Marriott Corp The Cost Of Capital Abridged Case Study Solution and Analysis
Intro
Marriott Corp The Cost Of Capital Abridged Case Study Solution is the largest publishing business with a greatest market share in the China's book retail market. CMP has ended up being a specialized information provider and a large detailed Science and Technology publishing business through the integration of print media, audio-visual media and the network media.
Crucial Issues
CMP has spent its 60 years journey efficiently, being a successful publishing house, nevertheless, the altering macro market trends and forces bring certain challenges to the publishing industry in general and Marriott Corp The Cost Of Capital Abridged Case Study Help in specific. These aspects consist of;
• Entrance of the new publishing companies in the market.
• Decreasing growth of the publishing market.
• Market saturation.
• Intro of digital publishing strategies
• Enhancement of science and innovation.
The improvement of the macro markets have raised a number of questions to the management at CPM that what could be the future of CMP in this situation? Do the long valuable experience, technical resources and the capabilities of the company could be used to pursue the future development unceasingly? How could the business sustain its long term competitive position in future?
Situational Analysis
Internal Analysis
SWOT Analysis
Strengths
Marriott Corp The Cost Of Capital Abridged Case Study Analysis has specific strengths that can be made use of to minimize the threats, conquer the weakness and avail the chances. Strengths of CMP are provided as follows;
• The long term experience of Marriott Corp The Cost Of Capital Abridged Case Study Solution in the publishing market i.e. 60 years allows the company to supply high quality items at a lower expense using its prior experiences.
• The technical resources and capabilities generated by its effective journey offer a competitive benefit to CMP.
• Huge item portfolioof CMP assists it to diversify its threat and provide high value to its clients.
• Strong financial position permits the company to consider a number of advancement chances with no worry of raising fund externally.
Weaknesses
In addition to the strengths, the business has particular weak points which might increase constraints for the business in implementing its development program. The weak points of Marriott Corp The Cost Of Capital Abridged Case Study Help are offered as follows;
• Despite of being a science and technology publishing firm, the business still has traditional methods ofpublishing which are not compatible with the growing technological shift.
• CMP highly relies over the Chinese markets for its growth. It must propose specific growth strategies to avoid its dependence over the Chinese markets to attain long term development.
Opportunities
Although, the development of the publishing industry is decreasing since 2008, impacting Marriott Corp The Cost Of Capital Abridged Case Study Solution as well, but the development might be revived by availing certain chances provided in the market. The marketplace chances for CMP include;
• The company might also present Digital Publishing by utilizing its long term technical experience and a strong customer acknowledgment in the market.
• CMP could think about a development program through the growth towards foreign markets in order to minimize its reliance over Chinese markets by utilizing its vast funds.
Risks
The changing macro trends in the market and increasing competitors in the publishing industry has actually postured certain threats to Marriott Corp The Cost Of Capital Abridged Case Study Help including;( Gurel, 2017).
• Introduction of digital publishing i.e. digital libraries might lead to declining market share of Marriott Corp The Cost Of Capital Abridged Case Study Analysis due to the customer shift towards virtual libraries.
• The presence of large number of rivals in the publishing industry increase the threat for CMP to lose its competitive position in the market, as competitors can get a strong customer base by using specific methods like aggressive promotion, quality items, and so on
• Entryway of brand-new publishing firms in the market in addition to existence of high competition increases the threat of losing the consumer base.
Financial Analysis.
Due to lack of data, the monetary ratios of CMP could not be computed. It might be analyzed from the Appendix III that the yearly total revenues of Marriott Corp The Cost Of Capital Abridged Case Study Solution throughout the duration 2000-2012 are growing at a high growth rate, showing that the yearly need of the products of CMP is growing and the company is rather effective in drawing in a large number of consumers at a possible cost.
Along with it, the second graph which reveals the annual development in the Marriott Corp The Cost Of Capital Abridged Case Study Analysis total assets, shows that the company is quite effective in adding value to its properties through its profits. The growth in assets shows that the overall value of the company is likewise increasing with increasing the overall earnings. (Unknown, 2013).
Another monetary analysis of the company using the given data could be the analysis regarding the distribution of overall revenues of the business. Major part of the revenues of CMP originates from the sales of its published books i.e. 64% as shown in the Case Appendix V. The business could move towards other organisation sections with a potential growth to attain its future advancement goal.
PESTEL Analysis
PESTEL analysis could be carried out to discover the different external forces affecting the performance of the business and the recent trends in the external environment of the company. A brief PESTEL analysis of the company is provided as follows; (Alanzi, 2018).
Political.
As the publishing sector could have a significant effect on the mindset of the people about the communist ideology of the government, for that reason, the publishing sector is extremely supervised and assisted by the Publicity Department of the Communist Celebration of China. It could be stated that the total political forces impacting CMP organisation are high. The government policies regarding the publishing sector are likewise increasing with the passage of time.
