Senior project- CanGo
The purpose of this report is to provide CanGo Corporation with guidance and recommendations based on a thorough analysis conducted by Team BEHS Consulting Specialist (Team BEHS). Team BEHS analyzed CanGo’s business processes, financial standing and future expansion plans. CanGo will be the one of the principal online entertainment and gaming companies within this thriving industry, with a rapidly developing consumer brand and growing customer base. The company is already renowned for their online wholesale book selling operation.
The company has expanded its operations to include CDs, DVDs, audio and video tapes. After a move to larger and newly renovated office space in the historic section of Kingston, the company’s latest venture is manufacturing customized MP3 players. CanGo has now set its sights on becoming a major player within the online gaming industry. With the assistance of BEHS, CanGo will re-invent the online shopping and gaming experience for individuals and families.
Senior project- CanGo Essay Example
CanGo’s launch into the new and exciting market will be benchmarked by the vision to provide high quality, innovative products and services at a reasonable price, designing a tasteful family oriented and intuitive online shopping and gaming experience. In order to grow at a rate consistent with our objectives, and following the successful release of its first stock offering, CanGo purchased Webjouster, a company whose specialty is online gaming. With the acquisition of Webjouster, CanGo is quickly garnering a major position in entertainment e-commerce.
Company CEO Liz Bennet said, “ the move is a natural progression for the company. ”. Business Strategy Analysis During this critical evolution it is vitally important to remember that planning by participation with key members creates a common focus, commitment and ownership, clarifies operational challenges, determines priorities and sets benchmarks for milestones, along with providing a pathway to success. (Maloney, Boulay, 1998) This is a fundamental element of becoming a successful business.
Many decisions must be made that will shape a business’ future and structure the way it operates. This is especially true when developing the Mission, Vision and Values statement. This is just one part of the Strategic Management Process. The Strategic Management Process is a three tiered process consisting of the Formulation, Implementation and Evaluation approach to promote successful organizational performance. Team BEHS and key CanGo leadership personnel have evaluated CanGo’s strategic plans for short, medium and long-term success.
We have discovered that the strategic planning process has been conducted in a haphazard and emergent fashion. Using Team BEH’s proven track record and solid strategic planning processes, we have developed clear and concise implementation plans to support CanGo’s goals for business success. This will set a course of action that will guide CanGo’s short-term objectives and long-term goals. Managerial Assessment CanGo is an organization filled with skilled employees and dedicated management personnel.
These components are the foundation of quality when used to maximum effectiveness. Successful companies also have clear identification of the organizational structure. A company’s organizational structure determines how business decisions are made and implemented when this is indistinct or missing chaos can ensue. This is a major managerial dilemma our analysis of CanGo has discovered. Today’s most successful companies understand the importance of quality leadership and standardized processes.
Team BEHS uses time proven framework and philosophies when engaging our clients regarding quality management and leadership. Processes such as Total Quality Management (TQM), International Organization for Standardization (ISO) 9000 and Deming’s Approach to Continuous Improvement are all part of our collaborative managerial assessment process. Employee empowerment, teamwork, process control, continuous improvement, customer focused management, and statistical methods and techniques are instrumental in successfully implementing total quality management (TQM) (Evans, & Lindsay, 2007).
These concepts as well as many others such as; Deming’s 14 Points and Theory of Profound Knowledge are key components to the BEHS training symposiums. BEHS symposiums are designed to meet the needs of corporations such as CanGo that may require assistance with understanding quality leadership and customer focus. We also work with management regarding techniques to mitigate employee conflict, improve leader-/subordinate relationships and increase employee motivation through implementation of a sound appraisal and reward system. Finally, we will look at your organizational structure and company make up.
Based on a thorough assessment of organizational structure, control and governance, and strategy and structure growth patterns Team BEHS will work with and the CanGo management team towill develop a comprehensive plan that to best guide growth and profit is the number one priroity. Strengths Weaknesses Opportunities Threats (SWOT) Analysis A SWOT Analysis is a valuable business tool used to evaluate a company’s Strengths, Weaknesses, Opportunities, and Threats involved in a project or in a business venture. It involves specifying the objective of the business venture or project and identifying the internal and external factors that
are favorable and unfavorable to achieve that objective. Team BEHS conducted an internal analysis (strengths and weaknesses) of costs, finances, market share and resources available based on the financial data provided by CanGo. Thorough evaluation was performed to determine if the organization can has the resources to move into new markets and provide a justification by an operational cost analysis. Coordination with the operational, accounting and financial management teams was leveraged in order to build a unified consensus for implementing a strategy for moving into the online gaming market or perhaps some other market less risky.
