A-TEAM CONSULTING CANGO ANALYSIS1

A-Team Consulting CanGo Analysis

BUSN-460 Senior Project
Professor McCarthy
Team Members: Sarah Misek
Ed Stevenson
Wendy Gerlach
Jose Carrasquillo
Kelly Hansen
DeVry University

A-TEAM CONSULTING CANGO ANALYSIS2

Table of Contents
1. Executive Summary

2 SWOT

4-5

3. Market Analysis

5-7

4. Competitive Analysis

7-10

5. Financial Analysis

10-12

6. Strategic Planning Recommendations

12-14

7. Conclusion

14

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Executive Summary
While CanGo has had a strong start with their company thus far we at A-team consulting
would like to see them increase their bottom line through a strategic and marketing plan and a
more defined organizational structure. CanGo has a market share of 1.96 % of the current B2C
(Business to consumer) ecommerce market which is $1.2 trillion as of 2013. (Statista, 2013) By
deploying the strategic and market plan as suggested this will help ground how their organization
is run allowing them to expand their departments and accompanying services and recognize what
is actually needed to get them to their goal of keeping their current customers and becoming a
force to be reckoned with going forward. A financial analysis of CanGo versus its competitors
will highlight how the funds are used now and how better utilization of those funds will help to
gain market share and ensure future profitability for CanGo.

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S.W.O.T. Analysis
Strengths:
CanGo is a company on the cutting edge of online shopping and gaming. Online industry is very
profitable and is growing each and every year.
CanGo has dedicated employees that will help their company to continue to grow and enable
CanGo to be a successful as it can be.
CanGo prides itself in having an excellent customer service, so that their customers are always
number one and any customer problems are addressed and correctly effectively and efficiently.
Weaknesses:
CanGo struggles with the lack of management guidance and needs to work on having a stronger
leadership and layers of management in order to be successful
CanGo has faced the many challenges of growing pain within the company and will need to be
able to address these issues as CanGo continues to grow faster within the next few years.
CanGo cannot be as competitive as it needs to be, if they do not have a business plan in place.
Working without a business plan has been one of the downfalls of the company. A strategic plan
will enable CanGo to grow and be successful.
Opportunities:
CanGo would be able to improve efficiency through the implementation of a new
barcoding and ASRS system and upgrading their current online ordering. By implementing this
system, it should bring an improved rate of return. Another opportunity is foreign market such as
the one that is already proving profitable with Japan. A partnership with an in-country gaming

A-TEAM CONSULTING CANGO ANALYSIS5

business would make the most sense rather than trying to open a satellite office. They can also
further explore the online gaming and due its rapid growth perhaps develop their own in house
production company further down the road. The gaming industry has had exponential growth and
that is expected to continue in the future. Last there is the opportunity to add e-books and ereaders to their current book offerings to reach a wider audience.
Threats:
CanGos major threat is from the other more established companies such as Amazon and
eBay who already have a significant share of the market. If CanGos plans to venture into online
gaming causes too much debt or the other planned upgrades are implemented poorly, they could
become unable to compete locally or in the world market. Compounding this threat is the current
manual process they use to fulfill orders and the high risk of human error. Last is the risk of
almost no business strategy or clear planning.
MARKET ANALYSIS
The Internet has drastically transformed how Americans entertain and shop. According
to a 2014 study, online retail/ecommerce sales amounted to $298.26 billion dollars with a
projected growth for 2018 is $481.94 billion. (Statistic. (n.d.). The market share for online retail
sales is exceptionally high in the United States which recorded. $ 1.6 trillion dollars in Internet
retail sales in 2015. In addition, this figure accounted for 20.9% growth of total retail sales, in
2015 vs 2014. The average online consumers are individuals with a college education and an
income above $70,000 per household. The flourishing online retail market has been aided by the
soaring numbers of Internet users, 84% of the United States population has access to the Internet.

