Optimal Portfolio Of Stocks And Bonds Case Study Solution and Analysis
Intro
Optimal Portfolio Of Stocks And Bonds Case Study Analysis is the biggest publishing company with a highest market share in the China's book retail market. CMP has actually ended up being a specialized information provider and a large comprehensive Science and Innovation publishing company through the integration of print media, audio-visual media and the network media.
Important Issues
CMP has actually invested its 60 years journey smoothly, being an effective publishing house, however, the changing macro market patterns and forces bring specific challenges to the publishing industry in basic and Optimal Portfolio Of Stocks And Bonds Case Study Analysis in specific. These aspects include;
• Entrance of the new publishing companies in the market.
• Decreasing development of the publishing market.
• Market saturation.
• Introduction of digital publishing techniques
• Improvement of science and technology.
The transformation of the macro markets have raised several questions to the management at CPM that what could be the future of CMP in this scenario? 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?
Situational Analysis
Internal Analysis
SWOT Analysis
Strengths
Optimal Portfolio Of Stocks And Bonds Case Study Solution has specific strengths that can be utilized to minimize the dangers, conquer the weak point and get the chances. Strengths of CMP are offered as follows;
• The long term experience of Optimal Portfolio Of Stocks And Bonds Case Study Help in the publishing industry i.e. 60 years permits the business to provide high quality items at a lower expense using its previous experiences.
• The technical resources and abilities created by its successful journey supply a competitive benefit to CMP.
• Large product portfolioof CMP assists it to diversify its risk and provide high value to its consumers.
• Strong monetary position allows the business to consider numerous advancement chances with no worry of raising fund externally.
Weak points
Along with the strengths, the business has certain weak points which could increase restrictions for the business in implementing its development program. The weaknesses of Optimal Portfolio Of Stocks And Bonds Case Study Solution are offered as follows;
• Despite of being a science and technology publishing company, the company still has conventional methods ofpublishing which are not suitable with the growing technological shift.
• CMP extremely relies over the Chinese markets for its development. It must propose specific expansion strategies to prevent its dependence over the Chinese markets to achieve long term growth.
Opportunities
Although, the development of the publishing industry is decreasing because 2008, impacting Optimal Portfolio Of Stocks And Bonds Case Study Solution too, but the development could be restored by availing specific opportunities presented in the market. The market opportunities for CMP include;
• The business could also introduce Digital Publishing by utilizing its long term technical experience and a strong customer recognition in the market.
• CMP could consider a development program through the growth towards foreign markets in order to decrease its dependence over Chinese markets by utilizing its large financial resources.
Dangers
The changing macro patterns in the market and increasing competition in the publishing industry has actually posed particular dangers to Optimal Portfolio Of Stocks And Bonds Case Study Help consisting of;( Gurel, 2017).
• Introduction of digital publishing i.e. virtual libraries could cause declining market share of Optimal Portfolio Of Stocks And Bonds Case Study Help due to the customer shift towards digital 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 customer base by using particular methods like aggressive promotion, quality products, etc.
• Entryway of new publishing firms in the market in addition to existence of high competition increases the threat of losing the consumer base.
Monetary Analysis.
The business has a quite competitive financial efficiency. Due to absence of information, the monetary ratios of CMP could not be determined. The general monetary efficiency of the company could be analyzed by using the graphs offered in the case Appendices. It might be examined from the Appendix III that the yearly overall revenues of CMP throughout the duration 2000-2012 are growing at a high growth rate, revealing that the annual demand of the products of Optimal Portfolio Of Stocks And Bonds Case Study Help is growing and the company is quite efficient in drawing in a a great deal of consumers at a possible price.
Along with it, the second chart which reveals the annual growth in the Optimal Portfolio Of Stocks And Bonds Case Study Analysis total assets, shows that the company is quite efficient in including value to its assets through its earnings. The growth in assets shows that the overall worth of the company is likewise increasing with increasing the overall incomes. (Unidentified, 2013).
Another financial analysis of the company utilizing the provided data could be the analysis concerning the circulation of total earnings of the company. Huge part of the earnings of CMP originates from the sales of its released books i.e. 64% as displayed in the Case Appendix V. The business might move towards other service sections with a potential development to accomplish its future advancement goal.
PESTEL Analysis
PESTEL analysis could be carried out to find out the different external forces impacting the performance of the business 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 might have a substantial impact on the mindset of individuals about the communist ideology of the federal government, therefore, the publishing sector is highly supervised and assisted by the Promotion Department of the Communist Celebration of China. It might be said that the total political forces impacting CMP service are high. The government policies regarding the publishing sector are also increasing with the passage of time.
Affordable.
Economic forces impacting the publishing sector in basic and the Optimal Portfolio Of Stocks And Bonds Case Study Solution in particular includesthe prices of paper, the income level of consumers, the inflation rate, and the total GDP development of the country. All these forces combine effect the demand for the publishing market. In addition to it, the financial policies associated with the import of books impact the overall company at CPM. China's financial conditions are quite beneficial for CMP with high GDP growth and consumer earnings level.
