Wh Group Limited Initial Public Offering Road Show Case Study Solution and Analysis
Introduction
Wh Group Limited Initial Public Offering Road Show Case Study Help is the biggest publishing business with a highest market share in the China's book retail market. CMP has actually become a specialized info service provider and a large detailed Science and Technology publishing business through the integration of print media, audio-visual media and the network media.
Critical Issues
CMP has invested its 60 years journey efficiently, being an effective publishing house, however, the changing macro market patterns and forces bring particular challenges to the publishing market in general and Wh Group Limited Initial Public Offering Road Show Case Study Solution in specific. These elements include;
• Entrance of the new publishing companies in the market.
• Declining growth of the publishing market.
• Market saturation.
• Intro of digital publishing strategies
• Enhancement of science and technology.
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 situation? 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 company sustain its long term competitive position in future?
Situational Analysis
Internal Analysis
SWOT Analysis
Strengths
Wh Group Limited Initial Public Offering Road Show Case Study Solution has certain strengths that can be used to reduce the hazards, get rid of the weakness and obtain the opportunities. Strengths of CMP are provided as follows;
• The long term experience of Wh Group Limited Initial Public Offering Road Show Case Study Solution in the publishing industry i.e. 60 years permits the company to offer high quality items at a lower expense utilizing its previous experiences.
• The technical resources and abilities created by its effective journey supply a competitive advantage to CMP.
• Huge item portfolioof CMP assists it to diversify its risk and provide high value to its customers.
• Strong financial position enables the company to consider several advancement chances without any fear of raising fund externally.
Weaknesses
Along with the strengths, the business has particular weak points which might increase constraints for the business in implementing its advancement program. The weaknesses of Wh Group Limited Initial Public Offering Road Show Case Study Solution are provided as follows;
• Despite of being a science and innovation publishing company, the business still has traditional methods ofpublishing which are not suitable 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 reliance over the Chinese markets to accomplish long term growth.
Opportunities
Although, the growth of the publishing market is declining given that 2008, affecting Wh Group Limited Initial Public Offering Road Show Case Study Help as well, but the growth might be restored by availing certain chances presented in the market. The market chances for CMP consist of;
• The business might likewise present Digital Publishing by utilizing its long term technical experience and a strong customer recognition in the market.
• CMP might think about a development program through the growth towards foreign markets in order to reduce its dependence over Chinese markets by utilizing its huge funds.
Threats
The altering macro trends in the market and increasing competition in the publishing market has actually positioned specific risks to Wh Group Limited Initial Public Offering Road Show Case Study Analysis consisting of;( Gurel, 2017).
• Intro of digital publishing i.e. virtual libraries might cause decreasing market share of Wh Group Limited Initial Public Offering Road Show Case Study Analysis due to the customer shift towards virtual libraries.
• The presence of large number of rivals in the publishing market increase the risk for CMP to lose its competitive position in the market, as competitors can gain a strong consumer base by utilizing specific strategies like aggressive promotion, quality products, and so on
• Entryway of new publishing companies in the industry in addition to presence of high competitors increases the risk of losing the client base.
Financial Analysis.
Due to absence of information, the monetary ratios of CMP could not be determined. It might be analyzed from the Appendix III that the yearly total profits of Wh Group Limited Initial Public Offering Road Show Case Study Analysis during the duration 2000-2012 are growing at a high development rate, revealing that the yearly need of the products of CMP is growing and the company is quite effective in bring in a big number of consumers at a potential rate.
Together with it, the 2nd graph which shows the annual development in the Wh Group Limited Initial Public Offering Road Show Case Study Help total assets, reveals that the business is quite effective in adding value to its properties through its revenues. The development in properties shows that the total value of the company is also increasing with increasing the total profits. (Unidentified, 2013).
Another financial analysis of the company utilizing the given data could be the analysis concerning the distribution of total earnings of the business. Major part of the incomes of CMP originates from the sales of its released books i.e. 64% as shown in the Case Appendix V. The business might move towards other business sectors with a potential development to accomplish its future advancement objective.
PESTEL Analysis
PESTEL analysis might be carried out to discover the numerous external forces impacting the efficiency of the business and the recent patterns in the external environment of the company. A brief PESTEL analysis of the business is provided as follows; (Alanzi, 2018).
Political.
As the publishing sector might have a significant impact on the frame of mind of individuals about the communist ideology of the government, for that reason, the publishing sector is highly supervised and assisted by the Promotion Department of the Communist Party of China. For that reason, it might be stated that the overall political forces affecting Wh Group Limited Initial Public Offering Road Show Case Study Help organisation are high. The federal government policies relating to the publishing sector are likewise increasing with the passage of time.
Cost-effective.
Economic forces impacting the publishing sector in basic and the Wh Group Limited Initial Public Offering Road Show Case Study Solution in particular includesthe prices of paper, the earnings level of consumers, the inflation rate, and the general GDP growth of the country. All these forces combine effect the demand for the publishing market. In addition to it, the economic policies connected to the import of books affect the general service at CPM. China's economic conditions are quite favorable for CMP with high GDP development and customer earnings level.
