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The Eastern Consultants: Team A

LOUTRICIA ABUYU

REBECA AQUINO

DINEL BOWEN

ANGELITA RIVERA

JOSHUA CLARK

DENIECE MCCOY-STEVENS

CRYSTAL TRAVIS

KRISIN POPIELA
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Final Report
Presented To The Board of Directors of CanGo
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AGENDA

Executive summary

SWOT Analysis

Market Analysis

Competitive Analysis

Financial Analysis

Strategic Planning

Conclusion
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EXECUTIVE SUMMARY

CanGo is currently a company with online shopping location
for books, video, and music

CanGo has an opportunity to enter the online gaming market

CanGo has being successful in the past and expects to
continue this way in this new venture

CanGo will need to use their strengths, recognizing their
weaknesses, taking advantage of all opportunities, and
avoiding or disarming all threats in order to succeed
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SWOT ANALYSIS
STRENGTHS




Company offers a popular product
- specialized media goods at an
affordable price
Company is particular about what
they sell – they only carry
merchandise that employees
would want to buy themselves
WEAKNESSES

No formal strategic plan

No financial analysis

Weak implementation plan for online
venture

Lack sufficient facilities to meet
increased business demands

Ordering system needs updating

High complaint level of wrong books
being delivered

Performance appraisal system lacks
objective measures, resulting in server
outages and order fulfillment errors
Talented and dedicated staff
Increased sales overseas
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SWOT ANALYSIS
OPPORTUNITIES

Develop marketing plan for online gaming system

Projected 500% increase in business for
upcoming holiday season

THREATS

Incorrect or inexperienced personnel
for online and other growth ventures

Current order fulfillment system is not
able to meet increased work-load

Insufficient amount of IT staff to work on
bandwidth, capacity and other projects

Current staff appraisal ratings are
inflated. Company will be forced to
increase payroll beyond what it can
afford if this continues.

Fickle nature of online consumers and
ever-changing technology
Considering issuing an IPO, which would increase
profits and visibility

Increase facility’s processing system. Implement
ASDS system to increase flexibility and capacity

Develop online marking plan based off of
research on consumer behavior that highlights
self-concept

Engage in market research in Japan to find out
why sales have increased so significantly

Research economic benefits of going into new
ventures such as digital music, movies, Project
Black Bear, etc.
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MARKET ANALYSIS
SIZE OF THE MARKET AND
DEMOGRAPHICS

Online Gaming growth rates have helped drive the market and has taken off in Europe and
holds a potential for the U.S. “The UK has one of the most established online gaming industries
and the Gaming Market is now worth as much as 30 Billion as of 2012. The size of the market is
growing and growing and times have changed and the U.S is lining up to Legislate their way
into the lucrative market of Online Gaming.

“H2 Gambling Capital, a leading supplier of data and market intelligence on the global
gambling industry, puts the size of the global online gaming market at about US$21 billion,
hitting US$30 billion by 2012 (Matuszak, 2011)”. This is considering that some of the biggest
potential markets such as the U.S., China, Japan, and South Korea, still prohibit many forms of
gaming over the Internet.

The Target market is geared toward all ages and background. The average game player is 30
years old and has been playing games for 13 years. The average age of the most frequent
game purchaser is 35 years old. Forty-five percent of all game players are women. In fact,
women over the age of 18 represent a significantly greater portion of the game-playing
population (31 percent) than boys age 17 or younger (19 percent) (Matuszak, 2011).”

The online gaming industry as many consumers living in rural areas, urban areas and major
cities across the globe. Their income range from $35,000 a year to $500,000. Most wealthy
consumers play for the sport of it. There are social network sites that range from all ages, such
as Facebook that gaming companies are closely watching for growth.
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MARKET ANALYSIS
GROWTH AND POTENTIAL

The online gaming market represents one of the fastest growing segments of the gaming industry and
the market prospects could abound in the coming years. Business-to-business expansion: Established
gaming sites are looking to license their software and services platforms to establish new revenue
streams and gain market presence.

