Taking Private Equity Public The Blackstone Group 2 Case Study Solution and Analysis
Introduction
Taking Private Equity Public The Blackstone Group 2 Case Study Help is the largest publishing company with a greatest market share in the China's book retail market. CMP provides a number of services including; gathering info, processing information and communication services. Major business sections of the business include; books, regulars, consultancy and distribution. The company has a vast item portfolio and its significant products include books, periodicals, online media, exhibits, research study reports and so on. Taking Private Equity Public The Blackstone Group 2 Case Study Solution has ended up being a specialized details company and a large detailed Science and Innovation publishing business through the combination of print media, audio-visual media and the network media.
Important Concerns
Although, Taking Private Equity Public The Blackstone Group 2 Case Study Analysis has spent its 60 years journey efficiently, being a successful publishing house, nevertheless, the changing macro market patterns and forces bring certain challenges to the publishing market in general and CMP in specific. These aspects include;
• Entrance of the new publishing firms in the market.
• Declining development of the publishing market.
• Market saturation.
• Intro of digital publishing methods
• Improvement of science and technology.
The change of the macro markets have raised numerous questions to the management at CPM that what could be the future of CMP in this scenario? Do the long important experience, technical resources and the capabilities of the company could be made use of to pursue the future development unceasingly? How could the business sustain its long term competitive position in future?
Situational Analysis
Internal Analysis
SWOT Analysis
Strengths
Taking Private Equity Public The Blackstone Group 2 Case Study Solution has certain strengths that can be used to reduce the risks, overcome the weak point and avail the opportunities. Strengths of CMP are given as follows;
• The long term experience of Taking Private Equity Public The Blackstone Group 2 Case Study Solution in the publishing industry i.e. 60 years allows the company to supply high quality items at a lower cost using its previous experiences.
• The technical resources and capabilities created by its successful journey supply a competitive benefit to CMP.
• Large item portfolioof CMP assists it to diversify its danger and supply high worth to its clients.
• Strong financial position permits the business to consider a number of advancement chances with no fear of raising fund externally.
Weaknesses
Along with the strengths, the company has particular weak points which might increase restrictions for the company in implementing its development program. The weak points of Taking Private Equity Public The Blackstone Group 2 Case Study Help are given as follows;
• Despite of being a science and technology publishing company, the company still has traditional ways ofpublishing which are not suitable with the growing technological shift.
• CMP extremely relies over the Chinese markets for its growth. It should propose particular growth plans to avoid its dependence over the Chinese markets to accomplish long term development.
Opportunities
Although, the growth of the publishing market is decreasing considering that 2008, affecting Taking Private Equity Public The Blackstone Group 2 Case Study Analysis too, but the development might be revived by availing specific chances provided in the market. The marketplace chances for CMP include;
• The company could also present Digital Publishing by utilizing its long term technical experience and a strong consumer recognition in the market.
• CMP could think about a development program through the growth towards foreign markets in order to lower its reliance over Chinese markets by utilizing its huge financial resources.
Dangers
The changing macro trends in the market and increasing competition in the publishing market has posed specific dangers to Taking Private Equity Public The Blackstone Group 2 Case Study Analysis including;( Gurel, 2017).
• Introduction of digital publishing i.e. digital libraries might lead to decreasing market share of Taking Private Equity Public The Blackstone Group 2 Case Study Analysis due to the customer shift towards digital libraries.
• The existence of a great deal of competitors in the publishing industry increase the hazard for CMP to lose its competitive position in the market, as competitors can acquire a strong consumer base by utilizing specific techniques like aggressive promo, quality products, etc.
• Entrance of brand-new publishing companies in the market together with presence of high competitors increases the threat of losing the customer base.
Monetary Analysis.
Due to lack of information, the financial ratios of CMP might not be computed. It could be examined from the Appendix III that the annual overall profits of Taking Private Equity Public The Blackstone Group 2 Case Study Help throughout the period 2000-2012 are growing at a high growth rate, showing that the yearly demand of the products of CMP is growing and the business is rather effective in drawing in a large number of clients at a prospective cost.
In addition to it, the second chart which reveals the yearly development in the Taking Private Equity Public The Blackstone Group 2 Case Study Analysis total assets, shows that the business is rather effective in adding worth to its possessions through its earnings. The growth in possessions shows that the total value of the firm is likewise increasing with increasing the total revenues. (Unknown, 2013).
Another financial analysis of the business using the given information might be the analysis relating to the distribution of overall earnings of the business. Major part of the earnings of CMP comes from the sales of its published books i.e. 64% as displayed in the Case Appendix V. The company could move towards other service sections with a potential growth to accomplish its future advancement goal.
PESTEL Analysis
PESTEL analysis could be carried out to find out the various external forces affecting the efficiency of the company and the recent patterns in the external environment of the business. A brief PESTEL analysis of the business is given as follows; (Alanzi, 2018).
Political.
As the publishing sector might have a considerable influence on the state of mind of the people about the communist ideology of the government, for that reason, the publishing sector is extremely monitored and guided by the Promotion Department of the Communist Celebration of China. It might be said that the general 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.
