The Canada Pension Plan Investment Board October 2012 2 Case Study Solution and Analysis
Introduction
The Canada Pension Plan Investment Board October 2012 2 Case Study Help is the largest publishing business with a greatest market share in the China's book retail market. CMP has ended up being a specialized info provider and a large detailed Science and Technology publishing company through the combination of print media, audio-visual media and the network media.
Important Issues
CMP has actually spent its 60 years journey smoothly, being an effective publishing home, however, the changing macro market trends and forces bring certain difficulties to the publishing market in general and The Canada Pension Plan Investment Board October 2012 2 Case Study Help in particular. These elements include;
• Entryway of the brand-new publishing firms in the market.
• Decreasing growth of the publishing market.
• Market saturation.
• Introduction of digital publishing strategies
• Enhancement of science and technology.
The transformation 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 capabilities of the company could be utilized to pursue the future development unceasingly? How could the company sustain its long term competitive position in future?
Situational Analysis
Internal Analysis
SWOT Analysis
Strengths
The Canada Pension Plan Investment Board October 2012 2 Case Study Solution has specific strengths that can be made use of to lower the hazards, overcome the weakness and avail the chances. Strengths of CMP are provided as follows;
• The long term experience of The Canada Pension Plan Investment Board October 2012 2 Case Study Solution in the publishing market i.e. 60 years permits the company to provide high quality products at a lower expense utilizing its prior experiences.
• The technical resources and abilities generated by its successful journey provide a competitive benefit to CMP.
• Large product portfolioof CMP helps it to diversify its danger and supply high value to its clients.
• Strong financial position allows the business to consider a number of development opportunities without any worry of raising fund externally.
Weak points
Along with the strengths, the business has particular weaknesses which could increase constraints for the company in executing its development program. The weak points of The Canada Pension Plan Investment Board October 2012 2 Case Study Help are given as follows;
• Despite of being a science and technology publishing company, the company still has standard 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 expansion strategies to avoid its dependence over the Chinese markets to achieve long term growth.
Opportunities
Although, the development of the publishing market is declining since 2008, affecting The Canada Pension Plan Investment Board October 2012 2 Case Study Solution as well, but the development could be revived by availing specific chances provided in the market. The market chances for CMP consist of;
• The business could also introduce Digital Publishing by utilizing its long term technical experience and a strong client recognition in the market.
• CMP could think about an advancement program through the growth towards foreign markets in order to minimize its dependence over Chinese markets by using its huge funds.
Risks
The altering macro patterns in the market and increasing competition in the publishing market has actually postured certain risks to The Canada Pension Plan Investment Board October 2012 2 Case Study Analysis consisting of;( Gurel, 2017).
• Intro of digital publishing i.e. virtual libraries might cause declining market share of The Canada Pension Plan Investment Board October 2012 2 Case Study Help due to the consumer shift towards virtual libraries.
• The existence of large number of competitors in the publishing market increase the hazard for CMP to lose its competitive position in the market, as competitors can acquire a strong consumer base by using particular strategies like aggressive promotion, quality products, and so on
• Entryway of new publishing companies in the market along with existence of high competition increases the hazard of losing the customer base.
Monetary Analysis.
The company has a rather competitive monetary performance. Due to lack of information, the financial ratios of CMP could not be determined. Nevertheless, the total financial performance of the business might be examined by using the charts given in the case Appendices. It could be examined from the Appendix III that the annual overall revenues of CMP during the period 2000-2012 are growing at a high growth rate, revealing that the yearly demand of the products of The Canada Pension Plan Investment Board October 2012 2 Case Study Analysis is growing and the company is rather effective in drawing in a a great deal of clients at a possible price.
Together with it, the second chart which shows the yearly growth in the The Canada Pension Plan Investment Board October 2012 2 Case Study Solution total properties, shows that the company is rather efficient in adding value to its properties through its earnings. The development in properties reveals that the overall value of the company is likewise increasing with increasing the total revenues. (Unknown, 2013).
Another financial analysis of the company using the given data might be the analysis regarding the circulation of total profits of the business. 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 business could move towards other company sections with a prospective growth to achieve its future advancement objective.
PESTEL Analysis
PESTEL analysis could be performed to learn the numerous 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 offered as follows; (Alanzi, 2018).
Political.
As the publishing sector might have a significant impact on the frame of mind of the people about the communist ideology of the government, therefore, the publishing sector is highly supervised and directed by the Promotion Department of the Communist Celebration of China. It might be stated that the total political forces affecting CMP business are high. The government policies relating to the publishing sector are also increasing with the passage of time.
Affordable.
Financial forces impacting the publishing sector in basic and the The Canada Pension Plan Investment Board October 2012 2 Case Study Analysis in specific includesthe prices of paper, the income level of customers, the inflation rate, and the general GDP growth of the country. All these forces combine effect the need for the publishing market. In addition to it, the financial policies associated with the import of books affect the general business at CPM. China's economic conditions are quite favorable for CMP with high GDP development and consumer income level.
