Walnut Venture Associates A Rbs Group Investment Memorandum Case Study Solution and Analysis
Introduction
Walnut Venture Associates A Rbs Group Investment Memorandum 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 info supplier and a large comprehensive Science and Technology publishing company through the combination of print media, audio-visual media and the network media.
Important Concerns
CMP has spent its 60 years journey smoothly, being an effective publishing house, however, the changing macro market patterns and forces bring particular difficulties to the publishing market in basic and Walnut Venture Associates A Rbs Group Investment Memorandum Case Study Solution in specific. These elements consist of;
• Entrance of the new publishing firms in the industry.
• Decreasing development of the publishing market.
• Market saturation.
• Intro of digital publishing techniques
• Enhancement of science and innovation.
The transformation 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 utilized to strive for the future advancement unceasingly? How could the business sustain its long term competitive position in future?
Situational Analysis
Internal Analysis
SWOT Analysis
Strengths
Walnut Venture Associates A Rbs Group Investment Memorandum Case Study Help has particular strengths that can be utilized to reduce the risks, overcome the weak point and obtain the chances. Strengths of CMP are offered as follows;
• The long term experience of Walnut Venture Associates A Rbs Group Investment Memorandum Case Study Analysis in the publishing market i.e. 60 years permits the company to provide high quality products at a lower expense utilizing its previous experiences.
• The technical resources and abilities produced by its successful journey offer a competitive advantage to CMP.
• Large product portfolioof CMP assists it to diversify its risk and supply high value to its customers.
• Strong monetary position allows the company to consider numerous development chances without any worry of raising fund externally.
Weaknesses
In addition to the strengths, the business has specific weak points which could increase restraints for the company in executing its development program. The weaknesses of Walnut Venture Associates A Rbs Group Investment Memorandum Case Study Analysis are provided as follows;
• Despite of being a science and innovation publishing firm, the company still has conventional methods ofpublishing which are not suitable with the growing technological shift.
• CMP extremely relies over the Chinese markets for its development. It must propose certain growth strategies to prevent its dependence over the Chinese markets to achieve long term development.
Opportunities
Although, the growth of the publishing industry is decreasing since 2008, affecting Walnut Venture Associates A Rbs Group Investment Memorandum Case Study Solution also, but the development might be restored by availing particular chances provided in the market. The marketplace opportunities for CMP consist of;
• The business might also introduce Digital Publishing by utilizing its long term technical experience and a strong customer recognition in the market.
• CMP might consider an advancement program through the growth towards foreign markets in order to lower its reliance over Chinese markets by utilizing its vast financial resources.
Threats
The altering macro trends in the market and increasing competitors in the publishing market has postured certain risks to Walnut Venture Associates A Rbs Group Investment Memorandum Case Study Help consisting of;( Gurel, 2017).
• Introduction of digital publishing i.e. digital libraries might cause declining market share of Walnut Venture Associates A Rbs Group Investment Memorandum Case Study Solution due to the consumer shift towards virtual libraries.
• The presence of large number of rivals in the publishing market increase the threat for CMP to lose its competitive position in the market, as competitors can gain a strong consumer base by utilizing particular strategies like aggressive promo, quality products, etc.
• Entrance of brand-new publishing firms in the industry together with presence of high competitors increases the threat of losing the customer base.
Monetary Analysis.
The business has a quite competitive monetary efficiency. Due to absence of information, the monetary ratios of CMP might not be determined. The total financial efficiency of the business might be examined by utilizing the graphs offered in the case Appendices. It could be analyzed from the Appendix III that the annual total earnings of CMP throughout the period 2000-2012 are growing at a high development rate, showing that the yearly demand of the items of Walnut Venture Associates A Rbs Group Investment Memorandum Case Study Help is growing and the business is rather effective in bring in a large number of consumers at a possible price.
Together with it, the 2nd graph which reveals the yearly growth in the Walnut Venture Associates A Rbs Group Investment Memorandum Case Study Help total possessions, reveals that the company is quite efficient in including worth to its properties through its revenues. The development in properties shows that the overall value of the firm is likewise increasing with increasing the total revenues. (Unknown, 2013).
Another financial analysis of the business utilizing the offered data could be the analysis relating to the circulation of overall earnings of the company. Major part of the revenues of CMP originates from the sales of its published books i.e. 64% as displayed in the Case Appendix V. The company might move towards other business sectors with a prospective growth to attain its future development objective.
PESTEL Analysis
PESTEL analysis could be conducted to learn the numerous external forces affecting the efficiency of the business and the current patterns in the external environment of the company. A quick PESTEL analysis of the business is provided as follows; (Alanzi, 2018).
Political.
As the publishing sector could have a significant influence on the mindset of individuals about the communist ideology of the federal government, for that reason, the publishing sector is highly supervised and guided by the Promotion Department of the Communist Celebration of China. It might be said that the overall political forces affecting CMP service are high. The federal government policies concerning the publishing sector are likewise increasing with the passage of time.
Cost-effective.
Economic forces impacting the publishing sector in general and the Walnut Venture Associates A Rbs Group Investment Memorandum Case Study Solution in particular includesthe costs of paper, the income level of consumers, 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 connected to the import of books affect the total business at CPM. China's financial conditions are quite favorable for CMP with high GDP growth and customer earnings level.
