Cango's Strengths And Weaknesses
Executive Summary
Information with Technology “IWT’ is a consulting company that specializes in examining various challenges facing new and existing companies. “IWT” goes into a company and evaluates management practices such as financial, human resources, business strategy, etc. In doing so, we generate a detailed report pointing out a company’s strengths and deficiencies. “IWT” will then give the company recommendations on how to improve on their deficiencies and how to increase their strengths.
Introduction
CanGo is an Internet company that sells a variety of products and services, ranging from books and videos to online gaming services. CanGo prides itself as having the trendiest games with the best service when it comes to product …show more content…
delivery and support. CanGo strives to provide our customers with the most exciting entertainment by employing the latest technology in Web site development, product innovation, and service.
We have been hired by CanGo Company to examine and address the following issues with recommendations on what needs improvement and how to make these improvements:
• SWOT
• Business Strategy
• Market Analysis
• Competitive Analysis
• Financial Analysis
• Observation of Company/Strategic Recommendation
SWOT Analysis
CanGo needs to develop a precise vision of what they want to offer customers and what products and services they want to provide. One way of doing this is creating a SWOT Analysis. SWOT analysis is a strategic planning method used to evaluate the Strengths, Weaknesses, Opportunities, and Threats involved in a project or in a business venture. This will involve specific objectives of CanGo and identifying the internal and external factors that are favorable and unfavorable for CanGo.
Strengths:
Unique Selling Proposition (USP). CanGo strives to provide their customers with the most exciting entertainment by using the latest technology in Web site development, product innovation, and service. This company sells a variety of products and services, ranging from books and videos to online gaming services.
Manageable size. CanGo does not have to support a large overhead, and their employees and customers know that they have a strong value belief in keeping employees happy which in turn will keep their customers because they will receive exceptional service.
Advantages. Staff that are enthusiastic, creative and driven. Staff is willing to take chances with CanGo and their new ventures.
Weaknesses (or Limitations):
Planning. CanGo lacks planning. This company has a tendency to bounce off ideas on each other without really thinking about what these new ventures will do to or for the company. They did not conduct the proper research on ideas such as online gaming. The company discusses getting into the online gaming business without knowing if the company has the capital to try such a risky venture.
Staff. Another weakness that CanGo needs to look at is their staffing evaluation. In order to be successful they need to come up with an evaluation across the board that is fair to all employees at hand. The company needs to be able to weed out those who will not help the company reach the next level of success. Employees are not organized in this company
Competitors View. CanGo is an e-commerce business specializing in selling books and videos or “stuff” as the state on their website. There are other online gaming companies that solely have their hand into gaming software and distribution. These companies will not feel like CanGo will be a threat.
Opportunities:
Internet growth. Online gaming is an opportunity that CanGo can get into. The online gaming market is worth more than $15 billion. Surprisingly, online gaming is somewhat equally divided between genders, at 58% male players and 42% female players. With progresses in technology and Internet, online gaming is becoming more popular across all boards.
Social media market. If CanGo can get into social media market with their products, it can lead to a lucrative venture. Example would be Facebook. Facebook has an online game section or advertising their website. CanGo can possibly look into breaking into the online gaming business through social Medias.
Threats:
The Internet is a threat as well as an opportunity. There are an excessive amount of ecommerce companies so CanGo will have to worry about other on-line distributors. Specific example: potential customers are now more likely to do comparable pricing with different website to get the lowest price for products that they desire or need.
New competitors. Online gaming and e-commerce companies coming out from China has increased rapidly. China represents one of the largest and fastest growing Internet business sectors in the country. American, Japanese, and South Korean companies have traditionally dominated the market; Chinese developed software now holds a 65% market share on the mainland, with an additional 20 million in revenue generated by users outside of China.
Debt or cash-flow problems. CanGo has had a lower than expected stock prices. The company has had a swift rise in the e-commerce world and a very successful IPO but after its addition of online gaming CanGo’s profits has not generated much of profits like they had anticipated.
Business Strategy
CanGo, Inc. has proven to be a successful business, and the company has interests in some rather promising business ventures. However, what CanGo, Inc. lacks, and has since its inception, is strategy. A business strategy is the core of any business, large or small; CanGo’s is weak and many times, questionable. CanGo has experienced a huge amount of success in just the first couple of years in operation, yet this success has not been harnessed to maintain or even increase achievement. With revamping, CanGo, Inc. can improve efficiency and maintain consumer interest and thus, its position in the online market. One thing which immediately stood out to me upon reviewing the company’s information is the lack of a Mission Statement. Many are aware that the company offers a range of products, but what is its purpose? What do the staff at CanGo aim to offer the community, to the world? The company seeks to service the entertainment desires of consumers – develop a comprehensive mission statement which makes this clear and attractive to consumers.
