The Norwegian Government Pension Fund The Divestiture Of Wal Mart Stores Inc Case Study Solution and Analysis
Introduction
The Norwegian Government Pension Fund The Divestiture Of Wal Mart Stores Inc Case Study Analysis is the biggest publishing company with a greatest market share in the China's book retail market. CMP has actually ended up being a specialized details service provider and a large extensive Science and Innovation publishing business through the combination of print media, audio-visual media and the network media.
Critical Concerns
CMP has spent its 60 years journey smoothly, being an effective publishing house, nevertheless, the altering macro market patterns and forces bring specific difficulties to the publishing market in basic and The Norwegian Government Pension Fund The Divestiture Of Wal Mart Stores Inc Case Study Help in particular. These aspects include;
• Entrance of the brand-new publishing companies in the industry.
• Declining growth of the publishing market.
• Market saturation.
• Intro of digital publishing strategies
• Improvement of science and technology.
The improvement of the macro markets have raised numerous concerns 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 abilities of the business could be used to strive for the future development unceasingly? How could the business sustain its long term competitive position in future?
Situational Analysis
Internal Analysis
SWOT Analysis
Strengths
The Norwegian Government Pension Fund The Divestiture Of Wal Mart Stores Inc Case Study Analysis has particular strengths that can be utilized to lower the threats, conquer the weak point and get the opportunities. Strengths of CMP are given as follows;
• The long term experience of The Norwegian Government Pension Fund The Divestiture Of Wal Mart Stores Inc Case Study Analysis in the publishing market i.e. 60 years enables the company to offer high quality items at a lower expense utilizing its previous experiences.
• The technical resources and capabilities produced by its successful journey offer a competitive advantage to CMP.
• Vast item portfolioof CMP assists it to diversify its risk and supply high value to its customers.
• Strong financial position allows the company to think about several development opportunities with no worry of raising fund externally.
Weaknesses
In addition to the strengths, the company has specific weak points which might increase restrictions for the company in executing its development program. The weaknesses of The Norwegian Government Pension Fund The Divestiture Of Wal Mart Stores Inc Case Study Help are given as follows;
• Despite of being a science and technology publishing firm, the company still has conventional ways ofpublishing which are not compatible with the growing technological shift.
• CMP highly relies over the Chinese markets for its growth. It needs to propose certain growth strategies to prevent its reliance over the Chinese markets to accomplish long term growth.
Opportunities
The development of the publishing industry is declining because 2008, affecting The Norwegian Government Pension Fund The Divestiture Of Wal Mart Stores Inc Case Study Analysis as well, but the growth might be revived by availing specific opportunities provided in the market. The market opportunities for CMP consist of;
• The business could likewise introduce Digital Publishing by utilizing its long term technical experience and a strong consumer acknowledgment in the market.
• CMP could think about an advancement program through the growth towards foreign markets in order to lower its dependence over Chinese markets by utilizing its large funds.
Threats
The altering macro trends in the market and increasing competition in the publishing industry has actually presented specific hazards to The Norwegian Government Pension Fund The Divestiture Of Wal Mart Stores Inc Case Study Solution including;( Gurel, 2017).
• Introduction of digital publishing i.e. digital libraries could cause declining market share of The Norwegian Government Pension Fund The Divestiture Of Wal Mart Stores Inc Case Study Help due to the customer shift towards digital libraries.
• The presence of a great deal of rivals in the publishing industry 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, and so on
• Entrance of new publishing firms in the industry together with presence of high competition increases the danger of losing the customer base.
Financial Analysis.
Due to lack of data, the financial ratios of CMP might not be computed. It could be examined from the Appendix III that the annual total profits of The Norwegian Government Pension Fund The Divestiture Of Wal Mart Stores Inc Case Study Help throughout the period 2000-2012 are growing at a high growth rate, revealing that the yearly demand of the products of CMP is growing and the company is quite efficient in attracting a large number of clients at a prospective price.
Along with it, the second graph which reveals the yearly development in the The Norwegian Government Pension Fund The Divestiture Of Wal Mart Stores Inc Case Study Solution total assets, reveals that the business is rather efficient in adding value to its properties through its profits. The development in properties shows that the total worth of the firm is likewise increasing with increasing the total incomes. (Unidentified, 2013).
Another financial analysis of the business utilizing the provided data might be the analysis regarding the circulation of total earnings of the company. Major part of the earnings of CMP originates from the sales of its released books i.e. 64% as displayed in the Case Appendix V. The business could move towards other service sectors with a prospective development to achieve its future development goal.
PESTEL Analysis
PESTEL analysis could be performed to find out the different external forces affecting the efficiency of the business and the recent patterns in the external environment of the company. A short PESTEL analysis of the company is offered as follows; (Alanzi, 2018).
Political.
As the publishing sector could have a considerable influence on the mindset of the people about the communist ideology of the government, for that reason, the publishing sector is highly monitored and directed by the Publicity Department of the Communist Party of China. It might be stated that the overall political forces impacting CMP business are high. The federal government policies relating to the publishing sector are also increasing with the passage of time.
Cost-effective.
Economic forces affecting the publishing sector in basic and the CMP in particular includesthe costs of paper, the earnings level of consumers, the inflation rate, and the total GDP development of the country. All these forces combine effect the demand for the publishing market.
Social and Demographical.
