Elizabeth Bennett, a businesswoman that had a great idea and worked hard to start a new business in the ecommerce market named CanGo. She began making groundbreaking decisions in 2006 when she started CanGo. Over the years this new booming business was established to provide customers with opportunities to purchase books, music, videos and games in an online environment. CanGo was designed to accommodate consumers in today’s market by providing them with affordable options for entertainment at the touch of the fingertips without leaving home.
However CanGo started off with a blast of success but the organization like any other have some concerns and issues that need some professional attention. One of the issues that CanGo lacks is a formal strategic business plan. The company has failed to really define its values and mission statement. They clearly do not have any goals set forth. Another issue is poor communication meaning the staff members and management is unclear of goals to meet project needs. In summary, CanGo cannot survive today’s world if they can’t adapt and develop a professional and aggressive strategic plan while implementing a range of reforms.
CanGo is an IPO Recognized Company. Liz thought it would be a good idea to hold an IPO (Initial Public Offering) to raise capital that would help expand the business. CanGo would like to add on more products. In today’s market there are so many competitors that sell a variety of products, it makes sense to try to keep up or past competition. CanGo has a loyal team that welcomes diversity. The team that is creative and works well together and welcomes new and exciting projects.
CanGo does not have a strategic business plan to follow. This plan would give CanGo significant direction and would allow them to identify short-term and long-term goals. It is up to Liz the CEO of the company to develop a strategic plan. CanGo struggles with communication from top to bottom. From management down to staff members goals and deadlines are unclear to meet project expectations. The tasks aren’t prioritized. CanGo lacks any structure in their warehouse. The products aren’t in any specific order, they are hard to find. When customers places orders, that staff members pull these orders manually and ship them. There is no organization whatsoever.
CanGo can utilize advanced technology with software and hardware with integration of inventory barcode control. This would give them more organization in the warehouse to locate products easier and keep track of the warehouse inventory. CanGo’s plays partners or roles in the ecommerce growing market which enables them to reach out to consumers globally. This gives them both a domestic and international consumer base.
While CanGo thinks about expansion, the staff members are juggling multiple tasks which result in the staff feeling overworked due to no type of system to work efficiently. CanGo has no technology in place to compete with their biggest competitors such as Amazon or EBay. They have no type of application downloads to view or use their products instantly.
In today’s ecommerce market, Internet has truly defined the way we a society do things from communication, entertainment, shopping, and research of information. E-commerce has been successful because it offers a lot of advantages for both consumers and retailers. Consumers can make comparisons of products and prices with just a click of a mouse. Online retailers or online company which is what CanGo is provides the power of online purchases from the comfort of the consumer homes and delivery to their doorstep. While doing some research, “In June 2009, a study by the Carnegie Mellon Green Design Institute in the US found that shopping online can reduce our environmental impact by as much as 66%.” For businesses like CanGo, the advantages of e-commerce lies mainly in the low cost setting up and maintaining the business.
According to MarketLine, the world online retail market expanded by almost 18% in 2010 and is predicted to reach close to $435 billion in sales. The market is expected to reach a 90% growth by 2015 and exceed $827 billion in sales. Listed in an article “Ecommerce Growth Statistics”, the average amount spent by each consumer is expected to rise from $1,207 per year to $1,738 per person by 2016. That is a significant increase. That shows that people prefer to shop online than going to the actual store in today’s society.
Shoppers will spend on an average of $327 billion online shopping in 2016, which is about 45% from $226 billion in 2012. It is very evident that consumers will drive ecommerce into the future; especially e-retail. In just a few years, purchases online will be more profitable than ever, with others products and services available to purchase such as mobile and social allowing consumers to shop to their convenience. For retailers and others, it would be strategic to utilize all tools available for advertisement such as social networking, website optimization, and marketing.
CanGo needs to be aware of their competition if they wish to remain completely in their particular market. It is very important to reach the success of any business. A competitive analysis is “a statement of the business strategy statement and how it relates to the competition” (Entrepreneur Media, Inc., 2006). This provides the appropriate data needed to remain competitive and in the competition. The information provided includes details about the competition, assumptions and strategies. Also anything that could possibly hinder business success. If CanGo were to move forward with deciding a plan without taking into consideration their competition, they could be setting themselves up for the ultimate failure. A competitive analysis was done for of CanGo to help in the development of their marketing strategy within the Retail and Software Industries. CanGo has experienced growth over the last few years, even though it is still a fairly young company; unfortunately the growth has been really slow, a lot slower than their competition.
In order to remain competitive in the market, CanGo must get a better understanding of both the Retail and Software industries, along with knowing their competitors objectives inside the market. The analysis focused on three of their competitor Amazon, being reliable and devoted in the industry, shows that there is definitely a market for selling books, CD’s, DVD’s and online gaming services. Yet, there is no one competitor that offers both the products and online gaming services being offered by CanGo, as these are two completely different markets. Yet, each of these companies does have a common offering, that which is PC and Video games. This suggests that CanGo may benefit from offering online gaming as part of their portfolio, and even leaves room for growth into other market segments in the future.
Amazon.com, Inc. (AMZN on NASDAQ), started as a bookseller and today is one of the largest, well- known, worldwide media retailers. They were “founded in 1994 by Jeff Bezos and became an online retail merchant in 1995” (Amazon.com, Inc., 2010). They have over twenty-two subsidiaries, operating in two different countries, North America and Germany (Luxembourg) and this does not include their seven online e-commerce sites. They are partnered with several third-party companies, which represent “30% of their unit sales for 2009” (Amazon.com, Inc., 2010). Sales for the year 2009 were $24.51 billion, which was an increase of 28% over 2008’s sales of $19.17 billion (Amazon.com, Inc., 2010).
