Unintended Economic Implications Of Financial Reporting Standards 2 Case Study Solution and Analysis
Intro
Unintended Economic Implications Of Financial Reporting Standards 2 Case Study Analysis is the biggest publishing business with a highest market share in the China's book retail market. CMP supplies a number of services consisting of; gathering details, processing details and interaction services. Significant organisation sections of the business consist of; books, regulars, consultancy and circulation. The business has a large item portfolio and its significant products include books, regulars, online media, exhibits, research reports and so on. Unintended Economic Implications Of Financial Reporting Standards 2 Case Study Help has ended up being a specialized information service provider and a big detailed Science and Innovation publishing company 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 home, however, the altering macro market patterns and forces bring certain challenges to the publishing market in general and Unintended Economic Implications Of Financial Reporting Standards 2 Case Study Help in specific. These factors include;
• Entrance of the new publishing firms in the industry.
• Declining growth of the publishing market.
• Market saturation.
• Intro of digital publishing methods
• Improvement 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 scenario? Do the long important experience, technical resources and the capabilities of the business could be utilized to pursue the future advancement unceasingly? How could the company sustain its long term competitive position in future?
Situational Analysis
Internal Analysis
SWOT Analysis
Strengths
Unintended Economic Implications Of Financial Reporting Standards 2 Case Study Analysis has specific strengths that can be made use of to reduce the hazards, get rid of the weak point and avail the opportunities. Strengths of CMP are given as follows;
• The long term experience of Unintended Economic Implications Of Financial Reporting Standards 2 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 prior experiences.
• The technical resources and abilities generated by its effective journey provide a competitive advantage to CMP.
• Vast product portfolioof CMP helps it to diversify its danger and provide high worth to its consumers.
• Strong monetary position enables the business to think about several development opportunities with no worry of raising fund externally.
Weak points
Together with the strengths, the business has specific weak points which could increase constraints for the business in implementing its development program. The weaknesses of Unintended Economic Implications Of Financial Reporting Standards 2 Case Study Analysis are provided as follows;
• Despite of being a science and innovation publishing firm, the company still has standard methods ofpublishing which are not suitable with the growing technological shift.
• CMP extremely relies over the Chinese markets for its growth. It ought to propose particular expansion plans to avoid its reliance over the Chinese markets to achieve long term growth.
Opportunities
The development of the publishing market is declining considering that 2008, impacting Unintended Economic Implications Of Financial Reporting Standards 2 Case Study Analysis as well, however the growth could be restored by availing particular opportunities presented in the market. The marketplace opportunities for CMP consist of;
• The company might also introduce Digital Publishing by using its long term technical experience and a strong client recognition in the market.
• CMP could consider a development program through the expansion towards foreign markets in order to lower its reliance over Chinese markets by utilizing its vast funds.
Dangers
The changing macro trends in the market and increasing competitors in the publishing industry has actually postured specific dangers to Unintended Economic Implications Of Financial Reporting Standards 2 Case Study Analysis including;( Gurel, 2017).
• Intro of digital publishing i.e. virtual libraries might cause decreasing market share of Unintended Economic Implications Of Financial Reporting Standards 2 Case Study Solution due to the consumer shift towards digital libraries.
• The presence of large number of competitors in the publishing industry increase the hazard for CMP to lose its competitive position in the market, as rivals can get a strong customer base by utilizing specific techniques like aggressive promo, quality products, and so on
• Entryway of brand-new publishing firms in the industry together with presence of high competitors increases the danger of losing the customer base.
Monetary Analysis.
Due to lack of data, the financial ratios of CMP might not be computed. It might be evaluated from the Appendix III that the yearly total revenues of Unintended Economic Implications Of Financial Reporting Standards 2 Case Study Analysis throughout the period 2000-2012 are growing at a high development rate, revealing that the yearly demand of the products of CMP is growing and the business is quite effective in attracting a big number of clients at a prospective price.
Along with it, the second chart which shows the annual development in the Unintended Economic Implications Of Financial Reporting Standards 2 Case Study Analysis overall properties, reveals that the business is quite efficient in adding value to its assets through its earnings. The growth in assets shows that the total worth of the firm is likewise increasing with increasing the total earnings. (Unknown, 2013).
Another monetary analysis of the company using the offered data could be the analysis regarding the distribution of total profits of the business. Major part of the incomes of CMP comes from the sales of its released books i.e. 64% as displayed in the Case Appendix V. The business might move towards other service sectors with a potential growth to attain its future advancement goal.
PESTEL Analysis
PESTEL analysis might be carried out to find out the different external forces affecting the efficiency of the company and the current patterns in the external environment of the business. A brief PESTEL analysis of the company is given as follows; (Alanzi, 2018).
Political.
As the publishing sector might 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 extremely supervised and assisted by the Promotion Department of the Communist Celebration of China. For that reason, it could be said that the total political forces impacting Unintended Economic Implications Of Financial Reporting Standards 2 Case Study Help service are high. The federal government policies regarding the publishing sector are also increasing with the passage of time.
