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 May 1998, J.P. Morgan to invest in Boo.com. In all, its first round of financing brings the company $12.5 million May 1999, The company begins advertising on TV and in print, in anticipation of its June 21 launch. Nov 1999, Boo.com launches May 2000, Boo.com goes bust! May 2007, Re launched in as a travel site June 2008, CNET hailed Boo.com as one of the greatest defunct websites in history
Boo’s Website
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 e.g. discounts, loyalty programme Poor user experience (easy, convenience)
Burn Rate $150,000 annual salaries for the founders $100,000 apiece to rent apartments in London, $100,000 to redecorate $654,100 on promotional giveaways $600,000 in public relations fees $42 million ad campaign $5,000 per day to crews to perfect the look of Miss Boo $70 million in technology, including Miss Boo
Lessons To Draw For Our Group Lots of money ≠ 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 Proper Use of Technology No matter how good your backend systems are, the users will only remember your front end. Fail there and you will fail Customers = Business Understand your customers as they are key to the business
Aftermath of boo.com Fashionmall.com bought the remains of boo.com Fashionmall.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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