Commencing
its business as trading pharmaceutical products, CCM stage its game to
manufacturing drugs by obtaining license from the government. As there
are many patents involved in manufacturing drugs, the industry find less
competitors. However, emergence of strong competitors recently in the
market has made the competition tougher than ever. As most of the people
purchasing decisions of pharmaceutical products depend largely on the
effectiveness rather than pricing, it won't be a problem for CCM to
adjust their price. In terms of branding, the company has few well
established products such as Thompson cough reliever and Chewes kids'
vitamin which gain the loyalty of its customers' base. Based on its cash
flow statements for the past ten years, there are no acquisitions of
any subsidiary nor associates where the company generates its growth
mostly internally which are different from other pharmaceutical
company's expansion strategy.
As
the company ventures itself into an industry that adapts automation
process, recent rise of utility rate will hugely affect the company's
margin unless the company adjusts its price.
Based
on the graph, the company has been performing on a gradual upward trend
for the past ten years. Although there is a sharp decrease during 2011,
it quickly recovered to the level before 2010. Both ratios are up to
expectations as the company has been performing efficiently. From what I
see, the company is adapting a very conservative strategy where the
growth is steady and minimal risks are bared. Overall, the company
performs well and possesses the potential to grow steadily in the
future.
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