Sogou Inc Financial Analysis Case Study Solution and Analysis
Introduction
Sogou Inc Financial Analysis Case Study Help is the biggest publishing business with a greatest market share in the China's book retail market. CMP has ended up being a specialized info supplier and a large extensive Science and Technology publishing business through the integration of print media, audio-visual media and the network media.
Critical Concerns
CMP has actually spent its 60 years journey smoothly, being an effective publishing home, nevertheless, the altering macro market trends and forces bring particular challenges to the publishing industry in basic and Sogou Inc Financial Analysis Case Study Solution in particular. These elements include;
• Entryway of the new publishing companies in the market.
• Decreasing development of the publishing market.
• Market saturation.
• Intro of digital publishing strategies
• 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 circumstance? Do the long valuable experience, technical resources and the abilities of the business could be utilized 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
Sogou Inc Financial Analysis Case Study Help has specific strengths that can be used to minimize the risks, get rid of the weak point and get the chances. Strengths of CMP are given as follows;
• The long term experience of Sogou Inc Financial Analysis Case Study Solution in the publishing industry i.e. 60 years permits the company to offer high quality items at a lower cost utilizing its prior experiences.
• The technical resources and abilities produced by its successful journey offer a competitive benefit to CMP.
• Huge product portfolioof CMP assists it to diversify its threat and offer high value to its clients.
• Strong financial position enables the company to consider a number of advancement opportunities without any worry of raising fund externally.
Weaknesses
Along with the strengths, the company has specific weaknesses which might increase restraints for the business in executing its advancement program. The weaknesses of Sogou Inc Financial Analysis Case Study Help are provided as follows;
• Despite of being a science and technology publishing firm, the business still has traditional methods ofpublishing which are not compatible with the growing technological shift.
• CMP highly relies over the Chinese markets for its development. It ought to propose particular expansion plans to avoid its reliance over the Chinese markets to attain long term growth.
Opportunities
Although, the development of the publishing industry is declining considering that 2008, affecting Sogou Inc Financial Analysis Case Study Solution as well, however the development might be revived by availing specific chances presented in the market. The market opportunities for CMP include;
• The business could likewise present 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 large funds.
Dangers
The altering macro patterns in the market and increasing competitors in the publishing market has actually posed specific risks to Sogou Inc Financial Analysis Case Study Solution consisting of;( Gurel, 2017).
• Intro of digital publishing i.e. virtual libraries could result in declining market share of Sogou Inc Financial Analysis Case Study Analysis due to the consumer shift towards virtual libraries.
• The existence of large number of rivals in the publishing industry increase the hazard for CMP to lose its competitive position in the market, as rivals can gain a strong customer base by utilizing particular strategies like aggressive promotion, quality products, and so on
• Entryway of brand-new publishing firms in the market in addition to existence of high competition increases the risk of losing the consumer base.
Financial Analysis.
The business has a rather competitive monetary performance. Due to lack of information, the financial ratios of CMP could not be calculated. The general monetary performance of the company could be analyzed by using the graphs offered in the case Appendices. It might be examined from the Appendix III that the yearly total profits of CMP throughout the duration 2000-2012 are growing at a high development rate, showing that the yearly need of the items of Sogou Inc Financial Analysis Case Study Analysis is growing and the company is rather efficient in attracting a large number of clients at a potential price.
Together with it, the second graph which shows the yearly development in the Sogou Inc Financial Analysis Case Study Help total possessions, reveals that the business is quite effective in including worth to its properties through its earnings. The development in possessions reveals that the total worth of the firm is also increasing with increasing the overall earnings. (Unidentified, 2013).
Another monetary analysis of the company utilizing the provided information might be the analysis concerning the circulation of total revenues of the company. Major part of the revenues of CMP originates from the sales of its released books i.e. 64% as displayed in the Case Appendix V. The company might move towards other company sections with a prospective growth to accomplish its future advancement objective.
PESTEL Analysis
PESTEL analysis might be conducted to learn the different external forces affecting the efficiency of the business and the recent trends in the external environment of the company. A brief PESTEL analysis of the company is offered as follows; (Alanzi, 2018).
Political.
As the publishing sector could have a substantial effect on the state of mind of the people about the communist ideology of the government, therefore, the publishing sector is extremely monitored and directed by the Publicity Department of the Communist Party of China. It could be stated that the overall political forces affecting CMP company are high. The government policies concerning the publishing sector are likewise increasing with the passage of time.
Economical.
Economic forces affecting the publishing sector in general and the Sogou Inc Financial Analysis Case Study Solution in specific includesthe costs of paper, the income level of customers, the inflation rate, and the total GDP development of the nation. All these forces combine effect the demand for the publishing market. Together with it, the financial policies associated with the import of books impact the total company at CPM. However, China's financial conditions are rather favorable for CMP with high GDP growth and consumer earnings level.
