Parent Company P And 80 Percent Owned Subsidiary Company S Case Study Solution and Analysis
Intro
Parent Company P And 80 Percent Owned Subsidiary Company S Case Study Help is the largest publishing business with a highest market share in the China's book retail market. CMP has become a specialized details service provider and a large extensive Science and Innovation publishing company through the combination of print media, audio-visual media and the network media.
Crucial Concerns
CMP has actually spent its 60 years journey smoothly, being a successful publishing house, however, the altering macro market patterns and forces bring certain difficulties to the publishing industry in basic and Parent Company P And 80 Percent Owned Subsidiary Company S Case Study Solution in particular. These elements consist of;
• Entryway of the brand-new publishing companies in the market.
• Declining growth of the publishing market.
• Market saturation.
• Introduction of digital publishing techniques
• Improvement of science and technology.
The improvement 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 situation? Do the long important experience, technical resources and the abilities of the business could be utilized to strive for the future development unceasingly? How could the company sustain its long term competitive position in future?
Situational Analysis
Internal Analysis
SWOT Analysis
Strengths
Parent Company P And 80 Percent Owned Subsidiary Company S Case Study Analysis has particular strengths that can be used to lower the risks, get rid of the weakness and get the opportunities. Strengths of CMP are given as follows;
• The long term experience of Parent Company P And 80 Percent Owned Subsidiary Company S Case Study Analysis in the publishing market i.e. 60 years permits the business to provide high quality products at a lower cost using its prior experiences.
• The technical resources and abilities created by its effective journey provide a competitive advantage to CMP.
• Vast item portfolioof CMP assists it to diversify its threat and supply high value to its clients.
• Strong monetary position allows the business to think about a number of advancement opportunities with no fear of raising fund externally.
Weaknesses
In addition to the strengths, the company has certain weak points which could increase restraints for the company in implementing its advancement program. The weaknesses of Parent Company P And 80 Percent Owned Subsidiary Company S Case Study Analysis are given as follows;
• Despite of being a science and technology publishing company, the business still has traditional methods ofpublishing which are not suitable with the growing technological shift.
• CMP extremely relies over the Chinese markets for its development. It needs to propose certain growth strategies to avoid its reliance over the Chinese markets to accomplish long term development.
Opportunities
Although, the development of the publishing market is declining because 2008, affecting Parent Company P And 80 Percent Owned Subsidiary Company S Case Study Help as well, but the growth could be restored by availing particular chances provided in the market. The marketplace opportunities for CMP include;
• The company might also introduce Digital Publishing by utilizing its long term technical experience and a strong client recognition in the market.
• CMP could think about a development program through the expansion towards foreign markets in order to lower its dependence over Chinese markets by utilizing its vast funds.
Threats
The changing macro patterns in the market and increasing competitors in the publishing market has postured specific dangers to Parent Company P And 80 Percent Owned Subsidiary Company S Case Study Help including;( Gurel, 2017).
• Intro of digital publishing i.e. virtual libraries could cause decreasing market share of Parent Company P And 80 Percent Owned Subsidiary Company S Case Study Solution due to the consumer shift towards digital libraries.
• The presence of a great deal of rivals in the publishing market increase the threat for CMP to lose its competitive position in the market, as rivals can acquire a strong consumer base by utilizing specific strategies like aggressive promo, quality items, and so on
• Entrance of brand-new publishing companies in the industry in addition to existence of high competition increases the risk of losing the customer base.
Monetary Analysis.
The business has a quite competitive monetary performance. Due to absence of data, the monetary ratios of CMP might not be computed. The general financial performance of the company could be analyzed by utilizing the charts provided in the case Appendices. It might be analyzed from the Appendix III that the yearly total incomes of CMP throughout the period 2000-2012 are growing at a high growth rate, showing that the yearly demand of the items of Parent Company P And 80 Percent Owned Subsidiary Company S Case Study Help is growing and the business is rather efficient in drawing in a large number of customers at a potential price.
Together with it, the second chart which reveals the annual growth in the Parent Company P And 80 Percent Owned Subsidiary Company S Case Study Solution overall properties, shows that the business is rather effective in adding value to its assets through its earnings. The growth in possessions shows that the overall worth of the company is also increasing with increasing the total earnings. (Unknown, 2013).
Another financial analysis of the business using the given information could be the analysis regarding the distribution of total profits of the company. Major part of the incomes 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 company sectors with a prospective development to attain its future advancement objective.
PESTEL Analysis
PESTEL analysis could be performed to learn the numerous external forces impacting the efficiency of the business and the current patterns in the external environment of the company. A brief PESTEL analysis of the business is given as follows; (Alanzi, 2018).
Political.
As the publishing sector might have a substantial influence on the frame of mind of the people about the communist ideology of the government, for that reason, the publishing sector is extremely supervised and guided by the Publicity Department of the Communist Party of China. It could be stated that the general political forces affecting CMP organisation are high. The federal government policies concerning the publishing sector are likewise increasing with the passage of time.
Economical.