Further analysis was able to identify significant Threats (risks) and discuss the best courses of action to mitigate them. An external analysis (opportunities and threats) was also performed on the online gaming market. According to a leading market research company, a recent report has stated that online gaming participation has increased 10 percent since 2009, and the number of digital downloads for games has increased 20 percent. Every year there is significant growth. CanGo’s marketing ideas have valid merit and present an excellent opportunity for future company expansion.
A brief synopsis of Team BEHS’ SWOT analysis can be found below in Table 1. Based on these findings we have come up with several business proposals that can be found in the Recommendations section of this document. Table 1: SWOT Analysis StrengthsWeaknesses •Existing online market share is booming •CanGo witnessed exponential growth in the book, CD and DVD video business •Continued fast growth is forecast •Smart employees•Limited investment capitol •Communication is non-existent •Limited facilities •Organization is dysfunctional •Leadership is lacking
•Strategic Plans are non-existent OpportunitiesThreats •IPO will open up much needed cash for new market investments •Expand product line •Enter online gaming market •Implement hardware/software sales and MP3/CD/DVD downloads for individuals •Possibility for global expansion •Work simultaneously with another gaming network•Large companies in the same market may have a competitive advantage •Fierce lower cost competitors •Economy •Internet security and bandwidth •Newer and changing technology •International piracy Market Analysis
America’s entertainment software industry creates a wide array of computer and video games to meet the demands and tastes of audiences as diverse as our nation’s population. Today’s gamers include millions of Americans of all ages and backgrounds. In fact, more than two-thirds of all American households play games. This vast audience is fueling the growth of this multi-billion dollar industry and bringing jobs to communities across the nation (Horston, 2010). The U. S. Video Gaming Market recorded a record $5. 53 Billion in the month of December 2009.
Meanwhile, the online gaming market has emerged as the most dynamic and transforming segment of the overall gaming industry in China. It has been witnessing a series of developments driven by increasing Internet and broadband penetration, double-digit growth in the number of online gaming users, rapid product development and commercialization. (RNCOS, 2009) Research was also conducted with online gaming hardware and the statistics state that 85% of users prefer the PC. Among non-PC systems, the Xbox 360 dominated for the third year in a row as the top system for online gaming with 48% of the market.
Interestingly, the Wii and the PS3 are in a near tie, with about 30 percent of online gamers reporting that they use both systems. However, it is important to point out that the PS3 increased 10 percentage points since last year. The average hours per week breakdown with the top three systems are the Xbox 360 (7. 3 hrs), PC (6. 6 hrs) and PS3 (5. 8 hrs) (Riley, 2010). “The number of online gaming paid subscribers, which totaled 19. 4 million at the end of last year, and will more than double to 44. 5 million by the end of 2014.
The increase in usage will be driven by the rise in digital distribution of online games as opposed to retail boxed sales, along with an increase in broadband adoption” (Sachoff, 2010). Competitive Analysis Competition in this industry will be fierce as there are numerous companies providing online gaming services. With an estimated $5 billion in revenue in game subscription by 2015, the return on investment will be very profitable and a further testimony to the large market for online gaming (Sachoff, 2010).
Online gaming service providers offer game downloads, free online game play, online gamer community chat rooms, club memberships, prizes for playing, games, and links to the other popular online games. To be competitive, CanGo should provide these services as a basic subscription package. Technology is about progression, and online gaming technology is no exception. Our research has indicated that a 3D gaming platform will outperform the conventional 2D platforms currently being used by the industry. 3D technology provides users the capability to view images in dimensional realism.
2D gaming only allows the consumer to view the image of an object in one view with a flat surface. Throughout the history of 3D rendering technology, you will notice that the 3d render has more ability to create higher quality rendered models, shadows, and light than the real time render used in 3d game industry. The main reason is that the real time render depends on the computer display card capabilities (www. graphicmania. net). With today’s technology, computer display hardware allows creating higher quality 3D games with semi-real objects and scenes.
In our assessment CanGo would be prudent to implement the 3D gaming system. There are technological requirements that must be considered such as bandwidth allocation and network and physical security measures. The cost of a high quality 3D gaming system will far exceed those of the standard 2D gaming system. BEHS evaluated the associated risks and added cost of a 3D gaming platform and consider them as solid returns on investment. A 3D online gaming system is a concrete opportunity for CanGo’s expansion efforts to carve out a point of difference in the marketplace.
