Suntech Power Holdings A The Pre Ipo Years 2 Case Study Solution and Analysis
Introduction
Suntech Power Holdings A The Pre Ipo Years 2 Case Study Help is the biggest publishing business with a highest market share in the China's book retail market. CMP has become a specialized info service provider and a large thorough Science and Technology publishing business through the integration of print media, audio-visual media and the network media.
Crucial Issues
CMP has actually invested its 60 years journey smoothly, being a successful publishing home, however, the altering macro market patterns and forces bring particular challenges to the publishing industry in general and Suntech Power Holdings A The Pre Ipo Years 2 Case Study Help in specific. These aspects consist of;
• Entrance of the new publishing companies in the industry.
• Decreasing growth of the publishing market.
• Market saturation.
• Intro of digital publishing strategies
• 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 situation? Do the long important experience, technical resources and the abilities of the company could be used 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
Suntech Power Holdings A The Pre Ipo Years 2 Case Study Help has certain strengths that can be used to decrease the risks, overcome the weak point and obtain the opportunities. Strengths of CMP are given as follows;
• The long term experience of Suntech Power Holdings A The Pre Ipo Years 2 Case Study Help in the publishing market i.e. 60 years permits the business to offer high quality products at a lower expense using its prior experiences.
• The technical resources and capabilities produced by its effective journey offer a competitive benefit to CMP.
• Vast product portfolioof CMP helps it to diversify its danger and supply high value to its clients.
• Strong financial position allows the business to think about a number of development chances without any worry of raising fund externally.
Weaknesses
Together with the strengths, the company has certain weak points which could increase restraints for the company in executing its advancement program. The weaknesses of Suntech Power Holdings A The Pre Ipo Years 2 Case Study Help are offered as follows;
• Despite of being a science and technology publishing firm, the business still has traditional ways ofpublishing which are not suitable with the growing technological shift.
• CMP highly relies over the Chinese markets for its growth. It ought to propose specific expansion plans to prevent its reliance over the Chinese markets to attain long term growth.
Opportunities
The growth of the publishing market is decreasing because 2008, impacting Suntech Power Holdings A The Pre Ipo Years 2 Case Study Help as well, but the development could be restored by availing particular chances provided in the market. The market chances for CMP consist of;
• The company could also present Digital Publishing by utilizing its long term technical experience and a strong client acknowledgment in the market.
• CMP could think about an advancement program through the expansion towards foreign markets in order to reduce its dependence over Chinese markets by using its vast funds.
Risks
The changing macro patterns in the market and increasing competition in the publishing market has postured particular risks to Suntech Power Holdings A The Pre Ipo Years 2 Case Study Analysis including;( Gurel, 2017).
• Introduction of digital publishing i.e. virtual libraries might lead to declining market share of Suntech Power Holdings A The Pre Ipo Years 2 Case Study Analysis due to the consumer shift towards digital libraries.
• The existence of a great deal of rivals in the publishing industry increase the hazard for CMP to lose its competitive position in the market, as rivals can acquire a strong customer base by utilizing specific techniques like aggressive promotion, quality items, etc.
• Entrance of new publishing companies in the industry in addition to existence of high competitors increases the threat of losing the customer base.
Financial Analysis.
The company has a quite competitive monetary performance. Due to absence of data, the financial ratios of CMP could not be computed. The total financial performance of the business could be examined by using the graphs given in the case Appendices. It might be examined from the Appendix III that the annual total earnings of CMP throughout the duration 2000-2012 are growing at a high development rate, showing that the annual demand of the items of Suntech Power Holdings A The Pre Ipo Years 2 Case Study Solution is growing and the company is rather effective in attracting a large number of consumers at a potential price.
Along with it, the second chart which shows the yearly growth in the Suntech Power Holdings A The Pre Ipo Years 2 Case Study Solution total properties, shows that the company is quite efficient in adding value to its possessions through its incomes. The development in assets shows that the total worth of the firm is likewise increasing with increasing the total incomes. (Unidentified, 2013).
Another monetary analysis of the company using the given data might be the analysis regarding the circulation of total earnings of the company. Major part of the earnings of CMP originates from the sales of its published books i.e. 64% as displayed in the Case Appendix V. The company might move towards other organisation sections with a possible growth to achieve its future advancement objective.
PESTEL Analysis
PESTEL analysis might be carried out to discover the various external forces impacting the efficiency of the company and the recent trends in the external environment of the company. A short PESTEL analysis of the business is offered as follows; (Alanzi, 2018).
Political.
As the publishing sector might have a substantial influence on the state of mind of individuals about the communist ideology of the federal government, therefore, the publishing sector is highly monitored and assisted by the Promotion Department of the Communist Celebration of China. It might be said that the overall political forces affecting CMP service are high. The government policies regarding the publishing sector are also increasing with the passage of time.
Economical.
Financial forces affecting the publishing sector in basic and the CMP in specific includesthe costs of paper, the income level of consumers, the inflation rate, and the general GDP development of the country. All these forces integrate effect the need for the publishing market.
Social and Demographical.
