Northampton Group Inc How To Increase Shareholder Value Case Study Solution and Analysis
Northampton Group Inc How To Increase Shareholder Value Case Study Help is the biggest publishing business with a greatest market share in the China's book retail market. CMP provides a variety of services consisting of; collecting information, processing information and interaction services. Major business sectors of the business consist of; books, regulars, consultancy and distribution. The company has a large product portfolio and its major products consist of books, regulars, online media, exhibits, research reports etc. Northampton Group Inc How To Increase Shareholder Value Case Study Help has actually become a specialized details supplier and a large detailed Science and Technology publishing business through the combination of print media, audio-visual media and the network media.
CMP has actually spent its 60 years journey smoothly, being a successful publishing home, nevertheless, the altering macro market trends and forces bring certain obstacles to the publishing market in basic and Northampton Group Inc How To Increase Shareholder Value Case Study Analysis in particular. These factors consist of;
• Entryway of the new publishing firms in the industry.
• Declining growth of the publishing market.
• Market saturation.
• Intro of digital publishing techniques
• Enhancement of science and innovation.
The change 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 utilized to strive for the future advancement unceasingly? How could the company sustain its long term competitive position in future?
Northampton Group Inc How To Increase Shareholder Value Case Study Solution has specific strengths that can be used to decrease the risks, conquer the weak point and get the opportunities. Strengths of CMP are provided as follows;
• The long term experience of Northampton Group Inc How To Increase Shareholder Value Case Study Solution in the publishing industry i.e. 60 years permits the business to provide high quality items at a lower cost utilizing its prior experiences.
• The technical resources and abilities created by its successful journey supply a competitive advantage to CMP.
• Large item portfolioof CMP helps it to diversify its risk and supply high value to its consumers.
• Strong monetary position enables the business to think about numerous advancement chances without any worry of raising fund externally.
Along with the strengths, the company has certain weak points which could increase constraints for the business in executing its development program. The weaknesses of Northampton Group Inc How To Increase Shareholder Value Case Study Help are provided as follows;
• Despite of being a science and technology publishing company, the business still has conventional ways ofpublishing which are not suitable with the growing technological shift.
• CMP highly relies over the Chinese markets for its growth. It ought to propose specific growth plans to prevent its reliance over the Chinese markets to accomplish long term growth.
Although, the growth of the publishing industry is declining because 2008, affecting Northampton Group Inc How To Increase Shareholder Value Case Study Help too, however the development could be revived by availing specific chances presented in the market. The market opportunities for CMP consist of;
• The company might also present Digital Publishing by utilizing its long term technical experience and a strong client 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 huge financial resources.
The changing macro trends in the market and increasing competitors in the publishing industry has presented specific threats to Northampton Group Inc How To Increase Shareholder Value Case Study Solution consisting of;( Gurel, 2017).
• Introduction of digital publishing i.e. virtual libraries could result in decreasing market share of Northampton Group Inc How To Increase Shareholder Value Case Study Analysis due to the customer shift towards digital libraries.
• The existence 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 acquire a strong consumer base by using specific techniques like aggressive promo, quality products, etc.
• Entryway of brand-new publishing firms in the market together with existence of high competition increases the danger of losing the consumer base.
The business has a rather competitive financial performance. Due to absence of information, the financial ratios of CMP could not be determined. The overall monetary efficiency of the company might be analyzed by utilizing the charts given in the case Appendices. It could be evaluated from the Appendix III that the annual total earnings of CMP during the period 2000-2012 are growing at a high development rate, showing 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 bring in a large number of consumers at a potential rate.
In addition to it, the 2nd chart which reveals the yearly development in the Northampton Group Inc How To Increase Shareholder Value Case Study Help overall assets, shows that the company is quite efficient in adding worth to its possessions through its incomes. The development in possessions reveals that the total worth of the company is also increasing with increasing the overall revenues. (Unidentified, 2013).
Another monetary analysis of the company using the provided data could be the analysis concerning the circulation of overall earnings of the business. Major part of the revenues of CMP comes from the sales of its published books i.e. 64% as shown in the Case Appendix V. The company could move towards other service sections with a potential growth to attain its future advancement objective.
PESTEL analysis could be carried out to discover the different external forces impacting the efficiency of the company and the current trends in the external environment of the business. A brief PESTEL analysis of the company is given as follows; (Alanzi, 2018).
As the publishing sector might have a substantial 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 directed by the Publicity Department of the Communist Party of China. For that reason, it could be stated that the general political forces impacting Northampton Group Inc How To Increase Shareholder Value Case Study Help company are high. The government policies relating to the publishing sector are also increasing with the passage of time.
