Suntech Power Holdings B The Post Ipo Years Case Study Solution and Analysis
Introduction
Suntech Power Holdings B The Post Ipo Years Case Study Solution is the largest publishing company with a highest market share in the China's book retail market. CMP has actually ended up being a specialized information provider and a big detailed Science and Innovation publishing business through the integration of print media, audio-visual media and the network media.
Important Concerns
CMP has invested its 60 years journey efficiently, being an effective publishing house, nevertheless, the changing macro market patterns and forces bring specific challenges to the publishing market in general and Suntech Power Holdings B The Post Ipo Years Case Study Analysis in particular. These elements include;
• Entrance of the new publishing companies in the industry.
• Declining growth of the publishing market.
• Market saturation.
• Intro of digital publishing strategies
• Improvement of science and innovation.
The change 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 abilities of the company could be used to pursue the future advancement unceasingly? How could the company sustain its long term competitive position in future?
Situational Analysis
Internal Analysis
SWOT Analysis
Strengths
Suntech Power Holdings B The Post Ipo Years Case Study Analysis has particular strengths that can be utilized to minimize the hazards, conquer the weak point and get the opportunities. Strengths of CMP are provided as follows;
• The long term experience of Suntech Power Holdings B The Post Ipo Years Case Study Solution in the publishing industry i.e. 60 years enables the business to offer high quality products at a lower expense utilizing its prior experiences.
• The technical resources and abilities created by its successful journey provide a competitive benefit to CMP.
• Vast product portfolioof CMP helps it to diversify its danger and offer high worth to its customers.
• Strong financial position enables the company to consider numerous advancement chances without any worry of raising fund externally.
Weak points
In addition to the strengths, the business has certain weaknesses which might increase restraints for the business in executing its development program. The weak points of Suntech Power Holdings B The Post Ipo Years Case Study Analysis are given as follows;
• Despite of being a science and technology publishing company, the company still has conventional methods ofpublishing which are not compatible with the growing technological shift.
• CMP highly relies over the Chinese markets for its growth. It should propose specific growth strategies to avoid its reliance over the Chinese markets to achieve long term development.
Opportunities
Although, the development of the publishing market is decreasing since 2008, impacting Suntech Power Holdings B The Post Ipo Years Case Study Analysis also, however the growth could be restored by availing certain chances presented in the market. The market opportunities for CMP include;
• The company might likewise present Digital Publishing by utilizing its long term technical experience and a strong customer acknowledgment in the market.
• CMP might think about a development program through the expansion towards foreign markets in order to reduce its dependence over Chinese markets by using its vast funds.
Dangers
The altering macro trends in the market and increasing competitors in the publishing market has presented specific dangers to Suntech Power Holdings B The Post Ipo Years Case Study Help including;( Gurel, 2017).
• Intro of digital publishing i.e. virtual libraries could result in decreasing market share of Suntech Power Holdings B The Post Ipo Years Case Study Help due to the customer shift towards digital libraries.
• The presence of large number of competitors in the publishing industry increase the risk for CMP to lose its competitive position in the market, as rivals can gain a strong consumer base by using specific strategies like aggressive promotion, quality items, and so on
• Entryway of brand-new publishing firms in the market together with existence of high competition increases the hazard of losing the consumer base.
Financial Analysis.
Due to lack of information, the financial ratios of CMP could not be determined. It could be evaluated from the Appendix III that the yearly total incomes of Suntech Power Holdings B The Post Ipo Years Case Study Analysis during the period 2000-2012 are growing at a high growth rate, revealing that the annual demand of the products of CMP is growing and the company is rather efficient in attracting a large number of customers at a possible cost.
Along with it, the 2nd chart which reveals the annual development in the Suntech Power Holdings B The Post Ipo Years Case Study Help total properties, reveals that the company is quite effective in including worth to its properties through its profits. The growth in assets shows that the total value of the firm is also increasing with increasing the total earnings. (Unknown, 2013).
Another monetary analysis of the company using the offered information might be the analysis relating to the circulation of total revenues of the business. Major part of the incomes of CMP comes from the sales of its published books i.e. 64% as shown in the Case Appendix V. The company could move towards other business sectors with a potential development to attain its future advancement objective.
PESTEL Analysis
PESTEL analysis might be performed to discover the different external forces impacting the performance of the business and the recent trends in the external environment of the business. A quick PESTEL analysis of the company is given as follows; (Alanzi, 2018).
Political.
As the publishing sector could have a considerable effect on the state of mind of individuals about the communist ideology of the federal government, therefore, the publishing sector is extremely supervised and assisted by the Promotion Department of the Communist Party of China. Therefore, it might be said that the overall political forces impacting Suntech Power Holdings B The Post Ipo Years Case Study Analysis organisation are high. The government policies concerning 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 B The Post Ipo Years Case Study Solution in specific includesthe prices of paper, the income level of consumers, the inflation rate, and the total GDP development of the nation. All these forces combine impact the demand for the publishing market. Along with it, the financial policies connected to the import of books impact the total organisation at CPM. China's financial conditions are rather favorable for CMP with high GDP development and consumer earnings level.
