Management Accounting Case Study Solution and Analysis
Intro
Management Accounting Case Study Analysis is the largest publishing company with a highest market share in the China's book retail market. CMP has actually ended up being a specialized info provider and a large detailed Science and Innovation publishing company through the integration of print media, audio-visual media and the network media.
Crucial Concerns
Although, Management Accounting Case Study Solution has actually invested its 60 years journey smoothly, being an effective publishing house, however, the changing macro market patterns and forces bring certain obstacles to the publishing industry in general and CMP in particular. These aspects include;
• Entryway of the brand-new publishing firms in the industry.
• Declining growth of the publishing market.
• Market saturation.
• Intro of digital publishing techniques
• Enhancement of science and technology.
The improvement 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 scenario? Do the long valuable experience, technical resources and the abilities of the company could be used to strive for the future development unceasingly? How could the business sustain its long term competitive position in future?
Situational Analysis
Internal Analysis
SWOT Analysis
Strengths
Management Accounting Case Study Analysis has certain strengths that can be utilized to decrease the dangers, conquer the weakness and avail the opportunities. Strengths of CMP are offered as follows;
• The long term experience of Management Accounting Case Study Analysis in the publishing industry i.e. 60 years allows the company to supply high quality products at a lower cost utilizing its prior experiences.
• The technical resources and capabilities generated by its effective journey offer a competitive benefit to CMP.
• Huge product portfolioof CMP assists it to diversify its risk and provide high worth to its clients.
• Strong monetary position enables the business to think about several development opportunities with no worry of raising fund externally.
Weak points
In addition to the strengths, the business has specific weak points which could increase restrictions for the business in implementing its advancement program. The weak points of Management Accounting Case Study Solution are offered as follows;
• Despite of being a science and innovation publishing firm, the business still has traditional ways ofpublishing which are not suitable with the growing technological shift.
• CMP extremely relies over the Chinese markets for its development. It needs to propose certain expansion plans to prevent its reliance over the Chinese markets to achieve long term development.
Opportunities
The growth of the publishing market is declining given that 2008, impacting Management Accounting Case Study Help as well, however the development might be revived by availing particular opportunities presented in the market. The market chances for CMP include;
• The company might likewise present Digital Publishing by utilizing its long term technical experience and a strong consumer acknowledgment in the market.
• CMP might think about an advancement program through the expansion towards foreign markets in order to decrease its dependence over Chinese markets by utilizing its vast financial resources.
Dangers
The changing macro trends in the market and increasing competitors in the publishing market has presented certain risks to Management Accounting Case Study Solution including;( Gurel, 2017).
• Introduction of digital publishing i.e. virtual libraries could cause decreasing market share of Management Accounting Case Study Analysis due to the customer shift towards virtual libraries.
• The presence of a great deal of competitors in the publishing industry increase the risk for CMP to lose its competitive position in the market, as rivals can get a strong consumer base by utilizing particular techniques like aggressive promo, quality products, etc.
• Entrance of new publishing firms in the industry in addition to existence of high competitors increases the threat of losing the customer base.
Financial Analysis.
Due to absence of information, the financial ratios of CMP might not be determined. It might be analyzed from the Appendix III that the yearly overall earnings of Management Accounting Case Study Analysis throughout the period 2000-2012 are growing at a high growth rate, showing that the annual need of the products of CMP is growing and the business is rather effective in bring in a big number of clients at a prospective rate.
Together with it, the second graph which reveals the annual growth in the Management Accounting Case Study Analysis total properties, reveals that the business is quite efficient in including value to its possessions through its revenues. The growth in possessions reveals that the overall value of the firm is also increasing with increasing the overall incomes. (Unknown, 2013).
Another financial analysis of the business using the given information might be the analysis relating to the distribution of overall revenues of the business. Major part of the incomes of CMP originates from the sales of its released books i.e. 64% as shown in the Case Appendix V. The business might move towards other organisation sectors with a prospective growth to accomplish its future development objective.
PESTEL Analysis
PESTEL analysis could be performed to learn the different external forces impacting the efficiency of the business and the recent trends in the external environment of the company. A brief PESTEL analysis of the business is offered as follows; (Alanzi, 2018).
Political.
As the publishing sector could have a significant impact on the state of mind of the people about the communist ideology of the federal government, therefore, the publishing sector is extremely monitored and assisted by the Publicity Department of the Communist Party of China. It might be stated that the total political forces impacting CMP service are high. The government policies relating to the publishing sector are also increasing with the passage of time.
Affordable.
