Understanding The Credit Crisis Of 2007 To 2008 2 Case Study Solution and Analysis
Introduction
Understanding The Credit Crisis Of 2007 To 2008 2 Case Study Analysis is the largest publishing company with a highest market share in the China's book retail market. CMP has actually become a specialized details service provider and a large extensive Science and Innovation publishing company through the integration of print media, audio-visual media and the network media.
Vital Concerns
Although, Understanding The Credit Crisis Of 2007 To 2008 2 Case Study Analysis has spent its 60 years journey efficiently, being an effective publishing home, nevertheless, the changing macro market trends and forces bring specific challenges to the publishing industry in basic 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 techniques
• Improvement of science and innovation.
The improvement of the macro markets have raised several concerns to the management at CPM that what could be the future of CMP in this circumstance? Do the long valuable experience, technical resources and the abilities of the company could be made use of 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
Understanding The Credit Crisis Of 2007 To 2008 2 Case Study Analysis has particular strengths that can be made use of to minimize the hazards, conquer the weak point and get the chances. Strengths of CMP are given as follows;
• The long term experience of Understanding The Credit Crisis Of 2007 To 2008 2 Case Study Analysis in the publishing industry i.e. 60 years enables the company to supply high quality products at a lower cost using its previous experiences.
• The technical resources and capabilities created by its effective journey supply a competitive advantage to CMP.
• Large item portfolioof CMP assists it to diversify its threat and supply high value to its clients.
• Strong monetary position enables the company to think about numerous advancement opportunities without any worry of raising fund externally.
Weaknesses
Along with the strengths, the business has certain weak points which might increase restrictions for the business in executing its development program. The weak points of Understanding The Credit Crisis Of 2007 To 2008 2 Case Study Analysis are offered as follows;
• Despite of being a science and technology publishing firm, the company still has traditional ways ofpublishing which are not compatible with the growing technological shift.
• CMP highly relies over the Chinese markets for its development. It ought to propose specific growth plans to prevent its dependence over the Chinese markets to attain long term growth.
Opportunities
The development of the publishing market is declining considering that 2008, impacting Understanding The Credit Crisis Of 2007 To 2008 2 Case Study Analysis as well, however the growth could be revived by availing particular opportunities provided in the market. The market chances for CMP consist of;
• The business could also introduce Digital Publishing by using its long term technical experience and a strong consumer acknowledgment in the market.
• CMP might consider a development program through the growth towards foreign markets in order to lower its dependence over Chinese markets by using its huge financial resources.
Dangers
The changing macro trends in the market and increasing competition in the publishing market has posed certain hazards to Understanding The Credit Crisis Of 2007 To 2008 2 Case Study Solution consisting of;( Gurel, 2017).
• Introduction of digital publishing i.e. digital libraries might lead to declining market share of Understanding The Credit Crisis Of 2007 To 2008 2 Case Study Solution due to the consumer shift towards digital libraries.
• The existence of a great deal of rivals in the publishing industry increase the threat for CMP to lose its competitive position in the market, as rivals can get a strong customer base by utilizing certain methods like aggressive promotion, quality items, and so on
• Entrance of brand-new publishing companies in the market in addition to existence of high competitors increases the risk of losing the customer base.
Monetary Analysis.
The business has a quite competitive monetary performance. Due to lack of data, the monetary ratios of CMP could not be calculated. Nevertheless, the total financial performance of the company could be evaluated by using the graphs given in the case Appendices. It could be analyzed from the Appendix III that the annual total revenues of CMP throughout the period 2000-2012 are growing at a high development rate, revealing that the annual demand of the items of Understanding The Credit Crisis Of 2007 To 2008 2 Case Study Solution is growing and the business is rather effective in bring in a large number of clients at a potential rate.
Together with it, the second chart which reveals the annual growth in the Understanding The Credit Crisis Of 2007 To 2008 2 Case Study Solution total properties, shows that the company is rather efficient in including worth to its possessions through its revenues. The growth in assets reveals that the total value of the company is also increasing with increasing the overall revenues. (Unknown, 2013).
Another financial analysis of the company utilizing the offered data could be the analysis concerning the circulation of overall earnings of the company. Huge part of the profits of CMP originates from the sales of its released books i.e. 64% as displayed in the Case Appendix V. The business might move towards other company sections with a possible growth to attain its future development goal.
PESTEL Analysis
PESTEL analysis might be conducted to discover the numerous external forces affecting the performance of the company and the recent patterns in the external environment of the company. A quick PESTEL analysis of the company is provided as follows; (Alanzi, 2018).
Political.
As the publishing sector could have a considerable 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 assisted by the Promotion Department of the Communist Party of China. It might be said that the general political forces impacting CMP company are high. The federal government policies relating to the publishing sector are likewise increasing with the passage of time.
Cost-effective.