This growth was due to Amazon.com, Inc.’s ability to minimize price increases for the consumer, and growing their stock both in inventory and selection for each of their product offerings (Amazon.com, Inc., 2010). Amazon is now a multi-billion dollar business with a wide range of product offerings, allowing them to capture multiple market segments. Based upon this data, Amazon.com, Inc. will be a tough competitor of CanGo. Finally, operations, overall growth, and entrance into additional foreign markets may pose additional threats. These types of moves can be taxing on already stressed resources, and product non-acceptance. These risks may keep Amazon.com, Inc. a solid competitor of CanGo. They may also allow CanGo to get ahead in the market, as they try to make a name for themselves, in providing a service not currently available in the Amazon.com, Inc. portfolio.
CanGo will have the chance to grow and keep growing more and more in future if they make themselves ready financially, train management, and staff to sell online. They should be able to have enough funds and tools for marketing, in order to market new online gaming in the right way. Having financial stability to grow the business is not enough, without having the strategic plans in place. The financial analysis of CanGo’s compared with the competitor like Amazon is very weak when it comes to revenue and sales value, but it has a lot of advantages for CanGo. For example, CanGo can become a partner with Amazon for online ordering throw Amazon website for basic commissions will be paid by CanGo, which is will help CanGo to increase their revenue within a year by at least 20% – 25%, also, will assess and evaluate CanGo’s liquidity, debt, profitability, and efficiency rations.
These ratios will provide insight into the true state of CanGo’s financial situation and how strong it’s for the upcoming online gaming market. The turnover ratio for CanGo Inventory is .29, and the turnover ratio for Amazon Inventory is.11. Which is indicates that CanGo manages its inventory better than Amazon because the less turnover ratio you have the less overstocking inventory company has. So, we can say that CanGo has more an efficient performance than Amazon. Another factor of having high ratios can indicate a loss of sales or returns. Amazon debt to equity ratio is stands at .42 while CanGo debt to equity is stands at .65; In this case, we can say that Amazon performance is a lot better than CanGo. A high Debt to Equity Ratio generally means that a company has been aggressive in financing its growth with debt.
Debt can come in the form of stocks, bonds, and loans that the company borrowed against. Amazon current ratio is 1.31, but CanGo current ratio is 5.33. In general we can see that CanGo is performing better in this area compared with their main competitor Amazon, because this ratio shows that CanGo is capable of repaying its debts and liabilities than Amazon. Like we all know that the higher the current ratio, the more capable the company is of paying its debts and liabilities. A ratio under 1 does not necessarily mean a company will go bankrupt. Finally, CanGo recorded a Net Profit Margin of 80%, whereas Amazon recorded a Net Profit Margin of 20%.
It means that CanGo’s made $0.8 of each $1.0 per sale as a profit to the company. CanGo should keep in mind at all the time that net margins often vary from company to company and certain ranges can be expected from industry to industry, as similar business constraints exist in each distinctive industry. We can see that CanGo financial analysis indicates that CanGo performs very well in certain areas more than the competitor like Amazon, but at the same time we will see that CanGo is performing poorly than Amazon in other areas too.
In order for CanGo to succeed in the market they’re currently in, they must first put in place strategic planning methods. Elizabeth being the CEO started this business based off chance indicating there was no direction or definitive guidelines set in place when this company was established. According to text, CanGo was recognized by the Professional Business Association, confirming indeed that CanGo has the potential to rise above their current standards; however, they lack since of direction when it comes to strategic planning. We suggest to CanGo and Liz not to expand their business and continue with the current products they currently offer until they’re able to determine their financial stability, having training in place for current employees, and the direction they would like the company to go within the next three to four years. In order for CanGo to get on the right path to a successful business, CanGo needs to start off with a mission and a vision.
Having a mission is the key tool that can be important in her business plan. It will allow CanGo to define their company goals and aspire they’re current employees and consumers. With a Vision, it will allow the company to focus on the big picture at hand. It will identify what they would like to achieve as a company, whether it be to expand or build based off what they currently have by adding new services. CanGo also need to train their employees and conduct monthly evaluations that will give them great feedback as to how their performing as an employee. We suggest you include incentive programs; which will not only motivate the employees to do better, but allow the company to earn revenue potential as well.
Having incentive programs in place, will motivate the employees to sale more products and push for CanGo to broaden their horizon within a competitive market. Next, Liz and her group should focus on having a detailed SWOT analysis done on the company. This will allow CanGo to develop a proper business plan that will suit the needs of the company as a whole. Strategic Planning will assist CanGo with making better decisions, allowing them to have the room for growth and become more of a competitive advantage. CanGo has the potential to become bigger than Amazon and or any other competitor, but Liz as the CEO need to set guidelines in getting the company where it needs to go in order to succeed.
Over the past 8 weeks, Team Blue Consulting has been working with the CEO of CanGo (Elizabeth), to provide her with the guidance she need in order to move CanGo to the next level. We had to the chance to provide the company with a SWOT analysis, pointing out the things that can be fixed and what things they can improve on as a business. Unfortunately, if CanGo doesn’t make the necessary changes in order to compete in the current market by first establishing their mission and vision for CanGo, there is no guarantee this company will be around for the years to come.
We provided CanGo with the financials, market analysis, SWOT, and strategic planning in order to assist with making their goals come to life. They have to begin with an end in mind, meaning having a plan in place that will give the employees and management the ability to work as a team in order to help Liz grow this business. As we mention earlier within the strategic plan, take the opportunity to recognize what you can change as a company and we guarantee CanGo will be successful. Again, we thank you for allowing Team Blue Consulting to assist you in making the right decisions in hopes you will consider all feedback in making your business a success.
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