Casa del Libro: Change or not to change

Founded in 1923, Casa del Libro is the only large bookshop chain in the Spanish market, with 12 bookshops in the most important cities at the end of 2003. The main competitors of Casa del Libro are general stores, commercializing other products and considering books as just an additional line. With more than 50 million euros sold at the end of 2003, Casa del Libro is the second bookseller in Spain, far from the leader, El Corte Inglês. Casa del Libro achieved the second position trough an expansive plan designed to grow in a mature market, growing at rates closed to inflation rates. Casa de Libro has more than than 1600 suppliers, the double of its main competitions in Spanish market.Casa del Libro’s database was the most complete and up-to-date database in industry. Casa del Libro leveraged on their huge stock of books to build a reputation of “the cult place” for readers and bibliophiles.

Casa del Libro started to sell books on internet in 1995. At that time Casa del Libro worked with a webside not integrated with the back office and this way not getting advantage of Casa del Libro’s huge database. The limitations of the platform used could not stand the growth expected. Casa del Libro decided to create a new company from the scratch. At this point in time was a strong motivation to launch online initiatives (market analysts were severely punishing all the firms with no presence in the web). Casa del Libro started the development (in 2000) of the initiative followed the typical pattern of the time, acquisition of the best and most expensive equipment and software available in the market. Due to all of this the expectations were too high.

In September to 2001, the CEO found out that the ambitious platform designed couldn’t be integrated, despite the huge amount of money already spent on this, due to design errors. At the same time the known Internet bubble exploded and stock markets fell down abruptly. Definitely September 2001 was not a good month for Casa del Libro. Due to this the strategy of Casa del Libro had to change radically. The high growth sales rates expended take into account during the platform design were not valid anymore. Casa del Libro found itself in a point where it had to decide new objectives for the development of this new platform, shifting from “spectacular investments to brutal austerity and abruptly projects closure. To decide about the new dimension of Casa de Libro the first decision that had to be made was, should Casa del Libro keep the platform or redesign it? Or adopt a new platform?

In my opinion the platform being developed was designed for growth perspectives that don’t exist anymore, is a complicate platform with integration issues. This platform will probably involve high costs of maintenance and high costs associated with future developments. The platform adopted by the company should be a simple one allowing at the same time the company to provide is service with max reliability (probably this won't happen with the actual platform). As a conclusion I would suggest the company to adapt another platform, more adapted to the new growth reality and more simple. By being simpler this platform will be easily to integrate, more reliable and the costs of maintenance and costs of future development will be lower.