Term Sheet Negotiations For Trendsetter Inc Case Study Solution and Analysis
Intro
Term Sheet Negotiations For Trendsetter Inc Case Study Solution is the largest publishing business with a greatest market share in the China's book retail market. CMP has actually become a specialized details service provider and a big detailed Science and Innovation publishing company through the combination of print media, audio-visual media and the network media.
Important Concerns
Although, Term Sheet Negotiations For Trendsetter Inc Case Study Solution has invested its 60 years journey smoothly, being a successful publishing house, nevertheless, the altering macro market patterns and forces bring specific obstacles to the publishing market in general and CMP in specific. These aspects consist of;
• Entryway of the brand-new publishing firms in the industry.
• Decreasing growth of the publishing market.
• Market saturation.
• Introduction of digital publishing strategies
• Improvement of science and innovation.
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 scenario? Do the long valuable experience, technical resources and the capabilities of the company could be utilized 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
Term Sheet Negotiations For Trendsetter Inc Case Study Solution has certain strengths that can be used to minimize the hazards, conquer the weak point and obtain the chances. Strengths of CMP are offered as follows;
• The long term experience of Term Sheet Negotiations For Trendsetter Inc Case Study Analysis in the publishing market i.e. 60 years allows the company to supply high quality products at a lower expense utilizing its prior experiences.
• The technical resources and abilities created by its successful journey supply a competitive benefit to CMP.
• Huge item portfolioof CMP assists it to diversify its danger and provide high value to its clients.
• Strong monetary position enables the company to consider numerous development opportunities without any fear of raising fund externally.
Weaknesses
Along with the strengths, the company has certain weaknesses which could increase constraints for the business in executing its advancement program. The weak points of Term Sheet Negotiations For Trendsetter Inc Case Study Help are provided as follows;
• Despite of being a science and technology publishing firm, 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 development. It ought to propose certain expansion strategies to prevent its reliance over the Chinese markets to attain long term growth.
Opportunities
Although, the development of the publishing industry is declining since 2008, impacting Term Sheet Negotiations For Trendsetter Inc Case Study Solution too, but the development might be restored by availing certain opportunities provided in the market. The market opportunities for CMP include;
• The business could also introduce Digital Publishing by utilizing its long term technical experience and a strong consumer recognition in the market.
• CMP could think about an advancement program through the expansion towards foreign markets in order to lower its dependence over Chinese markets by utilizing its large funds.
Threats
The changing macro trends in the market and increasing competitors in the publishing industry has posed particular risks to Term Sheet Negotiations For Trendsetter Inc Case Study Help consisting of;( Gurel, 2017).
• Introduction of digital publishing i.e. digital libraries could cause decreasing market share of Term Sheet Negotiations For Trendsetter Inc Case Study Solution due to the consumer shift towards virtual libraries.
• The presence of large number of rivals in the publishing market increase the risk for CMP to lose its competitive position in the market, as rivals can get a strong customer base by utilizing certain techniques like aggressive promo, quality items, etc.
• Entrance of new publishing firms in the industry along with presence of high competition increases the risk of losing the customer base.
Monetary Analysis.
Due to absence of data, the financial ratios of CMP could not be calculated. It might be evaluated from the Appendix III that the annual overall earnings of Term Sheet Negotiations For Trendsetter Inc Case Study Analysis during the duration 2000-2012 are growing at a high development rate, showing that the annual need of the items of CMP is growing and the business is quite effective in bring in a big number of customers at a prospective rate.
Together with it, the 2nd graph which reveals the annual development in the Term Sheet Negotiations For Trendsetter Inc Case Study Help total possessions, shows that the business is quite effective in adding value to its possessions through its revenues. The growth in assets shows that the overall worth of the firm is also increasing with increasing the total revenues. (Unknown, 2013).
Another financial analysis of the business utilizing the given data could be the analysis regarding the distribution of total revenues of the business. Major part of the revenues of CMP comes from the sales of its released books i.e. 64% as shown in the Case Appendix V. The business could move towards other service segments with a prospective growth to attain its future advancement objective.
PESTEL Analysis
PESTEL analysis might be carried out to discover the numerous external forces affecting the efficiency of the business and the recent trends in the external environment of the company. A short PESTEL analysis of the business is provided as follows; (Alanzi, 2018).
Political.
As the publishing sector could have a substantial influence on the state of mind of the people about the communist ideology of the federal government, therefore, the publishing sector is highly supervised and guided by the Publicity Department of the Communist Party of China. It could be stated that the total political forces affecting CMP service are high. The government policies regarding the publishing sector are likewise increasing with the passage of time.
Affordable.
Economic forces impacting the publishing sector in general and the CMP in specific includesthe costs of paper, the income level of customers, the inflation rate, and the overall GDP development of the nation. All these forces integrate effect the need for the publishing market.
