Suntech Power Holdings A The Pre Ipo Years Case Study Solution and Analysis
Intro
Suntech Power Holdings A The Pre Ipo Years 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 details provider and a big extensive Science and Innovation publishing company through the combination of print media, audio-visual media and the network media.
Important Issues
CMP has actually invested its 60 years journey smoothly, being a successful publishing house, however, the altering macro market trends and forces bring specific challenges to the publishing industry in basic and Suntech Power Holdings A The Pre Ipo Years Case Study Help in particular. These elements include;
• Entryway of the new publishing companies in the market.
• Declining growth of the publishing market.
• Market saturation.
• Introduction of digital publishing techniques
• Enhancement of science and innovation.
The improvement of the macro markets have raised numerous 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 abilities of the business could be utilized to strive for the future development unceasingly? How could the business sustain its long term competitive position in future?
Situational Analysis
Internal Analysis
SWOT Analysis
Strengths
Suntech Power Holdings A The Pre Ipo Years Case Study Help has particular strengths that can be utilized to lower the hazards, get rid of the weakness and obtain the chances. Strengths of CMP are given as follows;
• The long term experience of Suntech Power Holdings A The Pre Ipo Years Case Study Help in the publishing market i.e. 60 years allows the business to supply high quality items at a lower expense using its prior experiences.
• The technical resources and capabilities generated by its successful journey provide a competitive advantage to CMP.
• Vast item portfolioof CMP assists it to diversify its danger and supply high value to its clients.
• Strong financial position allows the company to consider several development chances with no fear of raising fund externally.
Weak points
Together with the strengths, the business has certain weak points which could increase restrictions for the company in executing its development program. The weaknesses of Suntech Power Holdings A The Pre Ipo Years Case Study Solution are provided as follows;
• Despite of being a science and innovation publishing company, the business still has standard methods ofpublishing which are not compatible with the growing technological shift.
• CMP highly relies over the Chinese markets for its growth. It must propose certain expansion strategies to prevent its reliance over the Chinese markets to achieve long term growth.
Opportunities
Although, the development of the publishing market is declining because 2008, impacting Suntech Power Holdings A The Pre Ipo Years Case Study Solution as well, however the development might be restored by availing certain chances presented in the market. The market chances for CMP consist of;
• The company could likewise introduce Digital Publishing by using its long term technical experience and a strong consumer acknowledgment in the market.
• CMP could think about an advancement program through the expansion towards foreign markets in order to decrease its dependence over Chinese markets by utilizing its huge financial resources.
Dangers
The changing macro patterns in the market and increasing competitors in the publishing market has actually positioned particular threats to Suntech Power Holdings A The Pre Ipo Years Case Study Solution consisting of;( Gurel, 2017).
• Introduction of digital publishing i.e. digital libraries could cause decreasing market share of Suntech Power Holdings A The Pre Ipo Years Case Study Help due to the customer shift towards digital libraries.
• The presence of large number of rivals in the publishing industry increase the danger for CMP to lose its competitive position in the market, as rivals can gain a strong consumer base by utilizing specific techniques like aggressive promotion, quality products, etc.
• Entryway of brand-new publishing companies in the industry together with existence of high competition increases the hazard of losing the client base.
Monetary Analysis.
Due to lack of data, the monetary ratios of CMP could not be determined. It could be examined from the Appendix III that the annual total profits of Suntech Power Holdings A The Pre Ipo Years Case Study Help throughout the period 2000-2012 are growing at a high development rate, showing that the annual need of the products of CMP is growing and the company is quite efficient in drawing in a large number of customers at a prospective rate.
Along with it, the second chart which shows the yearly growth in the Suntech Power Holdings A The Pre Ipo Years Case Study Help overall assets, reveals that the business is rather effective in including worth to its assets through its profits. The growth in assets shows that the overall worth of the company is also increasing with increasing the overall incomes. (Unknown, 2013).
Another financial analysis of the business using the given information could be the analysis relating to the distribution of total incomes of the business. Major part of the profits of CMP originates from the sales of its published books i.e. 64% as displayed in the Case Appendix V. The business could move towards other company sectors with a possible development to attain its future development objective.
PESTEL Analysis
PESTEL analysis could be carried out to find out the different external forces affecting the performance of the business and the current patterns in the external environment of the business. A quick PESTEL analysis of the company is provided as follows; (Alanzi, 2018).
Political.
As the publishing sector might have a considerable impact on the frame of mind of the people about the communist ideology of the federal government, therefore, the publishing sector is highly supervised and assisted by the Promotion Department of the Communist Party of China. It could be stated that the overall political forces impacting CMP organisation are high. The government policies regarding the publishing sector are also increasing with the passage of time.
