JNB538-E-Commerce Logistics Management
Boo hoo: “Learning from the largest European dot-com failure
"Unless we raise $20 million by midnight, boo.com is dead"
So said boo.com CEO Ernst Malmsten, on May 18th 2000. Half the investment was raised, but this was too little, too late, and at midnight, less than a year after its launch, Boo.com closed. The headlines in the Financial Times, the next day read: "Boo.com collapses as Investors refuse funds; Online Sports retailer becomes Europe's first big Internet casualty".
The boo.com case remains a valuable case study for all types of businesses, since it doesn't only illustrate the challenges of managing E-commerce for a clothes retailer, but rather highlights failings in E-commerce strategy and management that can be made in any type or organization.
Boo.com was a European company founded in 1998 and operating out of a London head office, which was founded by three Swedish entrepreneurs, Ernst Malmsten, Kajsa Leander and Patrik Hedelin. Malmsten and Leander had previous business experience in publishing where they created a specialist publisher and had also created an online bookstore, bokus.com, which in 1997 became the world's third largest book e-retailer behind Amazon and Barnes & Noble.
hey became millionaires when they sold the company in 1998. At boo.com, they were joined by Patrik Hedelin who was also the financial director at bokus, and at the time they were perceived as experienced European Internet entrepreneurs by the investors who backed them in their new venture.
You are required to analyse the given case study
1. Identify the potential issues/problems that might have caused the failure of the e-commerce business given in the case study? (You can discuss both existing/actual information and/or make assumptions regarding the probable issues in the digital business model/strategy that might have led to such a business failure).
2. Presume that currently, the business owners are considering to relaunch the same retail business with a different brand name and a digital business strategy within Australia. If you are appointed as the person in-charge of this start-up business what key macro-economic/ other factors do you consider to relaunching the digital business by leaning from the previous failure?
3. Finally, considering the factors mentioned in (2), develop a successful digital business strategy for the new start-up business. Discuss how you may integrate sell-side/ buy-side e-commerce in your digital business strategy. State how to minimise the potential risks to avoid the re-failure of the business?