A-TEAM CONSULTING CANGO ANALYSIS6

Of that 84%, 58% are senior citizen and 96% are young adults. (Americans' Internet
Access:2000-2015).
The figures corresponding to the online gaming market are likewise promising for
CanGo. For example, according to a report published by Transparency Market Research (TMR),
the global market for virtual reality in gaming stood at $466.6 million in 2012. Analysts expect it
to rise at a CAGR 39.20% during the period from 2013 to 2019 and reach an estimated value of
$5,839.9 million by the end of 2019. (Market Research Reports. (n.d.).
The demographics of online gaming consumers reflect a mixed spectrum of users, 155
million Americans playing video games, 59% are males and 41% females. The average age of
online gamers is 35 years old. (U.S. e-commerce grows 14.6% in 2015. (n.d.).
Games are valued (47%) more for their money than DVD (28%), going to the movies (14%), or
purchasing music (12%).
In terms of the global market, China, Japan, and South Korea represent the most rapidly
growing market in the world besides the United States.

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COMPETITIVE ANALYSIS
For the competitive analysis section of our proposal I decided to start off with a
comparison of Apple, Amazon, Barnes and Noble to CanGo.
Apple sells Online streaming of music and video and apps.
Amazon sells Books, Consumables, Prime Video and Music E-books, and Apps.
Barnes and Noble Largest textbook retailer, Digital content (Music, video, book).
The fact is CanGo is not an Amazon, Apple or Barnes and Noble nor should it be. CanGo
is an Online Retailor that is concerned with its customers. CanGo needs to understand their
competition and maximize on what they bring to the marketplace. You are a company of
consumers that want the products you like at a reasonable price when you want them. This

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analysis is to show the Board members what each of the three big online retailers have to offer
and where CanGo may fit in.
Barnes and Noble is no longer a brick and mortar bookstore as it used to be. According to
the website Mental floss digital sales of the eBooks are down 10 percent (Rossen 2016). This is
good news for CanGo and your new ASRS system. With Barnes and Noble being the largest
book seller there is plenty of room for CanGo to keep and improve its title selections. CanGo
may want to take a page from the Barnes and Noble playbook and that is the solid market area of
childrens and romance novels for women (Greenfield 2012). These two areas are important for
hard and soft cover editions that CanGo handles. By utilizing information that the big three
companies have discovered you can ride the coattails until the CanGo name has become a
household word. Barnes and Noble have also learned that it has become too expensive to operate
the old brick and mortar stores and are continually closing them.
Apple is a very recognizable name in the digital world. Always on the cutting edge of
technology and the digital world Apple is still not the top dog when it comes to everything
digital. Their exclusivity has often left big gaps in the marketplace that are always being filled by
competitors. They have their own market and do not want to share with anyone. Apple would
rather that you purchase all of their fine products in order to use, view, and listen to their content.
They still sell to their competitors devices but this is where they face the stiffest competition. As
we have said before CanGo is not Apple and by keeping this in mind we need to move forward
and provide the digital content of games, MP3 and other ventures together by looking at the
service you plan on providing. One of the most important things about Apple and CanGo is that
you both like the products that you sell (Bajarin 2012). It is that real person attitude that has
made Apple who they are and what has made CanGo the same. It is this area of customer service

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that needs to be important to CanGo. We all like to be knowledgeable about the products we like
and use. Sometimes customers have questions about products and services that they have or are
wanting to purchase and this is where Apple excels. They do not have hundreds of devices but
focus on the few that they have (Barjarin 2012), by doing so they bring the top of the line
customer service experience to their customers. CanGo needs to reflect that service when it
ventures into the digital world of media. There will be times when customers of the online
gaming will need technical help. Posting the most common problems online is one way but you
will need to have a live person available to answer the other calls and this customer service is
going to be a key item in your future. All of the big companies had that at one time or another but
have lost it. Apple continues to excel here and CanGo should too.
When it comes to online sales and service Amazon has the market. Continually outdoing
Barnes and Noble, Amazon is a force to be reckoned with. What makes Amazon so great? Oddly
enough it is the fact that they operate at a loss! Yes, Amazon borrows heavily against itself to
provide its services and that cannot be sustained for too long (Green 2015). They have to
constantly sell more to pay back what they borrow in order to operate but this is not what we are
going to focus on. We need to see what they are doing right. As we can see in Figure 1 provided
by Amazon financial reports (Jurevicius 2016), Amazons growth rate outpaced but followed ecommerce growth.
Figure 1. Amazon growth rate compared to e-commerce sales growth in U.S.