Affordable.
Economic forces affecting the publishing sector in basic and the Suntech Power Holdings A The Pre Ipo Years Case Study Solution in specific includesthe rates of paper, the earnings level of consumers, the inflation rate, and the general GDP growth of the nation. All these forces integrate impact the need for the publishing market. Together with it, the economic policies associated with the import of books affect the total organisation at CPM. China's financial conditions are quite favorable for CMP with high GDP development and consumer earnings level.
Social and Demographical.
Social and demographical forces consist of the population development, the customer's choices towards reading informative products and so on. China has the highest population in the world with a high population development, showing the increasing variety of customers of the Suntech Power Holdings A The Pre Ipo Years Case Study Help. The consumer choices are moving towards digital publishing rather than the conventional was of publishing. In this regard, CMP ought to concentrate on digital publishing to meet the changing customer choices.
Technological.
Technological forces impacting the CMP include the technological advancement in the reading methods and so on. Enhancement of science and technology in addition to the rise of digital publishing might reduce the demand for the CMP products, if specific actions would not be taken soon.
Environmental.
Ecological forces impacting Suntech Power Holdings A The Pre Ipo Years Case Study Help consists of the issues of ecological communities over the use of paper in publishing books. The paper used in the books while publishing is required to be disposable and the ink utilized while publishing should not be damaging for the environment.
Legal.
Legal regulations for the publishing sector at whole are high. Publishing Regulation 1997 requires the publishers to be approved initially by the 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 appearance of the publishing market China. A short analysis of the Porter's 5 Forces is offered as follows;.
Risk of New Entrants.
Threats of brand-new entrants in the Chinese Publishing Market is moderate. The prospective growth in the industry tends to bring in new entrants to the publishing market. The presence of extreme competitors and the requirement of huge capital tends to demotivate new entrants to go into in the market.
Danger of Substitution.
Threat of Alternative is high for the Chinese Publishing Industry. The replacement items for the published files is the documents presented in the digital libraries on certain websites. The altering consumer preferences towards digital learning increase the danger of substitution 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 and so on tends to produce high competitive rivalry for CMP. Along with it, new entrants are also entering into the marketplace increasing the competition for CMP.
Bargaining Power of Supplier.
The major suppliers of the Suntech Power Holdings A The Pre Ipo Years Case Study Solution consist of the suppliers of the paper for publishing documents. As CMP is the biggest publisher in the Chinese Publishing Market, therefore the general bargaining power of supplier for CMP is low.
Bargaining Power of Purchaser.
Bargaining power of purchaser 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 buyers needs high quality files at competitive prices.
Competitors Analysis.
CMP operates in a highly competitive market with the presence of large number of competitors. Nevertheless, the business has a competitive position in the market with the highest market share in the Chinese publishing market. Significant competitors of Suntech Power Holdings A The Pre Ipo Years Case Study Help consist of;.
• Chemical Industry Press (CIP).
• Posts and telecommunication Press (PTP).
Chemical Industry 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 existing market circumstance.
Posts and telecommunication Press (PTP).
Another close competitor of CMP is PTP. It was likewise established in the exact same period as CMP and CIP. It ranks sixth in the state-owned publishers in terms of service scale. It is also one of the popular gamers in the publishing market with a yearly total revenues of RMB 550 million in 2010.
Alternatives
Alternative-1: Broaden towards New Markets
Pros
• Decreasing dependence over the Chinese markets.
• Increasing variety of Customers
• Development chances.
• Avoiding the impact of market saturation in the Chinese publishing market.
Cons
• Usage of prospective resources in expansion.
• Danger of failure in new markets.
• Time consuming.
Alernative-2: Present Digital Publishing
Pros
• Sustaining consumer base.
• Approaching new markets.
• Easy to present utilizing current capabilities.
• Low threat of Failure.
• Low requirement for funds.
• Increased item portfolio provides high value 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 business to lose need of its products in the market.
Suggestions
As the choices are shifting towards digital publishing and the company need an instant service to avoid the decreasing market growth. The company might likewise consider the expansion program after the success of its digital publishing program.
Application
In order to introduce digital publishing in its item portfolio, the company ought to initially collects the information related to the consumer need, the prospective markets, the government regulations and the information related to the rivals presented in the market. If the initial offering proves a success, the company should go for the other markets. In this method the business would be able to execute its digital publishing program.
Conclusion
The development of the publishing industry is decreasing given that 2008, revealing a hazard to the business's long term presence, however the scenario can be controlled by thinking about an advancement strategy in the future. The company might think about presenting digital publishingin its existing market to implement its advancement program at immediate basis and to avoid the threat of failure for entryway in the brand-new markets.