Quite often, entrepreneurs are very near-sighted in terms of success – a long-term vision is not identified, at least until the business proves to be successful in its first two to four years. What some do not consider is the need for an extension or revamp of a business strategy which was initially developed with only short-term goals. CanGo has made a fair start in advancing a business strategy in that it has identified current market trends. Online gaming is popular; however, CanGo, Inc. will need to separate itself from the scores of other companies in this same industry. The marketing approach must be stepped up and the key market or demographic for this particular industry must be established using surveys and research based on competitor data. The next step is to explore a range of marketing mediums – such as online ads, newspapers, television ads, etc. An attractive slogan or marketing theme can help to gain consumer interest, enabling the company to stand out from competitors. A sure way to gain consumer interest and enthusiasm is to offer incentives – does the company plan to charge membership fees? Perhaps fees may be waived for a period of the first three months. The company could liaise with gaming organizations and offer online wins on a randomized basis, sending customers to live gaming events. Of course, any new business venture will increase the workload for all involved. As CanGo, Inc. is a small business, it would be advisable to hire a consultant, or temporary employee, with the necessary skillset to get the new project underway, and most effectively. With the project being a success and after several months of steady earnings, the company should consider the hiring of a permanent staff member to maintain the online gaming division, and offer ideas for possible future business endeavors. Some of CanGo’s current staff is being pulled in various directions at once; it would be wise going forward to allocate staff members to specific departments based on their area of expertise. Skills must be channeled where they already exist, and additional staff training would prove useful to the company, allowing for specialized knowledge which will better equip staff for large projects of any sort. In discussion, is the purchase of a new Automated Storage and Retrieval System (ASRS) for the company. This would not be a bad idea and would help to simplify business processes surrounding CanGo’s existing division providing the online purchase of media. Should CanGo decide on another undertaking in the future to expand their list of retail items, updated technology set in place now will remove the need to review an ASRS then. There have been past problems regarding consumer purchases and the timely delivery of the correct items; the staff at CanGo, Inc. will have more work on their hands, and this work should be streamlined where possible.
Marketing Analysis
The goal of this marketing analysis is to identify present and anticipated attractiveness of the markets within industries that CanGo provides products and services. While conducting this analysis IWT has been able to identified industry threats and opportunities and compared them to CanGo’s SWOT analysis, this comparative analysis will help CanGo develop a strategic business plan. The market analysis was compiled includes information on the state of the e-commerce and gaming markets, current and future profitability, demographics, and potential market growths. Knowing the current market state is a good place to begin as it will give CanGo insight into how the products they offer will fair based similar products in the industry.
State of the Market
When considering potential markets, company management must conduct a market analysis. A market analysis considers the market size, growth rate, profitability, industry cost structure, distribution channels, market trends and key success factors in order to properly assess the market. The e-commerce market and the online gaming market have experienced significant growth driven by increased internet availability. The E-Commerce market is booming and CanGo is in the right position to take advantage and make significant sales and revenue. According to the U.S. Commerce Department, e-commerce is taking a bigger portion of overall retail sales in the United States. 4.6% of total retail spending took place online during 2011, up from 4.3% in 2010 (Enright).
According to comScore.com, the specific growth in 2012 has been driven by sales in digital content & subscriptions, consumer electronics, flowers, greetings & gifts, computer hardware and apparel & accessories (comScore). Each category grew at least 16 percent over the previous year ago (comScore). Growth in the E-Commerce industry is good news for CanGo as they look to expand their product portfolio to include online gaming and digital content. These products will continue to be successful based on the current stability and the anticipated growth of the E-Commerce market. Figure 1, from eMarketer.com, illustrates real E-Commerce figures from 2008 through 2014 with an overall anticipated growth of 11%. CanGo should be able to capitalize on the expected growth in the E-Commerce Market. Considering the future growths CanGo should be able to gain considerable revenues on the 11% increase in 2012 to the turn of $11M and a 17% increase by 2014 $13.7M in online sales. In the case of the online gaming industry, online gaming is expected to increase at a compound annual growth rate of 38.7 % to reach $68.4 billion in 2012. With these projected figures, CanGo has an amazing opportunity to generate significant revenues by establishing and maintaining their corner of the online gaming market.
Figure 1: US Retail E-Commerce Sale, 2008-2014
Demographics
CanGo’s target customers are those considered members of Generations X and Y or those men and women between ages 11 and 43. Generation Y individuals are those that work to live, are technologically ahead of older co-workers, approximately 80% of Gen Y text every day and are considered impatient. Generation X individuals are those that live to work, approximately 60% of Gen X text message every day, 40% of which experienced the divorce of parents, prioritize family and social values over work, and lack trust in corporations and government. These individuals represent CanGo’s targeted customer base.
Social gaming is also a growing phenomenon due to the growth of users on social networks such as Twitter, MySpace, and Facebook. The popularity of these sites has played a significant role in the rapid and substantial growth of the online gaming industry especially in the realm of Adobe Shockwave and Flash based games. Social networking sites have taken advantage of the patrons and are marketing games that are generating phenomenal visits, sales, and success. These games are relatively simple to create, fully tested, developed in minimal time and cost. CanGo should use the resources on hand to develop additional Flash based games and market them on their websites as well as the social networks.
