Venture Capital Vignettes Difficult Financings 2 Case Study Solution and Analysis
Introduction
Venture Capital Vignettes Difficult Financings 2 Case Study Analysis is the biggest publishing business with a greatest market share in the China's book retail market. CMP has actually ended up being a specialized details company and a big thorough Science and Technology publishing business through the combination of print media, audio-visual media and the network media.
Critical Problems
Although, Venture Capital Vignettes Difficult Financings 2 Case Study Analysis has spent its 60 years journey smoothly, being a successful publishing house, however, the altering macro market trends and forces bring particular challenges to the publishing industry in general and CMP in particular. These elements include;
• Entryway of the new publishing companies in the market.
• Decreasing growth of the publishing market.
• Market saturation.
• Introduction of digital publishing techniques
• 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 circumstance? Do the long valuable experience, technical resources and the abilities of the business could be made use of to strive for the future advancement unceasingly? How could the company sustain its long term competitive position in future?
Situational Analysis
Internal Analysis
SWOT Analysis
Strengths
Venture Capital Vignettes Difficult Financings 2 Case Study Help has certain strengths that can be made use of to minimize the threats, get rid of the weak point and obtain the chances. Strengths of CMP are offered as follows;
• The long term experience of Venture Capital Vignettes Difficult Financings 2 Case Study Help in the publishing industry i.e. 60 years enables the company to supply high quality items at a lower cost using its prior experiences.
• The technical resources and abilities generated by its successful journey provide a competitive benefit to CMP.
• Huge item portfolioof CMP assists it to diversify its risk and supply high worth to its consumers.
• Strong monetary position enables the company to consider numerous development opportunities without any worry of raising fund externally.
Weak points
Together with the strengths, the company has certain weaknesses which could increase restrictions for the business in executing its advancement program. The weaknesses of Venture Capital Vignettes Difficult Financings 2 Case Study Help 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 extremely relies over the Chinese markets for its development. It needs to propose specific growth plans to avoid its dependence over the Chinese markets to attain long term growth.
Opportunities
Although, the development of the publishing industry is decreasing because 2008, affecting Venture Capital Vignettes Difficult Financings 2 Case Study Solution too, however the growth might be revived by availing particular opportunities presented in the market. The marketplace opportunities for CMP consist of;
• The business might likewise introduce Digital Publishing by utilizing its long term technical experience and a strong customer acknowledgment in the market.
• CMP could think about an advancement program through the growth towards foreign markets in order to decrease its reliance over Chinese markets by using its large funds.
Hazards
The changing macro patterns in the market and increasing competitors in the publishing market has positioned certain threats to Venture Capital Vignettes Difficult Financings 2 Case Study Help including;( Gurel, 2017).
• Introduction of digital publishing i.e. digital libraries could result in declining market share of Venture Capital Vignettes Difficult Financings 2 Case Study Help due to the consumer shift towards digital libraries.
• The presence of a great deal of competitors in the publishing market increase the threat for CMP to lose its competitive position in the market, as rivals can acquire a strong customer base by utilizing certain techniques like aggressive promo, quality items, etc.
• Entrance of brand-new publishing firms in the market in addition to presence of high competitors increases the risk of losing the consumer base.
Financial Analysis.
The company has a rather competitive financial performance. Due to absence of data, the financial ratios of CMP could not be determined. The total financial efficiency of the company might be evaluated by utilizing the graphs provided in the case Appendices. It might be examined from the Appendix III that the annual total profits of CMP throughout the period 2000-2012 are growing at a high development rate, revealing that the yearly need of the items of Venture Capital Vignettes Difficult Financings 2 Case Study Help is growing and the company is quite efficient in attracting a large number of clients at a potential rate.
Together with it, the 2nd chart which shows the yearly growth in the Venture Capital Vignettes Difficult Financings 2 Case Study Analysis total possessions, shows that the business is rather effective in adding value to its possessions through its incomes. The growth in properties reveals that the total worth of the firm is also increasing with increasing the overall revenues. (Unidentified, 2013).
Another monetary analysis of the company utilizing the given data could be the analysis relating to the distribution of overall revenues of the company. Huge part of the profits of CMP comes from the sales of its published books i.e. 64% as displayed in the Case Appendix V. The company might move towards other company sectors with a potential development to achieve its future development objective.
PESTEL Analysis
PESTEL analysis might be conducted to discover the different external forces affecting the performance of the company and the recent trends in the external environment of the company. A short PESTEL analysis of the business is offered as follows; (Alanzi, 2018).
Political.
As the publishing sector might have a significant influence on the state of mind of individuals about the communist ideology of the government, therefore, the publishing sector is extremely monitored and directed by the Publicity Department of the Communist Party of China. It might be said that the overall political forces impacting CMP company are high. The federal government policies concerning the publishing sector are likewise increasing with the passage of time.
Economical.
Financial forces affecting the publishing sector in general and the CMP in specific includesthe prices of paper, the income level of customers, the inflation rate, and the general GDP growth of the nation. All these forces integrate effect the demand for the publishing market.
Social and Demographical.