Affordable.
Financial forces affecting the publishing sector in general and the CMP in specific includesthe prices of paper, the earnings level of customers, the inflation rate, and the total GDP development of the country. All these forces combine effect the need for the publishing market.
Social and Demographical.
Social and demographical forces include the population growth, the customer's preferences towards checking out helpful materials and so on. China has the greatest population on the planet with a high population development, showing the increasing number of consumers of the Unintended Economic Implications Of Financial Reporting Standards 2 Case Study Solution. The consumer choices are moving towards digital publishing rather than the conventional was of publishing. In this regard, CMP should concentrate on digital publishing to meet the altering customer choices.
Technological.
Technological forces affecting the CMP consist of the technological advancement in the reading methods and so on. Improvement of science and innovation in addition to the increase of digital publishing might reduce the need for the CMP products, if specific actions would not be taken quickly.
Environmental.
Environmental forces affecting Unintended Economic Implications Of Financial Reporting Standards 2 Case Study Solution includes the issues of environmental neighborhoods over the use of paper in publishing books. The paper used in the books while publishing is needed to be non reusable and the ink used while publishing should not be harmful for the environment.
Legal.
Legal regulations for the publishing sector at whole are high. Publishing Ordinance 1997 needs the publishers to be authorized initially by the Government to be entered in the publishing market.
Industry Analysis (Porter's 5 Forces Design).
Porter's Five Forces Design could be utilized to examine the appearance of the publishing industry China. A short analysis of the Porter's 5 Forces is provided as follows;.
Risk of New Entrants.
Threats of brand-new entrants in the Chinese Publishing Market is moderate. The potential growth in the industry tends to bring in brand-new entrants to the publishing market. The presence of extreme competitors and the requirement of big capital tends to demotivate brand-new entrants to go into in the market.
Risk of Replacement.
Hazard of Alternative is high for the Chinese Publishing Industry. The substitute products for the published files is the files presented in the virtual libraries on specific websites. The changing consumer preferences towards digital learning increase the danger of alternative for the industry.
Competitive Competition.
Competitive rivalry in the publishing industry is high. The existence of large number of customers in the Chinese Publishing Market like CIP, PTP and so on tends to produce high competitive competition for CMP. In addition to it, brand-new entrants are also entering into the marketplace increasing the competitors for CMP.
Bargaining Power of Supplier.
The significant suppliers of the Unintended Economic Implications Of Financial Reporting Standards 2 Case Study Analysis consist of the suppliers of the paper for releasing documents. As CMP is the largest publisher in the Chinese Publishing Market, therefore the overall bargaining power of provider for CMP is low.
Bargaining Power of Buyer.
Bargaining power of purchaser in the publishing market is high. Due to the presence of a large number of publishers in the Chinese market and the market saturation, the buyers requires high quality documents at competitive prices.
Competitors Analysis.
CMP operates in a highly competitive industry 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 Unintended Economic Implications Of Financial Reporting Standards 2 Case Study Analysis include;.
• Chemical Market Press (CIP).
• Posts and telecommunication Press (PTP).
Chemical Market Press (CIP).
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 market share of CMP quickly in the current market circumstance.
Posts and telecommunication Press (PTP).
Another close rival of CMP is PTP. It was likewise established in the exact same period as CMP and CIP. It ranks 6th in the state-owned publishers in regards to company scale. It is likewise among the prominent players in the publishing market with an annual total revenues of RMB 550 million in 2010.
Alternatives
Alternative-1: Broaden towards New Markets
Pros
• Reducing dependence over the Chinese markets.
• Increasing number of Clients
• Growth opportunities.
• Preventing the effect of market saturation in the Chinese publishing industry.
Cons
• Use of potential resources in expansion.
• Risk of failure in new markets.
• Time consuming.
Alernative-2: Present Digital Publishing
Pros
• Sustaining consumer base.
• Approaching new markets.
• Easy to introduce using existing abilities.
• Low risk of Failure.
• Low requirement for funds.
• Increased product portfolio offers high value to customers.
Cons
• Competition in the market by CIP, who has prior concentrate 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 products in the market.
Suggestions
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 recommended to CMP to accomplish its future development. As the choices are moving towards digital publishing and the company require an instant solution to prevent the decreasing industry growth. For that reason, intro of digital publishing could show to be an instant service with low quantity of threat for the company. The company might also consider the growth program after the success of its digital publishing program.
Execution
In order to present digital publishing in its product portfolio, the business needs to first collects the information related to the consumer need, the potential markets, the government regulations and the information related to the competitors provided in the market. If the initial offering shows a success, the business must go for the other markets. In this way the business would be able to implement its digital publishing program.
Conclusion
Although, the development of the publishing market is declining because 2008, revealing a risk to the company's long term presence, but the situation can be controlled by thinking about an advancement strategy in the future. The company might think about introducing digital publishingin its existing market to implement its development program at immediate basis and to avoid the risk of failure for entryway in the new markets.