Potential
The Online Gaming Market has displayed similar growth to that of the E-Commerce Market. The increase in the availability of the Internet to users homes and cell phones, the popularity of the smart phone, and the reduction in prices of laptop and desktop computers, and the popularity of social networks have all contributed to the thriving state of the online gaming industry. One way that CanGo can increase revenues is to offer free games and game trials. These games would be used to attract customers by providing a forum for them to play games with no commitment. This area will be used to advertise the paid games and allow prospective customers to try out the paid games with limited access. This limited access should provide a good sample of the game, but only enough to wet the customer’s appetite and draw them in to generate purchases. Free games could provide a forum for CanGo to sell advertising space; this will provide additional opportunities generate additional revenue for shareholders. Figure 2, explains the anticipated growth of the video game advertising industry.
Figure 2: Global Gaming Video Game Revenues Furthermore, CanGo can offer advertising-free gaming as an incentive for gamers to upgrade their status. Once the customer purchases a game or access to a section or suite of games, the advertisements go away. In addition, there could be offers that customers complete that will give them in-game benefits such as upgraded weapons or perks. In this transaction, the advertising companies make sales and CanGo can receive kickbacks. Other gaming companies have employed these tactics, companies such as MySpace and Facebook on their sites with a great amount of success. CanGo can utilize these proven methods to boost their revenues. Finally, by developing games for use in the console gaming market provides CanGo access to a proven market worth over $40.7 billion with over 150 million registered players who spent between 5.8 to 7.3 hours per week playing online games (Hingley, 2012). Utilizing a sound marketing analysis and employing strategic plan the possibilities for CanGo seem endless.
Management Analysis All companies need good management to make a company profitable and able to make it.
CanGo is lacking in the management area. It seemed that no one really knew what their part of the team was and what they should be doing. Management should be like a pyramid. There should be only a small group for top management with more at middle management and even more people at the bottom. The top level should be comprised of the president, VP, and CEO among others and then the middle management would be division or department managers. (Griffin, 2009) At the bottom level there should be supervisors overseeing the general operation of the front line. (Griffin, 2009) All managers should have the skills necessary to carry out decision making, organizing, leading and controlling tasks. (Griffin, 2009) Decision making is being able to set goals for the company, organizing and knowing how to put together tasks and resources. Leading is being able to motivate employees while controlling is monitoring and coaching the front …show more content…
line. Managers should have technical skills, interpersonal skills, conceptual skills, diagnostic skills, communication skills, decision making skills and time management skills (Griffin, 2009). Technical skills involves knowing how to perform the main job of the front line in order to keep them running. (Griffin, 2009) Interpersonal skills are the ability to get along with all employees in a professional manner. (Griffin, 2009) Conceptual skills are the thinking skills that are able to problem solve problems or issues that come up. (Griffin, 2009) Diagnostic skills are being able to respond to a situation while communication is being able to communicate thoughts, ideas and information to the members of the team. (Griffin, 2009) Decision making is being able to see problems and being able to act on them. (Griffin, 2009) Time management is important because all teams need to be able to prioritize and delegate tasks. (Griffin, 2009) The top level should be very specific with the goals and mission of the company so that the rest of the team understands what the outcome should look like. Being able to delegate from the top down is important so that not all responsibility falls on one person or a small group of people. A productive team is being able to spread the work out for all to be a part of. By having different departments in a company it also makes jobs more straight forward instead of one small group doing all the work. Some suggestions would be to have a human resources department as well as financial, marketing, operating and administration department. By separating into departments and each department having their own managers the work is defined as to what each person is responsible for.
Financial Analysis
I think one of the best ways for CanGo to raise revenue/capital Financial of company start a company is to borrow either from friends and family or from a financial institution. Another way CanGo will raise capital will be using the company own funds. As the company grows and expands, its need for additional capital increases. Some of that could be provided out of past earnings, if there were any, which was retained in the company. It is also possible to sell securities in the company to raise money. Selling securities means that all purchasers become part owners of the company and have equity in the company. They, like the founder are interested in the survival and profitability of the company.
CanGo will also have to use advertisement to promote their business.
Everyone who owns even one share of stocks in the company is an owner and share in the profit or loss and growth of the business according to the proportion of stock they own. To raise the amount of funds needed the company must receive the approval from the appropriate regulatory authority to issue the stock. Large, well- established companies have the option of borrowing through debt instruments such as bonds and debentures. CanGo will have to choose to issue new "preferred" stock to raise capital, which means buyers of these shares have special status in the event the underlying company encounters financial trouble. If profits are limited, preferred-stock owners will be paid their dividends after bondholders receive their guaranteed interest payments but before any common stock dividends are
paid.
CanGo will have to use Selling Common Stock. If CanGo is in good financial health, it can raise capital by issuing common stock. Typically, investment banks help companies issue stock, agreeing to buy any new shares issued at a set price if the public refuses to buy the stock at a certain minimum price. Although common shareholders have the exclusive right to elect a corporation 's board of directors, they rank behind holders of bonds and preferred stock when it comes to sharing profits.