Social and Demographical.
The customer preferences are shifting towards digital publishing rather than the standard was of publishing. In this regard, CMP ought to focus on digital publishing to meet the changing customer choices.
Technological.
Technological forces impacting the CMP consist of the technological development in the reading methods and so on. Enhancement of science and technology together with the increase of digital publishing might minimize the need for the CMP items, if certain actions would not be taken quickly.
Environmental.
Ecological forces impacting Term Sheet Negotiations For Trendsetter Inc Case Study Solution includes the concerns of environmental neighborhoods over the usage of paper in publishing books. The paper used in the books while publishing is required to be non reusable and the ink utilized while publishing must not be harmful for the environment.
Legal.
Legal policies for the publishing sector at whole are high. The legal policies concerning the publishing sector is controlled by the General Administration of Press and Publication. Publishing Regulation 1997 needs the publishers to be authorized first by the Government to be gone into in the publishing market. The ordinance forbids direct involvement of foreign entities and individuals in the publishing sector.
Market Analysis (Porter's 5 Forces Model).
Porter's Five Forces Model could be utilized to examine the beauty of the publishing market China. A brief analysis of the Porter's Five Forces is offered as follows;.
Risk of New Entrants.
Threats of new entrants in the Chinese Publishing Industry is moderate. The potential development in the industry tends to attract brand-new entrants to the publishing industry. The existence of intense competition and the requirement of big capital tends to demotivate new entrants to go into in the market.
Threat of Replacement.
Risk of Substitution is high for the Chinese Publishing Industry. The substitute products for the released documents is the documents presented in the digital libraries on specific sites. The changing consumer preferences towards digital knowing increase the threat of replacement for the industry.
Competitive Competition.
Competitive competition in the publishing market is high. The existence of large number of consumers in the Chinese Publishing Industry like CIP, PTP and so on tends to produce high competitive rivalry for CMP. Along with it, brand-new entrants are also participating in the market increasing the competitors for CMP.
Bargaining Power of Provider.
The significant suppliers of the Term Sheet Negotiations For Trendsetter Inc Case Study Analysis consist of the suppliers of the paper for publishing documents. As CMP is the largest publisher in the Chinese Publishing Market, for that reason the general bargaining power of supplier for CMP is low.
Bargaining Power of Purchaser.
Negotiating power of buyer in the publishing industry is high. Due to the presence of a large number of publishers in the Chinese market and the market saturation, the purchasers requires high quality documents at competitive prices.
Competitors Analysis.
CMP operates in a highly competitive market with the existence of large number of rivals. Nevertheless, the company has a competitive position in the market with the highest market share in the Chinese publishing market. Major competitors of Term Sheet Negotiations For Trendsetter Inc Case Study Analysis include;.
• Chemical Market Press (CIP).
• Posts and telecommunication Press (PTP).
Chemical Industry Press (CIP).
CIP acts as a hazard 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 present market scenario.
Posts and telecommunication Press (PTP).
It was also established in the exact same period as Term Sheet Negotiations For Trendsetter Inc Case Study Analysis and CIP. It is likewise one of the prominent gamers in the publishing industry with a yearly total earnings of RMB 550 million in 2010.
Alternatives
Alternative-1: Broaden towards New Markets
Pros
• Reducing reliance over the Chinese markets.
• Increasing number of Clients
• Development opportunities.
• Preventing the effect of market saturation in the Chinese publishing market.
Cons
• Usage of potential resources in expansion.
• Threat of failure in new markets.
• Time consuming.
Alernative-2: Introduce Digital Publishing
Pros
• Sustaining consumer base.
• Approaching new markets.
• Easy to present utilizing present abilities.
• Low danger of Failure.
• Low requirement for funds.
• Increased item portfolio offers high worth to consumers.
Cons
• Competition in the market by CIP, who has prior focus on the digital publishing.
• Shift of focus from the core service sections to the new one can lead the company to lose need of its items in the market.
Suggestions
With the deep analysis of the internal and external environment of the company along with the market analysis and the rival analysis, Alternative 2 is advised to CMP to achieve its future advancement. As the choices are moving towards digital publishing and the business need an instant service to prevent the declining industry growth. For that reason, intro of digital publishing could show to be an instant option with low amount of threat for the business. The company could also 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 must first collects the data related to the consumer need, the potential markets, the government policies and the information related to the rivals provided in the market. If the initial offering proves a success, the business ought to go for the other markets. In this way the business would be able to execute its digital publishing program.
Conclusion
Although, the development of the publishing industry is declining since 2008, showing a hazard to the company's long term existence, but the situation can be managed by considering a development plan in the future. The company might consider introducing digital publishingin its existing market to execute its advancement program at instant basis and to prevent the threat of failure for entrance in the brand-new markets.
