will be easily affordable by all income groups since the company cannot afford to charge high prices due to competitive pressures. Many services such as gaming will also be provided for free.
Marketing Mix
The marketing mix of CanGo Inc. is discussed under the following sections:
Product
CanGo Inc. deals with online entertainment market. Their services include online video, audio, reading and gaming. Since level of competition is high in the market, CanGo Inc. will have to show a high degree of innovation in their services. It will have to come up with newer ideas that are not yet provided by other businesses. Gaming services provide a lot of room for innovation. Like Zynga, CanGo Inc. can collaborate with social networking websites such as Facebook, and provide free social gaming experience. The edge that social gaming provides is that firstly, it allows immense scope to promote the company. Secondly, the gaming in general can be free but gaming rewards can be sold for cash that assist in faster progressions in game. People who are too much into gaming buy these rewards without any reluctance, provided that the game offers them unique fun experience.
Price
Since the online entertainment market is highly competitive, CanGo Inc. will have to keep low subscription fee as far as video and audio downloading is concerned. While some websites that provide pirated material offer the facility of free downloads, CanGo Inc. cannot afford to do that as piracy is illegal and providing legal material for free will reduce the firm's profits. The weak side of downloading free torrents is that it poses a high threat of viruses and Trojans. CanGo Inc. can play on this weakness by ensuring that it provides quality and virus and Trojan free material. Online gaming, in general can be offered for free, however, cash payments can be charged for sale of game rewards.
Promotion
The best way to promote the CanGo Inc. services are by ensuring that the firm's official website appears in top search results of top search engines such as Google. This can be done by ensuring that the website's content is written using an excellent SEO language. The firm can also use social networking websites such as Facebook and other free gaming websites such as Miniclip.Com in order to promote its services.
Placement
The website will have to be easily accessible as well as searchable by the consumers. This can be done by ensuring that the firm uses a domain name that indicate the firm name along with the service that it provides for example www.CanGogames.com.
Financial Analysis
CanGo Corp. has survived well as far as financial aspect is concerned. It had not faced any cash flow problems so far. Initially, the gearing ratio was a bit high but with a low payback period of just two years, it managed to control the gearing. Proper management of weak areas can result in improved sales and reduced costs which will result in higher profitability. Although the business did not seem to have any cash flow shortfalls, the Current Ratios were consistently less than 1. This needs immediate attention as a current ratio of less than 1 would mean that the business can face serious cash flow problems in future. Gross Profit Margins of CanGo Inc. have been consistently very high, however, the Net Profit Margins are much lower in comparison to that. This is primarily due to high interest and tax payments. While taxes are out of the firm's influence, CanGo Inc. must try to reduce on interest payments on loans as a low net profit margin would mean that the profits contribute less to per unit of sales.
The financial statements of CanGo Inc. are given as follows:
References
Lauden, K. & Traver, C. (2008). Ecommerce. USA: Prentice Hall.
Plant, R. (2000), Ecommerce: Formulation of strategy. USA: Prentice Hall.
Subramani, M. & Walden, E. (1999). The Dot com effect. International Conference of Information System 1999.
Tedeschy, B. (2001). E-Commerce Report; the computer game industry seeks to bridge an online gap between geeks and the mainstream. The New York Times.
Wood, L. & Szydlik, S. (2000). E-treprenuer. Canada: John Wiley & Sons.
Sheet1
Initial Cost ($) 250,000
Financial Statements
P&L a/C
2006 ($) 2007 ($) 2008 ($) 2009 ($)
Net Sales 150,000-200,000-200,000-230,000
