Mergers And Acquisitions Of Small And Medium Sized Enterprises Case Study Solution and Analysis
Introduction
Mergers And Acquisitions Of Small And Medium Sized Enterprises Case Study Analysis is the biggest publishing company with a greatest market share in the China's book retail market. CMP has ended up being a specialized information supplier and a big extensive Science and Innovation publishing company through the integration of print media, audio-visual media and the network media.
Crucial Problems
CMP has actually invested its 60 years journey efficiently, being a successful publishing house, nevertheless, the changing macro market patterns and forces bring particular obstacles to the publishing industry in general and Mergers And Acquisitions Of Small And Medium Sized Enterprises Case Study Analysis in particular. These elements include;
• Entrance of the new publishing companies in the industry.
• Decreasing development of the publishing market.
• Market saturation.
• Intro of digital publishing techniques
• Improvement 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 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
Mergers And Acquisitions Of Small And Medium Sized Enterprises Case Study Help has specific strengths that can be utilized to decrease the dangers, get rid of the weak point and get the opportunities. Strengths of CMP are provided as follows;
• The long term experience of Mergers And Acquisitions Of Small And Medium Sized Enterprises Case Study Solution in the publishing market i.e. 60 years enables the business to supply high quality items at a lower expense utilizing its prior experiences.
• The technical resources and capabilities generated by its effective journey provide a competitive benefit to CMP.
• Huge item portfolioof CMP helps it to diversify its danger and supply high value to its customers.
• Strong monetary position permits the company to consider several advancement opportunities with no worry of raising fund externally.
Weaknesses
Along with the strengths, the company has certain weaknesses which might increase constraints for the company in executing its advancement program. The weak points of Mergers And Acquisitions Of Small And Medium Sized Enterprises Case Study Analysis are provided as follows;
• Despite of being a science and innovation publishing company, the company still has conventional methods ofpublishing which are not compatible with the growing technological shift.
• CMP extremely relies over the Chinese markets for its growth. It should propose particular growth strategies to prevent its dependence over the Chinese markets to accomplish long term growth.
Opportunities
Although, the growth of the publishing market is decreasing since 2008, impacting Mergers And Acquisitions Of Small And Medium Sized Enterprises Case Study Solution too, however the development could be restored by availing specific opportunities provided in the market. The marketplace opportunities for CMP include;
• The company might likewise present Digital Publishing by utilizing its long term technical experience and a strong customer recognition in the market.
• CMP might think about a development program through the expansion towards foreign markets in order to lower its reliance over Chinese markets by using its large funds.
Risks
The changing macro trends in the market and increasing competitors in the publishing market has actually posed certain hazards to Mergers And Acquisitions Of Small And Medium Sized Enterprises Case Study Analysis consisting of;( Gurel, 2017).
• Introduction of digital publishing i.e. digital libraries could lead to declining market share of Mergers And Acquisitions Of Small And Medium Sized Enterprises Case Study Help due to the customer shift towards digital libraries.
• The presence of large number of rivals in the publishing market increase the threat for CMP to lose its competitive position in the market, as rivals can gain a strong consumer base by utilizing specific methods like aggressive promo, quality products, and so on
• Entrance of brand-new publishing companies in the industry along with presence of high competition increases the hazard of losing the client base.
Financial Analysis.
The business has a rather competitive financial performance. Due to absence of data, the monetary ratios of CMP could not be determined. The overall monetary performance of the company could be analyzed by using the charts given in the case Appendices. It could be evaluated from the Appendix III that the annual total earnings of CMP throughout the period 2000-2012 are growing at a high growth rate, showing that the annual need of the items of Mergers And Acquisitions Of Small And Medium Sized Enterprises Case Study Analysis is growing and the business is quite efficient in bring in a a great deal of customers at a potential cost.
Along with it, the 2nd chart which shows the yearly development in the Mergers And Acquisitions Of Small And Medium Sized Enterprises Case Study Help total assets, shows that the company is rather efficient in including worth to its possessions through its revenues. The development in assets shows that the total value of the company is likewise increasing with increasing the total profits. (Unknown, 2013).
Another financial analysis of the business using the given information might be the analysis regarding the circulation of overall incomes of the business. Major part of the earnings 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 company sections with a prospective development to achieve its future development goal.
PESTEL Analysis
PESTEL analysis might be performed to find out the various external forces impacting the efficiency of the business and the current trends in the external environment of the business. A brief PESTEL analysis of the business is offered as follows; (Alanzi, 2018).
Political.
As the publishing sector might have a significant effect on the mindset of the people about the communist ideology of the government, therefore, the publishing sector is highly monitored and directed by the Promotion Department of the Communist Celebration of China. It could be stated that the overall political forces impacting CMP company are high. The government policies relating to the publishing sector are also increasing with the passage of time.
Affordable.
