The platform implemented by Casa del Libro in order to offer the clients an online service to buy books was not as good as the company was expected.
With the beginning of operations of AOL in the Spain market, Casa del Libro made an agreement with this ISP company in order to develop this online initiative. The new CEO hired in 2001, found that the platform could not satisfied Casa del Libro needs because the consultants could not use this tool effectively.
With the beginning of operations of AOL in the Spain market, Casa del Libro made an agreement with this ISP company in order to develop this online initiative. The new CEO hired in 2001, found that the platform could not satisfied Casa del Libro needs because the consultants could not use this tool effectively.
What would be your decision? Stick to the previous developed UNIX platform? Or switch to the new Microsoft one?
Having in mind that Casa del Libro was facing economic problems and that cost control and austerity were priorities; my decision would be to stick with the previous developed UNIX platform. Even though the new platform could be cheaper, the investment done in the previous platform would be difficult to recuperate. There will be sunk costs that the company has to calculate in order to take the decision.
I will also suggest to Casa Del Libro to study the possibility of, with AOL or a third party, fix the actual platform in order to solve the mistakes done in the design phase.
Which are the most relevant criteria for you to make the decision?
Before making the decision the company has to:
· Study the possibility of fixing the actual platform: Evaluate if there is something the company or a third party can make in order to fix de actual platform and the costs in which they incur if there is the possibility
· Calculate the sunk costs: Because there are costs that cannot be recover after incurred, in order to make a decision the company must take them into account.
· Evaluate the new investment and how many books they need to sell in order to recuperate the money made in the investment in the first platform as the investment made in the second platform.
· Study and review the new platform in order to be sure it will work: The previous CEO for sure was also convinced about the feasibility of the AOL platform. Therefore the company must study the convenience and the capability of the new platform.
· Evaluate other alternatives: Look in the market for more alternatives, evaluate the future and if there will be a new platform that is going to be launch in the next months. Maybe the company can wait in order to have a better platform.
· Study the possibility of fixing the actual platform: Evaluate if there is something the company or a third party can make in order to fix de actual platform and the costs in which they incur if there is the possibility
· Calculate the sunk costs: Because there are costs that cannot be recover after incurred, in order to make a decision the company must take them into account.
· Evaluate the new investment and how many books they need to sell in order to recuperate the money made in the investment in the first platform as the investment made in the second platform.
· Study and review the new platform in order to be sure it will work: The previous CEO for sure was also convinced about the feasibility of the AOL platform. Therefore the company must study the convenience and the capability of the new platform.
· Evaluate other alternatives: Look in the market for more alternatives, evaluate the future and if there will be a new platform that is going to be launch in the next months. Maybe the company can wait in order to have a better platform.
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