Social and Demographical.
The customer choices are moving towards digital publishing rather than the conventional was of publishing. In this regard, CMP ought to focus on digital publishing to fulfill the altering customer preferences.
Technological.
Technological forces affecting the CMP consist of the technological advancement in the reading methods and so on. Enhancement of science and innovation along with the rise of digital publishing could reduce the demand for the CMP items, if particular actions would not be taken quickly.
Environmental.
Ecological forces affecting Sogou Inc Financial Analysis Case Study Solution includes the issues of environmental neighborhoods over the use of paper in publishing books. The paper used in the books while publishing is required to be non reusable and the ink used while publishing ought to not be damaging for the environment.
Legal.
Legal regulations for the publishing sector at whole are high. Publishing Ordinance 1997 requires the publishers to be approved first by the Federal government to be entered in the publishing market.
Industry Analysis (Porter's Five Forces Model).
Porter's Five Forces Model could be utilized to analyze the appearance of the publishing industry China. A short analysis of the Porter's Five Forces is offered as follows;.
Threat of New Entrants.
Threats of brand-new entrants in the Chinese Publishing Industry is moderate. The prospective growth in the industry tends to draw in new entrants to the publishing market. However, the presence of intense competition and the requirement of huge capital tends to demotivate new entrants to go into in the marketplace.
Hazard of Alternative.
Danger of Replacement is high for the Chinese Publishing Market. 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 rivalry 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 rivalry for CMP. In addition to it, brand-new entrants are also participating in the marketplace increasing the competition for CMP.
Bargaining Power of Supplier.
The significant providers of the Sogou Inc Financial Analysis Case Study Help consist of the suppliers of the paper for publishing files. As CMP is the biggest publisher in the Chinese Publishing Market, therefore the overall bargaining power of supplier for CMP is low.
Bargaining Power of Buyer.
Haggling power of purchaser in the publishing market is high. Due to the presence of a a great deal of publishers in the Chinese market and the marketplace saturation, the buyers requires high quality files at competitive costs.
Competitors Analysis.
CMP operates in a highly competitive industry with the existence of a great deal of rivals. Nevertheless, the company has a competitive position in the market with the greatest market share in the Chinese publishing market. Significant competitors of Sogou Inc Financial Analysis Case Study Help consist of;.
• Chemical Market Press (CIP).
• Posts and telecommunication Press (PTP).
Chemical Market Press (CIP).
CIPis one of the close competitors of CMP. Established in the exact same period, CIP publishes comparable type of books. For a big time period, CIP held the largest market share, and still ranks 2nd and 3rd in various market segments, with a major focus on instructional publications. CIP acts as a threat for CMP as it could wean its market share due to its long term competitive background. CIP is concentrated on digital publishing and might wean the market share of Sogou Inc Financial Analysis Case Study Analysis quickly in the present market scenario.
Posts and telecommunication Press (PTP).
It was also established in the same period as Sogou Inc Financial Analysis Case Study Solution and CIP. It is likewise one of the popular players in the publishing market with a yearly total revenues of RMB 550 million in 2010.
Alternatives
Alternative-1: Expand towards New Markets
Pros
• Lowering reliance over the Chinese markets.
• Increasing variety of Customers
• Development chances.
• Preventing the impact of market saturation in the Chinese publishing market.
Cons
• Usage of possible resources in growth.
• Threat of failure in brand-new markets.
• Time consuming.
Alernative-2: Present Digital Publishing
Pros
• Sustaining consumer base.
• Approaching new markets.
• Easy to present utilizing present capabilities.
• Low risk of Failure.
• Low requirement for funds.
• Increased item portfolio supplies high worth to customers.
Cons
• Competition in the market by CIP, who has prior concentrate on the digital publishing.
• Shift of focus from the core company sectors to the new one can lead the company to lose need of its products in the market.
Suggestions
As the preferences are shifting towards digital publishing and the business require an instant solution to avoid the decreasing market development. The business might also think about the growth program after the success of its digital publishing program.
Implementation
In order to introduce digital publishing in its product portfolio, the company needs to first collects the data related to the customer need, the potential markets, the government guidelines and the information related to the competitors provided in the market. If the preliminary offering shows a success, the company should go for the other markets. In this method the company would be able to execute its digital publishing program.
Conclusion
The development of the publishing market is declining considering that 2008, showing a hazard to the business's long term presence, but the situation can be managed by considering a development strategy in the future. The company could think about presenting digital publishingin its existing market to execute its advancement program at immediate basis and to avoid the danger of failure for entryway in the new markets.
