Risk And Reward In Venture Capital Case Study Solution and Analysis
Introduction
Risk And Reward In Venture Capital Case Study Solution is the biggest publishing company with a greatest market share in the China's book retail market. CMP provides a number of services consisting of; gathering details, processing info and interaction services. Major business sections of the business include; books, periodicals, consultancy and circulation. The company has a huge product portfolio and its significant items include books, periodicals, online media, exhibitions, research reports and so on. Risk And Reward In Venture Capital Case Study Help has actually become a specialized details supplier and a big thorough Science and Innovation publishing business through the integration of print media, audio-visual media and the network media.
Vital Problems
Although, Risk And Reward In Venture Capital Case Study Solution has actually invested its 60 years journey smoothly, being an effective publishing house, however, the altering macro market trends and forces bring specific obstacles to the publishing industry in general and CMP in particular. These aspects include;
• Entrance of the new publishing companies in the market.
• Decreasing growth of the publishing market.
• Market saturation.
• Introduction of digital publishing methods
• Enhancement of science and technology.
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 circumstance? Do the long valuable experience, technical resources and the capabilities of the company could be used to strive for the future advancement unceasingly? How could the business sustain its long term competitive position in future?
Situational Analysis
Internal Analysis
SWOT Analysis
Strengths
Risk And Reward In Venture Capital Case Study Solution has specific strengths that can be used to decrease the threats, get rid of the weak point and get the opportunities. Strengths of CMP are given as follows;
• The long term experience of Risk And Reward In Venture Capital Case Study Analysis in the publishing industry i.e. 60 years allows the company to offer high quality products at a lower expense utilizing its prior experiences.
• The technical resources and capabilities produced by its effective journey supply a competitive advantage to CMP.
• Vast product portfolioof CMP assists it to diversify its risk and offer high value to its customers.
• Strong financial position allows the business to consider several development opportunities without any fear of raising fund externally.
Weak points
Together with the strengths, the business has particular weak points which could increase restrictions for the business in implementing its advancement program. The weak points of Risk And Reward In Venture Capital Case Study Analysis are provided as follows;
• Despite of being a science and innovation 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 growth. It needs to propose particular growth plans to avoid its dependence over the Chinese markets to achieve long term growth.
Opportunities
Although, the growth of the publishing market is decreasing considering that 2008, affecting Risk And Reward In Venture Capital Case Study Help too, however the growth might be restored by availing particular opportunities provided in the market. The market opportunities for CMP include;
• The company might also present Digital Publishing by utilizing its long term technical experience and a strong consumer acknowledgment in the market.
• CMP could consider a development program through the expansion towards foreign markets in order to decrease its reliance over Chinese markets by utilizing its vast financial resources.
Hazards
The changing macro patterns in the market and increasing competition in the publishing industry has actually postured particular risks to Risk And Reward In Venture Capital Case Study Solution consisting of;( Gurel, 2017).
• Intro of digital publishing i.e. digital libraries might cause declining market share of Risk And Reward In Venture Capital Case Study Analysis due to the customer shift towards digital libraries.
• The existence of a great deal of rivals in the publishing market increase the threat for CMP to lose its competitive position in the market, as competitors can acquire a strong customer base by using specific techniques like aggressive promo, quality items, etc.
• Entryway of brand-new publishing firms in the market together with presence of high competitors increases the threat of losing the client base.
Monetary Analysis.
Due to lack of data, the monetary ratios of CMP might not be computed. It might be analyzed from the Appendix III that the yearly overall profits of Risk And Reward In Venture Capital Case Study Analysis throughout the period 2000-2012 are growing at a high growth rate, revealing that the yearly need of the items of CMP is growing and the company is rather efficient in drawing in a large number of consumers at a possible rate.
Along with it, the second chart which reveals the yearly growth in the Risk And Reward In Venture Capital Case Study Analysis total assets, reveals that the business is quite effective in including worth to its properties through its revenues. The growth in possessions reveals that the overall value of the company is likewise increasing with increasing the total revenues. (Unknown, 2013).
Another monetary analysis of the business using the given information could be the analysis regarding the distribution of overall incomes of the business. Huge part of the incomes of CMP originates 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 development to accomplish its future development goal.
PESTEL Analysis
PESTEL analysis might be carried out to discover the different external forces impacting the performance of the company and the recent patterns in the external environment of the business. A quick PESTEL analysis of the business is offered as follows; (Alanzi, 2018).
Political.
As the publishing sector might have a substantial influence on the mindset of the people about the communist ideology of the government, for that reason, the publishing sector is highly monitored and guided by the Publicity Department of the Communist Party of China. For that reason, it might be stated that the general political forces impacting Risk And Reward In Venture Capital Case Study Analysis company are high. The federal government policies regarding the publishing sector are likewise increasing with the passage of time.
