Mergers And Acquisitions Overcoming Pitfalls Building Synergy And Creating Value Case Study Solution and Analysis
Introduction
Mergers And Acquisitions Overcoming Pitfalls Building Synergy And Creating Value Case Study Analysis is the largest publishing business with a greatest market share in the China's book retail market. CMP provides a number of services consisting of; collecting info, processing details and interaction services. Significant company sectors of the company consist of; books, periodicals, consultancy and distribution. The company has a large item portfolio and its significant items include books, periodicals, online media, exhibitions, research reports etc. Mergers And Acquisitions Overcoming Pitfalls Building Synergy And Creating Value Case Study Solution has become a specialized details supplier and a big comprehensive Science and Innovation publishing company through the combination of print media, audio-visual media and the network media.
Important Issues
Although, Mergers And Acquisitions Overcoming Pitfalls Building Synergy And Creating Value Case Study Solution has spent its 60 years journey smoothly, being a successful publishing home, nevertheless, the altering macro market patterns and forces bring specific challenges to the publishing market in general and CMP in particular. These aspects include;
• Entryway of the new publishing companies in the industry.
• Declining development of the publishing market.
• Market saturation.
• Intro of digital publishing methods
• 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 circumstance? Do the long valuable experience, technical resources and the capabilities of the business could be made use of 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
Mergers And Acquisitions Overcoming Pitfalls Building Synergy And Creating Value Case Study Solution has particular strengths that can be utilized to lower the threats, conquer the weakness and avail the chances. Strengths of CMP are provided as follows;
• The long term experience of Mergers And Acquisitions Overcoming Pitfalls Building Synergy And Creating Value Case Study Analysis in the publishing industry i.e. 60 years permits the company to offer high quality products at a lower cost using its previous experiences.
• The technical resources and capabilities generated by its successful journey provide a competitive advantage to CMP.
• Vast product portfolioof CMP assists it to diversify its risk and provide high worth to its customers.
• Strong monetary position enables the business to think about a number of development opportunities without any worry of raising fund externally.
Weaknesses
Along with the strengths, the business has certain weak points which could increase restrictions for the company in executing its development program. The weaknesses of Mergers And Acquisitions Overcoming Pitfalls Building Synergy And Creating Value Case Study Help are offered as follows;
• Despite of being a science and innovation publishing company, the business still has traditional ways ofpublishing which are not compatible with the growing technological shift.
• CMP extremely relies over the Chinese markets for its growth. It ought to propose particular expansion plans to avoid its dependence over the Chinese markets to attain long term growth.
Opportunities
Although, the development of the publishing market is declining since 2008, impacting Mergers And Acquisitions Overcoming Pitfalls Building Synergy And Creating Value Case Study Help as well, however the growth might be restored by availing particular opportunities presented in the market. The marketplace chances for CMP include;
• The business might also present Digital Publishing by using its long term technical experience and a strong customer acknowledgment in the market.
• CMP might think about a development program through the growth towards foreign markets in order to reduce its reliance over Chinese markets by utilizing its huge financial resources.
Threats
The altering macro patterns in the market and increasing competition in the publishing market has positioned specific threats to Mergers And Acquisitions Overcoming Pitfalls Building Synergy And Creating Value Case Study Analysis including;( Gurel, 2017).
• Introduction of digital publishing i.e. virtual libraries might cause declining market share of Mergers And Acquisitions Overcoming Pitfalls Building Synergy And Creating Value Case Study Help due to the consumer shift towards virtual libraries.
• The existence of large number of rivals in the publishing market increase the danger for CMP to lose its competitive position in the market, as competitors can acquire a strong customer base by utilizing certain techniques like aggressive promotion, quality products, and so on
• Entrance of brand-new publishing companies in the industry in addition to presence of high competition increases the hazard of losing the client base.
Financial Analysis.
Due to absence of data, the monetary ratios of CMP could not be calculated. It could be examined from the Appendix III that the annual total incomes of Mergers And Acquisitions Overcoming Pitfalls Building Synergy And Creating Value Case Study Help during the period 2000-2012 are growing at a high growth rate, revealing that the yearly need of the products of CMP is growing and the company is rather efficient in drawing in a large number of customers at a possible price.
Together with it, the 2nd graph which shows the yearly growth in the Mergers And Acquisitions Overcoming Pitfalls Building Synergy And Creating Value Case Study Solution overall possessions, shows that the company is rather efficient in including value to its assets through its profits. The growth in properties shows that the overall value of the company is also increasing with increasing the total profits. (Unknown, 2013).
Another financial analysis of the business using the given data might be the analysis regarding the distribution of total incomes of the business. Major part of the profits of CMP comes from the sales of its released books i.e. 64% as shown in the Case Appendix V. The business might move towards other business segments with a potential growth to attain its future advancement objective.
PESTEL Analysis
PESTEL analysis could be performed to learn the various external forces impacting the performance of the business and the current 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 considerable effect on the state of mind of individuals about the communist ideology of the government, for that reason, the publishing sector is extremely supervised and guided by the Promotion Department of the Communist Party of China. It could be stated that the overall political forces impacting CMP service are high. The federal government policies concerning the publishing sector are also increasing with the passage of time.
Affordable.