Financial forces affecting the publishing sector in general and the Mergers And Acquisitions Of Small And Medium Sized Enterprises Case Study Solution in particular includesthe rates of paper, the earnings level of consumers, the inflation rate, and the overall GDP growth of the nation. All these forces combine impact the demand for the publishing market. Together with it, the economic policies connected to the import of books impact the overall service at CPM. However, 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 preferences towards checking out informative materials etc. China has the greatest population on the planet with a high population growth, showing the increasing variety of customers of the Mergers And Acquisitions Of Small And Medium Sized Enterprises Case Study Analysis. Nevertheless, the customer preferences are moving towards digital publishing rather than the traditional was of publishing. In this regard, CMP must concentrate on digital publishing to satisfy the changing consumer preferences.
Technological.
Technological forces impacting the CMP include the technological advancement in the reading methods and so on. Enhancement of science and technology along with the increase of digital publishing could reduce the demand for the CMP items, if particular actions would not be taken soon.
Environmental.
Environmental forces impacting Mergers And Acquisitions Of Small And Medium Sized Enterprises Case Study Help includes the issues of environmental communities over the usage of paper in publishing books. The paper utilized in the books while publishing is required to be non reusable and the ink utilized while publishing needs to not be damaging for the environment.
Legal.
Legal guidelines for the publishing sector at whole are high. The legal guidelines concerning the publishing sector is managed by the General Administration of Press and Publication. Publishing Ordinance 1997 requires the publishers to be approved first by the Government to be entered in the publishing market. The regulation forbids direct participation of foreign entities and individuals in the publishing sector.
Market Analysis (Porter's 5 Forces Model).
Porter's Five Forces Model could be used to examine the beauty of the publishing industry China. A brief analysis of the Porter's Five Forces is provided as follows;.
Threat of New Entrants.
Hazards of new entrants in the Chinese Publishing Industry is moderate. The possible growth in the industry tends to draw 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 go into in the market.
Threat of Substitution.
Danger of Replacement is high for the Chinese Publishing Market. The alternative items for the published files is the files presented in the virtual libraries on specific sites. The altering consumer choices towards digital knowing increase the hazard of substitution for the market.
Competitive Competition.
Competitive rivalry in the publishing industry is high. The existence of large number 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 marketplace increasing the competition for CMP.
Bargaining Power of Supplier.
The major providers of the Mergers And Acquisitions Of Small And Medium Sized Enterprises Case Study Help include the suppliers of the paper for publishing documents. As CMP is the biggest publisher in the Chinese Publishing Market, therefore the total 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 presence 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 operates in an extremely competitive industry with the presence of a great deal of competitors. However, the company has a competitive position in the market with the greatest market share in the Chinese publishing market. Major competitors of Mergers And Acquisitions Of Small And Medium Sized Enterprises Case Study Help include;.
• Chemical Industry Press (CIP).
• Posts and telecommunication Press (PTP).
Chemical Industry Press (CIP).
CIPis among the close competitors of CMP. Founded in the exact same duration, CIP releases similar kind of books. For a large time period, CIP held the biggest market share, and still ranks 3rd and 2nd in various market sectors, with a significant focus on instructional publications. CIP functions as a danger for CMP as it might wean its market share due to its long term competitive background. CIP is concentrated on digital publishing and could wean the marketplace share of Mergers And Acquisitions Of Small And Medium Sized Enterprises Case Study Analysis quickly in the current market situation.
Posts and telecommunication Press (PTP).
Another close rival of CMP is PTP. It was also established in the exact same period as CMP and CIP. It ranks sixth in the state-owned publishers in terms of company scale. It is likewise among the prominent gamers in the publishing industry with an annual total profits of RMB 550 million in 2010.
Alternatives
Alternative-1: Expand towards New Markets
Pros
• Decreasing dependence over the Chinese markets.
• Increasing number of Customers
• Development chances.
• Preventing the impact of market saturation in the Chinese publishing industry.
Cons
• Usage of prospective resources in expansion.
• Threat of failure in brand-new markets.
• Time consuming.
Alernative-2: Present Digital Publishing
Pros
• Sustaining consumer base.
• Approaching new markets.
• Easy to present utilizing existing abilities.
• Low threat of Failure.
• Low requirement for funds.
• Increased product portfolio offers high worth to clients.
Cons
• Competition in the market by CIP, who has prior focus on the digital publishing.
• Shift of focus from the core business segments to the brand-new one can lead the company to lose demand of its products in the market.
Recommendations
As the choices are moving towards digital publishing and the company require an instant solution to prevent the decreasing market development. The business could also think about the growth program after the success of its digital publishing program.
Application
In order to present digital publishing in its product portfolio, the company must initially gathers the information related to the customer need, the potential markets, the government regulations and the data related to the competitors presented in the market. If the preliminary offering shows a success, the company should go for the other markets. In this way the business would be able to execute its digital publishing program.
Conclusion
Although, the development of the publishing market is declining because 2008, revealing a hazard to the company's long term existence, however the situation can be controlled by considering a development strategy in the future. The business could think about presenting digital publishingin its existing market to implement its advancement program at instant basis and to prevent the threat of failure for entryway in the brand-new markets.
