Pennycook Power Boats Considering An Offer To Sell The Firm Case Study Solution and Analysis
Introduction
Pennycook Power Boats Considering An Offer To Sell The Firm Case Study Solution is the largest publishing company with a greatest market share in the China's book retail market. CMP supplies a number of services including; collecting information, processing information and communication services. Significant company segments of the business consist of; books, regulars, consultancy and distribution. The business has a large item portfolio and its major items include books, regulars, online media, exhibits, research study reports and so on. Pennycook Power Boats Considering An Offer To Sell The Firm Case Study Analysis has ended up being a specialized details provider and a big comprehensive Science and Technology publishing business through the combination of print media, audio-visual media and the network media.
Crucial Problems
CMP has spent its 60 years journey smoothly, being an effective publishing house, however, the changing macro market patterns and forces bring particular difficulties to the publishing industry in basic and Pennycook Power Boats Considering An Offer To Sell The Firm Case Study Solution in specific. These elements include;
• Entrance of the brand-new publishing companies in the market.
• Declining development of the publishing market.
• Market saturation.
• Introduction of digital publishing strategies
• Enhancement 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 made use of to pursue the future development unceasingly? How could the company sustain its long term competitive position in future?
Situational Analysis
Internal Analysis
SWOT Analysis
Strengths
Pennycook Power Boats Considering An Offer To Sell The Firm Case Study Analysis has certain strengths that can be used to lower the dangers, conquer the weakness and obtain the opportunities. Strengths of CMP are given as follows;
• The long term experience of Pennycook Power Boats Considering An Offer To Sell The Firm Case Study Help in the publishing industry i.e. 60 years allows the business to offer high quality items at a lower expense utilizing its prior experiences.
• The technical resources and capabilities produced by its effective journey offer a competitive advantage to CMP.
• Vast item portfolioof CMP assists it to diversify its danger and provide high value to its clients.
• Strong financial position enables the company to consider numerous advancement chances with no worry of raising fund externally.
Weak points
In addition to the strengths, the business has particular weak points which might increase restrictions for the business in executing its development program. The weaknesses of Pennycook Power Boats Considering An Offer To Sell The Firm Case Study Analysis are provided as follows;
• Despite of being a science and innovation publishing firm, the company still has conventional ways ofpublishing which are not compatible with the growing technological shift.
• CMP extremely relies over the Chinese markets for its growth. It should propose certain growth strategies to prevent its dependence over the Chinese markets to attain long term growth.
Opportunities
The growth of the publishing market is decreasing given that 2008, affecting Pennycook Power Boats Considering An Offer To Sell The Firm Case Study Solution as well, however the development might be revived by availing particular chances provided in the market. The marketplace opportunities for CMP consist of;
• The business could also present Digital Publishing by utilizing its long term technical experience and a strong customer acknowledgment in the market.
• CMP could consider an advancement program through the growth towards foreign markets in order to minimize its dependence over Chinese markets by using its large financial resources.
Threats
The altering macro trends in the market and increasing competitors in the publishing industry has actually positioned specific threats to Pennycook Power Boats Considering An Offer To Sell The Firm Case Study Help including;( Gurel, 2017).
• Intro of digital publishing i.e. digital libraries might lead to declining market share of Pennycook Power Boats Considering An Offer To Sell The Firm Case Study Solution due to the consumer shift towards digital libraries.
• The existence of a great deal of rivals in the publishing industry increase the risk for CMP to lose its competitive position in the market, as competitors can get a strong consumer base by utilizing particular methods like aggressive promotion, quality products, etc.
• Entrance of new publishing companies in the market in addition to presence of high competition increases the risk of losing the client base.
Financial Analysis.
The company has a quite competitive financial efficiency. Due to lack of data, the monetary ratios of CMP could not be determined. Nevertheless, the total monetary efficiency of the business could be analyzed by utilizing the charts given in the case Appendices. It could be evaluated from the Appendix III that the yearly total revenues of CMP throughout the period 2000-2012 are growing at a high development rate, revealing that the annual demand of the products of Pennycook Power Boats Considering An Offer To Sell The Firm Case Study Help is growing and the company is rather efficient in attracting a large number of clients at a potential cost.
Along with it, the 2nd graph which reveals the yearly growth in the Pennycook Power Boats Considering An Offer To Sell The Firm Case Study Help overall possessions, shows that the company is quite efficient in adding worth to its assets through its earnings. The development in properties shows that the overall worth of the firm is also increasing with increasing the total revenues. (Unidentified, 2013).
Another financial analysis of the business utilizing the offered data might be the analysis concerning the distribution of overall earnings of the business. Major part of the earnings of CMP originates 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 possible development to accomplish its future advancement objective.
PESTEL Analysis
PESTEL analysis could be carried out to learn the different external forces affecting the performance of the business and the recent patterns in the external environment of the business. A quick PESTEL analysis of the company is given as follows; (Alanzi, 2018).
Political.
As the publishing sector could have a substantial impact on the state of mind of the people about the communist ideology of the government, therefore, the publishing sector is highly supervised and directed by the Publicity Department of the Communist Party of China. It could be said that the overall political forces impacting CMP service are high. The federal government policies regarding the publishing sector are likewise increasing with the passage of time.
Cost-effective.
