business to offer high quality items at a lower expense using its previous experiences.
• The technical resources and capabilities created by its effective journey provide a competitive benefit to CMP.
• Huge item portfolioof CMP helps it to diversify its threat and offer high worth to its clients.
• Strong monetary position permits the company to think about a number of advancement chances with no fear of raising fund externally.
Weaknesses
Along with the strengths, the company has specific weak points which might increase constraints for the business in implementing its development program. The weaknesses of Johnson Family Farm Hedging Decision Case Study Solution are given as follows;
• Despite of being a science and innovation publishing firm, the business still has standard ways ofpublishing which are not suitable with the growing technological shift.
• CMP highly relies over the Chinese markets for its development. It must propose specific growth strategies to avoid its dependence over the Chinese markets to accomplish long term development.
Opportunities
The development of the publishing market is declining since 2008, impacting Johnson Family Farm Hedging Decision Case Study Help as well, however the development might be revived by availing certain chances presented in the market. The market chances for CMP include;
• The business might also present Digital Publishing by using its long term technical experience and a strong consumer acknowledgment in the market.
• CMP might think about a development program through the expansion towards foreign markets in order to decrease its dependence over Chinese markets by utilizing its large funds.
Threats
The changing macro patterns in the market and increasing competitors in the publishing industry has actually postured particular dangers to Johnson Family Farm Hedging Decision Case Study Solution consisting of;( Gurel, 2017).
• Intro of digital publishing i.e. virtual libraries could lead to declining market share of Johnson Family Farm Hedging Decision Case Study Solution due to the consumer shift towards digital libraries.
• The existence of large number 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 consumer base by utilizing certain methods like aggressive promo, quality products, etc.
• Entrance of brand-new publishing companies in the industry in addition to presence of high competition increases the hazard of losing the consumer base.
Monetary Analysis.
The company has a rather competitive financial performance. Due to absence of data, the monetary ratios of CMP might not be calculated. The total monetary efficiency of the company might be analyzed by utilizing the graphs offered in the case Appendices. It could be analyzed from the Appendix III that the annual total profits of CMP during the duration 2000-2012 are growing at a high development rate, revealing that the annual demand of the items of Johnson Family Farm Hedging Decision Case Study Analysis is growing and the business is quite effective in attracting a a great deal of clients at a prospective cost.
Together with it, the second graph which shows the annual growth in the Johnson Family Farm Hedging Decision Case Study Help total assets, reveals that the business is rather effective in including value to its assets through its incomes. The development in assets shows that the overall value of the company is also increasing with increasing the total earnings. (Unidentified, 2013).
Another financial analysis of the company using the offered data could be the analysis relating to the distribution of total earnings of the company. Huge part of the profits of CMP originates from the sales of its released books i.e. 64% as shown in the Case Appendix V. The company might move towards other company segments with a possible growth to accomplish its future advancement objective.
PESTEL Analysis
PESTEL analysis could be carried out to find out the different external forces impacting the efficiency of the business and the recent trends in the external environment of the company. A short PESTEL analysis of the business is given as follows; (Alanzi, 2018).
Political.
As the publishing sector could have a considerable influence on the frame of mind of individuals about the communist ideology of the government, for that reason, the publishing sector is extremely monitored and directed by the Promotion Department of the Communist Party of China. Therefore, it might be said that the total political forces impacting Johnson Family Farm Hedging Decision Case Study Solution business are high. The federal government policies relating to the publishing sector are also increasing with the passage of time.
Affordable.
Economic forces affecting the publishing sector in general and the Johnson Family Farm Hedging Decision Case Study Solution in specific includesthe costs of paper, the income level of consumers, the inflation rate, and the overall GDP growth of the country. All these forces integrate impact the need for the publishing market. Together with it, the economic policies related to the import of books affect the overall company at CPM. However, China's financial conditions are quite beneficial for CMP with high GDP growth and customer earnings level.
Social and Demographical.
Social and demographical forces include the population development, the consumer's choices towards checking out informative materials and so on. China has the highest population in the world with a high population development, revealing the increasing variety of customers of the Johnson Family Farm Hedging Decision Case Study Analysis. Nevertheless, the customer choices are shifting towards digital publishing rather than the traditional was of publishing. In this regard, CMP ought to concentrate on digital publishing to meet the altering customer choices.
Technological.
Technological forces impacting the CMP consist of the technological development in the reading techniques and so on. Improvement of science and innovation together with the rise of digital publishing could lower the demand for the CMP products, if specific actions would not be taken quickly.
Environmental.