Social and demographical forces include the population growth, the consumer's preferences towards reading helpful materials and so on. China has the highest population in the world with a high population growth, showing the increasing number of consumers of the Suntech Power Holdings A The Pre Ipo Years 2 Case Study Help. Nevertheless, the consumer choices are moving towards digital publishing instead of the standard was of publishing. In this regard, CMP must focus on digital publishing to satisfy the changing customer choices.
Technological.
Technological forces impacting the CMP consist of the technological advancement in the reading strategies etc. Enhancement of science and innovation along with the increase of digital publishing could decrease the need for the CMP products, if certain actions would not be taken quickly.
Environmental.
Ecological forces impacting Suntech Power Holdings A The Pre Ipo Years 2 Case Study Help includes the concerns of ecological neighborhoods over the usage of paper in publishing books. The paper used in the books while publishing is needed to be disposable and the ink utilized while publishing must not be hazardous for the environment.
Legal.
Legal regulations for the publishing sector at whole are high. The legal policies relating to the publishing sector is managed by the General Administration of Press and Publication. Publishing Regulation 1997 needs the publishers to be approved initially by the Government to be gone into in the publishing market. The ordinance forbids direct participation of foreign entities and people in the publishing sector.
Market Analysis (Porter's Five Forces Design).
Porter's Five Forces Design could be used to examine the attractiveness of the publishing industry China. A quick analysis of the Porter's Five Forces is given as follows;.
Danger of New Entrants.
Threats of brand-new entrants in the Chinese Publishing Market is moderate. The possible development in the industry tends to bring in new entrants to the publishing industry. The existence of intense competition and the requirement of substantial capital tends to demotivate new entrants to go into in the market.
Risk of Replacement.
Threat of Alternative is high for the Chinese Publishing Industry. The replacement products for the published documents is the documents presented in the digital libraries on particular websites. The altering customer preferences towards digital knowing increase the threat of substitution for the industry.
Competitive Competition.
Competitive rivalry in the publishing industry is high. The existence of a great deal of customers in the Chinese Publishing Industry like CIP, PTP etc. tends to produce high competitive competition for CMP. In addition to it, brand-new entrants are likewise participating in the market increasing the competitors for CMP.
Bargaining Power of Provider.
The significant providers of the Suntech Power Holdings A The Pre Ipo Years 2 Case Study Solution include the suppliers of the paper for publishing files. As CMP is the biggest publisher in the Chinese Publishing Market, for that reason the overall bargaining power of supplier for CMP is low.
Bargaining Power of Purchaser.
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 market saturation, the buyers needs high quality documents at competitive costs.
Rivals Analysis.
CMP operates in an extremely competitive market with the existence of a great deal of rivals. Nevertheless, the company has a competitive position in the market with the highest market share in the Chinese publishing market. Significant rivals of Suntech Power Holdings A The Pre Ipo Years 2 Case Study Solution include;.
• Chemical Industry Press (CIP).
• Posts and telecommunication Press (PTP).
Chemical Industry Press (CIP).
CIP acts as a hazard 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 easily in the existing market situation.
Posts and telecommunication Press (PTP).
It was also founded in the exact same period as Suntech Power Holdings A The Pre Ipo Years 2 Case Study Analysis and CIP. It is also one of the popular players in the publishing industry with an annual overall revenues of RMB 550 million in 2010.
Alternatives
Alternative-1: Broaden towards New Markets
Pros
• Lowering dependence over the Chinese markets.
• Increasing number of Consumers
• Development chances.
• Avoiding the impact of market saturation in the Chinese publishing market.
Cons
• Usage of possible resources in expansion.
• Risk of failure in brand-new markets.
• Time consuming.
Alernative-2: Present Digital Publishing
Pros
• Sustaining customer base.
• Approaching new markets.
• Easy to introduce utilizing present abilities.
• Low threat of Failure.
• Low requirement for funds.
• Increased item portfolio supplies high worth to consumers.
Cons
• Competition in the market by CIP, who has prior concentrate on the digital publishing.
• Shift of focus from the core business segments to the new one can lead the company to lose demand of its items in the market.
Recommendations
With the deep analysis of the external and internal environment of the business along with the market analysis and the competitor analysis, Alternative 2 is suggested to CMP to accomplish its future advancement. As the preferences are moving towards digital publishing and the company require an instant solution to avoid the declining market growth. Introduction of digital publishing might prove to be an immediate option with low amount of threat for the business. However, the company might likewise consider the expansion program after the success of its digital publishing program.
Execution
In order to introduce digital publishing in its product portfolio, the company ought to first gathers the information related to the customer demand, the potential markets, the federal government regulations and the data connected to the rivals provided in the market. After that, the business needs to choose one potential segment for its initial offering. It must collect research study that how it could differentiate its digital publishing from the existing rivals' items. The actions above the company should go for the preliminary offering. If the initial offering proves a success, the business ought to go for the other markets. In this method the business would have the ability to execute its digital publishing program.
Conclusion
The growth of the publishing industry is decreasing given that 2008, revealing a danger to the company's long term existence, but the situation can be controlled by thinking about an advancement strategy in the future. The business could think about presenting digital publishingin its existing market to implement its development program at instant basis and to avoid the threat of failure for entrance in the new markets.
