Northampton Group Inc How To Increase Shareholder Value Case Study Solution and Analysis
Introduction
Northampton Group Inc How To Increase Shareholder Value Case Study Help is the largest publishing business with a highest market share in the China's book retail market. CMP supplies a variety of services consisting of; collecting details, processing info and communication services. Major service sections of the business consist of; books, regulars, consultancy and circulation. The company has a vast product portfolio and its major items include books, periodicals, online media, exhibits, research reports etc. Northampton Group Inc How To Increase Shareholder Value Case Study Help has actually ended up being 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
CMP has spent its 60 years journey efficiently, being a successful publishing house, however, the changing macro market patterns and forces bring specific difficulties to the publishing market in general and Northampton Group Inc How To Increase Shareholder Value Case Study Help in specific. These factors include;
• Entrance of the brand-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 transformation 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 circumstance? Do the long important experience, technical resources and the abilities of the business could be used to pursue the future advancement unceasingly? How could the business sustain its long term competitive position in future?
Situational Analysis
Internal Analysis
SWOT Analysis
Strengths
Northampton Group Inc How To Increase Shareholder Value Case Study Help has certain strengths that can be made use of to reduce the hazards, conquer the weakness and obtain the chances. Strengths of CMP are given as follows;
• The long term experience of Northampton Group Inc How To Increase Shareholder Value Case Study Help in the publishing industry i.e. 60 years permits the company to offer high quality products at a lower cost using its prior experiences.
• The technical resources and abilities produced by its successful journey supply a competitive advantage to CMP.
• Huge product portfolioof CMP helps it to diversify its danger and supply high worth to its clients.
• Strong financial position permits the business to consider several advancement opportunities with no worry of raising fund externally.
Weaknesses
In addition to the strengths, the company has certain weak points which could increase restrictions for the business in implementing its development program. The weaknesses of Northampton Group Inc How To Increase Shareholder Value Case Study Solution are offered as follows;
• Despite of being a science and technology publishing company, the business still has conventional methods ofpublishing which are not compatible with the growing technological shift.
• CMP highly relies over the Chinese markets for its growth. It ought to propose particular expansion plans to prevent its dependence over the Chinese markets to accomplish long term development.
Opportunities
The development of the publishing market is decreasing given that 2008, impacting Northampton Group Inc How To Increase Shareholder Value Case Study Solution as well, however the development might be restored by availing certain chances presented in the market. The marketplace opportunities for CMP consist of;
• The company could also present Digital Publishing by using its long term technical experience and a strong client acknowledgment in the market.
• CMP might think about an advancement program through the expansion towards foreign markets in order to decrease its reliance over Chinese markets by using its vast financial resources.
Hazards
The changing macro trends in the market and increasing competition in the publishing industry has actually presented certain dangers to Northampton Group Inc How To Increase Shareholder Value Case Study Analysis including;( Gurel, 2017).
• Intro of digital publishing i.e. digital libraries could lead to declining market share of Northampton Group Inc How To Increase Shareholder Value Case Study Help due to the customer 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 rivals can gain a strong consumer base by using specific methods like aggressive promo, quality products, and so on
• Entrance of brand-new publishing companies in the industry in addition to existence of high competitors increases the danger of losing the client base.
Financial Analysis.
The company has a quite competitive monetary performance. Due to lack of data, the monetary ratios of CMP could not be calculated. However, the overall monetary efficiency of the company could be evaluated by using the graphs given up the case Appendices. It could be examined from the Appendix III that the yearly total revenues of CMP during the period 2000-2012 are growing at a high development rate, revealing that the annual need of the items of Northampton Group Inc How To Increase Shareholder Value Case Study Solution is growing and the business is quite effective in attracting a a great deal of consumers at a potential price.
Along with it, the second graph which reveals the annual growth in the Northampton Group Inc How To Increase Shareholder Value Case Study Help overall properties, shows 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 company is also increasing with increasing the total profits. (Unknown, 2013).
Another financial analysis of the company using the given data could be the analysis concerning the distribution of overall incomes of the company. Huge part of the profits of CMP originates from the sales of its published books i.e. 64% as displayed in the Case Appendix V. The business could move towards other service sectors with a possible growth to achieve its future advancement objective.
PESTEL Analysis
PESTEL analysis could be conducted to find out the different external forces affecting the performance of the company and the recent trends in the external environment of the company. A short PESTEL analysis of the company is provided 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 government, therefore, the publishing sector is highly supervised and assisted by the Promotion Department of the Communist Celebration of China. It could be stated that the general political forces affecting CMP business are high. The government policies relating to the publishing sector are likewise increasing with the passage of time.
Economical.
Economic forces affecting the publishing sector in general and the Northampton Group Inc How To Increase Shareholder Value Case Study Solution in particular includesthe costs of paper, the income level of consumers, the inflation rate, and the general GDP development of the nation. All these forces combine effect the demand for the publishing market. Together with it, the economic policies related to the import of books affect the total company at CPM. China's economic conditions are quite beneficial for CMP with high GDP development and consumer earnings level.