Financial forces affecting the publishing sector in general and the Taking Private Equity Public The Blackstone Group 2 Case Study Analysis in particular includesthe costs of paper, the income level of customers, the inflation rate, and the overall GDP growth of the nation. All these forces combine impact the need for the publishing market. In addition to it, the economic policies related to the import of books impact the total service at CPM. China's economic conditions are rather beneficial for CMP with high GDP development and customer income level.
Social and Demographical.
Social and demographical forces include the population development, the consumer's choices towards reading informative materials and so on. China has the greatest population on the planet with a high population growth, revealing the increasing variety of customers of the Taking Private Equity Public The Blackstone Group 2 Case Study Help. The consumer choices are shifting towards digital publishing rather than the conventional was of publishing. In this regard, CMP should concentrate on digital publishing to meet the altering customer choices.
Technological.
Technological forces impacting 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 need for the CMP products, if particular actions would not be taken quickly.
Environmental.
Environmental forces affecting Taking Private Equity Public The Blackstone Group 2 Case Study Solution includes the issues of environmental neighborhoods over the usage of paper in publishing books. The paper utilized in the books while publishing is needed to be disposable and the ink utilized while publishing ought to not be hazardous for the environment.
Legal.
Legal policies for the publishing sector at whole are high. The legal guidelines concerning the publishing sector is controlled by the General Administration of Press and Publication. Publishing Ordinance 1997 requires the publishers to be approved first by the Government to be gone into in the publishing market. The regulation prohibits direct participation of foreign entities and individuals in the publishing sector.
Industry Analysis (Porter's 5 Forces Model).
Porter's 5 Forces Model might be utilized to examine the attractiveness of the publishing market China. A quick analysis of the Porter's Five Forces is given as follows;.
Risk 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 brand-new entrants to the publishing industry. The presence of intense competition and the requirement of substantial capital tends to demotivate brand-new entrants to go into in the market.
Risk of Alternative.
Threat of Replacement is high for the Chinese Publishing Industry. The replacement items for the released files is the files presented in the digital libraries on certain sites. The altering customer preferences towards digital learning increase the danger of replacement for the industry.
Competitive Rivalry.
Competitive rivalry in the publishing market is high. The existence of large number of consumers in the Chinese Publishing Market like CIP, PTP and so on tends to produce high competitive rivalry for CMP. Along with it, brand-new entrants are likewise participating in the marketplace increasing the competitors for CMP.
Bargaining Power of Supplier.
The major suppliers of the Taking Private Equity Public The Blackstone Group 2 Case Study Help include the providers 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 provider for CMP is low.
Bargaining Power of Purchaser.
Negotiating power of purchaser in the publishing industry is high. Due to the existence of a a great deal of publishers in the Chinese market and the market saturation, the buyers needs high quality files at competitive prices.
Rivals Analysis.
CMP runs in a highly competitive industry with the existence of large number of rivals. The company has a competitive position in the market with the greatest market share in the Chinese publishing market. Significant competitors of Taking Private Equity Public The Blackstone Group 2 Case Study Analysis include;.
• Chemical Market Press (CIP).
• Posts and telecommunication Press (PTP).
Chemical Industry Press (CIP).
CIP acts as a risk 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).
Another close rival of CMP is PTP. It was also founded in the very same duration as CMP and CIP. It ranks 6th in the state-owned publishers in terms of company scale. It is likewise among the popular gamers in the publishing industry with an annual total profits of RMB 550 million in 2010.
Alternatives
Alternative-1: Broaden towards New Markets
Pros
• Decreasing dependence over the Chinese markets.
• Increasing variety of Clients
• Development chances.
• Preventing the effect of market saturation in the Chinese publishing industry.
Cons
• Usage of possible resources in expansion.
• Risk of failure in brand-new markets.
• Time consuming.
Alernative-2: Introduce Digital Publishing
Pros
• Sustaining consumer base.
• Approaching brand-new markets.
• Easy to present using existing abilities.
• Low threat of Failure.
• Low requirement for funds.
• Increased item portfolio provides high value to consumers.
Cons
• Competitors in the market by CIP, who has prior focus on the digital publishing.
• Shift of focus from the core company sections to the brand-new one can lead the business to lose demand of its items in the market.
Recommendations
With the deep analysis of the internal and external environment of the business along with the market analysis and the rival analysis, Alternative 2 is suggested to CMP to accomplish its future advancement. As the preferences are shifting towards digital publishing and the company require an instant solution to avoid the declining industry growth. For that reason, introduction of digital publishing might prove to be an immediate solution with low quantity of risk for the business. The business could likewise consider the growth program after the success of its digital publishing program.
Execution
In order to introduce digital publishing in its item portfolio, the business needs to first gathers the data connected to the consumer need, the prospective markets, the government policies and the information related to the rivals provided in the market. After that, the business needs to choose one prospective sector for its initial offering. It must gather research study that how it might separate its digital publishing from the existing competitors' products. The actions above the business should go for the initial offering. If the initial offering proves a success, the company should go for the other markets. In this way the company would have the ability to implement its digital publishing program.
Conclusion
Although, the development of the publishing industry is declining since 2008, revealing a risk to the business's long term existence, however the scenario can be managed by thinking about an advancement plan in the future. The business could think about introducing digital publishingin its existing market to execute its development program at immediate basis and to prevent the threat of failure for entryway in the new markets.
