Sharks In The Water Battling An Activist Investor For Corporate Control A Case Study Solution and Analysis
Introduction
Sharks In The Water Battling An Activist Investor For Corporate Control A Case Study Analysis is the largest publishing business with a highest market share in the China's book retail market. CMP has ended up being a specialized information service provider and a big extensive Science and Technology publishing company through the combination of print media, audio-visual media and the network media.
Important Issues
CMP has spent its 60 years journey smoothly, being an effective publishing house, however, the changing macro market trends and forces bring certain obstacles to the publishing industry in basic and Sharks In The Water Battling An Activist Investor For Corporate Control A Case Study Help in particular. These factors consist of;
• Entryway of the brand-new publishing firms in the industry.
• Declining growth of the publishing market.
• Market saturation.
• Introduction of digital publishing strategies
• Enhancement of science and innovation.
The improvement of the macro markets have raised numerous concerns to the management at CPM that what could be the future of CMP in this circumstance? Do the long important experience, technical resources and the capabilities of the business could be made use of 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
Sharks In The Water Battling An Activist Investor For Corporate Control A Case Study Analysis has certain strengths that can be used to reduce the dangers, get rid of the weakness and get the chances. Strengths of CMP are given as follows;
• The long term experience of Sharks In The Water Battling An Activist Investor For Corporate Control A Case Study Analysis in the publishing industry i.e. 60 years enables the business to provide high quality products at a lower cost using its prior experiences.
• The technical resources and abilities produced by its successful journey provide a competitive advantage to CMP.
• Large product portfolioof CMP helps it to diversify its risk and provide high value to its consumers.
• Strong financial position permits the business to consider several development opportunities with no fear of raising fund externally.
Weaknesses
Together with the strengths, the company has particular weak points which could increase constraints for the company in implementing its advancement program. The weak points of Sharks In The Water Battling An Activist Investor For Corporate Control A Case Study Analysis are offered 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 highly relies over the Chinese markets for its development. It must propose specific growth plans to prevent its reliance over the Chinese markets to attain long term development.
Opportunities
The growth of the publishing industry is decreasing given that 2008, affecting Sharks In The Water Battling An Activist Investor For Corporate Control A Case Study Solution as well, however the development might be restored by availing certain opportunities provided in the market. The marketplace opportunities for CMP include;
• The company could also introduce Digital Publishing by utilizing its long term technical experience and a strong client acknowledgment in the market.
• CMP might think about an advancement program through the growth towards foreign markets in order to minimize its reliance over Chinese markets by using its vast funds.
Hazards
The altering macro patterns in the market and increasing competitors in the publishing industry has actually postured particular dangers to Sharks In The Water Battling An Activist Investor For Corporate Control A Case Study Solution consisting of;( Gurel, 2017).
• Intro of digital publishing i.e. digital libraries could result in decreasing market share of Sharks In The Water Battling An Activist Investor For Corporate Control A Case Study Help due to the customer shift towards virtual libraries.
• The presence of large number of competitors in the publishing industry increase the threat for CMP to lose its competitive position in the market, as competitors can gain a strong customer base by using certain strategies like aggressive promo, quality items, and so on
• Entrance of new publishing companies in the market together with presence of high competitors increases the danger of losing the client base.
Monetary Analysis.
Due to absence of data, the financial ratios of CMP might not be calculated. It could be analyzed from the Appendix III that the annual total revenues of Sharks In The Water Battling An Activist Investor For Corporate Control A Case Study Analysis during the duration 2000-2012 are growing at a high growth rate, showing that the yearly demand of the items of CMP is growing and the business is rather efficient in drawing in a large number of customers at a potential price.
In addition to it, the second graph which shows the annual development in the Sharks In The Water Battling An Activist Investor For Corporate Control A Case Study Help overall possessions, reveals that the business is rather efficient in adding value to its properties through its incomes. The growth in properties shows that the total worth of the firm is also increasing with increasing the overall revenues. (Unknown, 2013).
Another monetary analysis of the business utilizing the provided data might be the analysis concerning the distribution of overall revenues of the company. Major part of the incomes of CMP originates from the sales of its published books i.e. 64% as displayed in the Case Appendix V. The company could move towards other company sectors with a possible development to achieve its future development objective.
PESTEL Analysis
PESTEL analysis might be performed to learn the various external forces impacting the efficiency of the business and the current patterns in the external environment of the company. A short PESTEL analysis of the company is offered as follows; (Alanzi, 2018).
Political.