Borrowing money will be one of CanGo best choices because CanGo can also raise short-term capital usually to finance inventories by getting loans from banks or other lenders.
CanGo can use profits. CanGo also can finance their operations by retaining their earnings. Strategies concerning retained earnings vary. Some corporations, especially electric, gas, and other utilities, pay out most of their profits as dividends to their stockholders. And CanGo have to use Debt financing because new business owners can also raise capital through debt financing. In its simplest terms, “debt financing” means a loan. Usually, this form of capital for a new business is offered by banks and accredited government agencies, such as the Small Business Administration.
CanGo should Issue Bonds. A bond is a written promise to pay back a specific amount of money at a certain date or dates in the future. In the interim, CanGo as bondholders will receive interest payments at fixed rates on specified dates.
Finally for CanGo to increase profit, CanGo will have to implement a variety of strategies. Some strategies will be provided by other companies that may charge one-time or recurring fees to use their products or services.
There are many ways to increase company profit without having to pay for a service. Businesses that need to improve revenue can offer discounts to customers who pay their accounts off early. Some businesses offer a two to five percent discount if the balance is paid off within seven to ten days. Another way to improve profit is to charge late fees for customers who fail to repay their accounts on time. Implementing these strategies gives customers an incentive to pay early, which leads to increased revenue.
Observation of Company
The case study speaks volumes of Can Go, a company that had much success as a business entity over a couple of year. Most of the success could be attributed to ‘’luck’’ as it was clearly underscored by the leader, Elizabeth in her speech addressing the Hudson Valley Professional Business Association. Given the much success, CanGo decided to emerge into a new market led by its CEO and founder Elizabeth. However, Elizabeth seems to have a dilemma and struggles with the development of a competitive strategic plan that will foster growth and expansion.
Accordingly, the lack of leadership expressed by the CEO and founder of Can Go left the entire team in disarray as they figure out ways and means to target a new market of Online Gaming. In a successful business environment, a business plan plays a pivotal role in its overall success. The strategic management process of Can Go could be described as chaotic. Elizabeth needed to be proactive in taking the initiative to create strategic plans outlining the business model. A business plan should be the precise vision of Can Go’s objective as a business entity. This plan entails the mission statement that defines who their customers are, and services rendered, and the supply of products to accommodate it consumers base; to conduct a SWOT analysis of Can Go 's strengths, its environmental opportunities and external challenges in order to minimize their exposure to threats, and identifying the firm 's target market, products, services, processes, and philosophy.
As the team embarked on the new emerging market, Elizabeth needed to take control with proper guidance through a comprehensive strategic plan. It was observed throughout the operation planning that members lack the approach and coordination amongst the team members. Elizabeth could have developed a deliberate strategic plan by adopting the strategic management process. This process entails the strategic direction and enhances team performance as they are focused on core activities that bring direct success to Can Go. It is imperative for a business entity to have a comprehensive collection of ongoing activities and processes that organizations use to systematically coordinate and align resources and actions with mission, vision and strategy throughout an organization. Strategic management activities transform the static plan into a system that provides strategic performance feedback to decision making and enables the plan to evolve and grow as requirements and other circumstances change. Can Go can also seek the advice of a professional consultant to help with their strategic plans.
Conclusion
Information with Technology Consulting will provide CanGo with guidance as they get started with the New Gaming Program. The S. W. O. T analysis will match CanGo’s resources and capabilities to their competitive environment. The Market Analysis identifies current and anticipated markets. The Competitive Analysis shows the status of the markets that CanGo has to compete with as they get started in online gaming. The financial analysis provides CanGo guidance on their debt ratio and what they will be able to afford as they enter the gaming program. The strategic planning recommends guidance on the market, competitors, finances ethics and social conscience. With this guidance and marketing know how CanGo will now be able to operate efficiently, effectively, and profitably on future business endeavors.
REFERENCES
1. Magee. (Unknown Date). Automated Storage and Retrieval Systems Law & Legal Definition. US Legal. Retrieved August 1, 2012, from http://definitions.uslegal.com/a/automated-storage-and-retrieval-systems/.
2. Author Unknown. (Unknown Date). How to Revamp a Business’ Marketing Strategy. eHow. Retrieved August 1, 2012, from http://www.ehow.com/how_4583503_revamp-business-marketing-strategy.html.
