Considering the facts outlined in the Casa del Libro case, I would propose using a number of criteria against which to evaluate both options and decide on an approach.
I believe Casadellibro.com should consider at a minimum:
a) The objectives set by Planeta, the parent company, which as the case indicates were cost control and reduction of losses.
b) The reliability of analyst projections for continued growth in the online market, despite the overall market being down due to the dot.com crash and September 11.
c) The investment that would be required to re-design the UNIX platform to make it operational (in this case, investment made in the platform until that point should probably be considered a sunk cost; going forward costs should be compared to the cost of developing the alternative Microsoft platform).
d) The scalability of the MS platform, should the online market grow as projected.
e) Ongoing maintenance and support costs for both platforms.
f) The intended timeline for the new Casadellibro.com to be online and whether redesign of the existing platform or development of a new one would fit within that timeline.
I believe that after considering these criteria and applying the knowledge that the Microsoft platform would entail lower development and maintenance costs, I would place more focus on market forecasts. If the company had a good reason to believe that the market would grow significantly and that the Microsoft solution would not be scalable, then that would make the switch a short term solution and would not necessarily address the company’s needs or save money in the medium term. However, if market growth was expected to be less than what was originally anticipated when selecting the UNIX platform, I would recommend to the company to switch to the simpler, flatter, more economical Microsoft platform. To conclude, I believe that it is necessary for us to make an assumption in order to provide an answer to the problem. We will therefore assume that market growth would be below projections and we will propose a switch to the Microsoft platform.
Wednesday, February 4, 2009
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