Economic forces affecting the publishing sector in basic and the Management Accounting Case Study Help in particular includesthe rates of paper, the earnings level of customers, the inflation rate, and the overall GDP growth of the nation. All these forces combine effect the need for the publishing market. In addition to it, the financial policies connected to the import of books affect the general company at CPM. China's economic conditions are quite beneficial for CMP with high GDP development and customer income level.
Social and Demographical.
Social and demographical forces include the population growth, the customer's choices towards checking out helpful materials etc. China has the greatest population in the world with a high population growth, showing the increasing number of consumers of the Management Accounting Case Study Analysis. However, the customer choices are moving towards digital publishing instead of the traditional was of publishing. In this regard, CMP should concentrate on digital publishing to fulfill the altering consumer preferences.
Technological.
Technological forces impacting the CMP include the technological development in the reading strategies and so on. Enhancement of science and innovation in addition to the increase of digital publishing might decrease the demand for the CMP items, if specific actions would not be taken soon.
Environmental.
Ecological forces affecting Management Accounting Case Study Help consists of the issues of ecological communities over the use of paper in publishing books. The paper utilized in the books while publishing is required to be non reusable and the ink used while publishing must not be hazardous for the environment.
Legal.
Legal regulations for the publishing sector at whole are high. The legal policies concerning the publishing sector is controlled by the General Administration of Press and Publication. Publishing Ordinance 1997 needs the publishers to be authorized first by the Federal government to be entered in the publishing market. The ordinance forbids direct involvement of foreign entities and individuals in the publishing sector.
Industry Analysis (Porter's 5 Forces Model).
Porter's Five Forces Model might be used to evaluate the beauty of the publishing industry China. A short analysis of the Porter's 5 Forces is provided as follows;.
Danger of New Entrants.
Threats of new entrants in the Chinese Publishing Industry is moderate. The potential growth in the industry tends to attract brand-new entrants to the publishing industry. The existence of intense competitors and the requirement of substantial capital tends to demotivate brand-new entrants to go into in the market.
Threat of Alternative.
Threat of Replacement is high for the Chinese Publishing Market. The replacement items for the released documents is the documents presented in the virtual libraries on certain websites. The changing consumer preferences towards digital knowing increase the risk of replacement for the market.
Competitive Competition.
Competitive competition in the publishing industry is high. The existence of large number of consumers in the Chinese Publishing Market like CIP, PTP etc. tends to produce high competitive competition for CMP. Together with it, brand-new entrants are also participating in the market increasing the competitors for CMP.
Bargaining Power of Provider.
The significant providers of the Management Accounting Case Study Analysis consist of the suppliers of the paper for publishing files. As CMP is the largest publisher in the Chinese Publishing Market, for that reason the total bargaining power of supplier for CMP is low.
Bargaining Power of Purchaser.
Bargaining power of purchaser in the publishing industry is high. Due to the existence of a a great deal of publishers in the Chinese market and the market saturation, the purchasers requires high quality files at competitive costs.
Rivals Analysis.
CMP runs in a highly competitive market with the presence of a great deal of competitors. The company has a competitive position in the market with the greatest market share in the Chinese publishing market. Major rivals of Management Accounting Case Study Analysis include;.
• Chemical Market Press (CIP).
• Posts and telecommunication Press (PTP).
Chemical Market Press (CIP).
CIP acts as a threat 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 quickly in the current market scenario.
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 sixth in the state-owned publishers in terms of service scale. It is also one of the prominent gamers in the publishing industry with a yearly total earnings of RMB 550 million in 2010.
Alternatives
Alternative-1: Broaden towards New Markets
Pros
• Decreasing reliance over the Chinese markets.
• Increasing variety of Customers
• Growth chances.
• Preventing the effect 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: Present Digital Publishing
Pros
• Sustaining consumer base.
• Approaching new markets.
• Easy to introduce using existing capabilities.
• Low risk of Failure.
• Low requirement for funds.
• Increased product portfolio supplies high worth to customers.
Cons
• Competition in the market by CIP, who has prior concentrate on the digital publishing.
• Shift of focus from the core organisation sections to the new one can lead the business to lose need of its products in the market.
Recommendations
As the preferences are shifting towards digital publishing and the company require an instant service to prevent the decreasing industry growth. The company could also think about the growth program after the success of its digital publishing program.
Execution
In order to present digital publishing in its product portfolio, the business ought to first collects the data related to the customer need, the potential markets, the government policies and the information related to the competitors presented in the market. If the initial offering proves a success, the business needs to go for the other markets. In this way the business would be able to implement its digital publishing program.
Conclusion
The development of the publishing industry is decreasing considering that 2008, showing a hazard to the business's long term existence, however the circumstance can be managed by considering an advancement strategy in the future. The company might think about introducing digital publishingin its existing market to execute its advancement program at immediate basis and to avoid the threat of failure for entrance in the new markets.
