Cango According to Many of the Events

CanGo

According to many of the events and reports contained in the news blurbs that make up the qualitative information supplied in this case study, Liz Bennett has every right to be proud of what she has accomplished with a company that started in her bedroom. A successful IPO, the acquisition of another company as a means of expanding operations, and the previous diversification of operations and product offerings all occurred within a few short years, demonstrating the pace, commitment, and ambition of this company and its leader. Not all of these ambitious projects have actually met with a great deal of success, however, and in fact according to the statements made in the case study the only profitable division of the company is the book selling division, which was the original business created by Ms. Bennett before any diversification or expansion took place. An examination of the company's financial well-being can help to determine if Ms. Bennett's place really is at the helm of this company, as she claims, or if it is time to hand the wheel over to someone with more experience and for her to take a back seat for a time to watch and learn.

The company is by no means in dire financial straits; despite significant costs and a lack of profitability in the majority of the company's operations, the company still shows an overall profit of more than five million dollars annually. This is by no means Fortune 500 territory, but for a young company still very much in its growth phase and bogged down by expanding operations that haven't necessarily become streamlined it isn't so bad. Still, there are recommendations that can be made to create a better financial position for the company.

Even though the divisions are not yet profitable, the online gaming and customized MP3/CD/DVD divisions generate significant revenues, meaning that the company is already quite successful at delivering these products and services to consumers. Brand loyalty is being built -- at quite a rapid pace, given the increase in revenue from previous years observed in the book and customized MP3/CD/DVD sales revenues -- which should provide a great deal of confidence in the company's ability to continue generating large revenue streams and eventually a large amount of profit from these operations. Clearly, there are issues in the value chain that are eroding profits; these inefficiencies need to be sought out and eradicated through much tighter controls and possibly some significant restructuring. If costs can be brought down, profits can be easily obtained, and this is not something that every business (let alone every Internet business) can claim in the current era.