Social and demographical forces include the population growth, the customer's preferences towards checking out useful materials and so on. China has the greatest population in the world with a high population development, revealing the increasing variety of customers of the Venture Capital Vignettes Difficult Financings 2 Case Study Solution. The consumer preferences are shifting towards digital publishing rather than the conventional was of publishing. In this regard, CMP ought to focus on digital publishing to meet the changing consumer choices.
Technological.
Technological forces impacting the CMP consist of the technological development in the reading methods and so on. Enhancement of science and innovation together with the rise of digital publishing could decrease the need for the CMP products, if particular actions would not be taken soon.
Environmental.
Environmental forces impacting Venture Capital Vignettes Difficult Financings 2 Case Study Analysis consists of the issues of environmental neighborhoods over the usage of paper in publishing books. The paper utilized in the books while publishing is needed to be disposable and the ink utilized while publishing should not be damaging for the environment.
Legal.
Legal guidelines for the publishing sector at whole are high. The legal policies relating to the publishing sector is controlled by the General Administration of Press and Publication. Publishing Regulation 1997 requires the publishers to be authorized first by the Federal government to be entered in the publishing market. The ordinance prohibits direct involvement of foreign entities and people in the publishing sector.
Market Analysis (Porter's Five Forces Model).
Porter's 5 Forces Design might be utilized to examine the attractiveness of the publishing industry China. A quick analysis of the Porter's Five Forces is provided as follows;.
Risk of New Entrants.
Hazards of new entrants in the Chinese Publishing Market is moderate. The potential growth in the market tends to draw in new entrants to the publishing industry. However, the existence of intense competitors and the requirement of big capital tends to demotivate new entrants to enter in the marketplace.
Threat of Substitution.
Hazard of Alternative is high for the Chinese Publishing Industry. The substitute items for the published files is the files presented in the digital libraries on particular sites. The altering consumer preferences towards digital knowing increase the danger of alternative for the market.
Competitive Rivalry.
Competitive competition in the publishing market is high. The existence of a great deal of consumers in the Chinese Publishing Industry like CIP, PTP and so on tends to produce high competitive rivalry for CMP. In addition to it, new entrants are also participating in the marketplace increasing the competition for CMP.
Bargaining Power of Supplier.
The major providers of the Venture Capital Vignettes Difficult Financings 2 Case Study Solution include the providers of the paper for releasing documents. As CMP is the biggest publisher in the Chinese Publishing Market, for that reason the total bargaining power of supplier for CMP is low.
Bargaining Power of Buyer.
Bargaining power of buyer 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 costs.
Competitors Analysis.
CMP runs in an extremely competitive market with the existence of a great deal of rivals. The company has a competitive position in the market with the greatest market share in the Chinese publishing market. Significant competitors of Venture Capital Vignettes Difficult Financings 2 Case Study Solution consist of;.
• Chemical Market Press (CIP).
• Posts and telecommunication Press (PTP).
Chemical Market Press (CIP).
CIPis one of the close competitors of CMP. Established in the exact same duration, CIP publishes comparable kind of books. For a big time period, CIP held the largest market share, and still ranks 3rd and second in different market segments, with a major focus on academic publications. CIP serves as a risk 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 Venture Capital Vignettes Difficult Financings 2 Case Study Analysis quickly in the present market scenario.
Posts and telecommunication Press (PTP).
It was also founded in the very same period as Venture Capital Vignettes Difficult Financings 2 Case Study Solution and CIP. It is likewise one of the popular players in the publishing market with a yearly total incomes of RMB 550 million in 2010.
Alternatives
Alternative-1: Broaden towards New Markets
Pros
• Reducing dependence over the Chinese markets.
• Increasing variety of Consumers
• Development opportunities.
• Preventing the impact of market saturation in the Chinese publishing industry.
Cons
• Use of possible resources in growth.
• Danger of failure in new markets.
• Time consuming.
Alernative-2: Present Digital Publishing
Pros
• Sustaining consumer base.
• Approaching new markets.
• Easy to present utilizing present abilities.
• Low risk of Failure.
• Low requirement for funds.
• Increased item portfolio supplies high worth to customers.
Cons
• Competition in the market by CIP, who has prior concentrate on the digital publishing.
• Shift of focus from the core organisation sections to the new one can lead the company to lose demand of its products in the market.
Suggestions
With the deep analysis of the external and internal environment of the business together with the industry analysis and the competitor analysis, Alternative 2 is suggested to CMP to achieve its future advancement. As the preferences are shifting towards digital publishing and the business need an instant solution to avoid the declining market development. Introduction of digital publishing could prove to be an instant solution with low amount of threat for the business. Nevertheless, the company could likewise 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 first gathers the data related to the customer demand, the prospective markets, the federal government guidelines and the data connected to the rivals presented in the market. After that, the company must decide one potential segment for its preliminary offering. It needs to gather research study that how it could separate its digital publishing from the existing competitors' products. The actions above the business must go for the initial offering. The business needs to go for the other markets if the preliminary offering proves a success. In this method the business would be able to implement its digital publishing program.
Conclusion
Although, the development of the publishing market is decreasing given that 2008, revealing a hazard to the business's long term presence, but the scenario can be controlled by considering a development plan in the future. The business might consider introducing digital publishingin its existing market to execute its development program at immediate basis and to prevent the danger of failure for entrance in the new markets.