3. Dahl, D. (February 2010). How to Develop a Business Growth Strategy. Inc. Retrieved August 2, 2012, from http://www.inc.com/guides/small-business-growth-strategies.html
4. Author Unknown. April 13, 2007. China 's online game industry on a roll Retrieved August 8, 2012, from http://english.people.com.cn/200704/13/eng20070413_366346.html
5. Chung, O. (May 19, 2007) China scores in online games battle Retrieved August 8, 2012, from http://www.atimes.com/atimes/China_Business/IE19Cb02.html
6. Entrepreneur Magazine: How to Raise Money for Your Business Inc. Magazine: How to Raise Start-up Capita
7. How Do Firms Raise Capital? (August 2012) from http://www.ehow.com/about_6710273_do-firms-raise-capital_.html#ixzz2378H44EZ
8. This is your plan. (August 2012) from http://www.masterplans.com/index.php
9. comScore Inc. (2012). comScore Reports $43.2 Billion in Q2 2012 U.S. Retail E-Commerce Spending, Up 15 Percent vs. Year Ago. Retrieved From: http://www.comscore.com/Press_Events/Press_Releases/2012/8/comScore_Reports_43.2_Billion_in_Q2_2012_U.S._Retail_E-Commerce_Spending
10. Enright, A (2012). InternetRetailer. E-commerce sales jump 16% in 2011. Retrieved From: http://www.internetretailer.com/2012/02/16/e-commerce-sales-jump-16-2011
11. Hingley, M. (2011) Itcandor.net. Gaming Console Market Share And Forecast – A Falling 2011. Retrieved From: http://itcandor.net/2012/02/09/gaming-console-forecast-q112/
12. Griffin, R. W. (2009). Management - 10th Edition. Southwestern CengageLearning.
Information with Technology “IWT’ is a consulting company that specializes in examining various challenges facing new and existing companies. “IWT” goes into a company and evaluates management practices such as financial, human resources, business strategy, etc. In doing so, we generate a detailed report pointing out a company’s strengths and deficiencies. “IWT” will then give the company recommendations on how to improve on their deficiencies and how to increase their strengths.
Introduction
CanGo is an Internet company that sells a variety of products and services, ranging from books and videos to online gaming services. CanGo prides itself as having the trendiest games with the best service when it comes to product …show more content…
delivery and support. CanGo strives to provide our customers with the most exciting entertainment by employing the latest technology in Web site development, product innovation, and service.
We have been hired by CanGo Company to examine and address the following issues with recommendations on what needs improvement and how to make these improvements:
• SWOT
• Business Strategy
• Market Analysis
• Competitive Analysis
• Financial Analysis
• Observation of Company/Strategic Recommendation
SWOT Analysis
CanGo needs to develop a precise vision of what they want to offer customers and what products and services they want to provide. One way of doing this is creating a SWOT Analysis. SWOT analysis is a strategic planning method used to evaluate the Strengths, Weaknesses, Opportunities, and Threats involved in a project or in a business venture. This will involve specific objectives of CanGo and identifying the internal and external factors that are favorable and unfavorable for CanGo.
Strengths:
Unique Selling Proposition (USP). CanGo strives to provide their customers with the most exciting entertainment by using the latest technology in Web site development, product innovation, and service. This company sells a variety of products and services, ranging from books and videos to online gaming services.
Manageable size. CanGo does not have to support a large overhead, and their employees and customers know that they have a strong value belief in keeping employees happy which in turn will keep their customers because they will receive exceptional service.
Advantages. Staff that are enthusiastic, creative and driven. Staff is willing to take chances with CanGo and their new ventures.
Weaknesses (or Limitations):
Planning. CanGo lacks planning. This company has a tendency to bounce off ideas on each other without really thinking about what these new ventures will do to or for the company. They did not conduct the proper research on ideas such as online gaming. The company discusses getting into the online gaming business without knowing if the company has the capital to try such a risky venture.
Staff. Another weakness that CanGo needs to look at is their staffing evaluation. In order to be successful they need to come up with an evaluation across the board that is fair to all employees at hand. The company needs to be able to weed out those who will not help the company reach the next level of success. Employees are not organized in this company
Competitors View. CanGo is an e-commerce business specializing in selling books and videos or “stuff” as the state on their website. There are other online gaming companies that solely have their hand into gaming software and distribution. These companies will not feel like CanGo will be a threat.
Opportunities:
Internet growth. Online gaming is an opportunity that CanGo can get into. The online gaming market is worth more than $15 billion. Surprisingly, online gaming is somewhat equally divided between genders, at 58% male players and 42% female players. With progresses in technology and Internet, online gaming is becoming more popular across all boards.
Social media market. If CanGo can get into social media market with their products, it can lead to a lucrative venture. Example would be Facebook. Facebook has an online game section or advertising their website. CanGo can possibly look into breaking into the online gaming business through social Medias.
Threats:
The Internet is a threat as well as an opportunity. There are an excessive amount of ecommerce companies so CanGo will have to worry about other on-line distributors. Specific example: potential customers are now more likely to do comparable pricing with different website to get the lowest price for products that they desire or need.
New competitors. Online gaming and e-commerce companies coming out from China has increased rapidly. China represents one of the largest and fastest growing Internet business sectors in the country. American, Japanese, and South Korean companies have traditionally dominated the market; Chinese developed software now holds a 65% market share on the mainland, with an additional 20 million in revenue generated by users outside of China.
Debt or cash-flow problems. CanGo has had a lower than expected stock prices. The company has had a swift rise in the e-commerce world and a very successful IPO but after its addition of online gaming CanGo’s profits has not generated much of profits like they had anticipated.