Social and Demographical.
Social and demographical forces include the population development, the customer's preferences towards reading informative products and so on. China has the highest population on the planet with a high population growth, showing the increasing number of customers of the Suntech Power Holdings B The Post Ipo Years Case Study Help. However, the consumer choices are shifting towards digital publishing instead of the traditional was of publishing. In this regard, CMP needs to concentrate on digital publishing to fulfill the changing consumer choices.
Technological.
Technological forces impacting the CMP consist of the technological development in the reading methods etc. Improvement of science and innovation along with the rise of digital publishing might reduce the demand for the CMP items, if particular actions would not be taken soon.
Environmental.
Ecological forces impacting Suntech Power Holdings B The Post Ipo Years Case Study Help includes the concerns of environmental neighborhoods over the use of paper in publishing books. The paper utilized in the books while publishing is needed to be non reusable and the ink used while publishing should not be harmful for the environment.
Legal.
Legal regulations for the publishing sector at whole are high. The legal policies regarding the publishing sector is managed by the General Administration of Press and Publication. Publishing Ordinance 1997 needs the publishers to be authorized first by the Government to be gone into in the publishing market. The regulation prohibits direct participation of foreign entities and people in the publishing sector.
Market Analysis (Porter's Five Forces Design).
Porter's 5 Forces Model could be utilized to analyze the appearance of the publishing industry China. A quick analysis of the Porter's 5 Forces is offered as follows;.
Threat of New Entrants.
Dangers of brand-new entrants in the Chinese Publishing Industry is moderate. The possible growth in the market tends to draw in new entrants to the publishing market. The existence of intense competitors and the requirement of huge capital tends to demotivate new entrants to enter in the market.
Danger of Substitution.
Threat of Replacement is high for the Chinese Publishing Market. The alternative items for the published files is the documents presented in the virtual libraries on certain sites. The changing customer choices towards digital learning increase the threat of substitution for the market.
Competitive Competition.
Competitive competition in the publishing market is high. The existence of large number of customers in the Chinese Publishing Industry like CIP, PTP etc. tends to produce high competitive competition for CMP. Together with it, new entrants are also participating in the marketplace increasing the competition for CMP.
Bargaining Power of Provider.
The major suppliers of the Suntech Power Holdings B The Post Ipo Years Case Study Solution consist of the providers 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.
Negotiating power of purchaser in the publishing market is high. Due to the existence of a a great deal of publishers in the Chinese market and the marketplace saturation, the purchasers needs high quality documents at competitive costs.
Competitors Analysis.
CMP runs in an extremely competitive industry with the presence of large number of rivals. However, the business has a competitive position in the market with the greatest market share in the Chinese publishing market. Major rivals of Suntech Power Holdings B The Post Ipo Years Case Study Help consist of;.
• Chemical Industry Press (CIP).
• Posts and telecommunication Press (PTP).
Chemical Industry 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 easily in the present market circumstance.
Posts and telecommunication Press (PTP).
Another close rival of CMP is PTP. It was also founded in the same duration as CMP and CIP. It ranks 6th in the state-owned publishers in terms of business scale. It is also among the popular players in the publishing market with a yearly total incomes of RMB 550 million in 2010.
Alternatives
Alternative-1: Broaden towards New Markets
Pros
• Minimizing dependence over the Chinese markets.
• Increasing number of Customers
• Development chances.
• Avoiding the effect of market saturation in the Chinese publishing industry.
Cons
• Use of prospective resources in expansion.
• Danger of failure in new markets.
• Time consuming.
Alernative-2: Introduce Digital Publishing
Pros
• Sustaining consumer base.
• Approaching brand-new markets.
• Easy to present using present abilities.
• Low threat 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 service sectors to the new one can lead the business to lose need of its items in the market.
Recommendations
As the choices are moving towards digital publishing and the business need an immediate solution to avoid the declining industry growth. The business might also think about the growth program after the success of its digital publishing program.
Execution
In order to introduce digital publishing in its product portfolio, the company ought to initially collects the data connected to the consumer demand, the possible markets, the federal government guidelines and the data connected to the competitors provided in the market. After that, the business should decide one possible segment for its initial offering. It ought to collect research that how it might distinguish its digital publishing from the existing competitors' products. The actions above the business should go for the initial offering. If the preliminary offering proves a success, the business should go for the other markets. In this way the business would have the ability to implement its digital publishing program.
Conclusion
Although, the development of the publishing market is decreasing because 2008, revealing a risk to the company's long term presence, however the situation can be managed by considering a development strategy in the future. The business could consider presenting digital publishingin its existing market to implement its advancement program at instant basis and to avoid the threat of failure for entrance in the brand-new markets.
