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316 Part 2 Strategy and applications

10 Process improvement. The extent to which companies can change and automate business
processes.
11 Integration. The provision of links between underlying IT systems in support of partner-
ship and process improvement.
As a counterpoint to Case Study 5.3, consider Mini Case Study 2.3 which shows how SME
Firebox.com has survived and prospered.

Case Study 5.3 Boo hoo – learning from the largest European dot-com failure

Context though, that in contrast, Amazon did not launch simul-
taneously in all markets. Rather it became established in
‘Unless we raise $20 million by midnight, boo.com is
the US before providing local European distribution
dead.’ So said boo.com CEO Ernst Malmsten, on 18 May
through acquisition and re-branding of other e-retailers
2000. Half the investment was raised, but this was too
in the United Kingdom for example.
little, too late, and at midnight, less than a year after its
launch, Boo.com closed. The headlines in the Financial
The boo.com brand name
Times, the next day read: ‘Boo.com collapses as investors
refuse funds. Online sports retailer becomes Europe’s first According to Malmsten et al. (2001), the boo brand
big Internet casualty.’ name originated from film star Bo Derek, best known for
The Boo.com case remains a valuable case study for her role in the movie 10. The domain name ‘bo.com’
all types of businesses, since it doesn’t only illustrate was unavailable, but adding an ‘o’, they managed to
the challenges of managing e-commerce for a clothes procure the domain ‘boo.com’ for $2,500 from a domain
retailer, but rather highlights failings in e-commerce name dealer. According to Rob Talbot, director of
strategy and management that can be made in any type marketing for Boo.com, Boo were ‘looking for a name
that was easy to spell across all the different countries
of organization.
and easy to remember ... something that didn’t have a
Company background particular meaning’.

Boo.com was a European company founded in 1998 Target market
and operating out of a London head office, which was
The audience targeted by Boo.com can be character-
founded by three Swedish entrepreneurs, Ernst
ized as ‘young, well-off and fashion-conscious’ 18-to-
Malmsten, Kajsa Leander and Patrik Hedelin. Malmsten
24-year-olds. The concept was that globally the target
and Leander had previous business experience in
market would be interested in sports and fashion brands
publishing where they created a specialist publisher and

had also created an online bookstore, bokus.com, stocked by Boo.com.
which in 1997 became the world’s third largest book The market for clothing in this area was viewed as
very large, so the thought was that capture of only a
e-retailer behind Amazon and Barnes & Noble. They
small part of this market was required for Boo.com to be
became millionaires when they sold the company in
successful. The view at this time on the scale of this
1998. At Boo.com, they were joined by Patrik Hedelin
market and the basis for success is indicated by New
who was also the financial director at bokus, and at the
Media Age (1999) where it was described as
time they were perceived as experienced European
Internet entrepreneurs by the investors who backed The $60b USD industry is dominated by Gen X’ers
them in their new venture. who are online and according to market research in
need of knowing what is in, what is not and a way to
Company vision receive such goods quickly. If boo.com becomes
known as the place to keep up with fashion and can
The vision for Boo.com was for it to become the world’s
supply the latest trends then there is no doubt that
first online global sports retail site. It would be a
there is a market, a highly profitable one at that, for
European brand, but with a global appeal. Think of it as
profits to grow from.
a sports and fashion retail version of Amazon. At launch
it would open its virtual doors in both Europe and The growth in market was also supported by retail
America with a view to ‘amazoning the sector’. Note, analysts, with Verdict predicting online shopping in the