Economic forces impacting the publishing sector in general and the Pennycook Power Boats Considering An Offer To Sell The Firm Case Study Solution in particular includesthe costs of paper, the earnings level of customers, the inflation rate, and the overall GDP development of the country. All these forces integrate impact the need for the publishing market. Together with it, the economic policies associated with the import of books affect the general company at CPM. China's financial conditions are quite beneficial for CMP with high GDP growth and customer income level.
Social and Demographical.
The customer choices are moving towards digital publishing rather than the standard was of publishing. In this regard, CMP needs to focus on digital publishing to meet the altering consumer preferences.
Technological.
Technological forces impacting the CMP consist of the technological advancement in the reading strategies etc. Enhancement of science and technology together with the rise of digital publishing could minimize the need for the CMP items, if specific actions would not be taken quickly.
Environmental.
Environmental forces impacting Pennycook Power Boats Considering An Offer To Sell The Firm Case Study Help consists of the issues of ecological neighborhoods over the usage of paper in publishing books. The paper used in the books while publishing is needed to be non reusable and the ink used while publishing must not be hazardous for the environment.
Legal.
Legal guidelines for the publishing sector at whole are high. The legal guidelines relating to the publishing sector is controlled by the General Administration of Press and Publication. Publishing Ordinance 1997 needs the publishers to be authorized first by the Government to be gone into in the publishing market. The ordinance prohibits direct participation of foreign entities and people in the publishing sector.
Industry Analysis (Porter's 5 Forces Design).
Porter's 5 Forces Design might be used to examine the appearance of the publishing market China. A quick analysis of the Porter's Five Forces is offered as follows;.
Risk of New Entrants.
Threats of new entrants in the Chinese Publishing Market is moderate. The potential development in the industry tends to bring in new entrants to the publishing industry. Nevertheless, the existence of intense competition and the requirement of big capital tends to demotivate brand-new entrants to enter in the marketplace.
Danger of Replacement.
Hazard of Alternative is high for the Chinese Publishing Industry. The alternative items for the published files is the files provided in the virtual libraries on certain websites. The altering consumer preferences towards digital learning increase the risk of replacement for the market.
Competitive Competition.
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. Together with it, new entrants are likewise entering into the marketplace increasing the competition for CMP.
Bargaining Power of Provider.
The major suppliers of the Pennycook Power Boats Considering An Offer To Sell The Firm Case Study Solution consist of the providers of the paper for publishing files. As CMP is the largest publisher in the Chinese Publishing Market, therefore the general bargaining power of provider for CMP is low.
Bargaining Power of Buyer.
Negotiating power of purchaser in the publishing market is high. Due to the existence of a a great deal of publishers in the Chinese market and the market saturation, the purchasers requires high quality files at competitive costs.
Competitors Analysis.
CMP runs in a highly competitive industry with the presence of large number of competitors. The company has a competitive position in the market with the greatest market share in the Chinese publishing market. Major rivals of Pennycook Power Boats Considering An Offer To Sell The Firm Case Study Analysis 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 period, CIP publishes similar type of books. For a big time period, CIP held the largest market share, and still ranks 3rd and second in various market sectors, with a significant concentrate on instructional publications. CIP serves as a risk for CMP as it might wean its market share due to its long term competitive background. CIP is concentrated on digital publishing and might wean the marketplace share of Pennycook Power Boats Considering An Offer To Sell The Firm Case Study Help quickly in the existing market circumstance.
Posts and telecommunication Press (PTP).
It was also founded in the same period as Pennycook Power Boats Considering An Offer To Sell The Firm Case Study Solution and CIP. It is also one of the prominent gamers in the publishing market with a yearly total revenues of RMB 550 million in 2010.
Alternatives
Alternative-1: Expand towards New Markets
Pros
• Minimizing dependence over the Chinese markets.
• Increasing variety of Customers
• Growth chances.
• Avoiding the impact of market saturation in the Chinese publishing industry.
Cons
• Use of potential resources in growth.
• Danger of failure in new markets.
• Time consuming.
Alernative-2: Introduce Digital Publishing
Pros
• Sustaining customer base.
• Approaching brand-new markets.
• Easy to introduce utilizing existing capabilities.
• Low threat of Failure.
• Low requirement for funds.
• Increased item portfolio provides high value to consumers.
Cons
• Competition in the market by CIP, who has prior focus on the digital publishing.
• Shift of focus from the core service segments to the brand-new one can lead the business to lose need of its products in the market.
Suggestions
As the preferences are moving towards digital publishing and the business require an immediate option to avoid the decreasing industry development. The company could likewise think about the expansion program after the success of its digital publishing program.
Application
In order to introduce digital publishing in its product portfolio, the company ought to first gathers the information associated with the consumer need, the prospective markets, the federal government policies and the data related to the competitors provided in the market. After that, the company should choose one possible section for its initial offering. It must gather research study that how it could differentiate its digital publishing from the existing competitors' products. After all the steps above the business should opt for the preliminary offering. If the preliminary offering shows a success, the business 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 decreasing given that 2008, showing a danger to the business's long term presence, however the situation can be managed by thinking about an advancement strategy in the future. The business could think about introducing digital publishingin its existing market to execute its development program at immediate basis and to avoid the threat of failure for entrance in the new markets.