Cost-effective.
Financial forces affecting the publishing sector in basic and the CMP 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 combine effect the demand for the publishing market.
Social and Demographical.
Social and demographical forces include the population growth, the consumer's preferences towards checking out helpful materials etc. China has the greatest population on the planet with a high population growth, revealing the increasing number of customers of the Risk And Reward In Venture Capital Case Study Help. However, the customer choices are shifting towards digital publishing rather than the traditional was of publishing. In this regard, CMP ought to focus on digital publishing to meet the altering customer preferences.
Technological.
Technological forces affecting the CMP include the technological advancement in the reading methods etc. Enhancement of science and innovation in addition to the rise of digital publishing could lower the need for the CMP products, if certain actions would not be taken soon.
Environmental.
Ecological forces impacting Risk And Reward In Venture Capital Case Study Analysis consists of the concerns of environmental communities over the use of paper in publishing books. The paper utilized in the books while publishing is required 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. Publishing Ordinance 1997 needs the publishers to be authorized initially by the Federal government to be entered in the publishing market.
Industry Analysis (Porter's 5 Forces Model).
Porter's Five Forces Design might be utilized to analyze the beauty of the publishing industry China. A quick analysis of the Porter's Five Forces is given as follows;.
Hazard of New Entrants.
Threats of brand-new entrants in the Chinese Publishing Industry is moderate. The prospective growth in the industry tends to bring in new entrants to the publishing market. Nevertheless, the presence of intense competition and the requirement of big capital tends to demotivate brand-new entrants to enter in the market.
Risk of Replacement.
Danger of Alternative is high for the Chinese Publishing Market. The alternative products for the published files is the documents provided in the virtual libraries on particular sites. The altering customer preferences towards digital learning increase the risk of substitution for the industry.
Competitive Rivalry.
Competitive competition in the publishing industry is high. The existence of large number of consumers in the Chinese Publishing Industry like CIP, PTP and so on tends to produce high competitive rivalry for CMP. Along with it, brand-new entrants are likewise entering into the marketplace increasing the competitors for CMP.
Bargaining Power of Provider.
The significant suppliers of the Risk And Reward In Venture Capital Case Study Help consist of the suppliers of the paper for releasing documents. As CMP is the largest publisher in the Chinese Publishing Market, for that reason the general bargaining power of provider for CMP is low.
Bargaining Power of Buyer.
Negotiating power of buyer 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 buyers needs high quality files at competitive prices.
Rivals Analysis.
CMP runs in a highly competitive market with the presence of a great deal of competitors. The company has a competitive position in the market with the highest market share in the Chinese publishing market. Significant rivals of Risk And Reward In Venture Capital Case Study Help consist of;.
• Chemical Market Press (CIP).
• Posts and telecommunication Press (PTP).
Chemical Market 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 quickly in the current market scenario.
Posts and telecommunication Press (PTP).
It was likewise established in the same duration as Risk And Reward In Venture Capital Case Study Analysis and CIP. It is likewise one of the popular gamers in the publishing market with an annual total incomes of RMB 550 million in 2010.
Alternatives
Alternative-1: Expand towards New Markets
Pros
• Minimizing dependence over the Chinese markets.
• Increasing number of Customers
• Growth opportunities.
• Avoiding the impact of market saturation in the Chinese publishing industry.
Cons
• Use of prospective resources in expansion.
• Danger of failure in brand-new markets.
• Time consuming.
Alernative-2: Introduce Digital Publishing
Pros
• Sustaining consumer base.
• Approaching new markets.
• Easy to introduce utilizing existing capabilities.
• Low danger of Failure.
• Low requirement for funds.
• Increased item portfolio supplies high worth to consumers.
Cons
• Competitors in the market by CIP, who has prior concentrate on the digital publishing.
• Shift of focus from the core business sections to the brand-new one can lead the company to lose need of its items in the market.
Recommendations
As the choices are moving towards digital publishing and the business need an instant solution to prevent the decreasing market growth. The company could likewise consider the expansion program after the success of its digital publishing program.
Execution
In order to present digital publishing in its product portfolio, the company must first gathers the information related to the consumer demand, the prospective markets, the federal government policies and the data related to the competitors presented 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 execute its digital publishing program.
Conclusion
The growth of the publishing industry is declining since 2008, showing a threat to the company's long term existence, but the circumstance can be controlled by considering an advancement strategy in the future. The business could think about presenting digital publishingin its existing market to execute its advancement program at immediate basis and to prevent the risk of failure for entrance in the new markets.
