Risk Management And Real Option Case Study Solution and Analysis
Risk Management And Real Option Case Study Solution is the biggest publishing company with a greatest market share in the China's book retail market. CMP has actually ended up being a specialized information supplier and a large comprehensive Science and Technology publishing company through the combination of print media, audio-visual media and the network media.
Although, Risk Management And Real Option Case Study Analysis has spent its 60 years journey efficiently, being an effective publishing house, nevertheless, the changing macro market trends and forces bring specific obstacles to the publishing market in basic and CMP in particular. These factors include;
• Entrance of the new publishing companies in the industry.
• Declining development of the publishing market.
• Market saturation.
• Intro 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 situation? Do the long important experience, technical resources and the capabilities of the business could be utilized to pursue the future advancement unceasingly? How could the business sustain its long term competitive position in future?
Risk Management And Real Option Case Study Solution has specific strengths that can be utilized to decrease the dangers, get rid of the weakness and obtain the opportunities. Strengths of CMP are offered as follows;
• The long term experience of Risk Management And Real Option Case Study Analysis in the publishing market i.e. 60 years enables the company to offer high quality products at a lower cost using its previous experiences.
• The technical resources and capabilities produced by its effective journey offer a competitive advantage to CMP.
• Vast product portfolioof CMP assists it to diversify its risk and provide high worth to its consumers.
• Strong financial position enables the business to consider a number of advancement chances with no fear of raising fund externally.
In addition to the strengths, the business has particular weaknesses which might increase restrictions for the business in implementing its development program. The weak points of Risk Management And Real Option Case Study Solution are given as follows;
• Despite of being a science and technology publishing firm, the company still has conventional methods ofpublishing which are not suitable with the growing technological shift.
• CMP highly relies over the Chinese markets for its development. It ought to propose particular expansion plans to prevent its reliance over the Chinese markets to achieve long term development.
Although, the growth of the publishing industry is decreasing since 2008, affecting Risk Management And Real Option Case Study Analysis also, however the growth could be revived by availing specific chances provided in the market. The marketplace 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 might think about a development program through the growth towards foreign markets in order to decrease its dependence over Chinese markets by utilizing its huge financial resources.
The altering macro trends in the market and increasing competition in the publishing market has postured particular threats to Risk Management And Real Option Case Study Help including;( Gurel, 2017).
• Introduction of digital publishing i.e. digital libraries might result in decreasing market share of Risk Management And Real Option Case Study Help due to the customer shift towards virtual libraries.
• The presence of a great deal of rivals in the publishing market increase the danger for CMP to lose its competitive position in the market, as rivals can get a strong customer base by using specific techniques like aggressive promotion, quality items, and so on
• Entryway of new publishing companies in the market along with existence of high competition increases the threat of losing the consumer base.
The company has a quite competitive financial efficiency. Due to lack of information, the monetary ratios of CMP might not be determined. However, the overall financial efficiency of the business might be evaluated by utilizing the graphs given up the case Appendices. It could be examined from the Appendix III that the annual overall earnings of CMP throughout the period 2000-2012 are growing at a high growth rate, showing that the yearly need of the products of Risk Management And Real Option Case Study Analysis is growing and the business is quite effective in drawing in a large number of clients at a potential price.
Along with it, the second graph which shows the yearly growth in the Risk Management And Real Option Case Study Solution overall possessions, shows that the business is rather efficient in adding value to its properties through its profits. The growth in properties reveals that the overall worth of the firm is also increasing with increasing the total earnings. (Unknown, 2013).
Another monetary analysis of the company using the provided data might be the analysis regarding the circulation of overall earnings of the company. Major part of the earnings of CMP originates from the sales of its published books i.e. 64% as shown in the Case Appendix V. The company might move towards other company segments with a possible growth to accomplish its future development goal.
PESTEL analysis could be performed to discover the different external forces affecting the efficiency of the company and the current trends in the external environment of the business. A quick PESTEL analysis of the business is offered as follows; (Alanzi, 2018).
As the publishing sector could have a substantial effect on the state of mind of the people about the communist ideology of the federal government, therefore, the publishing sector is extremely supervised and directed by the Promotion Department of the Communist Celebration of China. For that reason, it could be stated that the overall political forces impacting Risk Management And Real Option Case Study Analysis organisation are high. The federal government policies concerning the publishing sector are also increasing with the passage of time.
