Cango free essay sample

Over the last two months Be Bold has observed the operations of CanGo’s managers and employees. Through our observations we have found a number of issues and have several recommendations. Be Bold suggests that CanGo can better understand their company by learning how to make better decisions for the future of the company. One major recommendation is for CanGo to define itself by developing a mission and vision statement. By creating a vision and mission statement CanGo will have a better understanding of the future. Mission and vision statements can help narrow their focus and only choose the path that best fits that of CanGo. Currently, CanGo has just made decisions without really understanding how it could or would affect the company. If CanGo follows our recommendations and constructs a mission/vision statement it could improve their company standing, by drawing in possible employees with the same values or investors that believe in what CanGo stands for. We will write a custom essay sample on Cango or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page As CanGo knows, Be Bold was brought in to analysis the operations and policies of CanGo. Be Bold has done this by looking at some important factors and has enlisted specific individuals to perform these analysis. Oksana Harbar is going to provide a SWOT (strengths, weaknesses, opportunities and threats) Analysis, Alheri Gajere will present the Market Analysis, Binish Maroof will provide the Competitive Analysis, Sherry Youngs will inform CanGo on Financial Analysis issues, and Hope will bring forth some Strategic Recommendations. Each of these members of CanGo was picked specifically due to their background in these fields. SWOT is an acronym that stands for strengths, weaknesses, opportunities, and threats. The SWOT analysis will help CanGo understand the opportunities that are available and what threats may affect its operations. Before moving forward CanGo needs to assess the position they currently have in the market place. The use of a SWOT analysis technique will be beneficial at this point and will serve as the baseline to elaborate on a strategic plan for the organization. Be Bold has been observing CanGo’s operations for a couple of months, and have developed the following preliminary SWOT Analysis from these observations: Strength * Purchase an automated storage and retrieval system (ASRS) to help improve the warehouse. An automated storage and retrieval system (ASRS) is a great solution for CanGo’s inventory handling. * CanGo has experienced exponential growth in their first two years of operation. CanGo has been recognized as one of the fastest growing small business in the Hudson Valley. Constant interest in research and improving company. As we can see that CanGo is always looking for something new, they are always trying to beat their competitors, they are constantly trying to improve company, and find another way to be successful and gain profit. Weaknesses * CanGo, Inc. has no vision or mission statement. Growth opportunities are imminent and the possibility to go public requires a clear vision and mission statement in order to u nderstand their direction on the market * CanGo is lacking in management by objectives (MBO). The aim of MBO is to increase organizational performance by aligning goal and subordinate objectives throughout the organization. * CanGo is missing a strategic management plan. A strategic approach will help CanGo build teamwork by developing commitment and trust; will strengthen the leadership team by aligning their goals with those of the CEO; and will move the organization from the current status quo to an organized environment with clear goal setting for the short and long term. o develop and maintain a viable fit between their objectives, resources, and opportunities * Need for systems analysis and programmer. The marketing department must focus and apply their expertise and support in the areas of market intelligence and strategic business planning. Opportunities * Developing an in-house database that is incorporates into an automated storage and retrieval system ASRS. An automated storage and retrieval system (ASRS) is a great resolution for CanGo’s inventory usage. * Opportunities also exist in the Asia Pacific region for online sales. Company has to keep an eye on the future opportunities and possible consumers. The region could be their next step ahead to become a continental corporation. * Updating the website to incorporate some of the marketing ideas found to be relevant in the recent research analysis project. Threats * CanGo needs to expand its operating capacity to continue its’ growth. If they stay the same there won’t be growth, so in order to become more profitable, beneficial, and successful company they need to increase their productivity. Management must develop a strategic management plan. The purpose of the strategic marketing plan is to fit between the organization’s objectives and resources and its changing market opportunities so it is beneficial for the company. * CanGo could potentially have employee retention problems. It is the responsibility of the CEO to ensure equal opportunity for all employees, adequate compensation packages, fair performance evaluation processes and career development programs for employees. * Lack of capital for necessary growth needs. Lack of money and cost of ASRS system. Company needs to have funds to change or improve warehouse. When expanding into a new market CanGo needs to understand and take into account trends that are in the industry and account for them when doing any sort of planning. Market analysis is a detailed overview of the industry and the market business one is intending to enter. Conducting an effective market research will help determine if there is a need or interest to actively implementing the launch of a new venture. Knowing the markets needs and how it is currently serviced provides you with key information that is essential in developing your product/service and marketing plan. The online gaming market is worth more than $15 billion with a total of 40 million users. In 2007, there were a total of 217 million online gamers worldwide. Surprisingly, online gaming is somewhat equally divided between genders, at 58% male players and 42% female players (Grabstats, 2008). With progresses in technology and internet, online gaming is becoming more popular across all boards. Extensive data, research report and statistics may be needed to support findings and conclusions. One recommendation is to construct customer surveys which will give information pertaining to CanGo’s current customer base to figure out who is making purchases. From what we understand CanGo only conducts surveys based on purchases. By adding a few questions, such as age group, sex and area of the world, they would be able to find what people are making purchases. (Appendix A). It is important to understand what best suits both the company and the customers. Consumer demographics are used to identify consumer markets and involve the study of characteristics of a human populations and population segments and how these change over time. Such variables to consider are how the population is changing based on individual factors such as gender, age, income, level of education, family situation (single, married, divorced), ethnicity, occupation, and social class. According to Grabstats, the demographics and average income of online gamers are console owners and casual gamers from middle income households ($35,000-$75,000) aged 25-44 (2008). CanGo should also evaluate personal variables, such as, analyzing consumer behavior based on both demographic and non-demographic (customer behavior, attitudes, lifestyles) factors which can be used for grouping customers into specific market segments from which a marketer then selects its target markets. By paying close attention to these trends CanGo can prepare their long-term marketing approach to be ready when the shift becomes more apparent. Based on statistics, the highest ranking genres of games played online were card, puzzle, arcade and word games (44%), family-oriented games (25%) and RPG/MMOGs (19%). Casual, family oriented and gambling games (17%) were generally favored by PC online gamers while console/portable online gamers were more inclined to prefer non-casual game genres such as shooting and racing games. Consumers that use PC/Mac spend an average of 5. 