Business Strategy
CanGo, Inc. has proven to be a successful business, and the company has interests in some rather promising business ventures. However, what CanGo, Inc. lacks, and has since its inception, is strategy. A business strategy is the core of any business, large or small; CanGo’s is weak and many times, questionable. CanGo has experienced a huge amount of success in just the first couple of years in operation, yet this success has not been harnessed to maintain or even increase achievement. With revamping, CanGo, Inc. can improve efficiency and maintain consumer interest and thus, its position in the online market. One thing which immediately stood out to me upon reviewing the company’s information is the lack of a Mission Statement. Many are aware that the company offers a range of products, but what is its purpose? What do the staff at CanGo aim to offer the community, to the world? The company seeks to service the entertainment desires of consumers – develop a comprehensive mission statement which makes this clear and attractive to consumers.
Quite often, entrepreneurs are very near-sighted in terms of success – a long-term vision is not identified, at least until the business proves to be successful in its first two to four years. What some do not consider is the need for an extension or revamp of a business strategy which was initially developed with only short-term goals. CanGo has made a fair start in advancing a business strategy in that it has identified current market trends. Online gaming is popular; however, CanGo, Inc. will need to separate itself from the scores of other companies in this same industry. The marketing approach must be stepped up and the key market or demographic for this particular industry must be established using surveys and research based on competitor data. The next step is to explore a range of marketing mediums – such as online ads, newspapers, television ads, etc. An attractive slogan or marketing theme can help to gain consumer interest, enabling the company to stand out from competitors. A sure way to gain consumer interest and enthusiasm is to offer incentives – does the company plan to charge membership fees? Perhaps fees may be waived for a period of the first three months. The company could liaise with gaming organizations and offer online wins on a randomized basis, sending customers to live gaming events. Of course, any new business venture will increase the workload for all involved. As CanGo, Inc. is a small business, it would be advisable to hire a consultant, or temporary employee, with the necessary skillset to get the new project underway, and most effectively. With the project being a success and after several months of steady earnings, the company should consider the hiring of a permanent staff member to maintain the online gaming division, and offer ideas for possible future business endeavors. Some of CanGo’s current staff is being pulled in various directions at once; it would be wise going forward to allocate staff members to specific departments based on their area of expertise. Skills must be channeled where they already exist, and additional staff training would prove useful to the company, allowing for specialized knowledge which will better equip staff for large projects of any sort. In discussion, is the purchase of a new Automated Storage and Retrieval System (ASRS) for the company. This would not be a bad idea and would help to simplify business processes surrounding CanGo’s existing division providing the online purchase of media. Should CanGo decide on another undertaking in the future to expand their list of retail items, updated technology set in place now will remove the need to review an ASRS then. There have been past problems regarding consumer purchases and the timely delivery of the correct items; the staff at CanGo, Inc. will have more work on their hands, and this work should be streamlined where possible.
Marketing Analysis
The goal of this marketing analysis is to identify present and anticipated attractiveness of the markets within industries that CanGo provides products and services. While conducting this analysis IWT has been able to identified industry threats and opportunities and compared them to CanGo’s SWOT analysis, this comparative analysis will help CanGo develop a strategic business plan. The market analysis was compiled includes information on the state of the e-commerce and gaming markets, current and future profitability, demographics, and potential market growths. Knowing the current market state is a good place to begin as it will give CanGo insight into how the products they offer will fair based similar products in the industry.
State of the Market
When considering potential markets, company management must conduct a market analysis. A market analysis considers the market size, growth rate, profitability, industry cost structure, distribution channels, market trends and key success factors in order to properly assess the market. The e-commerce market and the online gaming market have experienced significant growth driven by increased internet availability. The E-Commerce market is booming and CanGo is in the right position to take advantage and make significant sales and revenue. According to the U.S. Commerce Department, e-commerce is taking a bigger portion of overall retail sales in the United States. 4.6% of total retail spending took place online during 2011, up from 4.3% in 2010 (Enright).
According to comScore.com, the specific growth in 2012 has been driven by sales in digital content & subscriptions, consumer electronics, flowers, greetings & gifts, computer hardware and apparel & accessories (comScore). Each category grew at least 16 percent over the previous year ago (comScore). Growth in the E-Commerce industry is good news for CanGo as they look to expand their product portfolio to include online gaming and digital content. These products will continue to be successful based on the current stability and the anticipated growth of the E-Commerce market. Figure 1, from eMarketer.com, illustrates real E-Commerce figures from 2008 through 2014 with an overall anticipated growth of 11%. CanGo should be able to capitalize on the expected growth in the E-Commerce Market. Considering the future growths CanGo should be able to gain considerable revenues on the 11% increase in 2012 to the turn of $11M and a 17% increase by 2014 $13.7M in online sales. In the case of the online gaming industry, online gaming is expected to increase at a compound annual growth rate of 38.7 % to reach $68.4 billion in 2012. With these projected figures, CanGo has an amazing opportunity to generate significant revenues by establishing and maintaining their corner of the online gaming market.