Social and Demographical.
Social and demographical forces consist of the population development, the consumer's preferences towards reading informative materials etc. China has the greatest population on the planet with a high population development, revealing the increasing number of consumers of the Northampton Group Inc How To Increase Shareholder Value Case Study Help. The customer choices are shifting towards digital publishing rather than the traditional was of publishing. In this regard, CMP ought to concentrate on digital publishing to fulfill the changing customer choices.
Technological.
Technological forces affecting the CMP consist of the technological improvement in the reading techniques etc. Enhancement of science and innovation together with the increase of digital publishing could minimize the demand for the CMP items, if certain actions would not be taken quickly.
Environmental.
Ecological forces affecting Northampton Group Inc How To Increase Shareholder Value Case Study Analysis includes the issues of environmental neighborhoods over the usage of paper in publishing books. The paper utilized in the books while publishing is needed to be disposable and the ink utilized while publishing needs to not be hazardous for the environment.
Legal.
Legal guidelines for the publishing sector at whole are high. The legal policies regarding the publishing sector is controlled by the General Administration of Press and Publication. Publishing Regulation 1997 requires the publishers to be approved initially 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.
Market Analysis (Porter's 5 Forces Model).
Porter's 5 Forces Design might be used to analyze the attractiveness of the publishing market China. A quick analysis of the Porter's Five Forces is given as follows;.
Hazard of New Entrants.
Dangers of new entrants in the Chinese Publishing Market is moderate. The possible growth in the industry tends to bring in brand-new entrants to the publishing industry. The existence of intense competitors and the requirement of big capital tends to demotivate new entrants to go into in the market.
Danger of Substitution.
Danger of Substitution is high for the Chinese Publishing Market. The alternative items for the published files is the files presented in the virtual libraries on particular websites. The altering consumer choices towards digital learning increase the danger of substitution for the industry.
Competitive Rivalry.
Competitive rivalry in the publishing industry is high. The existence of a great deal of consumers in the Chinese Publishing Market like CIP, PTP and so on tends to produce high competitive rivalry for CMP. Along with it, brand-new entrants are also participating in the market increasing the competitors for CMP.
Bargaining Power of Supplier.
The major suppliers of the Northampton Group Inc How To Increase Shareholder Value Case Study Help include the providers of the paper for publishing files. As CMP is the biggest publisher in the Chinese Publishing Market, for that reason the general 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 large number of publishers in the Chinese market and the marketplace saturation, the buyers requires high quality files at competitive costs.
Competitors Analysis.
CMP operates in an extremely competitive industry with the existence of a great deal of rivals. However, the business has a competitive position in the market with the greatest market share in the Chinese publishing market. Major competitors of Northampton Group Inc How To Increase Shareholder Value Case Study Analysis consist of;.
• 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 might wean the market share of CMP quickly in the existing market circumstance.
Posts and telecommunication Press (PTP).
Another close competitor of CMP is PTP. It was likewise established in the same duration as CMP and CIP. It ranks 6th in the state-owned publishers in terms of service scale. It is likewise among the popular gamers in the publishing industry with a yearly overall incomes of RMB 550 million in 2010.
Alternatives
Alternative-1: Expand towards New Markets
Pros
• Reducing dependence over the Chinese markets.
• Increasing number of Customers
• Development chances.
• Avoiding the impact of market saturation in the Chinese publishing industry.
Cons
• Use of potential resources in growth.
• Threat of failure in brand-new markets.
• Time consuming.
Alernative-2: Present Digital Publishing
Pros
• Sustaining consumer base.
• Approaching brand-new markets.
• Easy to present using current abilities.
• Low risk of Failure.
• Low requirement for funds.
• Increased item portfolio offers high value to consumers.
Cons
• Competition in the market by CIP, who has prior concentrate on the digital publishing.
• Shift of focus from the core business segments to the new one can lead the company to lose need of its items in the market.
Suggestions
With the deep analysis of the external and internal environment of the business together with the industry analysis and the rival analysis, Alternative 2 is advised to CMP to accomplish its future advancement. As the choices are moving towards digital publishing and the business require an instant solution to prevent the declining industry development. Introduction of digital publishing could show to be an instant service with low amount of threat for the company. Nevertheless, the business might also think about the growth 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 gathers the information related to the consumer demand, the prospective markets, the federal government guidelines and the information 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 method the business would be able to execute its digital publishing program.
Conclusion
Although, the development of the publishing market is declining since 2008, showing a hazard to the company's long term existence, however the circumstance can be managed by thinking about an advancement plan in the future. The business might consider introducing digital publishingin its existing market to implement its advancement program at instant basis and to avoid the threat of failure for entrance in the new markets.