Economical.
Economic forces impacting the publishing sector in basic and the CMP in specific includesthe rates of paper, the earnings level of consumers, the inflation rate, and the overall GDP growth of the country. All these forces integrate effect the need for the publishing market.
Social and Demographical.
Social and demographical forces consist of the population development, the customer's choices towards reading useful products etc. China has the highest population on the planet with a high population development, showing the increasing number of consumers of the Marriott Corp The Cost Of Capital Abridged Case Study Analysis. The consumer preferences are moving towards digital publishing rather than the conventional was of publishing. In this regard, CMP must concentrate on digital publishing to fulfill the changing customer choices.
Technological.
Technological forces impacting the CMP include the technological development in the reading strategies etc. Enhancement of science and innovation along with the increase of digital publishing might lower the need for the CMP products, if specific actions would not be taken quickly.
Environmental.
Ecological forces impacting Marriott Corp The Cost Of Capital Abridged Case Study Solution includes the issues of ecological neighborhoods 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 needs 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 controlled by the General Administration of Press and Publication. Publishing Regulation 1997 requires the publishers to be authorized initially by the Government to be entered in the publishing market. The ordinance forbids direct participation of foreign entities and people in the publishing sector.
Industry Analysis (Porter's 5 Forces Model).
Porter's 5 Forces Model could be used to analyze the appearance of the publishing market China. A short analysis of the Porter's Five Forces is given as follows;.
Threat of New Entrants.
Dangers of brand-new entrants in the Chinese Publishing Market is moderate. The prospective development in the industry tends to attract new entrants to the publishing market. However, the presence of extreme competition and the requirement of huge capital tends to demotivate brand-new entrants to enter in the market.
Risk of Alternative.
Danger of Substitution is high for the Chinese Publishing Market. The substitute products for the published files is the files provided in the digital libraries on specific sites. The altering consumer preferences towards digital learning increase the risk of alternative for the industry.
Competitive Competition.
Competitive rivalry 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. In addition to it, brand-new entrants are likewise participating in the market increasing the competition for CMP.
Bargaining Power of Provider.
The major suppliers of the Marriott Corp The Cost Of Capital Abridged Case Study Help consist of the providers of the paper for publishing documents. 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.
Haggling power of purchaser in the publishing market is high. Due to the existence of a large number of publishers in the Chinese market and the marketplace saturation, the buyers requires high quality files at competitive prices.
Rivals Analysis.
CMP runs in a highly competitive industry with the existence of large number of rivals. However, the company has a competitive position in the market with the greatest market share in the Chinese publishing market. Significant rivals of Marriott Corp The Cost Of Capital Abridged Case Study Help consist of;.
• Chemical Market Press (CIP).
• Posts and telecommunication Press (PTP).
Chemical Market 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 might wean the market share of CMP easily in the present market scenario.
Posts and telecommunication Press (PTP).
It was also founded in the very same period as Marriott Corp The Cost Of Capital Abridged Case Study Solution and CIP. It is also one of the popular players in the publishing market with a yearly total earnings of RMB 550 million in 2010.
Alternatives
Alternative-1: Broaden towards New Markets
Pros
• Reducing dependence over the Chinese markets.
• Increasing variety of Customers
• Growth opportunities.
• Avoiding the effect of market saturation in the Chinese publishing market.
Cons
• Use of potential resources in growth.
• Risk of failure in brand-new markets.
• Time consuming.
Alernative-2: Introduce Digital Publishing
Pros
• Sustaining customer base.
• Approaching new markets.
• Easy to introduce utilizing current abilities.
• Low threat of Failure.
• Low requirement for funds.
• Increased item portfolio offers 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 company sectors to the new one can lead the company to lose demand of its products in the market.
Recommendations
With the deep analysis of the internal and external environment of the business in addition to the industry analysis and the competitor analysis, Alternative 2 is recommended to CMP to attain its future advancement. As the preferences are shifting towards digital publishing and the company require an immediate solution to prevent the declining industry growth. Introduction of digital publishing could prove to be an instant service with low quantity of danger for the company. The company might also think about the growth program after the success of its digital publishing program.
Application
In order to present digital publishing in its item portfolio, the business must initially collects the information related to the consumer demand, the prospective markets, the government regulations and the information related to the rivals provided in the market. If the preliminary offering proves a success, the business ought to go for the other markets. In this method the company would be able to implement its digital publishing program.
Conclusion
Although, the development of the publishing industry is declining considering that 2008, revealing a threat to the business's long term existence, but the circumstance can be controlled by considering an advancement strategy in the future. The business could consider introducing digital publishingin its existing market to implement its development program at instant basis and to avoid the danger of failure for entryway in the new markets.