As the publishing sector might have a significant influence on the mindset of the people about the communist ideology of the federal government, therefore, the publishing sector is highly monitored and directed by the Publicity Department of the Communist Celebration of China. It could be stated that the overall political forces affecting CMP organisation are high. The federal government policies concerning the publishing sector are also increasing with the passage of time.
Cost-effective.
Economic forces impacting the publishing sector in basic and the CMP in specific includesthe rates of paper, the earnings level of customers, the inflation rate, and the general GDP development of the nation. All these forces integrate effect the demand for the publishing market.
Social and Demographical.
The customer choices are shifting towards digital publishing rather than the traditional was of publishing. In this regard, CMP needs to focus on digital publishing to satisfy the changing customer choices.
Technological.
Technological forces affecting the CMP consist of the technological development in the reading methods etc. Improvement of science and innovation in addition to the increase of digital publishing might minimize the demand for the CMP items, if particular actions would not be taken soon.
Environmental.
Ecological forces affecting Sharks In The Water Battling An Activist Investor For Corporate Control A Case Study Solution consists of the concerns of ecological neighborhoods over the use 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 ought to 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 Government to be gone into in the publishing market.
Market Analysis (Porter's Five Forces Model).
Porter's 5 Forces Model could be utilized to analyze the attractiveness of the publishing market China. A quick analysis of the Porter's Five Forces is given as follows;.
Hazard of New Entrants.
Dangers of new entrants in the Chinese Publishing Industry is moderate. The prospective development in the market tends to draw in new entrants to the publishing industry. The existence of intense competition and the requirement of big capital tends to demotivate brand-new entrants to enter in the market.
Threat of Replacement.
Danger of Substitution is high for the Chinese Publishing Industry. The alternative products for the published documents is the documents provided in the digital libraries on certain websites. The altering customer preferences towards digital knowing increase the danger of alternative for the industry.
Competitive Rivalry.
Competitive competition in the publishing market is high. The presence of large number of customers in the Chinese Publishing Market like CIP, PTP etc. 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 Supplier.
The significant suppliers of the Sharks In The Water Battling An Activist Investor For Corporate Control A Case Study Solution consist of the suppliers of the paper for releasing documents. As CMP is the largest publisher in the Chinese Publishing Market, therefore the general bargaining power of supplier for CMP is low.
Bargaining Power of Purchaser.
Haggling power of purchaser 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 needs high quality documents at competitive costs.
Rivals Analysis.
CMP operates in an extremely competitive industry with the presence of a great deal of competitors. However, the business has a competitive position in the market with the greatest market share in the Chinese publishing market. Significant rivals of Sharks In The Water Battling An Activist Investor For Corporate Control A Case Study Solution include;.
• Chemical Market Press (CIP).
• Posts and telecommunication Press (PTP).
Chemical Market Press (CIP).
CIP acts as a danger for CMP as it might 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 circumstance.
Posts and telecommunication Press (PTP).
It was also established in the same period as Sharks In The Water Battling An Activist Investor For Corporate Control A Case Study Help and CIP. It is also one of 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 number of Consumers
• Growth opportunities.
• Avoiding the effect of market saturation in the Chinese publishing market.
Cons
• Use of possible resources in expansion.
• Risk of failure in new markets.
• Time consuming.
Alernative-2: Introduce Digital Publishing
Pros
• Sustaining consumer base.
• Approaching brand-new markets.
• Easy to introduce using present abilities.
• Low danger of Failure.
• Low requirement for funds.
• Increased item portfolio provides high worth to clients.
Cons
• Competition in the market by CIP, who has prior focus on the digital publishing.
• Shift of focus from the core company sectors to the new one can lead the company to lose demand of its products in the market.
Recommendations
With the deep analysis of the internal and external environment of the company together with the market analysis and the competitor analysis, Alternative 2 is recommended to CMP to attain its future development. As the preferences are shifting towards digital publishing and the business require an immediate option to avoid the decreasing industry development. Introduction of digital publishing might show to be an instant service with low quantity of danger for the business. Nevertheless, the business could also think about the expansion program after the success of its digital publishing program.
Application
In order to present digital publishing in its item portfolio, the company ought to first collects the information related to the customer need, the prospective markets, the federal government regulations and the data related to the rivals provided in the market. If the preliminary offering shows a success, the company should go for the other markets. In this method the business would be able to implement its digital publishing program.
Conclusion
The development of the publishing market is declining because 2008, showing a threat to the business's long term presence, however the situation can be controlled by considering an advancement plan in the future. The company might think about presenting digital publishingin its existing market to execute its advancement program at instant basis and to prevent the danger of failure for entrance in the brand-new markets.