Environmental forces impacting Johnson Family Farm Hedging Decision Case Study Analysis includes the concerns of ecological neighborhoods over the usage of paper in publishing books. The paper used in the books while publishing is required to be non reusable and the ink used while publishing ought to not be harmful for the environment.
Legal.
Legal regulations for the publishing sector at whole are high. The legal regulations concerning the publishing sector is managed by the General Administration of Press and Publication. Publishing Regulation 1997 requires the publishers to be authorized initially by the Federal government to be gone into in the publishing market. The ordinance prohibits direct participation of foreign entities and people in the publishing sector.
Market Analysis (Porter's 5 Forces Design).
Porter's Five Forces Design might be used to evaluate the beauty of the publishing market China. A quick analysis of the Porter's 5 Forces is given as follows;.
Risk of New Entrants.
Risks of new entrants in the Chinese Publishing Industry is moderate. The potential development in the industry tends to attract brand-new entrants to the publishing industry. Nevertheless, the existence of intense competition and the requirement of big capital tends to demotivate brand-new entrants to enter in the market.
Threat of Alternative.
Hazard of Substitution is high for the Chinese Publishing Market. The substitute items for the published documents is the documents presented in the virtual libraries on specific websites. The changing consumer preferences towards digital knowing increase the threat of alternative for the market.
Competitive Competition.
Competitive rivalry in the publishing market is high. The existence of a great deal of customers in the Chinese Publishing Industry like CIP, PTP and so on tends to produce high competitive rivalry for CMP. Along with it, new entrants are likewise entering into the marketplace increasing the competition for CMP.
Bargaining Power of Provider.
The major suppliers of the Johnson Family Farm Hedging Decision Case Study Help include the providers of the paper for publishing documents. As CMP is the biggest publisher in the Chinese Publishing Market, therefore the overall bargaining power of provider for CMP is low.
Bargaining Power of Purchaser.
Negotiating power of purchaser in the publishing market is high. Due to the presence of a large number of publishers in the Chinese market and the marketplace saturation, the purchasers needs high quality files at competitive prices.
Competitors Analysis.
CMP operates in an extremely competitive industry with the existence of large number 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 Johnson Family Farm Hedging Decision Case Study Solution consist of;.
• Chemical Industry Press (CIP).
• Posts and telecommunication Press (PTP).
Chemical Market Press (CIP).
CIPis one of the close rivals of CMP. Founded in the very same period, CIP releases similar kind of books. For a big period, CIP held the largest market share, and still ranks 2nd and third in numerous market sectors, with a significant focus on academic publications. CIP functions 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 might wean the marketplace share of Johnson Family Farm Hedging Decision Case Study Help quickly in the existing market situation.
Posts and telecommunication Press (PTP).
It was also established in the exact same period as Johnson Family Farm Hedging Decision Case Study Help and CIP. It is likewise one of the prominent players in the publishing market with a yearly overall earnings of RMB 550 million in 2010.
Alternatives
Alternative-1: Broaden towards New Markets
Pros
• Decreasing reliance over the Chinese markets.
• Increasing number of Clients
• Growth opportunities.
• Avoiding the impact of market saturation in the Chinese publishing market.
Cons
• Use of potential resources in expansion.
• Danger of failure in brand-new markets.
• Time consuming.
Alernative-2: Introduce Digital Publishing
Pros
• Sustaining customer base.
• Approaching new markets.
• Easy to introduce utilizing present capabilities.
• Low risk of Failure.
• Low requirement for funds.
• Increased item portfolio offers high value to customers.
Cons
• Competitors in the market by CIP, who has prior focus on the digital publishing.
• Shift of focus from the core service segments to the new one can lead the company to lose need of its products in the market.
Suggestions
With the deep analysis of the internal and external environment of the business along with the market analysis and the competitor analysis, Alternative 2 is advised to CMP to accomplish its future development. As the choices are shifting towards digital publishing and the company require an instant solution to avoid the decreasing market growth. Intro of digital publishing could show to be an instant option with low amount of danger for the business. The business might also consider the growth program after the success of its digital publishing program.
Execution
In order to present digital publishing in its item portfolio, the company must initially gathers the data related to the customer need, the prospective markets, the government guidelines and the information related to the rivals provided in the market. If the preliminary offering shows a success, the company needs to go for the other markets. In this method the company would be able to execute its digital publishing program.
Conclusion
The growth of the publishing market is decreasing because 2008, revealing a hazard to the company's long term existence, but the scenario can be managed by thinking about a development 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 prevent the risk of failure for entrance in the brand-new markets.
