Management Accounting 2 Case Study Solution and Analysis
Intro
Management Accounting 2 Case Study Solution is the largest publishing business with a greatest market share in the China's book retail market. CMP has become a specialized info provider and a big extensive Science and Innovation publishing company through the integration of print media, audio-visual media and the network media.
Critical Problems
CMP has actually spent its 60 years journey smoothly, being an effective publishing home, however, the changing macro market trends and forces bring particular obstacles to the publishing market in general and Management Accounting 2 Case Study Help in specific. These elements consist of;
• Entrance of the new publishing companies in the market.
• Declining growth of the publishing market.
• Market saturation.
• Intro of digital publishing techniques
• Improvement of science and technology.
The improvement of the macro markets have raised numerous questions to the management at CPM that what could be the future of CMP in this situation? Do the long important 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?
Situational Analysis
Internal Analysis
SWOT Analysis
Strengths
Management Accounting 2 Case Study Analysis has certain strengths that can be made use of to reduce the risks, overcome the weakness and get the chances. Strengths of CMP are offered as follows;
• The long term experience of Management Accounting 2 Case Study Analysis in the publishing industry i.e. 60 years allows the business to provide high quality products at a lower expense using its prior experiences.
• The technical resources and abilities produced by its successful journey supply a competitive benefit to CMP.
• Vast product portfolioof CMP helps it to diversify its danger and provide high value to its customers.
• Strong monetary position allows the company to consider several advancement chances with no worry of raising fund externally.
Weak points
In addition to the strengths, the company has particular weak points which might increase constraints for the company in executing its development program. The weak points of Management Accounting 2 Case Study Solution are given as follows;
• Despite of being a science and innovation publishing firm, the company still has conventional ways ofpublishing which are not compatible with the growing technological shift.
• CMP extremely relies over the Chinese markets for its growth. It needs to propose particular expansion plans to avoid its reliance over the Chinese markets to achieve long term development.
Opportunities
The growth of the publishing market is decreasing since 2008, affecting Management Accounting 2 Case Study Solution as well, but the growth might be revived by availing particular opportunities presented in the market. The market chances for CMP consist of;
• The company could also present Digital Publishing by utilizing its long term technical experience and a strong customer acknowledgment in the market.
• CMP might consider an advancement program through the growth towards foreign markets in order to reduce its reliance over Chinese markets by utilizing its large financial resources.
Risks
The altering macro trends in the market and increasing competition in the publishing industry has positioned specific dangers to Management Accounting 2 Case Study Analysis consisting of;( Gurel, 2017).
• Intro of digital publishing i.e. virtual libraries might lead to declining market share of Management Accounting 2 Case Study Help due to the customer 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 competitors can acquire a strong customer base by utilizing specific techniques like aggressive promo, quality items, and so on
• Entryway of new publishing firms in the industry together with existence of high competition increases the danger of losing the customer base.
Monetary Analysis.
Due to absence of information, the monetary ratios of CMP could not be calculated. It might be evaluated from the Appendix III that the annual total profits of Management Accounting 2 Case Study Analysis throughout the duration 2000-2012 are growing at a high growth rate, revealing that the annual need of the products of CMP is growing and the company is quite effective in attracting a large number of clients at a possible cost.
Along with it, the second graph which shows the annual development in the Management Accounting 2 Case Study Analysis overall properties, shows that the company is quite efficient in adding value to its assets through its earnings. The development in assets reveals that the overall worth of the company is also increasing with increasing the total profits. (Unknown, 2013).
Another financial analysis of the company using the provided information might be the analysis regarding the circulation of overall revenues of the business. Major part of the revenues of CMP comes from the sales of its released books i.e. 64% as displayed in the Case Appendix V. The company might move towards other organisation segments with a potential development to accomplish its future advancement objective.
PESTEL Analysis
PESTEL analysis might be performed to learn the different external forces affecting the performance of the company and the current patterns in the external environment of the company. A brief PESTEL analysis of the company is given as follows; (Alanzi, 2018).
Political.
As the publishing sector might have a substantial influence on the state of mind of the people about the communist ideology of the federal government, therefore, the publishing sector is highly monitored and directed by the Promotion Department of the Communist Celebration of China. For that reason, it could be stated that the total political forces affecting Management Accounting 2 Case Study Solution business are high. The federal government policies relating to the publishing sector are also increasing with the passage of time.