Financial forces impacting the publishing sector in basic and the Parent Company P And 80 Percent Owned Subsidiary Company S Case Study Analysis in particular includesthe costs of paper, the income level of consumers, the inflation rate, and the total GDP growth of the nation. All these forces combine effect the demand for the publishing market. Along with it, the economic policies connected to the import of books impact the overall service at CPM. China's economic conditions are quite beneficial for CMP with high GDP development and customer income level.
Social and Demographical.
The consumer choices are shifting towards digital publishing rather than the conventional was of publishing. In this regard, CMP needs to focus on digital publishing to satisfy the changing consumer preferences.
Technological.
Technological forces affecting the CMP consist of the technological improvement in the reading techniques etc. Enhancement of science and innovation in addition to the increase of digital publishing might lower the demand for the CMP products, if particular actions would not be taken quickly.
Environmental.
Ecological forces affecting Parent Company P And 80 Percent Owned Subsidiary Company S Case Study Help consists of the concerns of ecological communities over the use of paper in publishing books. The paper used in the books while publishing is needed to be disposable and the ink used while publishing needs to not be hazardous for the environment.
Legal.
Legal regulations for the publishing sector at whole are high. Publishing Ordinance 1997 needs the publishers to be approved first by the Government to be entered in the publishing market.
Market Analysis (Porter's 5 Forces Design).
Porter's Five Forces Model could be used to examine the attractiveness of the publishing industry China. A brief analysis of the Porter's Five Forces is given as follows;.
Risk of New Entrants.
Risks of brand-new entrants in the Chinese Publishing Market is moderate. The prospective development in the industry tends to bring in new entrants to the publishing market. However, the presence of extreme competitors and the requirement of substantial capital tends to demotivate new entrants to enter in the marketplace.
Danger of Substitution.
Danger of Substitution is high for the Chinese Publishing Industry. The replacement items for the published files is the files provided in the digital libraries on particular sites. The changing customer choices towards digital knowing increase the danger of substitution for the industry.
Competitive Rivalry.
Competitive rivalry in the publishing market is high. The existence of large number of consumers in the Chinese Publishing Market like CIP, PTP etc. tends to produce high competitive rivalry for CMP. In addition to it, new entrants are also entering into the marketplace increasing the competition for CMP.
Bargaining Power of Provider.
The significant providers of the Parent Company P And 80 Percent Owned Subsidiary Company S Case Study Analysis include the providers of the paper for publishing files. As CMP is the biggest publisher in the Chinese Publishing Market, therefore the general 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 presence of a large number of publishers in the Chinese market and the marketplace saturation, the buyers requires high quality documents at competitive costs.
Rivals Analysis.
CMP runs in an extremely competitive industry with the presence of a great deal of competitors. The business has a competitive position in the market with the greatest market share in the Chinese publishing market. Significant rivals of Parent Company P And 80 Percent Owned Subsidiary Company S Case Study Help include;.
• Chemical Market Press (CIP).
• Posts and telecommunication Press (PTP).
Chemical Industry Press (CIP).
CIP acts as a risk for CMP as it could wean its market share due to its long term competitive background. CIP is focused on digital publishing and could wean the market share of CMP easily in the existing market circumstance.
Posts and telecommunication Press (PTP).
Another close competitor of CMP is PTP. It was likewise established in the very same period as CMP and CIP. It ranks sixth in the state-owned publishers in regards to business scale. It is also among the prominent players in the publishing industry with a yearly total profits of RMB 550 million in 2010.
Alternatives
Alternative-1: Broaden towards New Markets
Pros
• Decreasing dependence over the Chinese markets.
• Increasing variety of Clients
• Growth chances.
• Preventing the effect of market saturation in the Chinese publishing industry.
Cons
• Usage of potential resources in growth.
• Danger of failure in brand-new markets.
• Time consuming.
Alernative-2: Present Digital Publishing
Pros
• Sustaining customer base.
• Approaching new markets.
• Easy to present using existing abilities.
• Low risk of Failure.
• Low requirement for funds.
• Increased product portfolio provides high worth to customers.
Cons
• Competitors in the market by CIP, who has prior focus on the digital publishing.
• Shift of focus from the core organisation sectors to the brand-new one can lead the business to lose demand of its products in the market.
Recommendations
With the deep analysis of the external and internal environment of the business along with the market analysis and the competitor analysis, Alternative 2 is advised to CMP to achieve its future advancement. As the preferences are shifting towards digital publishing and the business require an instant option to prevent the declining industry development. For that reason, intro of digital publishing might show to be an instant option with low quantity of risk for the company. Nevertheless, the company could also consider the expansion program after the success of its digital publishing program.
Implementation
In order to present digital publishing in its product portfolio, the company ought to initially gathers the information related to the consumer need, the prospective markets, the federal government guidelines and the data associated with the competitors provided in the market. After that, the business must choose one potential segment for its initial offering. It ought to gather research that how it might differentiate its digital publishing from the existing rivals' products. The actions above the business must go for the preliminary offering. If the preliminary offering shows a success, the company must go for the other markets. In this way the company would be able to execute its digital publishing program.
Conclusion
The development of the publishing market is declining given that 2008, revealing a hazard to the company's long term presence, however the situation can be controlled by thinking about a development plan in the future. The business could think about introducing digital publishingin its existing market to implement its advancement program at instant basis and to avoid the threat of failure for entryway in the brand-new markets.