Financial forces impacting the publishing sector in basic and the Mergers And Acquisitions Overcoming Pitfalls Building Synergy And Creating Value Case Study Help in particular includesthe rates of paper, the income level of consumers, the inflation rate, and the total GDP growth of the country. All these forces integrate effect the demand for the publishing market. In addition to it, the economic policies connected to the import of books affect the general organisation at CPM. Nevertheless, China's economic conditions are rather beneficial for CMP with high GDP growth and customer earnings level.
Social and Demographical.
The customer choices are shifting towards digital publishing rather than the conventional was of publishing. In this regard, CMP needs to focus on digital publishing to fulfill the altering customer preferences.
Technological.
Technological forces affecting the CMP consist of the technological improvement in the reading techniques etc. Improvement of science and technology in addition to the increase of digital publishing might reduce the demand for the CMP products, if specific actions would not be taken soon.
Environmental.
Ecological forces affecting Mergers And Acquisitions Overcoming Pitfalls Building Synergy And Creating Value Case Study Help includes the issues of environmental neighborhoods over the use of paper in publishing books. The paper used in the books while publishing is needed to be non reusable and the ink utilized while publishing must not be harmful for the environment.
Legal.
Legal guidelines 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 requires the publishers to be authorized initially by the Government to be entered 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 5 Forces Model could be used to analyze the beauty of the publishing market 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 Industry is moderate. The prospective growth in the industry tends to draw in new entrants to the publishing market. However, the presence of extreme competition and the requirement of big capital tends to demotivate brand-new entrants to enter in the market.
Hazard of Replacement.
Threat of Alternative is high for the Chinese Publishing Industry. The replacement products for the released documents is the files provided in the digital libraries on specific websites. The changing customer preferences towards digital knowing increase the risk of alternative for the market.
Competitive Rivalry.
Competitive rivalry in the publishing industry is high. The presence of large number of consumers in the Chinese Publishing Industry like CIP, PTP and so on tends to produce high competitive competition for CMP. In addition to it, brand-new entrants are likewise entering into the marketplace increasing the competitors for CMP.
Bargaining Power of Supplier.
The major providers of the Mergers And Acquisitions Overcoming Pitfalls Building Synergy And Creating Value Case Study Solution consist of the suppliers of the paper for releasing 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 Buyer.
Negotiating power of buyer in the publishing industry is high. Due to the existence of a a great deal of publishers in the Chinese market and the marketplace saturation, the buyers requires high quality documents at competitive prices.
Rivals Analysis.
CMP runs in a highly competitive industry with the presence of a great deal of competitors. Nevertheless, the business has a competitive position in the market with the greatest market share in the Chinese publishing market. Significant competitors of Mergers And Acquisitions Overcoming Pitfalls Building Synergy And Creating Value Case Study Analysis consist of;.
• Chemical Market Press (CIP).
• Posts and telecommunication Press (PTP).
Chemical Industry Press (CIP).
CIPis one of the close competitors of CMP. Established in the same period, CIP publishes similar type of books. For a big time period, CIP held the largest market share, and still ranks 2nd and third in different market sectors, with a major focus on educational publications. CIP acts as a risk for CMP as it could wean its market share due to its long term competitive background. CIP is concentrated on digital publishing and might wean the marketplace share of Mergers And Acquisitions Overcoming Pitfalls Building Synergy And Creating Value Case Study Analysis quickly in the current market scenario.
Posts and telecommunication Press (PTP).
It was likewise established in the very same duration as Mergers And Acquisitions Overcoming Pitfalls Building Synergy And Creating Value Case Study Analysis and CIP. It is also one of the popular players in the publishing market with a yearly overall revenues of RMB 550 million in 2010.
Alternatives
Alternative-1: Broaden towards New Markets
Pros
• Minimizing dependence over the Chinese markets.
• Increasing variety of Clients
• Development chances.
• Avoiding the effect of market saturation in the Chinese publishing market.
Cons
• Usage of potential resources in growth.
• Danger of failure in brand-new markets.
• Time consuming.
Alernative-2: Present Digital Publishing
Pros
• Sustaining consumer base.
• Approaching new markets.
• Easy to present utilizing present abilities.
• Low danger 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 sectors to the new one can lead the company to lose demand of its items in the market.
Suggestions
With the deep analysis of the external and internal environment of the company along with the market analysis and the competitor analysis, Alternative 2 is suggested to CMP to accomplish its future advancement. As the preferences are moving towards digital publishing and the company require an instant solution to avoid the declining market development. For that reason, intro of digital publishing could show to be an immediate solution with low quantity of danger for the company. Nevertheless, the business could also think about the expansion program after the success of its digital publishing program.
Implementation
In order to present digital publishing in its item portfolio, the company ought to first collects the information connected to the consumer need, the prospective markets, the federal government guidelines and the information related to the competitors presented in the market. After that, the business needs to choose one prospective sector for its preliminary offering. It needs to collect research that how it might differentiate its digital publishing from the existing competitors' products. The actions above the company must go for the initial offering. If the preliminary offering proves a success, the company needs to go for the other markets. In this way the company would be able to implement its digital publishing program.
Conclusion
Although, the growth of the publishing market is declining since 2008, showing a threat to the company's long term presence, but the scenario can be controlled by thinking about an advancement strategy in the future. The company might consider presenting digital publishingin its existing market to implement its advancement program at instant basis and to avoid the risk of failure for entryway in the new markets.