Economical.
Economic forces affecting the publishing sector in basic and the CMP in specific includesthe prices of paper, the income level of customers, the inflation rate, and the overall GDP development of the nation. All these forces combine 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 must focus on digital publishing to fulfill the changing consumer preferences.
Technological.
Technological forces affecting the CMP include the technological development in the reading techniques and so on. Improvement of science and technology in addition to the rise of digital publishing could decrease the need for the CMP items, if particular actions would not be taken soon.
Environmental.
Environmental forces affecting Management Accounting 2 Case Study Help includes the concerns of ecological communities over the use of paper in publishing books. The paper used in the books while publishing is required to be disposable and the ink used while publishing needs to not be damaging for the environment.
Legal.
Legal guidelines for the publishing sector at whole are high. Publishing Ordinance 1997 requires the publishers to be authorized initially by the Government to be entered in the publishing market.
Market Analysis (Porter's 5 Forces Design).
Porter's 5 Forces Model might be utilized to evaluate the appearance of the publishing industry China. A brief analysis of the Porter's 5 Forces is offered as follows;.
Hazard of New Entrants.
Risks of new entrants in the Chinese Publishing Market is moderate. The prospective growth in the market tends to bring in new entrants to the publishing industry. However, the existence of extreme competitors and the requirement of substantial capital tends to demotivate brand-new entrants to enter in the marketplace.
Hazard of Alternative.
Hazard of Replacement is high for the Chinese Publishing Industry. The alternative items for the published documents is the files provided in the virtual libraries on specific websites. The changing consumer choices towards digital knowing increase the danger of replacement 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 Market like CIP, PTP and so on tends to produce high competitive rivalry for CMP. Together with it, brand-new entrants are likewise entering into the market increasing the competition for CMP.
Bargaining Power of Provider.
The major providers of the Management Accounting 2 Case Study Analysis consist of the providers of the paper for publishing files. As CMP is the biggest publisher in the Chinese Publishing Market, for that reason the overall bargaining power of provider for CMP is low.
Bargaining Power of Buyer.
Haggling power of purchaser in the publishing market is high. Due to the existence of a a great deal of publishers in the Chinese market and the market saturation, the buyers requires high quality documents at competitive prices.
Competitors Analysis.
CMP runs in a highly competitive industry 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 Management Accounting 2 Case Study Analysis consist of;.
• Chemical Market Press (CIP).
• Posts and telecommunication Press (PTP).
Chemical Industry Press (CIP).
CIP acts as a hazard for CMP as it could 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 quickly in the present market circumstance.
Posts and telecommunication Press (PTP).
It was likewise established in the same period as Management Accounting 2 Case Study Help and CIP. It is likewise one of the popular players in the publishing industry with a yearly overall revenues of RMB 550 million in 2010.
Alternatives
Alternative-1: Broaden towards New Markets
Pros
• Lowering reliance over the Chinese markets.
• Increasing variety of Customers
• Development chances.
• Preventing the effect of market saturation in the Chinese publishing industry.
Cons
• Usage of prospective resources in growth.
• Danger of failure in brand-new markets.
• Time consuming.
Alernative-2: Introduce Digital Publishing
Pros
• Sustaining consumer base.
• Approaching new markets.
• Easy to introduce using existing capabilities.
• Low danger of Failure.
• Low requirement for funds.
• Increased item portfolio offers high worth to consumers.
Cons
• Competitors in the market by CIP, who has prior focus on the digital publishing.
• Shift of focus from the core company sectors to the new one can lead the company to lose demand of its items in the market.
Suggestions
As the preferences are shifting towards digital publishing and the company need an immediate option to avoid the declining industry growth. The business might likewise consider the growth program after the success of its digital publishing program.
Application
In order to present digital publishing in its product portfolio, the business must initially collects the data associated with the consumer demand, the prospective markets, the federal government regulations and the data connected to the rivals provided in the market. After that, the company should decide one potential section for its initial offering. It needs to gather research that how it might differentiate its digital publishing from the existing competitors' items. The actions above the business must go for the preliminary offering. The business ought to go for the other markets if the initial offering shows a success. In this way the company would be able to execute its digital publishing program.
Conclusion
Although, the growth of the publishing market is decreasing since 2008, showing a danger to the business's long term existence, but the scenario can be controlled by considering an advancement 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 threat of failure for entrance in the brand-new markets.