Figure 1: US Retail E-Commerce Sale, 2008-2014
Demographics
CanGo’s target customers are those considered members of Generations X and Y or those men and women between ages 11 and 43. Generation Y individuals are those that work to live, are technologically ahead of older co-workers, approximately 80% of Gen Y text every day and are considered impatient. Generation X individuals are those that live to work, approximately 60% of Gen X text message every day, 40% of which experienced the divorce of parents, prioritize family and social values over work, and lack trust in corporations and government. These individuals represent CanGo’s targeted customer base.
Social gaming is also a growing phenomenon due to the growth of users on social networks such as Twitter, MySpace, and Facebook. The popularity of these sites has played a significant role in the rapid and substantial growth of the online gaming industry especially in the realm of Adobe Shockwave and Flash based games. Social networking sites have taken advantage of the patrons and are marketing games that are generating phenomenal visits, sales, and success. These games are relatively simple to create, fully tested, developed in minimal time and cost. CanGo should use the resources on hand to develop additional Flash based games and market them on their websites as well as the social networks.
Potential
The Online Gaming Market has displayed similar growth to that of the E-Commerce Market. The increase in the availability of the Internet to users homes and cell phones, the popularity of the smart phone, and the reduction in prices of laptop and desktop computers, and the popularity of social networks have all contributed to the thriving state of the online gaming industry. One way that CanGo can increase revenues is to offer free games and game trials. These games would be used to attract customers by providing a forum for them to play games with no commitment. This area will be used to advertise the paid games and allow prospective customers to try out the paid games with limited access. This limited access should provide a good sample of the game, but only enough to wet the customer’s appetite and draw them in to generate purchases. Free games could provide a forum for CanGo to sell advertising space; this will provide additional opportunities generate additional revenue for shareholders. Figure 2, explains the anticipated growth of the video game advertising industry.
Figure 2: Global Gaming Video Game Revenues Furthermore, CanGo can offer advertising-free gaming as an incentive for gamers to upgrade their status. Once the customer purchases a game or access to a section or suite of games, the advertisements go away. In addition, there could be offers that customers complete that will give them in-game benefits such as upgraded weapons or perks. In this transaction, the advertising companies make sales and CanGo can receive kickbacks. Other gaming companies have employed these tactics, companies such as MySpace and Facebook on their sites with a great amount of success. CanGo can utilize these proven methods to boost their revenues. Finally, by developing games for use in the console gaming market provides CanGo access to a proven market worth over $40.7 billion with over 150 million registered players who spent between 5.8 to 7.3 hours per week playing online games (Hingley, 2012). Utilizing a sound marketing analysis and employing strategic plan the possibilities for CanGo seem endless.
Management Analysis All companies need good management to make a company profitable and able to make it.
CanGo is lacking in the management area. It seemed that no one really knew what their part of the team was and what they should be doing. Management should be like a pyramid. There should be only a small group for top management with more at middle management and even more people at the bottom. The top level should be comprised of the president, VP, and CEO among others and then the middle management would be division or department managers. (Griffin, 2009) At the bottom level there should be supervisors overseeing the general operation of the front line. (Griffin, 2009) All managers should have the skills necessary to carry out decision making, organizing, leading and controlling tasks. (Griffin, 2009) Decision making is being able to set goals for the company, organizing and knowing how to put together tasks and resources. Leading is being able to motivate employees while controlling is monitoring and coaching the front …show more content…
line. Managers should have technical skills, interpersonal skills, conceptual skills, diagnostic skills, communication skills, decision making skills and time management skills (Griffin, 2009). Technical skills involves knowing how to perform the main job of the front line in order to keep them running. (Griffin, 2009) Interpersonal skills are the ability to get along with all employees in a professional manner. (Griffin, 2009) Conceptual skills are the thinking skills that are able to problem solve problems or issues that come up. (Griffin, 2009) Diagnostic skills are being able to respond to a situation while communication is being able to communicate thoughts, ideas and information to the members of the team. (Griffin, 2009) Decision making is being able to see problems and being able to act on them. (Griffin, 2009) Time management is important because all teams need to be able to prioritize and delegate tasks. (Griffin, 2009) The top level should be very specific with the goals and mission of the company so that the rest of the team understands what the outcome should look like. Being able to delegate from the top down is important so that not all responsibility falls on one person or a small group of people. A productive team is being able to spread the work out for all to be a part of. By having different departments in a company it also makes jobs more straight forward instead of one small group doing all the work. Some suggestions would be to have a human resources department as well as financial, marketing, operating and administration department. By separating into departments and each department having their own managers the work is defined as to what each person is responsible for.
Financial Analysis
I think one of the best ways for CanGo to raise revenue/capital Financial of company start a company is to borrow either from friends and family or from a financial institution. Another way CanGo will raise capital will be using the company own funds. As the company grows and expands, its need for additional capital increases. Some of that could be provided out of past earnings, if there were any, which was retained in the company. It is also possible to sell securities in the company to raise money. Selling securities means that all purchasers become part owners of the company and have equity in the company. They, like the founder are interested in the survival and profitability of the company.