Social and Demographical.
The customer preferences are moving towards digital publishing rather than the traditional was of publishing. In this regard, CMP must focus on digital publishing to satisfy the changing customer preferences.
Technological.
Technological forces affecting the CMP consist of the technological advancement in the reading techniques and so on. Enhancement of science and technology in addition to the rise of digital publishing might decrease the need for the CMP items, if certain actions would not be taken soon.
Environmental.
Environmental forces impacting Walnut Venture Associates A Rbs Group Investment Memorandum Case Study Analysis 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 should not be damaging for the environment.
Legal.
Legal regulations for the publishing sector at whole are high. The legal regulations relating to the publishing sector is controlled by the General Administration of Press and Publication. Publishing Ordinance 1997 requires the publishers to be authorized initially by the Federal government to be entered in the publishing market. The ordinance prohibits direct participation of foreign entities and people in the publishing sector.
Industry Analysis (Porter's 5 Forces Design).
Porter's Five Forces Design might be utilized to evaluate the appearance of the publishing industry China. A brief analysis of the Porter's 5 Forces is provided as follows;.
Hazard of New Entrants.
Hazards of new entrants in the Chinese Publishing Market is moderate. The prospective development in the industry tends to attract brand-new entrants to the publishing industry. Nevertheless, the existence of intense competitors and the requirement of big capital tends to demotivate brand-new entrants to go into in the market.
Risk of Alternative.
Risk of Substitution is high for the Chinese Publishing Industry. The alternative products for the released documents is the files provided in the digital libraries on specific sites. The altering consumer choices towards digital knowing increase the hazard of substitution for the industry.
Competitive Rivalry.
Competitive rivalry in the publishing market is high. The existence of large number of customers in the Chinese Publishing Market like CIP, PTP etc. tends to produce high competitive rivalry for CMP. Along with it, brand-new entrants are also entering into the market increasing the competitors for CMP.
Bargaining Power of Provider.
The major providers of the Walnut Venture Associates A Rbs Group Investment Memorandum Case Study Help consist of the suppliers of the paper for releasing files. As CMP is the largest publisher in the Chinese Publishing Market, for that reason the overall bargaining power of provider for CMP is low.
Bargaining Power of Purchaser.
Negotiating 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 marketplace saturation, the purchasers requires high quality files at competitive costs.
Rivals Analysis.
CMP runs in a highly 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 competitors of Walnut Venture Associates A Rbs Group Investment Memorandum Case Study Help consist of;.
• Chemical Industry Press (CIP).
• Posts and telecommunication Press (PTP).
Chemical Market Press (CIP).
CIPis one of the close rivals of CMP. Established in the same duration, CIP releases comparable kind of books. For a large time period, CIP held the biggest market share, and still ranks 2nd and third in various market sectors, with a significant concentrate on academic publications. CIP serves as a risk for CMP as it might wean its market share due to its long term competitive background. CIP is concentrated on digital publishing and might wean the marketplace share of Walnut Venture Associates A Rbs Group Investment Memorandum Case Study Solution easily in the current market scenario.
Posts and telecommunication Press (PTP).
Another close competitor of CMP is PTP. It was likewise founded in the very same duration as CMP and CIP. It ranks 6th in the state-owned publishers in regards to organisation scale. It is also one of the popular players in the publishing market with an annual total incomes of RMB 550 million in 2010.
Alternatives
Alternative-1: Broaden towards New Markets
Pros
• Reducing dependence over the Chinese markets.
• Increasing number of Consumers
• Development chances.
• Avoiding the impact of market saturation in the Chinese publishing market.
Cons
• Use of potential resources in growth.
• Risk of failure in brand-new markets.
• Time consuming.
Alernative-2: Introduce Digital Publishing
Pros
• Sustaining customer base.
• Approaching new markets.
• Easy to present using current capabilities.
• Low threat of Failure.
• Low requirement for funds.
• Increased item portfolio provides high worth to customers.
Cons
• Competition in the market by CIP, who has prior focus on the digital publishing.
• Shift of focus from the core business sectors to the brand-new one can lead the business 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 competitor analysis, Alternative 2 is advised to CMP to achieve its future development. As the preferences are moving towards digital publishing and the business require an instant solution to prevent the declining industry growth. Therefore, intro of digital publishing could prove to be an immediate option with low quantity of danger for the company. However, the business might likewise consider the growth program after the success of its digital publishing program.
Execution
In order to introduce digital publishing in its product portfolio, the company should initially collects the data associated with the customer need, the possible markets, the federal government policies and the data associated with the competitors presented in the market. After that, the company must decide one potential section for its initial offering. It ought to collect research study that how it might differentiate its digital publishing from the existing rivals' products. After all the steps above the business must opt for the preliminary offering. The company must go for the other markets if the preliminary offering shows a success. In this method the business would be able to execute its digital publishing program.
Conclusion
The development of the publishing market is decreasing since 2008, showing a danger to the business's long term presence, but the situation can be controlled by considering an advancement strategy in the future. The company could think about presenting digital publishingin its existing market to implement its advancement program at immediate basis and to prevent the danger of failure for entryway in the brand-new markets.
