Teuer Furniture A Discounted Cash Flow Valuation Case Study Solution and Analysis
Intro
Teuer Furniture A Discounted Cash Flow Valuation Case Study Solution is the biggest publishing company with a greatest market share in the China's book retail market. CMP provides a number of services consisting of; collecting information, processing info and interaction services. Major service sections of the business consist of; books, periodicals, consultancy and distribution. The company has a large item portfolio and its major products consist of books, periodicals, online media, exhibitions, research study reports etc. Teuer Furniture A Discounted Cash Flow Valuation Case Study Help has actually become a specialized information service provider and a big detailed Science and Technology publishing company through the combination of print media, audio-visual media and the network media.
Vital Issues
CMP has invested its 60 years journey smoothly, being an effective publishing home, however, the altering macro market trends and forces bring certain obstacles to the publishing industry in general and Teuer Furniture A Discounted Cash Flow Valuation Case Study Help in specific. These elements include;
• Entrance of the brand-new publishing firms in the market.
• Decreasing development of the publishing market.
• Market saturation.
• Intro of digital publishing methods
• Improvement of science and innovation.
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 circumstance? Do the long important experience, technical resources and the abilities of the company could be utilized to strive for the future development unceasingly? How could the company sustain its long term competitive position in future?
Situational Analysis
Internal Analysis
SWOT Analysis
Strengths
Teuer Furniture A Discounted Cash Flow Valuation Case Study Help has certain strengths that can be made use of to decrease the hazards, conquer the weak point and obtain the opportunities. Strengths of CMP are given as follows;
• The long term experience of Teuer Furniture A Discounted Cash Flow Valuation Case Study Analysis in the publishing market i.e. 60 years allows the company to supply high quality products at a lower expense using its previous experiences.
• The technical resources and abilities produced by its effective journey offer a competitive benefit to CMP.
• Large product portfolioof CMP assists it to diversify its risk and supply high value to its customers.
• Strong financial position permits the company to think about several advancement chances without any worry of raising fund externally.
Weak points
In addition to the strengths, the business has certain weak points which could increase restrictions for the company in executing its development program. The weak points of Teuer Furniture A Discounted Cash Flow Valuation Case Study Analysis are offered as follows;
• Despite of being a science and innovation publishing firm, the business still has standard ways ofpublishing which are not compatible with the growing technological shift.
• CMP extremely relies over the Chinese markets for its development. It should propose specific growth plans to avoid its dependence over the Chinese markets to attain long term development.
Opportunities
Although, the growth of the publishing market is declining considering that 2008, affecting Teuer Furniture A Discounted Cash Flow Valuation Case Study Analysis too, but the growth could be revived by availing certain opportunities provided in the market. The marketplace opportunities for CMP include;
• The company could likewise introduce Digital Publishing by utilizing its long term technical experience and a strong consumer recognition in the market.
• CMP might consider a development program through the expansion towards foreign markets in order to minimize its reliance over Chinese markets by using its vast financial resources.
Hazards
The changing macro patterns in the market and increasing competitors in the publishing industry has actually posed specific dangers to Teuer Furniture A Discounted Cash Flow Valuation Case Study Help including;( Gurel, 2017).
• Intro of digital publishing i.e. digital libraries might cause decreasing market share of Teuer Furniture A Discounted Cash Flow Valuation Case Study Solution due to the consumer shift towards virtual libraries.
• The presence 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 gain a strong customer base by using particular methods like aggressive promo, quality products, and so on
• Entrance of new publishing firms in the industry along with presence of high competitors increases the threat of losing the customer base.
Financial Analysis.
Due to absence of information, the monetary ratios of CMP might not be determined. It could be analyzed from the Appendix III that the yearly overall revenues of Teuer Furniture A Discounted Cash Flow Valuation Case Study Help throughout the period 2000-2012 are growing at a high growth rate, revealing that the yearly need of the products of CMP is growing and the business is quite efficient in bring in a big number of customers at a possible price.
In addition to it, the second chart which shows the annual development in the Teuer Furniture A Discounted Cash Flow Valuation Case Study Solution overall assets, shows that the business is quite efficient in including worth to its properties through its incomes. The growth in properties reveals that the total worth of the firm is likewise increasing with increasing the overall incomes. (Unknown, 2013).
Another financial analysis of the business utilizing the provided information could be the analysis regarding the distribution of total revenues of the company. Major part of the profits of CMP comes from the sales of its released books i.e. 64% as displayed in the Case Appendix V. The company could move towards other organisation sectors with a prospective growth to achieve its future advancement objective.
PESTEL Analysis
PESTEL analysis could be carried out to find out the different external forces affecting the efficiency of the business and the recent patterns in the external environment of the business. A quick PESTEL analysis of the business is provided as follows; (Alanzi, 2018).
Political.
As the publishing sector could have a substantial influence on the mindset of individuals about the communist ideology of the federal government, therefore, the publishing sector is extremely monitored and directed by the Publicity Department of the Communist Celebration of China. It might be stated that the total political forces affecting CMP service are high. The federal government policies relating to the publishing sector are likewise increasing with the passage of time.
Affordable.