Financial forces impacting the publishing sector in general and the CMP in specific includesthe prices of paper, the income level of customers, 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 growth, the customer's choices towards reading helpful products and so on. China has the greatest population in the world with a high population development, showing the increasing variety of customers 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 must focus on digital publishing to satisfy the altering customer choices.
Technological forces impacting the CMP consist of the technological advancement in the reading techniques etc. Enhancement of science and technology along with the increase of digital publishing might minimize the need for the CMP products, if particular actions would not be taken quickly.
Environmental forces impacting Northampton Group Inc How To Increase Shareholder Value Case Study Analysis includes the issues of ecological neighborhoods over the use of paper in publishing books. The paper used in the books while publishing is required to be disposable and the ink used while publishing needs to not be damaging for the environment.
Legal policies for the publishing sector at whole are high. Publishing Ordinance 1997 requires the publishers to be authorized initially by the Federal government to be gone into in the publishing market.
Market Analysis (Porter's Five Forces Model).
Porter's 5 Forces Design could be used to analyze the appearance of the publishing industry China. A brief analysis of the Porter's 5 Forces is provided as follows;.
Risk of New Entrants.
Hazards of new entrants in the Chinese Publishing Market is moderate. The possible growth in the industry tends to attract brand-new entrants to the publishing industry. Nevertheless, the presence of extreme competitors and the requirement of substantial capital tends to demotivate brand-new entrants to go into in the marketplace.
Risk of Alternative.
Threat of Replacement is high for the Chinese Publishing Market. The replacement products for the published files is the documents provided in the digital libraries on particular sites. The altering customer preferences towards digital knowing increase the threat of substitution for the industry.
Competitive rivalry in the publishing industry is high. The presence of large number of consumers 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 participating in the marketplace increasing the competition for CMP.
Bargaining Power of Supplier.
The significant providers of the Northampton Group Inc How To Increase Shareholder Value Case Study Help include the suppliers of the paper for releasing files. 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 Purchaser.
Bargaining power of buyer in the publishing market is high. Due to the presence of a a great deal of publishers in the Chinese market and the market saturation, the buyers requires high quality files at competitive prices.
CMP runs in a highly competitive industry with the existence of large number of rivals. Nevertheless, the business has a competitive position in the market with the greatest market share in the Chinese publishing market. Significant competitors of Northampton Group Inc How To Increase Shareholder Value Case Study Solution include;.
• Chemical Market Press (CIP).
• Posts and telecommunication Press (PTP).
Chemical Industry Press (CIP).
CIPis one of the close rivals of CMP. Established in the very same duration, CIP publishes similar type of books. For a big time period, CIP held the largest market share, and still ranks third and 2nd in various market sections, with a significant concentrate on academic publications. CIP acts as a hazard 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 Northampton Group Inc How To Increase Shareholder Value Case Study Help easily in the current market scenario.
Posts and telecommunication Press (PTP).
It was likewise established in the same period as Northampton Group Inc How To Increase Shareholder Value Case Study Solution and CIP. It is also one of the popular players in the publishing industry with a yearly overall earnings of RMB 550 million in 2010.
Alternative-1: Broaden towards New Markets
• Decreasing reliance over the Chinese markets.
• Increasing number of Consumers
• Development opportunities.
• Preventing the impact of market saturation in the Chinese publishing market.
• Usage of possible resources in growth.
• Threat of failure in new markets.
• Time consuming.
Alernative-2: Introduce Digital Publishing
• Sustaining consumer base.
• Approaching brand-new markets.
• Easy to introduce utilizing present abilities.
• Low threat of Failure.
• Low requirement for funds.
• Increased product portfolio offers high worth to clients.
• Competition in the market by CIP, who has prior focus on the digital publishing.
• Shift of focus from the core organisation sections to the new one can lead the business to lose demand of its items in the market.
As the choices are shifting towards digital publishing and the company require an immediate solution to prevent the decreasing market development. The company could likewise think about the growth program after the success of its digital publishing program.
In order to present digital publishing in its product portfolio, the business should initially collects the information related to the consumer need, the possible markets, the federal government policies and the data related to the rivals presented in the market. If the preliminary offering shows a success, the business ought to go for the other markets. In this method the company would be able to execute its digital publishing program.
Although, the growth of the publishing industry is decreasing given that 2008, revealing a danger to the company's long term existence, but the circumstance can be managed by thinking about a development strategy in the future. The company might consider presenting digital publishingin its existing market to execute its advancement program at instant basis and to avoid the threat of failure for entrance in the new markets.