Case Analysis: Auction Wagon
Tianyuan Wang, twang27@calstatela.edu
MGMT 588
10/02/2014
State the problem Through the case I found that the main problem of AW is finance. The undercapitalization put the company at a great disadvantage. They don’t have enough money on advertising to attract consumers and business, also delay to improve the inappropriateness of software. As it mentioned in case, AW is the first Bay drop-off store in America’s second largest metropolis, Los Angeles. They did not take advantage well of it because the finance problem. Missing the best time to develop market. Thus, the coming competitors make a more difficult business. The number of stores that sprung up around Los Angeles in a short period of time surpassed their imagination. Problems occur in legal issues too, due to the limited financial resources, it could not afford to relocate or appeal to the city, which would have cost lot money in lawyers’ fees with no guarantee of success.

Analyze the problem “Entrepreneurs create new technologies, products, processes, and services that become the next wave of new industries, and these in turn drive the economy.” According to this conception, AW doing well on first comes in a new market with new technology, but AW ignores the importance of finance. Due to the big problem, they don’t have enough cash for operating expenses include the costs of processing transaction and human resource. They need money to improve their initial software that was inefficient and prone to mistakes and delays. Also AW cannot afford good wages to employees as promised. What’s more, AW is facing with the legal issue that may cost lot money in lawyers and put the company in a dilemma situation. These following problems weaken the advantage of AW in this market and competitors coming as well.

Conclusion and Recommendations AW has a good plan in selecting market with unique technology at the beginning, but finance problem make the plan processing slowly. At last, AW realizes their finance problem and missing the best time to develop