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Much of this is due to their low cost structuring. CanGo needs to utilize their known
pricing structure when it comes to charging for online gaming. By understanding their customer
and the price break points you can maximize on the perceived value of online gaming per unit of
time. Amazon has what they call AMAZON PRIME. Amazon Prime has the feature of bundling
all that Amazon has to offer with things like free shipping and free content to those loyal
customers that would already use Amazon. By targeting the regulars and offering them this type
of service, CanGo can provide things like fee shipping to their Gaming customers so they may
want to buy books or free sneak peeks or limited try before you buy games for the book lovers
who may want to play games occasionally.
In short, CanGo can utilize the already popular things that the world wide web has to
offer and ride the crest of the digital wave that was started by others like Apple, Barnes and
Noble and Amazon buy noting their successes and failures.

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COMPETITIVE FINANCIAL ANALYSIS
We at A-Team consulting felt it would be helpful to address some concerns regarding
CanGo and its financial situation. CanGo has proved to be a successful company; however, we
felt that they are not able to continue moving forward with the addition of new projects, ventures
or the hiring of new personnel. Looking at the financial ratios we are able to obtain information
on where they stand compared to their competitors. We will be comparing Apple, Barnes and
Noble, Game Stop and Amazon, who are a few of CanGos major competitors. CanGos financial
ratios give you information on where the company is financially compared to the industry and
their competitors. Some of the financial ratios that are used by CanGo and their top competitors
are liquidity, profitability, leverage and efficiency ratios.
Liquidity ratios are a way to show how fast a company can convert their assets into cash
to pay debts. CanGos current ratio was 5.39. This shows that CanGo will have a harder time
paying their bills on time and can lead to their inability to receive credit from creditor or lose
investors and indicates that CanGo might fail due to financial stress. Amazon had a current ratio
of 1.08, Apples was 1.11, Barnes and Noble stood at 1.19 and Game Stop was at 1.05.
(Investing, 2016; NasDaq,2016) CanGos quick ratio was .85 and this means that it only
accounts for 0.85 percent of the companys assets. This means that they were able to move the
inventory that they have quickly and easily. Amazon, Apple, Barnes and Noble and Game stop
all had quick ratios of .77, 1.08, .26 and .27 consecutively. (Nasdaq, 2016; Investing, 2016)
The profitability ratios provide you with information on CanGos ability to generate a
return on their investments and sales. These ratios provide creditors and investors with how
successful the company is. These ratios consist of return on assets and return on equity. CanGo
showed a ratio of .233 on their return on assets. Amazon and Apple both showed a return on their

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assets of .0107 and .1947. Barnes and Noble and Game Stop showed they had return on assets at
-.0043 and .0842. (MarketWatch,2016; Ycharts,2016; Investing,2016) The return on sales or
equity was .11 for CanGo, whereas Amazon, Apple, Barnes and Noble and Game Stop were at .
12, .61, .10, and .2021. (NasDaq,2016; Investing,2016; Marketwatch, 2016) From these two
ratios we could see that CanGo was not able to provide their services at a lower cost and remain
profitable compared to their competitors abilities to do so. Their competitors were much larger
companies that had been in business a while. They also had a larger customer bases that they had
continuously been able to keep coming back. They offered more products to their customers
compared to what CanGo was able to do.
The leverage ratio was used to show the debt that was incurred in using financing to
continue their operations and invest in other activities such as adding new ventures or to improve
the business. CanGos debt to equity ratio was 0.67. This shows that they were in a good position
to take on new financing if they needed to, but they were still at risk to pay any financing back.
Their competitors show their debt to equity ratios were: Amazon, .6153; Apple, .4909; Barnes
and Noble, .3297 and Game Stop .1807. (Ycharts, 2016; Investing, 2016; Yahoo,2016) The next
ratio is receivables turnover and it shows the ability of the company to be able to pay their bills
on time. CanGos ratio was at 1.52. Amazon, Apple, Barnes and Noble and Game Stop all
consecutively showed ratios of .1778, .1584, .5005 and .6161. (Marketwatch, 2016; Investing,
2016; CSIMarket , 2016) CanGos inventory turnover shows the companys ability to recognize
any obsolescence inventory. This shows that CanGos ability to convert their inventory to cash
was easy. CanGos inventory turnover ratio was .28. They werent holding their inventory too
long and were able to sell it almost as soon as it comes in. Amazons ratio was 8.23, Apples
was .5943, Barnes and Nobles was .0401 and Game Stops was .0362. (CSIMarket,2016;