Cost of Goods Sold 27,500-32000 30,000-30,000
Gross Profit 122,500-168,000-170,000-200,000
Less: Expenses 45,000-45,000-46,000-42,500
Net Profit 77,500-123,000-124,000-157,500
Projected P&L
2011($) 2012 ($) 2013 ($)
Net Sales 250,000-300,000-320,000
Cost of Goods Sold 27,000-27250 27,000
Gross Profit 223,000-272,750-293,000
Less: Expenses 50,000-52,000-50,000
Net Profit 173,000-220,750-243,000
Balance Sheet 2006
Fixed Assets 150000 Current Liabilities 172500
Current Assets 100000 Net Profit 77500
Capital Employed 250000 Capital Employed 250000
Balance Sheet 2007
Fixed Assets 140000 Current Liabilities 167000
Current Assets 150000 Net Profit 123,000
Capital Employed 290000 Capital Employed 290000
Balance Sheet 2008
Fixed Assets 150000 Current Liabilities 146000
Current Assets 120000 Net Profit 124,000
Capital Employed 270000 Capital Employed 270000
Balance Sheet 2009
Fixed Assets 200000 Current Liabilities 142500
Current Assets 100000 Net Profit 157,500
Capital Employed 300000 Capital Employed 300000
Sheet2
Sheet3
Sheet1
Initial Cost ($) 250,000
Financial Statements
P&L a/C
2006 ($) 2007 ($) 2008 ($) 2009 ($)
Net Sales 150,000-200,000-200,000-230,000
Cost of Goods Sold 27,500-32000 30,000-30,000
Gross Profit 122,500-168,000-170,000-200,000
Less: Expenses 45,000-45,000-46,000-42,500
Net Profit 77,500-123,000-124,000-157,500
Projected P&L
2011($) 2012 ($) 2013 ($)
Net Sales 250,000-300,000-320,000
Cost of Goods Sold 27,000-27250 27,000
Gross Profit 223,000-272,750-293,000
Less: Expenses 50,000-52,000-50,000
Net Profit 173,000-220,750-243,000
Balance Sheet 2006
Fixed Assets 150000 Current Liabilities 172500
Current Assets 100000 Net Profit 77500
Capital Employed 250000 Capital Employed 250000
Balance Sheet 2007
Fixed Assets 140000 Current Liabilities 167000
Current Assets 150000 Net Profit 123,000
Capital Employed 290000 Capital Employed 290000
Balance Sheet 2008
Fixed Assets 150000 Current Liabilities 146000
Current Assets 120000 Net Profit 124,000
Capital Employed 270000 Capital Employed 270000
Balance Sheet 2009
Fixed Assets 200000 Current Liabilities 142500
Current Assets 100000 Net Profit 157,500
Capital Employed 300000 Capital Employed 300000
Projected Cashflows
2011 2012 2013
Opening Balance 330000-480,000-635,000
Cash Inflows 300,000-320000 315000
Total 630,000-800,000-950,000
Less: Cash Outflows 150000-165000 200000
Closing Balance 480,000-635,000-750,000
Sheet2
Sheet3
Sheet1
Initial Cost ($) 250,000
Financial Statements
P&L a/C
2006 ($) 2007 ($) 2008 ($) 2009 ($)
Net Sales 150,000-200,000-200,000-230,000
Cost of Goods Sold 27,500-32000 30,000-30,000
/>
Gross Profit 122,500-168,000-170,000-200,000
Less: Expenses 45,000-45,000-46,000-42,500
Net Profit 77,500-123,000-124,000-157,500
Projected P&L
2011($) 2012 ($) 2013 ($)
Net Sales 250,000-300,000-320,000
Cost of Goods Sold 27,000-27250 27,000
Gross Profit 223,000-272,750-293,000
Less: Expenses 50,000-52,000-50,000
Net Profit 173,000-220,750-243,000
Balance Sheet 2006
Fixed Assets 150000 Current Liabilities 172500
Current Assets 100000 Net Profit 77500
Capital Employed 250000 Capital Employed 250000
Balance Sheet 2007
Fixed Assets 140000 Current Liabilities 167000
Current Assets 150000 Net Profit 123,000
Capital Employed 290000 Capital Employed 290000
Balance Sheet 2008
Fixed Assets 150000 Current Liabilities 146000
Current Assets 120000 Net Profit 124,000
Capital Employed 270000 Capital Employed 270000
Balance Sheet 2009
Fixed Assets 200000 Current Liabilities 142500
Current Assets 100000 Net Profit 157,500
Capital Employed 300000 Capital Employed 300000
Projected Cashflows
2011 2012 2013
Opening Balance 330000-480,000-635,000
Cash Inflows 300,000-320000 315000
Total 630,000-800,000-950,000
Less: Cash Outflows 150000-165000 200000
Closing Balance 480,000-635,000-750,000
2011 2012 2013
Projected Sales 250,000-300,000-320,000
Projected Fixed Cost 20,000-20,000-20,000
Projected Variable Costs 30,000-32,000-30,000
Sheet2
Sheet3
Sheet1
Initial Cost ($) 250,000
Financial Statements
P&L a/C
2006 ($) 2007 ($) 2008 ($) 2009 ($)
Net Sales 150,000-200,000-200,000-230,000
Cost of Goods Sold 27,500-32000 30,000-30,000
Gross Profit 122,500-168,000-170,000-200,000
Less: Expenses 45,000-45,000-46,000-42,500
Net Profit 77,500-123,000-124,000-157,500