Social and Demographical.
Social and demographical forces consist of the population growth, the customer's preferences towards checking out informative products and so on. China has the highest population worldwide with a high population development, revealing the increasing number of consumers of the Optimal Portfolio Of Stocks And Bonds Case Study Solution. The customer preferences are shifting towards digital publishing rather than the standard was of publishing. In this regard, CMP must focus on digital publishing to fulfill the changing customer preferences.
Technological.
Technological forces impacting the CMP include the technological advancement in the reading strategies etc. Improvement of science and innovation along with the increase of digital publishing might reduce the demand for the CMP items, if specific actions would not be taken soon.
Environmental.
Environmental forces impacting Optimal Portfolio Of Stocks And Bonds Case Study Analysis includes the issues of ecological communities over the use of paper in publishing books. The paper utilized in the books while publishing is needed to be non reusable and the ink used 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 Regulation 1997 requires the publishers to be authorized initially by the Federal government to be entered in the publishing market. The regulation prohibits direct involvement of foreign entities and people in the publishing sector.
Industry Analysis (Porter's 5 Forces Design).
Porter's Five Forces Model could be utilized to analyze the attractiveness of the publishing industry China. A short analysis of the Porter's 5 Forces is provided as follows;.
Danger of New Entrants.
Threats of brand-new entrants in the Chinese Publishing Market is moderate. The potential growth in the market tends to draw in brand-new entrants to the publishing industry. The existence of intense competition and the requirement of substantial capital tends to demotivate brand-new entrants to go into in the market.
Threat of Alternative.
Risk of Replacement is high for the Chinese Publishing Industry. The substitute products for the released documents is the files presented in the digital libraries on particular websites. The changing customer choices towards digital knowing increase the hazard of replacement for the industry.
Competitive Competition.
Competitive rivalry in the publishing industry is high. The presence of a great deal of consumers in the Chinese Publishing Industry like CIP, PTP and so on tends to produce high competitive rivalry for CMP. Along with it, new entrants are likewise participating in the marketplace increasing the competition for CMP.
Bargaining Power of Provider.
The significant providers of the Optimal Portfolio Of Stocks And Bonds Case Study Help include the providers of the paper for publishing documents. As CMP is the largest publisher in the Chinese Publishing Market, therefore the total bargaining power of provider for CMP is low.
Bargaining Power of Buyer.
Haggling power of buyer 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 documents at competitive rates.
Rivals Analysis.
CMP runs in a highly competitive industry with the existence of large number of competitors. Nevertheless, the company has a competitive position in the market with the greatest market share in the Chinese publishing market. Major rivals of Optimal Portfolio Of Stocks And Bonds Case Study Solution consist of;.
• Chemical Industry Press (CIP).
• Posts and telecommunication Press (PTP).
Chemical Market Press (CIP).
CIP acts as a risk 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 easily in the current market situation.
Posts and telecommunication Press (PTP).
Another close competitor of CMP is PTP. It was also founded in the exact same duration as CMP and CIP. It ranks sixth in the state-owned publishers in terms of company scale. It is likewise one of the prominent players in the publishing market with an annual overall earnings of RMB 550 million in 2010.
Alternatives
Alternative-1: Broaden towards New Markets
Pros
• Minimizing dependence over the Chinese markets.
• Increasing variety of Customers
• Development opportunities.
• Preventing the impact of market saturation in the Chinese publishing industry.
Cons
• Usage of possible resources in growth.
• Danger of failure in brand-new markets.
• Time consuming.
Alernative-2: Introduce Digital Publishing
Pros
• Sustaining consumer base.
• Approaching new markets.
• Easy to introduce using current abilities.
• Low threat of Failure.
• Low requirement for funds.
• Increased product portfolio offers high value to clients.
Cons
• Competitors in the market by CIP, who has prior concentrate on the digital publishing.
• Shift of focus from the core business sectors to the brand-new one can lead the business to lose demand of its items in the market.
Recommendations
With the deep analysis of the internal and external environment of the company together with the market analysis and the rival analysis, Alternative 2 is advised to CMP to attain its future advancement. As the choices are shifting towards digital publishing and the business need an immediate solution to prevent the declining market growth. For that reason, introduction of digital publishing could show to be an immediate service with low amount of threat for the business. Nevertheless, the business could likewise consider the expansion program after the success of its digital publishing program.
Implementation
In order to introduce digital publishing in its item portfolio, the business ought to initially collects the data related to the customer need, the prospective markets, the government guidelines and the information related to the rivals provided in the market. If the initial offering shows a success, the business should go for the other markets. In this way the business would be able to implement its digital publishing program.
Conclusion
Although, the growth of the publishing industry is decreasing because 2008, showing a risk to the business's long term existence, however the situation can be managed by considering a development strategy in the future. The business might think about introducing digital publishingin its existing market to implement its development program at immediate basis and to prevent the danger of failure for entryway in the new markets.