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Investing, 2016; Morningstar, 2016) This shows that compared to these competitors, CanGo
had the ability to have a quick turnaround in acquiring and then selling their inventory. Whereas
Amazon and Apple were holding inventory longer and Barnes and Noble and Game Stop were
selling just a quick as CanGo.
We would recommend to CanGo that they continue forward with an initial public offering
to raise the capital they needed instead of acquiring financing. This would be helpful by adding
investors instead of creditors. This would give you the ability to finance future expansion and
projects. While the ratios were not the best right then this was still a relatively newer company
that still had a lot more room to grow. We would also suggest that by offering the IPO they
wouuld be able to add the ASRS system to help with processing orders faster and more
effectively for the company. This would enable them to maximize the rate of return on their
investments, the sales that they made and showed more profits with system improvements.
Strategic Planning Recommendations
A-team consulting has identified and analyzed CanGos position in online gaming and its
current distribution center system. CanGo has gotten off to a great start in the online gaming
marketplace. However, CanGo will need to reposition itself in how it relates to online gaming in
the marketplace. In addition, CanGo will need to upgrade its distribution center to a more
modern and updated facility. A-team has its recommendations for the online gaming and the
implementation of new technology in its distribution center. How will CanGo accomplish this
goal? A-team consulting has set in place a strategic plan that will help the CanGo organization in
the short- and long-term, therefore creating stability, longevity, and efficiency in all phases of its
operation.

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Online Gaming
It is no secret that the online gaming marketplace is growing at a fast pace; its large and
diverse. There are also various platforms to consider, such as laptops, smartphones, tablets and/or
I-pads, and desktop computers. The good news is online gaming projections have reach $41.4
billion and by 2025 it will reach $82 billion. Another interesting fact is that 52% of online
gamers are female. In addition, 58% of all gamers are over the age of 40. In the United States
online gamers have reached the 100 million mark. The potential for CanGo to reach all gamers
starts with taking A-team consulting recommendations and executing the strategic plan.
Recommendations
There are several things to considering about the online gaming industry. For example,
who is your target audience? Will you be pursuing a particular age group? Will CanGo focus on
male and/or female gamers? My first recommendations are to conduct statistical research. The
best source to find out statistical information is statista.com a statistics portal with over 18,000
sources. The next recommendation is to decide on a gaming platform, in terms of what kind of
game and who will be your target audience. Considering CanGo lacks the personnel needed for
such a large project. It is recommended that CanGo considers out-sourcing this aspect of its
operations. The other option for CanGo would be to hire the appropriate personnel in order to
fulfil such a large project. The CanGo management team will need to conduct regular meetings
to see its new position in gaming come to fruition.
Distribution Center
Currently the CanGo organization and its distribution center warehouses books and other
products. CanGo has and infrastructure that can be upgraded to become more efficient;

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ultimately it will benefit the consumer and the organization itself. New technology will automate
most of the functions if not all. New technology upgrades will help the CanGo organization
reach its goals in the short- and long-term.
Recommendation
In order to set up the CanGo organization for the long haul we recommend implementing
new technology in the form of Automated Storage and Retrieval System or AS/RS. This new
system will require an up-front investment and will require knowledge and experience in such a
system. There are multiple AS/RS systems to consider, however A-team recommends Stacker
Cranes for boxes. This automated storage and retrieval system is for boxes, totes or trays that
weigh less than 220 lbs.; ideal for books and/or smaller products. Interlake/Mecalux specializes
in warehouse storage solutions. This would be a great starting point for the CanGo organization
to starts its research in pursuit for a better system. Additionally, westfaliaUSA has a benefits
calculator that can be used to calculate the benefits of a high-density automated warehouse
system. A-team consulting strongly recommends using such a tool as part of its research in order
to determine a cost/benefits analysis.
Conclusion
Over the past 8 weeks, A-team Consulting has had the pleasure of working with Ms.
Elizabeth Bennett and her young start-up company CanGo. With a core group of faithful
management staff, she has had stunning success in a short amount of time. However, Elizabeth
and her staff have not grown with the company in terms of organizational structure changes or
human resource management such as employee feedback, evaluations and training which would
include management staff. Nor has the company grown in terms of updated procedures for

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ordering and shipping. This has left them at a distinct disadvantage. By implementing our
suggestions for strategic management, organizational restructuring and training and updating the
existing logistics and ordering systems we feel that these changes will really help Ms. Bennett
and her company succeed as a major contender in the global market.

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