Less: Interest & Taxes 25,000-32,000-33,000-38,000
NP After Tax & Interest 52,500-91,000-91,000-119,500
Projected P&L
2011($) 2012 ($) 2013 ($)
Net Sales 250,000-300,000-320,000
Cost of Goods Sold 27,000-27250 27,000
Gross Profit 223,000-272,750-293,000
Less: Expenses 50,000-52,000-50,000
Net Profit 173,000-220,750-243,000
Balance Sheet 2006
Fixed Assets 150000 Current Liabilities 172500
Current Assets 100000 Net Profit 77500
Capital Employed 250000 Capital Employed 250000
Balance Sheet 2007
Fixed Assets 140000 Current Liabilities 167000
Current Assets 150000 Net Profit 123,000
Capital Employed 290000 Capital Employed 290000
Balance Sheet 2008
Fixed Assets 150000 Current Liabilities 146000
Current Assets 120000 Net Profit 124,000
Capital Employed 270000 Capital Employed 270000
Balance Sheet 2009
Fixed Assets 200000 Current Liabilities 142500
Current Assets 100000 Net Profit 157,500
Capital Employed 300000 Capital Employed 300000
Projected Cashflows
2011 2012 2013
Opening Balance 330000-480,000-635,000
Cash Inflows 300,000-320000 315000
Total 630,000-800,000-950,000
Less: Cash Outflows 150000-165000 200000
Closing Balance 480,000-635,000-750,000
2011 2012 2013
Projected Sales 250,000-300,000-320,000
Projected Fixed Cost 20,000-20,000-20,000
Projected Variable Costs 30,000-32,000-30,000
2006 2007-2008-2009
NP Margin 35% 46% 46% 52%
GP Margin 82% 84% 85% 87%
Current Ratio 0.58-0.90-0.82-0.70
Rerturn on Capital Employed 21.00% 36.40% 36.40% 47.80%
Sheet2
Sheet3
Sheet1
Initial Cost ($) 250,000
Financial Statements
P&L a/C
2006 ($) 2007 ($) 2008 ($) 2009 ($)
Net Sales 150,000-200,000-200,000-230,000
Cost of Goods Sold 27,500-32000 30,000-30,000
Gross Profit 122,500-168,000-170,000-200,000
Less: Expenses 45,000-45,000-46,000-42,500
Net Profit 77,500-123,000-124,000-157,500
Projected P&L
2011($) 2012 ($) 2013 ($)
Net Sales 250,000-300,000-320,000
Cost of Goods Sold 27,000-27250 27,000
Gross Profit 223,000-272,750-293,000
Less: Expenses 50,000-52,000-50,000
Net Profit 173,000-220,750-243,000
Balance Sheet 2006
Fixed Assets 150000 Current Liabilities 172500
Current Assets 100000 Net Profit 77500
Capital Employed 250000 Capital Employed 250000
Balance Sheet 2007
Fixed Assets 140000 Current Liabilities 167000
Current Assets 150000 Net Profit 123,000
Capital Employed 290000 Capital Employed 290000
Balance Sheet 2008
Fixed Assets 150000 Current Liabilities 146000
Current Assets 120000 Net Profit 124,000
Capital Employed 270000 Capital Employed 270000
Balance Sheet 2009
Fixed Assets 200000 Current Liabilities 142500
Current Assets 100000 Net Profit 157,500
Capital Employed 300000 Capital Employed 300000
Sheet2
Sheet3
Sheet1
Initial Cost ($) 250,000
Financial Statements
P&L a/C
2006 ($) 2007 ($) 2008 ($) 2009 ($)
Net Sales 150,000-200,000-200,000-230,000
Cost of Goods Sold 27,500-32000 30,000-30,000
Gross Profit 122,500-168,000-170,000-200,000
Less: Expenses 45,000-45,000-46,000-42,500
Net Profit 77,500-123,000-124,000-157,500
Less: Interest & Taxes 25,000-32,000-33,000-38,000
NP After Tax & Interest 52,500-91,000-91,000-119,500
Projected P&L
2011($) 2012 ($) 2013 ($)
Net Sales 250,000-300,000-320,000
Cost of Goods Sold 27,000-27250 27,000
Gross Profit 223,000-272,750-293,000
Less: Expenses 50,000-52,000-50,000
Net Profit 173,000-220,750-243,000
Balance Sheet 2006
Fixed Assets 150000 Current Liabilities 172500
Current Assets 100000 Net Profit 77500
Capital Employed 250000 Capital Employed 250000
Balance Sheet 2007
Fixed Assets 140000 Current Liabilities 167000
Current Assets 150000 Net Profit 123,000
Capital Employed 290000 Capital Employed 290000
Balance Sheet 2008
Fixed Assets 150000 Current Liabilities 146000
Current Assets 120000 Net Profit 124,000
Capital Employed 270000 Capital Employed 270000
Balance Sheet 2009
Fixed Assets 200000 Current Liabilities 142500
Current Assets 100000 Net Profit 157,500
Capital Employed 300000 Capital Employed 300000
Projected Cashflows
2011 2012 2013
Opening Balance 330000-480,000-635,000
Cash Inflows 300,000-320000 315000
Total 630,000-800,000-950,000
Less: Cash Outflows 150000-165000 200000
Closing Balance 480,000-635,000-750,000
2011 2012 2013
Projected Sales 250,000-300,000-320,000
Projected Fixed Cost 20,000-20,000-20,000
Projected Variable Costs 30,000-32,000-30,000
Sheet2
Sheet3
