lesson from flops
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Lesson From Flops
By Team Trump
Company Background European company founded in 1998 and
operating out of a London head office World’s first online global sports and
fashion retail site Founded by three Swedish entrepreneurs:
Ernst Malmsten, Kajsa Leander and Patrik Hedelin.
Previous experience in online business: bookstore, bokus.com, which in 1997 became the world’s third largest book e-retailer
Company Vision To become the world’s leading
Internet-based retailer of prestigious brand for leisure and sportswear names
Listed brands such as Polo Ralph Lauren, Tommy Hilfiger, Nike, Fila, Lacoste and Adidas
At launch it would open its virtual doors in both Europe and America with a view to ‘amazoning the sector’
The brand name Boo brand name originated from filmstar ‘Bo
Derek’, best known for her role in the movie ‘10’. The domain name ‘bo.com’ was unavailable, but adding an ‘o’, procured the domain ‘boo.com’ for $2,500
According to Rob Talbot, director of marketing for Boo.com, they were “looking for a name that was easy to spell across all the different countries and easy to remember ... something that didn't have a particular meaning”.
SWOT Analysis
Strengths Big resources and funding Media savvy Huge marketing campaigns Innovativeness : State of the art
technology, Miss Boo Good networking skills
SWOT Analysis
Weakness Liability of newness, lack of experience in the
industry, lack of management skills High overheads Lack of financial controls Too ambitious, expand too fast Did not understand customers Clumsy User Interface
SWOT Analysis
Opportunities Breaking into 18 countries
simultaneously World wide branding First to come up with virtual fitting Economies of scale opportunities Exploit its logistics platform to sell other
products
SWOT Analysis
Threat E-Commerce relatively new Low adoption of technology by users Key internet buying driver –lower prices Conflict with retailer interest High expectations from stakeholders
and customers to deliver
SWOT Analysis
Timeline
(Plan to give interactive timeline, from founded, money expenditure, bankrupt, liquidated)
Boo’s WebsiteLaunched 3 Nov 99
The End of Boo…. 18 May 2000 6 months after its launch Investor funds could not be raised to
meet the increasing costs Burned $185 million in 18 months!
What went wrong…Poor Management
Lack of experience Face challenges of building a global brand No risk management
Growth plan was too aggressive Over recruitment of staff Tight timeline to deliver
What went wrong…Lack of sound Financial Management
Hefty programming costs Excessive employment benefits and luxurious
spending Costs of consultancy
Poor timing of Marketing Launch of site was delay for six months, missing 3
launch dates High expectations and hype had been set
What went wrong…Technology – double-edged sword
Poor timing of technology, customers not ready
Building technology infrastructure – difficult Dogged by technical delays
Poor Customer Management Faulty customer survey Did not account for internet buying driver No customer retention strategies eg
discounts, loyalty programme Poor user experience (easy, convenience)
Lessons To Draw For Our Group Lots of money ≠ equal success. Start small, expand in an appropriate
manner Good Marketing – importance of
branding Experience needed in the industry in
order to understand customers, suppliers
Lessons To Draw For Our Group Importance of good financial controls Understand your customers Proper Use of Technology No matter
how good your back end systems are, the users will only remember your front end. Fail there and you will fail
Aftermath of boo.com Fashionmall.com bought the remains of boo.com The deal also included the Miss Boo character.
Boo's main assets, its software and technology, was sold to Bright Station for $250,000. Boo.com had purchased this technology for $70 million.
Less than $2 million was earned by selling all Boo's remaining assets.
In August 2010, the similarly-named UK online fashion outlet boohoo.com was launched, possibly a name inspired by the earlier website.
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