Financial forces impacting the publishing sector in general and the CMP in specific includesthe costs of paper, the earnings 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 moving towards digital publishing rather than the standard was of publishing. In this regard, CMP needs to focus on digital publishing to fulfill the changing consumer preferences.
Technological.
Technological forces impacting the CMP consist of the technological development in the reading methods and so on. Improvement of science and technology along with the increase of digital publishing could lower the demand for the CMP products, if certain actions would not be taken quickly.
Environmental.
Environmental forces affecting Understanding The Credit Crisis Of 2007 To 2008 2 Case Study Analysis consists of the concerns of environmental neighborhoods over the usage of paper in publishing books. The paper used in the books while publishing is needed to be disposable and the ink utilized while publishing ought to not be harmful for the environment.
Legal.
Legal guidelines for the publishing sector at whole are high. Publishing Regulation 1997 requires the publishers to be approved initially by the Federal government to be entered in the publishing market.
Industry Analysis (Porter's 5 Forces Model).
Porter's 5 Forces Design could be used to evaluate the beauty of the publishing market China. A brief analysis of the Porter's 5 Forces is provided as follows;.
Threat of New Entrants.
Dangers of brand-new entrants in the Chinese Publishing Market is moderate. The potential development in the industry tends to bring in brand-new entrants to the publishing industry. Nevertheless, the presence of extreme competitors and the requirement of big capital tends to demotivate new entrants to enter in the market.
Threat of Alternative.
Hazard of Alternative is high for the Chinese Publishing Industry. The replacement items for the published documents is the files presented in the digital libraries on particular sites. The altering customer preferences towards digital learning increase the danger of substitution for the market.
Competitive Rivalry.
Competitive rivalry in the publishing industry is high. The presence of large number of customers in the Chinese Publishing Industry like CIP, PTP and so on tends to produce high competitive rivalry for CMP. Together with it, brand-new entrants are likewise entering into the marketplace increasing the competitors for CMP.
Bargaining Power of Provider.
The major providers of the Understanding The Credit Crisis Of 2007 To 2008 2 Case Study Help include the providers of the paper for publishing documents. As CMP is the biggest 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 market 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 files at competitive prices.
Rivals Analysis.
CMP operates in an extremely competitive industry with the existence of a great deal of rivals. The business has a competitive position in the market with the highest market share in the Chinese publishing market. Significant rivals of Understanding The Credit Crisis Of 2007 To 2008 2 Case Study Analysis include;.
• Chemical Industry Press (CIP).
• Posts and telecommunication Press (PTP).
Chemical Industry Press (CIP).
CIPis one of the close rivals of CMP. Established in the same duration, CIP publishes comparable type of books. For a large period, CIP held the biggest market share, and still ranks 3rd and 2nd in various market sectors, with a significant concentrate on academic publications. CIP functions 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 might wean the market share of Understanding The Credit Crisis Of 2007 To 2008 2 Case Study Help easily in the existing market circumstance.
Posts and telecommunication Press (PTP).
It was likewise established in the exact same duration as Understanding The Credit Crisis Of 2007 To 2008 2 Case Study Analysis and CIP. It is also one of the prominent players in the publishing market with an annual total earnings of RMB 550 million in 2010.
Alternatives
Alternative-1: Broaden towards New Markets
Pros
• Decreasing reliance over the Chinese markets.
• Increasing variety of Consumers
• Growth chances.
• Preventing the impact of market saturation in the Chinese publishing market.
Cons
• Use of potential resources in expansion.
• Risk of failure in brand-new markets.
• Time consuming.
Alernative-2: Introduce Digital Publishing
Pros
• Sustaining consumer base.
• Approaching new markets.
• Easy to introduce utilizing present abilities.
• Low danger of Failure.
• Low requirement for funds.
• Increased item portfolio offers high value to customers.
Cons
• Competitors in the market by CIP, who has prior focus on the digital publishing.
• Shift of focus from the core business segments to the new one can lead the business to lose need of its items in the market.
Suggestions
With the deep analysis of the external and internal environment of the company along with the industry analysis and the rival analysis, Alternative 2 is suggested to CMP to accomplish its future development. As the choices are moving towards digital publishing and the business need an immediate solution to prevent the declining market growth. Introduction of digital publishing might prove to be an immediate option with low quantity of danger for the company. The business might likewise consider the growth program after the success of its digital publishing program.
Implementation
In order to introduce digital publishing in its product portfolio, the company must initially gathers the information related to the customer demand, the potential markets, the federal government policies and the data related to the competitors provided in the market. If the preliminary offering proves a success, the business should go for the other markets. In this method the company would be able to execute its digital publishing program.
Conclusion
The growth of the publishing industry is decreasing because 2008, revealing a hazard to the business's long term existence, but the situation can be managed by thinking about a development strategy in the future. The business might consider introducing digital publishingin its existing market to implement its development program at immediate basis and to avoid the risk of failure for entrance in the new markets.