Social and Demographical.
Social and demographical forces include the population growth, the customer's preferences towards reading useful products and so on. China has the highest population in the world with a high population growth, revealing the increasing variety of customers of the The Canada Pension Plan Investment Board October 2012 2 Case Study Solution. The consumer preferences are moving towards digital publishing rather than the traditional was of publishing. In this regard, CMP should focus on digital publishing to satisfy the changing consumer choices.
Technological.
Technological forces affecting the CMP consist of the technological development in the reading strategies etc. Improvement of science and innovation along with the rise of digital publishing might reduce the demand for the CMP products, if particular actions would not be taken quickly.
Environmental.
Ecological forces impacting The Canada Pension Plan Investment Board October 2012 2 Case Study Solution consists of the concerns of environmental neighborhoods over the use of paper in publishing books. The paper used in the books while publishing is needed to be disposable and the ink used while publishing must not be harmful for the environment.
Legal.
Legal regulations for the publishing sector at whole are high. Publishing Regulation 1997 needs the publishers to be authorized initially by the Federal government to be entered in the publishing market.
Industry Analysis (Porter's 5 Forces Model).
Porter's Five Forces Model might be used to analyze the beauty of the publishing industry China. A short analysis of the Porter's 5 Forces is offered as follows;.
Threat of New Entrants.
Dangers of new entrants in the Chinese Publishing Industry is moderate. The potential development in the industry tends to bring in new entrants to the publishing industry. However, the existence of extreme competitors and the requirement of huge capital tends to demotivate new entrants to enter in the market.
Danger of Substitution.
Hazard of Replacement is high for the Chinese Publishing Market. The substitute products for the released files is the files presented in the virtual libraries on particular sites. The changing consumer choices towards digital learning increase the danger of replacement for the market.
Competitive Rivalry.
Competitive competition 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 rivalry for CMP. In addition to it, brand-new entrants are likewise entering into the marketplace increasing the competition for CMP.
Bargaining Power of Supplier.
The significant providers of the The Canada Pension Plan Investment Board October 2012 2 Case Study Help include the suppliers of the paper for releasing documents. As CMP is the largest publisher in the Chinese Publishing Market, therefore the total bargaining power of provider for CMP is low.
Bargaining Power of Buyer.
Haggling 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 purchasers requires high quality documents at competitive rates.
Competitors Analysis.
CMP runs in an extremely 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. Major competitors of The Canada Pension Plan Investment Board October 2012 2 Case Study Solution consist of;.
• Chemical Market Press (CIP).
• Posts and telecommunication Press (PTP).
Chemical Market Press (CIP).
CIP acts as a danger 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 present market scenario.
Posts and telecommunication Press (PTP).
It was likewise established in the exact same duration as The Canada Pension Plan Investment Board October 2012 2 Case Study Solution and CIP. It is also one of the popular gamers in the publishing market with a yearly overall profits of RMB 550 million in 2010.
Alternatives
Alternative-1: Expand towards New Markets
Pros
• Reducing reliance over the Chinese markets.
• Increasing number of Clients
• Development opportunities.
• Preventing the impact of market saturation in the Chinese publishing industry.
Cons
• Use of possible resources in growth.
• Threat of failure in brand-new markets.
• Time consuming.
Alernative-2: Present Digital Publishing
Pros
• Sustaining consumer base.
• Approaching new markets.
• Easy to introduce using present abilities.
• Low danger of Failure.
• Low requirement for funds.
• Increased item portfolio provides high value to consumers.
Cons
• Competitors in the market by CIP, who has prior concentrate on the digital publishing.
• Shift of focus from the core organisation segments to the new one can lead the company to lose need of its items in the market.
Recommendations
With the deep analysis of the internal and external environment of the company along with the industry analysis and the rival analysis, Alternative 2 is suggested to CMP to attain its future advancement. As the choices are moving towards digital publishing and the company need an immediate option to prevent the declining industry growth. Intro of digital publishing could show to be an immediate option with low amount of threat for the business. The business could also think about the expansion program after the success of its digital publishing program.
Execution
In order to introduce digital publishing in its item portfolio, the business should initially collects the information associated with the consumer demand, the prospective markets, the federal government regulations and the information related to the competitors presented in the market. After that, the business must decide one prospective segment for its initial offering. It must collect research that how it could separate its digital publishing from the existing competitors' items. After all the steps above the business need to choose the initial offering. If the preliminary offering proves a success, the business must opt for the other markets. In this way the business would be able to execute its digital publishing program.
Conclusion
The development of the publishing market is declining because 2008, revealing a threat to the business's long term existence, however the situation can be controlled by thinking about a development strategy in the future. The business could consider presenting digital publishingin its existing market to execute its development program at immediate basis and to avoid the risk of failure for entryway in the new markets.