CanGo’s mission is to create a market that will not only meet but exceed customer expectations, as such CanGo must carry out as the top online gaming company and one in which customers will use for service. We developed an extensive analysis of alternatives (AoA) (four different options), then selected the one that best meets the desired goals of CanGo, based on variety of input factors. The baseline used was predicated on the services offered by the main competitors in the industry; with the intended resolution being CanGo providing its customer base with unique and exciting gaming experience.
Team BEHS reviewed industry standards and conducted surveys of avid online gaming participants and developed a combination of the latest technologies as seen in Table 2. Our Analysis showed Sony to be the only competitor with Cross-game Voice Chat, while no other company provided “iChat-like” video Capabilities. Cross-game Voice Chat allows users to chat with their opponents from their gaming console’s internet connection while playing the online game. Mind you, this is strictly a voice capability.
What will set CanGo apart from the competition is the use of iChat-like video conferencing and chat tool (much like Oovoo or Skype) for Windows, loaded with useful, powerful tools that make it a viable alternative for small work groups using conference calls and screen-sharing applications. (Rosenblatt, 2008) Our research has shown this technology is now mature enough to make the transition into the video gaming arena. This service can make CanGo the leader in the market because others currently do not have this feature available. This alone should generate enough revenue for CanGo to be prosperous for many years.
Table 2: Capabilities Assessment Financial Analysis CanGo announced October sales are expected to increase 500% and addressed needs to immediately find ways to accommodate more personnel, trucks, warehouse space, shipping & receiving and implementing truck satellite tracking technology. More resources and finances are required from CanGo, which will affect the online gaming effort. The IPO is expected to bring in $130,000,000 in revenue. This funding can propel CanGo to a new echelon. CanGo’s financial pricing objectives should strategically aim to achieve profitability by the second year of introducing the gaming products. According to entertainment media industry analyst Wanda Meloni, “previous console development has been between $3 – 5 million per platform. She estimates that the average cost of making one game for one platform is $10 million while multiplatform releases clock in at $18 – $28 million. ” (Glasser, 2010) An important aspect for CanGo to consider in entering the gaming market is developing games for Facebook, the iPhone and other social media or mobile gaming platforms because it is far cheaper thanks to lower production costs.
The cost of developing social media/casual games is estimated at $30,000 – $300,000 in a six month development cycle and mobile/iPhone games at $5,000 – $20,000 thousand with four months of development. (Glasser, 2010) More developers are expected to streamline development, and switch up distribution models for ways to include micro-transactions. The key word for CanGo is to focus on Return-On- Investment (ROI). CanGo should consider web driven flash games that takes 3 to 5 developers approximately 6 weeks to roll out a new game at a cost of about $25-50K.
Leasing server bandwidth costs approximately $3. 50 to $5. 50 per Gigabit of throughput depending on the vendor and traffic location. Strategic Planning The Team BEHS strategic plan acts as the basis for programmatic investments and resource allocations. The strategic plan is the roadmap for allocating resources, both financial and non-financial, to ensure we are focusing our efforts pertaining toon activities that strategically enable CanGo to achieve its mission.
Our strategic planning is guided by four principles: •Educational Needs Are Primary- Supporting and valuing a culture of learning in the workplace is important because ongoing education learning is essential toneeded to survive in a time of increasing competition. The work-place is the key area site infor the developmingent of generic skills such as; communication, problem-solving, teamwork, information technology and customer service skills (GaziI Mahabubul Alam, 2009) •.
Growth Through Focus- The engines of growth are narrowing your current focus, Team BEHS recommends lessfewer brands, smallerfewer categories, and fewer markets for newly expanding businesses such as CanGo. Simplicity, commonsimple vision, simplified execution, and straightforwardsimpler organizational designs are key ingredients to driving profitable expansion. •Shared Governance- Ppartnership, equity, accountability, and ownership are all critical elements of shared decision making every employee feel like he or she is “part manager” with a personal stake in the success of the organization.
•Organizational Development- Our proven process is carefully planned and implemented to benefit any organization deliveringpaying particular attention to Profitability, productivity, morale and quality of work life for all employees. Practicing our four basic principles of strategic planning guarantees that your strategic direction is preserved, stakeholders will have ownership in the plan’s success, and that CanGo’s decision making body is held accountable for achieving its desired mission through an annual assessment and audit process. Through continual communications, and transparency successful operations are achieved.