8 hours a week on online gaming (Grabstats, 2008). Since CanGo is a company targeting the youth market they must be aware of the shift in trends and economic conditions. They need to implement a design to entice customers to spend their money on their products. Economic analysis can help them define production, distribution and consumers goods and services. CanGo must also analyze the governmental environment within the demographics. This will allow CanGo to look into unfair competition, restraint of trade, environmental, discrimination, online registration, privacy, product safety, labeling, intellectual property, warranties, deceptive and misleading claims, advertising to children, telemarketing, email spam, tying contracts, exclusive dealerships, transportation safety, price discrimination, rapacious pricing, consumer credit purchasing. Based on Be Bold’s Competitive Analysis we feel that CanGo may benefit from extending the online gaming website to include these services. Certain content functionality appears to be standard in this industry and CanGo should include Free Games/Online store/Chat rooms/Prizes and Club membership on their website. Competitive analysis focused on three main online gaming competitors who are Sony play station 3, Microsoft Xbox live and Apple Nintendo Wii. The existence of these competitors indicates that there is certainly a market for online gaming. This Competitive Analysis was conducted to help in the development of CanGo. It is an important part of the planning process and it was done to help management understand their competitive advantages/disadvantages related to competitors and to generate understanding of competitors’ past, present and future strategies. Furthermore to provide an informed basis to develop strategies to achieve competitive advantage in the future and to help forecast the returns that may be made from future investments. As CanGo moves forward into expansion and new markets Be Bold Consulting feels that it is imperative for an understanding of financial ratios as it has an impact on the future of this company. Financial ratios can help to understand what CanGo is doing well and what may need to be worked on. To explain this we are going to use a chart containing some financial ratios of CanGo and that of a few of their competitors. In the following chart CanGo can see how this comparison is made. Table 1: Financial Comparision There are a few types of ratios used for this table that will help CanGo determine the financial health of the company, along with areas that can be improved on. Efficiency ratios, such as inventory turnover is used to determine how well your managers are managing your inventory. This is important to a company because too much inventory could be due to over ordering or having inventory that will not sell. A higher inventory turnover is a good thing but too high could me that your customers are waiting due to back orders due to depleted stock. If CanGo compares the information of this ratio between itself and the three other companies it is noticeable that CanGo’s inventory turnover is very low. Compared to Barnes and Noble and Amazon, CanGo has to see that these companies are controlling their inventory much better. This brings us to what is causing CanGo to have such a low inventory turnover, and what they can do to improve this. CanGo has a lot of capital, as in the books, just sitting on the shelves of a warehouse that are not being sold. Financial leverage ratios, such as the debt equity ratio is used to determine a company’s financial standings. If a company has a high debt equity ratio then it could be a risk to that of a company. Potential investors could look at this among other ratios to determine if CanGo is a good investment. It would be a good idea for CanGo to look at the debt that they currently have and find a way to reduce this amount. It would be beneficial for CanGo to get their debt/equity ratio below . 50. Liquidity ratios are those that show a company’s ability to liquidate the assets of the company. In the case of CanGo this would include servers, inventory and equipment, just to name a few. One such liquidity ratio would be a current ratio, shows how easily it would be to pay off short term debts. CanGo’s ratio is higher than the other companies but it is too high. Last, profitability ratios tell us a company’s ability to make a profit. A couple of these are return on assets (ROA) and return on sales (ROS). Return on assets tells us how much profit you can make on your assets. While Return on sales tells us how much net income you made from each dollar. It is important for a company to understand how this is happening and these ratios can help to determine what is and is not working. CanGo has a higher ROS than any of the companies that Be Bold has used to compare them too, which says that CanGo has less coming out of each sale giving more income. There are a number of strategic recommendations that we have for CanGo that need to be established before the company can proceed towards expansion. The first step is the mission and objectives. As Be Bold has pointed out having the mission statement is important to not only CanGo but possible future investors. Clarity of who CanGo is will help to pull in the investors with the same values and objectives as that of CanGo. Environmental scanning is also an interchangeable attribute working within the spectrum of the SWOT Analysis. Internal exponents include the strengths and weakness of CanGo. The external exponents of this analysis will complete your SWOT by showing the opportunities and threats to CanGo. With this new understanding CanGo can then make decisions about new markets or expansions by gaining a better understanding of what it is CanGo is up against. The completion of the environmental scanning process can give CanGo a clearer prospective and view of the future. Be Bold next discussed strategy formulation. Now that CanGo has a better understanding of itself and the competition it is time to develop a growth plan. CanGo should have a clear consisted plan for any project that is intended. CanGo can use this time to get investments for the new plans. With a clear plan it will be easier not only on the business but also on the possible investors. After CanGo has a good understanding of the strategy it is time for the investors to be brought in, if needed, and put the plan in place. This would include having a program, budget and procedures in place. If CanGo’s plan is working you will be able to tell from the evaluation and control process.