Casa del Libro.com

What would have been my decision if I were the management of Casa del Libro in 2002? Would I opt to keep using the previously developed UNIX platform, or would I opt for the cheaper Microsoft version.

In hindsight it's always easy to make a choice. A traditional "management trap" is to keep hanging on to previous made decisions, especially if the company has invested heavily in it. Seeing the situation in which Casa del Libro found itself in 2002, a thorough investigation of the alternatives was more than justified. If I would be there in 2002, I would choose to stick with the expensive and complex solution, which would provide me a robust solution once internet sales took of. The cheaper version could only support low volumes and needs to be replaced when the market takes off.

Why would I do that. Most important for me is the objective Casa del Libro wants to achieve. The wanted to be the leader in the Spanish book market. Of course "catching the Internet wave and improving the market capitalization of the Planeta group as a whole was a strong motivation to launch an online initiative (at the time, all market analysts were severely punishing all firms with no presence on the Internet)". And that wave had mostly disappeared in 2002, or so it seemed.

But at the other hand, internet was the future and in a mature market there were no obvious alternatives for Casa del Libro to further expand and carry the costs of their investment in the huge database and the delivery of all those books. "The online initiative was an available way to achieve world leadership in the Spanish books market".

A second most commonly made management mistake is to cut costs in time of economic downturn. Casa del Libro "made cost control and loss reduction urgent and prior objectives in the short term, moving all the former strategic objectives to a second level". What a company should do, especially if their long term goals depend on it, is invest in times of economic downturn. They have to invest wisely and keep budgets under control. But abandoning the strategic long term goals will lead them to lose whatever advantage they might have had and lose the momentum to gain more headway. Competitors will not start investing in new technologies. Casadellibro.com already made a huge investment in an earlier stage. Once the market for online sales would pick up, casadellibro.com would be able to fully profit from it and expand their position in the market.

Would they use the cheaper Microsoft version, they would have to reinvest in new technology at the moment when they need a good working system the most to stay ahead of competition. If they need to change they will most probably lose their competitive edge (if they were able to achieve any with a cheaper less good functioning system).

Would it have been 2010 I would probable advised the company to invest in putting their database in the cloud and invest in applications to sell these books via Mobile OS of Smartphones and social websites.