Social and Demographical.
Social and demographical forces consist of the population growth, the customer's choices towards checking out informative materials and so on. China has the highest population in the world with a high population development, showing the increasing number of consumers of the Wh Group Limited Initial Public Offering Road Show Case Study Solution. Nevertheless, the consumer choices are moving towards digital publishing rather than the traditional was of publishing. In this regard, CMP needs to focus on digital publishing to meet the changing customer preferences.
Technological.
Technological forces impacting the CMP include the technological development in the reading techniques etc. Improvement of science and technology in addition to the increase of digital publishing could reduce the demand for the CMP products, if certain actions would not be taken soon.
Environmental.
Ecological forces affecting Wh Group Limited Initial Public Offering Road Show Case Study Analysis includes 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 used while publishing ought to not be hazardous for the environment.
Legal.
Legal regulations for the publishing sector at whole are high. The legal policies regarding 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 Government to be gone into in the publishing market. The regulation forbids direct participation of foreign entities and individuals in the publishing sector.
Industry Analysis (Porter's Five Forces Design).
Porter's Five Forces Model could be utilized to evaluate the beauty of the publishing industry China. A brief analysis of the Porter's 5 Forces is given as follows;.
Risk of New Entrants.
Risks of new entrants in the Chinese Publishing Market is moderate. The possible growth in the industry tends to draw in brand-new entrants to the publishing industry. However, the existence of extreme competition and the requirement of huge capital tends to demotivate brand-new entrants to go into in the marketplace.
Risk of Substitution.
Danger of Replacement is high for the Chinese Publishing Industry. The substitute items for the published documents is the files presented in the digital libraries on specific sites. The changing consumer choices towards digital learning increase the danger of replacement for the market.
Competitive Competition.
Competitive competition in the publishing industry is high. The existence of large number of customers in the Chinese Publishing Industry like CIP, PTP and so on tends to produce high competitive competition for CMP. Along with it, brand-new entrants are also participating in the marketplace increasing the competitors for CMP.
Bargaining Power of Supplier.
The major providers of the Wh Group Limited Initial Public Offering Road Show Case Study Help include the providers of the paper for releasing files. As CMP is the biggest publisher in the Chinese Publishing Market, for that reason the overall bargaining power of provider for CMP is low.
Bargaining Power of Purchaser.
Haggling 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 market saturation, the purchasers requires high quality files at competitive costs.
Rivals Analysis.
CMP operates in an extremely competitive market with the presence of a great deal of rivals. The business has a competitive position in the market with the greatest market share in the Chinese publishing market. Significant competitors of Wh Group Limited Initial Public Offering Road Show Case Study Help include;.
• Chemical Market Press (CIP).
• Posts and telecommunication Press (PTP).
Chemical Market Press (CIP).
CIPis one of the close competitors of CMP. Founded in the same period, CIP releases similar type of books. For a large period, CIP held the biggest market share, and still ranks 2nd and 3rd in various market sectors, with a significant concentrate on educational publications. CIP functions as a hazard 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 Wh Group Limited Initial Public Offering Road Show Case Study Solution easily in the current market circumstance.
Posts and telecommunication Press (PTP).
Another close rival of CMP is PTP. It was also founded in the very same duration as CMP and CIP. It ranks 6th in the state-owned publishers in regards to service scale. It is also among the prominent gamers in the publishing market with an annual total earnings of RMB 550 million in 2010.
Alternatives
Alternative-1: Expand towards New Markets
Pros
• Minimizing reliance over the Chinese markets.
• Increasing variety of Clients
• Development chances.
• Preventing the effect of market saturation in the Chinese publishing market.
Cons
• Usage of possible resources in expansion.
• Threat of failure in new markets.
• Time consuming.
Alernative-2: Introduce Digital Publishing
Pros
• Sustaining consumer base.
• Approaching brand-new markets.
• Easy to present utilizing existing abilities.
• Low danger of Failure.
• Low requirement for funds.
• Increased item portfolio supplies high value to clients.
Cons
• Competition in the market by CIP, who has prior focus on the digital publishing.
• Shift of focus from the core service sectors to the new one can lead the company to lose demand of its items in the market.
Suggestions
With the deep analysis of the internal and external environment of the business together with the market analysis and the competitor analysis, Alternative 2 is recommended to CMP to achieve its future development. As the choices are moving towards digital publishing and the business require an instant solution to avoid the decreasing market development. Introduction of digital publishing could show to be an immediate option with low amount of risk for the company. However, 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 initially gathers the data related to the customer demand, the possible markets, the federal government policies and the information related to the competitors presented in the market. After that, the business should choose one possible sector for its initial offering. It must gather research that how it might separate its digital publishing from the existing competitors' products. After all the actions above the business ought to go for the preliminary offering. If the initial offering proves a success, the company must opt for the other markets. In this method the company would have the ability to implement its digital publishing program.
Conclusion
Although, the growth of the publishing market is declining because 2008, revealing a danger to the company's long term existence, but the situation can be controlled by thinking about an advancement strategy in the future. The company could consider 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 brand-new markets.