Economic forces impacting the publishing sector in basic and the Teuer Furniture A Discounted Cash Flow Valuation Case Study Solution in particular includesthe rates of paper, the earnings level of customers, the inflation rate, and the total GDP development of the nation. All these forces combine impact the demand for the publishing market. In addition to it, the financial policies related to the import of books impact the total company at CPM. Nevertheless, China's economic conditions are quite beneficial for CMP with high GDP growth and consumer income level.
Social and Demographical.
Social and demographical forces consist of the population growth, the customer's choices towards reading helpful products etc. China has the highest population worldwide with a high population development, showing the increasing variety of consumers of the Teuer Furniture A Discounted Cash Flow Valuation Case Study Analysis. The customer preferences are moving towards digital publishing rather than the traditional was of publishing. In this regard, CMP needs to concentrate on digital publishing to fulfill the changing customer preferences.
Technological.
Technological forces affecting the CMP consist of the technological improvement in the reading methods etc. Enhancement of science and innovation in addition to the increase of digital publishing might reduce the demand for the CMP products, if particular actions would not be taken quickly.
Environmental.
Ecological forces affecting Teuer Furniture A Discounted Cash Flow Valuation Case Study Help consists of the issues of ecological communities over the use of paper in publishing books. The paper utilized in the books while publishing is required to be disposable and the ink utilized while publishing ought to not be damaging for the environment.
Legal.
Legal policies for the publishing sector at whole are high. The legal regulations concerning the publishing sector is managed by the General Administration of Press and Publication. Publishing Regulation 1997 requires the publishers to be approved first by the Federal government to be gone into in the publishing market. The ordinance prohibits direct participation of foreign entities and people in the publishing sector.
Industry Analysis (Porter's Five Forces Model).
Porter's Five Forces Model could be utilized to evaluate the beauty of the publishing market China. A quick analysis of the Porter's 5 Forces is given as follows;.
Danger of New Entrants.
Risks of new entrants in the Chinese Publishing Industry is moderate. The prospective development in the market tends to bring in new entrants to the publishing market. Nevertheless, the existence of extreme competitors and the requirement of big capital tends to demotivate new entrants to enter in the marketplace.
Hazard of Substitution.
Threat of Alternative is high for the Chinese Publishing Market. The alternative products for the released files is the files provided in the virtual libraries on certain sites. The altering customer choices towards digital learning increase the threat of replacement for the market.
Competitive Rivalry.
Competitive rivalry in the publishing industry is high. The presence of large number of consumers in the Chinese Publishing Market like CIP, PTP etc. tends to produce high competitive competition for CMP. Along with it, new entrants are also entering into the marketplace increasing the competition for CMP.
Bargaining Power of Supplier.
The significant suppliers of the Teuer Furniture A Discounted Cash Flow Valuation Case Study Solution include the providers of the paper for releasing documents. As CMP is the largest publisher in the Chinese Publishing Market, therefore the general bargaining power of provider for CMP is low.
Bargaining Power of Purchaser.
Haggling power of buyer in the publishing industry is high. Due to the existence of a large number of publishers in the Chinese market and the market saturation, the purchasers needs high quality files at competitive costs.
Rivals Analysis.
CMP runs in a highly competitive industry with the existence of large number of rivals. However, the company has a competitive position in the market with the highest market share in the Chinese publishing market. Significant rivals of Teuer Furniture A Discounted Cash Flow Valuation Case Study Help consist of;.
• Chemical Market Press (CIP).
• Posts and telecommunication Press (PTP).
Chemical Market 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 present market situation.
Posts and telecommunication Press (PTP).
Another close competitor 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 organisation scale. It is likewise among the prominent gamers in the publishing industry with an annual overall revenues of RMB 550 million in 2010.
Alternatives
Alternative-1: Expand towards New Markets
Pros
• Decreasing reliance over the Chinese markets.
• Increasing number of Customers
• Growth opportunities.
• Preventing the impact of market saturation in the Chinese publishing market.
Cons
• Usage of prospective resources in growth.
• Danger of failure in brand-new markets.
• Time consuming.
Alernative-2: Introduce Digital Publishing
Pros
• Sustaining customer base.
• Approaching new markets.
• Easy to present using current capabilities.
• Low danger of Failure.
• Low requirement for funds.
• Increased item portfolio offers 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 organisation sectors to the new one can lead the business to lose demand of its products in the market.
Suggestions
With the deep analysis of the internal and external environment of the business in addition to the market analysis and the competitor analysis, Alternative 2 is suggested to CMP to accomplish its future advancement. As the preferences are shifting towards digital publishing and the business need an immediate option to prevent the decreasing industry development. Therefore, introduction of digital publishing could prove to be an instant option with low quantity of danger for the company. Nevertheless, the company might also think about the growth program after the success of its digital publishing program.
Application
In order to present digital publishing in its product portfolio, the business ought to initially collects the data related to the consumer demand, the prospective markets, the government guidelines and the data related to the competitors presented in the market. If the initial offering proves a success, the business must go for the other markets. In this way the company would be able to implement its digital publishing program.
Conclusion
Although, the growth of the publishing industry is declining because 2008, revealing a risk to the company's long term presence, but the situation can be controlled by considering an advancement plan in the future. The company could consider introducing digital publishingin its existing market to execute its advancement program at instant basis and to prevent the risk of failure for entryway in the brand-new markets.