Economic forces impacting the publishing sector in general and the Risk Management And Real Option Case Study Solution in particular includesthe prices of paper, the income level of customers, the inflation rate, and the general GDP growth of the nation. All these forces integrate impact the need for the publishing market. Along with it, the financial policies related to the import of books impact the overall business at CPM. China's financial conditions are quite beneficial for CMP with high GDP development and consumer income level.
Social and Demographical.
The customer choices are moving towards digital publishing rather than the conventional was of publishing. In this regard, CMP needs to focus on digital publishing to fulfill the altering customer choices.
Technological forces impacting the CMP include the technological improvement in the reading strategies and so on. Improvement of science and technology in addition to the increase of digital publishing could reduce the demand for the CMP items, if specific actions would not be taken quickly.
Environmental forces impacting Risk Management And Real Option Case Study Help consists of the concerns of ecological communities over the usage of paper in publishing books. The paper utilized in the books while publishing is needed to be non reusable and the ink utilized while publishing must not be hazardous for the environment.
Legal regulations for the publishing sector at whole are high. Publishing Regulation 1997 requires the publishers to be approved first by the Federal government to be entered in the publishing market.
Industry Analysis (Porter's 5 Forces Model).
Porter's Five Forces Model could be used to examine the appearance of the publishing market China. A brief analysis of the Porter's 5 Forces is offered as follows;.
Danger of New Entrants.
Hazards of new entrants in the Chinese Publishing Industry is moderate. The potential growth in the industry tends to draw in brand-new entrants to the publishing industry. The existence of extreme competition and the requirement of big capital tends to demotivate brand-new entrants to go into in the market.
Risk of Replacement.
Risk of Alternative is high for the Chinese Publishing Market. The substitute items for the published files is the files presented in the digital libraries on certain websites. The altering consumer preferences towards digital learning increase the danger of alternative for the industry.
Competitive competition in the publishing market 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 competition for CMP. Along with it, new entrants are also entering into the market increasing the competitors for CMP.
Bargaining Power of Supplier.
The major providers of the Risk Management And Real Option Case Study Analysis consist of the suppliers of the paper for releasing documents. 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 Buyer.
Haggling power of buyer in the publishing market is high. Due to the existence of a large number of publishers in the Chinese market and the market saturation, the purchasers requires high quality documents at competitive prices.
CMP operates in a highly competitive market with the presence of large number of competitors. The business has a competitive position in the market with the highest market share in the Chinese publishing market. Significant rivals of Risk Management And Real Option Case Study Analysis consist of;.
• Chemical Industry Press (CIP).
• Posts and telecommunication Press (PTP).
Chemical Market Press (CIP).
CIPis one of the close rivals of CMP. Established in the exact same duration, CIP publishes comparable kind of books. For a big time period, CIP held the largest market share, and still ranks 3rd and 2nd in numerous market segments, with a significant focus on educational publications. CIP serves as a threat 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 Risk Management And Real Option Case Study Help quickly in the existing market scenario.
Posts and telecommunication Press (PTP).
It was also established in the same period as Risk Management And Real Option Case Study Help and CIP. It is also one of the prominent gamers in the publishing industry with an annual overall profits of RMB 550 million in 2010.
Alternative-1: Broaden towards New Markets
• Minimizing reliance over the Chinese markets.
• Increasing number of Customers
• Growth chances.
• Avoiding the impact of market saturation in the Chinese publishing industry.
• Use of potential resources in growth.
• Danger of failure in brand-new markets.
• Time consuming.
Alernative-2: Introduce Digital Publishing
• Sustaining consumer base.
• Approaching brand-new markets.
• Easy to introduce utilizing present capabilities.
• Low danger of Failure.
• Low requirement for funds.
• Increased product portfolio provides high value to customers.
• Competitors in the market by CIP, who has prior concentrate on the digital publishing.
• Shift of focus from the core organisation sections to the brand-new one can lead the business to lose need of its items in the market.
As the choices are shifting towards digital publishing and the business need an instant option to prevent the declining market development. The business might also consider the expansion program after the success of its digital publishing program.
In order to present digital publishing in its product portfolio, the company ought to first gathers the information related to the consumer demand, the prospective markets, the government policies and the information related to the rivals provided in the market. If the initial offering shows a success, the business must go for the other markets. In this method the company would be able to execute its digital publishing program.
Although, the development of the publishing industry is declining since 2008, showing a danger to the company's long term existence, however the scenario can be managed by considering a development strategy in the future. The business could consider presenting digital publishingin its existing market to implement its development program at instant basis and to prevent the risk of failure for entrance in the new markets.