The online gaming market has a very high rate of growth. The market for global interactive gaming
will grow at about 42% to U.S. $30 Billion in 2012 (Matuszak, 2010).” Online gaming growth rates have
also helped to drive market consolidation, as larger players in the gaming sector have looked to fill
out their capabilities or reach into new markets. Online gaming growth will continue worldwide as the
potentially richest marketplace remains largely unrealized.

The United States may have the most potential as a lucrative market for online gaming. There is
potential in the U.S. for new rounds of merger and acquisition activity, both among traditional gaming
companies reaching into virtual markets and existing virtual leaders taking over smaller niche
competitors. The industry will remain strong and is growing fast.

There is far to much demand and enough reason for consumers to keep coming back. Online gaming
has a loyal customer base, the focus is high on profit sectors, listen to customers and they embrace
change. As the popularity of both gaming and online entertainment continues to grow, the online
gaming market is without a doubt an attractive area of expansion for software developers, casinos and
other land-based gambling operators, related suppliers, and industry newcomers and investors alike.
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Competitive Analysis
CanGo Inc. Strategy to Enter Online Gaming
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Competitive Analysis
In order for a business to remain competitive in their market, they need to be aware of whom their
competition is; this is vital to the success of a business. A competitive analysis gives a business the
necessary data to remain competitive, providing detailed information about the competition; including
strategies and success. Developing your own plan, without taking into account your competition, is
potentially setting yourself up for failure.
Eastern Consultants have conducted a competitive analysis on behalf of CanGo to aid in the development
of their marketing strategy within the Retail and Online Gaming Industries. This young business has
experienced growth by chance over the last few years. The growth has been slow as of late, much slower
than their competition. In order to remain competitive in the market, CanGo must understand both the
Retail and Online Gaming industries, as well as knowing their competitors objectives, market desires, and
success rates within the market.
The three gaming companies were rated on site quality, user quality, customer service and match quality.
CanGo can learn a wealth of information about its competition from the few key areas that are depicted
below. These areas are very important to customers/gamers and will have a large impact on revenue and
growth if taken into consideration when implementing its system.
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Paybackgames.com

Paybackgames.com currently holds the number one slot was built by gamers for gamers each
and every feature on their site was created and designed based upon feed-back from PBG
gamers

There is a moderator present for each and every Daily Match, watching the players to ensure
that there is no cheating, as well as that game behavior and communications are appropriate
and not disruptive to the match and its players.

Paybackgames.com listens to its user’s feedback, and weighs user suggestions regarding how
they can improve the site or the matches that they are providing.

Paybackgames.com has excellent match structure. They provide free matches daily, and the
match types allow for individual and team play. They have regularly scheduled tournaments,
as well as money and prize matches.
FraggedNation.com

FraggedNation.com is a fairly large competitive gaming website. They have managed to grow
their website fairly successfully without sacrificing much of the quality of the site, or the
matches.

The site is clean, and the information is easily visible and accessible. Advertisements blend in
with the site's format, instead of blasting the player in the face. To a new-comer with no
competitive gaming experience, it may be too complicated for them to digest.
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
FraggedNation.com, as these are the users which actually care
about game etiquette, and who contribute to quality game play
experiences - plus the cheating occurrences are fewer amongst
these users.

Turn-around for trouble-tickets is much faster, with it usually
occurring within 24-48 hours. However, this may be due to the fact
that the user community within the site is so good.
Gamebattles.com

GameBattles.com is the largest online destination for competitive
console and PC gaming. Amazing in its quality, but covered with
advertisements. The ads are the first thing you see, instead of the
actual content of the site, which is a negative.

Most of the users of this website consist of "weekend warriors" or
juveniles who are constantly yelling obscenities at you that would
make anyone's mother blush with shame.