Social and demographical forces consist of the population growth, the consumer's choices towards checking out useful products etc. China has the highest population worldwide with a high population growth, showing the increasing number of customers of the The Norwegian Government Pension Fund The Divestiture Of Wal Mart Stores Inc Case Study Analysis. However, the customer preferences are shifting towards digital publishing instead of the conventional was of publishing. In this regard, CMP needs to focus on digital publishing to meet the altering customer preferences.
Technological.
Technological forces impacting the CMP consist of the technological improvement in the reading methods and so on. Improvement of science and technology together with the increase of digital publishing could reduce the need for the CMP products, if certain actions would not be taken quickly.
Environmental.
Ecological forces impacting The Norwegian Government Pension Fund The Divestiture Of Wal Mart Stores Inc Case Study Analysis consists of the concerns of ecological neighborhoods over the usage of paper in publishing books. The paper utilized in the books while publishing is required to be non reusable and the ink used while publishing should not be hazardous for the environment.
Legal.
Legal guidelines 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 Ordinance 1997 needs the publishers to be authorized initially by the Federal government to be entered in the publishing market. The regulation prohibits direct participation of foreign entities and individuals in the publishing sector.
Industry Analysis (Porter's Five Forces Design).
Porter's 5 Forces Model might be utilized to analyze the appearance of the publishing industry China. A brief analysis of the Porter's Five Forces is provided as follows;.
Hazard of New Entrants.
Risks of brand-new entrants in the Chinese Publishing Market is moderate. The prospective development in the industry tends to attract brand-new entrants to the publishing market. However, the presence of intense competition and the requirement of substantial capital tends to demotivate new entrants to go into in the marketplace.
Danger of Substitution.
Risk of Replacement is high for the Chinese Publishing Industry. The replacement items for the released files is the files provided in the digital libraries on specific websites. The changing customer preferences towards digital knowing increase the hazard of alternative for the market.
Competitive Rivalry.
Competitive rivalry in the publishing industry is high. The existence of a great deal of consumers in the Chinese Publishing Industry like CIP, PTP etc. tends to produce high competitive competition for CMP. Along with it, new entrants are also participating in the market increasing the competition for CMP.
Bargaining Power of Provider.
The significant suppliers of the The Norwegian Government Pension Fund The Divestiture Of Wal Mart Stores Inc Case Study Solution include the suppliers of the paper for releasing documents. As CMP is the biggest publisher in the Chinese Publishing Market, for that reason the overall bargaining power of supplier for CMP is low.
Bargaining Power of Buyer.
Haggling power of buyer in the publishing industry is high. Due to the existence of a a great deal of publishers in the Chinese market and the marketplace saturation, the buyers requires high quality documents at competitive rates.
Rivals Analysis.
CMP operates in a highly competitive market with the presence of a great deal of competitors. Nevertheless, the company has a competitive position in the market with the highest market share in the Chinese publishing market. Significant rivals of The Norwegian Government Pension Fund The Divestiture Of Wal Mart Stores Inc Case Study Analysis consist of;.
• Chemical Market Press (CIP).
• Posts and telecommunication Press (PTP).
Chemical Industry Press (CIP).
CIPis among the close rivals of CMP. Established in the very same duration, CIP releases similar type of books. For a big time period, CIP held the biggest market share, and still ranks second and 3rd in various market sections, with a major focus on educational publications. CIP acts as a hazard for CMP as it could wean its market share due to its long term competitive background. CIP is focused on digital publishing and might wean the marketplace share of The Norwegian Government Pension Fund The Divestiture Of Wal Mart Stores Inc Case Study Help easily in the current market situation.
Posts and telecommunication Press (PTP).
It was likewise founded in the exact same duration as The Norwegian Government Pension Fund The Divestiture Of Wal Mart Stores Inc Case Study Help and CIP. It is likewise one of the popular gamers in the publishing market with a yearly overall earnings of RMB 550 million in 2010.
Alternatives
Alternative-1: Broaden towards New Markets
Pros
• Reducing reliance over the Chinese markets.
• Increasing variety of Customers
• Growth chances.
• Avoiding the impact of market saturation in the Chinese publishing industry.
Cons
• Use of potential resources in growth.
• Risk of failure in brand-new markets.
• Time consuming.
Alernative-2: Introduce Digital Publishing
Pros
• Sustaining consumer base.
• Approaching new markets.
• Easy to present utilizing current abilities.
• Low threat of Failure.
• Low requirement for funds.
• Increased product portfolio offers high worth to customers.
Cons
• Competitors 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 business to lose demand of its items in the market.
Recommendations
With the deep analysis of the external and internal environment of the company together with the market analysis and the competitor 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 solution to avoid the decreasing market growth. Intro of digital publishing could prove to be an immediate service with low quantity of danger for the business. The company could also consider the expansion program after the success of its digital publishing program.
Implementation
In order to introduce digital publishing in its product portfolio, the business must initially gathers the information connected to the consumer demand, the prospective markets, the government guidelines and the information connected to the rivals provided in the market. After that, the company needs to decide one prospective segment for its initial offering. It should gather research that how it might distinguish its digital publishing from the existing competitors' items. After all the actions above the business must go for the preliminary offering. The company needs to go for the other markets if the initial offering shows a success. In this method the business would have the ability to execute its digital publishing program.
Conclusion
The development of the publishing market is decreasing considering that 2008, revealing a hazard to the company's long term presence, but the circumstance can be managed by thinking about a development strategy in the future. The company could think about introducing digital publishingin its existing market to implement its development program at immediate basis and to prevent the danger of failure for entrance in the new markets.