CanGo will also have to use advertisement to promote their business.
Everyone who owns even one share of stocks in the company is an owner and share in the profit or loss and growth of the business according to the proportion of stock they own. To raise the amount of funds needed the company must receive the approval from the appropriate regulatory authority to issue the stock. Large, well- established companies have the option of borrowing through debt instruments such as bonds and debentures. CanGo will have to choose to issue new "preferred" stock to raise capital, which means buyers of these shares have special status in the event the underlying company encounters financial trouble. If profits are limited, preferred-stock owners will be paid their dividends after bondholders receive their guaranteed interest payments but before any common stock dividends are
paid.
CanGo will have to use Selling Common Stock. If CanGo is in good financial health, it can raise capital by issuing common stock. Typically, investment banks help companies issue stock, agreeing to buy any new shares issued at a set price if the public refuses to buy the stock at a certain minimum price. Although common shareholders have the exclusive right to elect a corporation 's board of directors, they rank behind holders of bonds and preferred stock when it comes to sharing profits.
Borrowing money will be one of CanGo best choices because CanGo can also raise short-term capital usually to finance inventories by getting loans from banks or other lenders.
CanGo can use profits. CanGo also can finance their operations by retaining their earnings. Strategies concerning retained earnings vary. Some corporations, especially electric, gas, and other utilities, pay out most of their profits as dividends to their stockholders. And CanGo have to use Debt financing because new business owners can also raise capital through debt financing. In its simplest terms, “debt financing” means a loan. Usually, this form of capital for a new business is offered by banks and accredited government agencies, such as the Small Business Administration.
CanGo should Issue Bonds. A bond is a written promise to pay back a specific amount of money at a certain date or dates in the future. In the interim, CanGo as bondholders will receive interest payments at fixed rates on specified dates.
Finally for CanGo to increase profit, CanGo will have to implement a variety of strategies. Some strategies will be provided by other companies that may charge one-time or recurring fees to use their products or services.
There are many ways to increase company profit without having to pay for a service. Businesses that need to improve revenue can offer discounts to customers who pay their accounts off early. Some businesses offer a two to five percent discount if the balance is paid off within seven to ten days. Another way to improve profit is to charge late fees for customers who fail to repay their accounts on time. Implementing these strategies gives customers an incentive to pay early, which leads to increased revenue.
Observation of Company
The case study speaks volumes of Can Go, a company that had much success as a business entity over a couple of year. Most of the success could be attributed to ‘’luck’’ as it was clearly underscored by the leader, Elizabeth in her speech addressing the Hudson Valley Professional Business Association. Given the much success, CanGo decided to emerge into a new market led by its CEO and founder Elizabeth. However, Elizabeth seems to have a dilemma and struggles with the development of a competitive strategic plan that will foster growth and expansion.
Accordingly, the lack of leadership expressed by the CEO and founder of Can Go left the entire team in disarray as they figure out ways and means to target a new market of Online Gaming. In a successful business environment, a business plan plays a pivotal role in its overall success. The strategic management process of Can Go could be described as chaotic. Elizabeth needed to be proactive in taking the initiative to create strategic plans outlining the business model. A business plan should be the precise vision of Can Go’s objective as a business entity. This plan entails the mission statement that defines who their customers are, and services rendered, and the supply of products to accommodate it consumers base; to conduct a SWOT analysis of Can Go 's strengths, its environmental opportunities and external challenges in order to minimize their exposure to threats, and identifying the firm 's target market, products, services, processes, and philosophy.
As the team embarked on the new emerging market, Elizabeth needed to take control with proper guidance through a comprehensive strategic plan. It was observed throughout the operation planning that members lack the approach and coordination amongst the team members. Elizabeth could have developed a deliberate strategic plan by adopting the strategic management process. This process entails the strategic direction and enhances team performance as they are focused on core activities that bring direct success to Can Go. It is imperative for a business entity to have a comprehensive collection of ongoing activities and processes that organizations use to systematically coordinate and align resources and actions with mission, vision and strategy throughout an organization. Strategic management activities transform the static plan into a system that provides strategic performance feedback to decision making and enables the plan to evolve and grow as requirements and other circumstances change. Can Go can also seek the advice of a professional consultant to help with their strategic plans.
Conclusion
Information with Technology Consulting will provide CanGo with guidance as they get started with the New Gaming Program. The S. W. O. T analysis will match CanGo’s resources and capabilities to their competitive environment. The Market Analysis identifies current and anticipated markets. The Competitive Analysis shows the status of the markets that CanGo has to compete with as they get started in online gaming. The financial analysis provides CanGo guidance on their debt ratio and what they will be able to afford as they enter the gaming program. The strategic planning recommends guidance on the market, competitors, finances ethics and social conscience. With this guidance and marketing know how CanGo will now be able to operate efficiently, effectively, and profitably on future business endeavors.
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