With a response time of 48 - 72 hours for trouble-tickets, timeliness
is not impressive. This may be a result of an attempt to save money
on employee costs, which results in a lower quality experience for
gamers.
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
FINANCIAL ANALYSIS
Return on Equity – How well is CanGo using
investor dollars
Efficiency Ratio – How effective is CanGo on
Collecting Credit
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Financial Analysis
Ratio
Efficiency Ratio:
Receivables
Turnover
Efficiency Ratio:
Inventory Turnover
Financial Leverage
Ratio: Debt/Equity
Ratio
Liquidity Ratio:
Current Ratio
Final number (final Explanation of why ratio is
CanGo's State
result of the detailed
important
calculation)
1.56
Quantifies the company's
ability to extend credit and
collect on debts
Analyze how CanGo is going about
collecting on their accounts receivable.
0.28
Measures how many times the
company's inventory is sold,
We would like to see this number higher
used or replaced during a
so we will need to find ways to move
given time
inventory faster
0.67
Proportion of shareholder
equity and debt used to fund
assets
More debt needs to be financed with
equity.
5.39
Current assets of the company
compared to its liabilities.
CanGo seems to be in a good position.
Liquidity Ratio:
Quick Ratio
4.53
Liquidity: Working
Capital
164,520,000
Profitability Ratio:
Return on Assets
0.02
Profitability Ratio:
Return on Sales
0.1097
Short term liquidity that
measures the company's
ability to meet short term
obligations with liquid assets.
Higher number = Stronger financial
position. Would have to do an industry
comparison to review how well CanGo is
doing.
Determines if the company has Currently CanGo is operating with a
enough short term assets to
good amount of working capital. It is
cover short term debt
over 50% of their current assets.
Indicates how profitable the
company is in relation to its
assets or generating revenue We would want this to be higher by
likely working to raise net income.
The net income earned from
each dollar in sales
Raise this number where possible to
show we have a high rate of return on
sales.
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Financial Analysis – Net Income
11%
$5,486,000.00
$50,000,000.00
Net Income
Sales
Net Profit Margin
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ROA,
2.30%
Assets,
$235,900,000.00
Net Income,
$5,486,000.00
Earnings
(after tax),
$5,486,000.00
ROE,
3.90%
Stockholder
Equity,
$142,000,000.00
Strategic Planning
Recommendations
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
Strategic Plan - A strategic plan tells a company where they
are at now, where they will be going, and how they will get
there

Vision Statement - Our vision is to continually expand our
company. We want to continue to provide customers with an
exceptional shopping experience with books and videos, as
well as grow our footprint into the world of online gaming.

Mission Statement - Our mission at CanGo is to provide an
industry leading service to our customers with a commitment
to quality.

Goals



CanGo is striving to increase revenue by 500% by the end of the
fiscal year.
Seeking the top rated customer satisfaction feedback
Building trust with our customers to keep them as returning
customers
Strategic Planning
Recommendations
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


Actionable Planning

Understanding the target audience

Know the demographics of that audience

Seek out the trends of where customers are shopping

Building trust with customers

User friendly Website
Competitive and Financial Guidance

Hire development talent

Build a unique distribution network

Optimize monetization
Ethics and Social Conscience

Gamers getting virtual life and real life situations mixed up

Incorporate online games that are educational and storytelling
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CONCLUSION
 Principle
Issues of Concern
 Leadership
(Decision Making Skills)
 Lack of Company Direction
 Recommendations
 Management
Skills Training
Leadership Development
 Team Management
 Decision Making
 Project Management
 Strategic Planning
Be Aware of Emerging Technology
 Research and Development


For Improvement
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REFERENCES

Millard, E. (2003). The Future of Online Gaming. E-Commerce
Times, 2.

Matuszak, G. (2010, March 10). Online Gaming: A Gamble or a
Sure Bet. Key Trends, pp. 5,6,10.

Return on equity. (n.d.). Retrieved from
http://www.investopedia.com/terms/r/returnonequity.asp

Spiceland, J. David. Intermediate Accounting, 6th Edition. McGrawHill Learning Solutions, 2011.
<vbk:0077587502#outline(7.6.2.3.1.1)>. Pages 133-138