In 2001 Planeta Group, from Spain, decided to lunch a new project on the web called Casadellibro.com. Their idea was to become world leaders in the Spanish book market. They were expecting an important growth in their sales, but due to the world situation with the dot.com crash and 9/11 terrorist attack their priorities changed. Know they are facing a situation in which cost control and loss reduction is their primary objective. Given to this, being in the middle of lunching their new venture has taken them to the edge to make a critical decision on whether using their old high maintenance platform or buying a new inexpensive one in order to have a successful venture.
When taking the first steps to create Casadellibro.com the company was very enthusiastic with the new venture and decided to get the most advanced platform at the time. This platform had the best components but wasn’t integrated, regardless to the efforts of the consultants. Nevertheless, this platform was costumed designed and prepared to handle the growth of the company, but the high maintenance costs contrasted the new goals of the company to reduce costs. But if any changes had o be made to rescale the platform for growth in the company more problems would have to be taken into consideration. The lack of integration is a big problem for dynamic businesses such as this one, that are vulnerable to new technologies that can make their business simpler and more profitable.
As the market environment changed Planeta Group decided to look for a new option in the market to reduce their operation costs. They came up with an inexpensive Microsoft Platform fully integrated that offered them the possibility to reduce their cost and therefore reduce losses. Changing into this new platform involved accepting a loss in the previous investment on the old platform and loss of time adapting all their systems to the new platform.
The operation costs to implement a new platform, involved training personal, instalation problems, and time loss. New technologies never fit perfectly, there are always unexpected situations that have to be taken into consideration before making critical changes. But after implementing the whole system there is no doubt that operational costs are going to be reduced, permitting Casadellibro.com to have an advantage to reduce their prices and be more competitive in the mature market in which they are. However, if the growth happened to be higher than expected the new platform would have to be rescaled and redesigned to meet their needs, which means spending more money and loosing more time.
Therefore, by taking into consideration the existing crisis in the market to expect growth is not realistic. But to reduce their costs is a problem they have to face in the present regardless to any change in the market. The company has their leverage on books and has to be able to sell as many as they can to meet their obligations. For this reason I consider that bringing new technology to their operations is an investment that will turn into future growth. The new integrated systems are inexpensive and easy to rescale, because Microsoft focuses on making their products simple and efficient to their customers. As for the other platform they can sell it and reduce their losses. At the moment the market is slowing down making it a good time to invest in a better service, so that when the market peaks they can overlap the competition. Is always better to solve small problems while they are small, because as they get big everything gets more complicated.
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