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Compare and discuss contrast between Staples.com & Boo.com

Extracts from this document...

Introduction

TABLE OF CONTENT Executive Summary 2 I. Staples.com - Success Case Study 3 A. Introduction 3 B. Business model & Strategy 4 C. Major Reasons for Staples.com Success 5 D. What could Staples.com have done differently that might made it a failure? 7 II. Boo.com - Failure Case Study 8 A. Introduction 8 B. Business model & Strategy 9 C. Major Reasons for Failure 10 D. What could Boo.com have done differently that might made it a success? 12 III. Compare and discuss contrast between Staples.com & Boo.com 13 IV. Conclusion 16 Appendix A: Critical Success factors 17 Reference: 18 Executive Summary Electronic Commerce (EC) applications were first developed in the early 1970s with innovations such as electronic fund transfer (EFT). As the Internet became more commercialized and users flocked to participate in the World Wide Web in the early 1990s, the term Electronic Commerce was coined and EC applications rapidly expanded. Starting in 1999, a large number of EC companies, especially e-tailing ones, began failing. At the same time, many EC initiatives in click-and-mortar organizations were discontinued. Although many blame the failure on economy and recession, but even in hard times, it's still possible to flourish. This article will analyze both a successful (Staples.com) and failure (Boo.com) stories of company involved in the electronic commerce (EC) and discuss the likely keys factors that may explain its current state. The article will also try to look into the keys factor that may have changed the fate of these companies. The last section of this article will attempt to compare and discuss the contrasts between the two organizations in term of critical success factors. I. Staples.com - Success Case Study A. Introduction Staples.com, is a B2B (business-to-business) office supplies delivery provider which owns and operates its own fleet of trucks, but also uses third-party logistics providers. Their clearly stated value proposition is "next day delivery guaranteed." ...read more.

Middle

The site's advanced search engine allowed customers to search for items by color, brand, price, style, and even sport. Visitors were able to question Miss Boo, an animated figure offering fashion advice based on locale or on a specific activity (such as trekking in Nepal). Boo.com also made available a telephone customer service advice line. In addition Boo was to feature an independently run fashion magazine to report on global fashion trends. Customers could view each product from every angle, zoom in and out and even use a virtual mannequin to try on outfits so they could see how the latest retro Puma sneaker or Fred Perry garment really looked. And unlike almost every other e-commerce business, Boo.com would flaunt its e-snobbery by charging full price for everything. C. Major Reasons for Failure * Liquidity and Cash Flow Many Internet companies have problems controlling the rate at which they spend their available funds, sometimes called their "cash burn" rate. Boo.com suffered from this problem throughout its life. Boo.com spent very large amounts setting up their systems and, funded generously by individual investors. They were able to pay for massive advertising campaigns before they began trading to publicise their web sites. * Poor Service (Lack of Customer Relationship Management) 1. Launched non-complete version of their website. Consumers get very annoyed when the e-commerce website they are trying to shop does not work. In software related commerce, one of the biggest complaints from users is insufficient testing for bugs before marketing to the public. 2. Annoying pop-up windows and Cumbersome Interface The multiple pop-ups further slowed down user download times and took away the sense of user control. When making a purchase most consumers prefer to make their own decision without pressure from pushy salesmen. From personal experience, most consumers prefer to seek out information as needed instead of having it pop up in another window. ...read more.

Conclusion

With this vision, it laid the strategy foundation that the key to online success and increased market share was to make its e-commerce site as usable as possible. Staples wanted the site to be "customer-driven": to support customer needs in an easy-to-use, intuitive way. IV. Conclusion There would be various reasons for failure in EC such as lack of funding, incorrect revenue model, and so much more, but typically, no business model should ever ignore the golden rule - customer satisfaction. Strategic planning clarifies what an EC project should do or focus on with respect to the company's mission and the given business environment. To start or to survive companies must learn from the lesson of others' failure and successful stories. Appendix A: Critical Success factors (Extract from: http://www.e-bc.ca/) Critical Success Factor Definition Competitive Advantage 1. Convenience The usability of the web site for the purpose for which it was designed: for example, to assist, buying or selling, to find information, to track a process. Users find it easy to carry out the process, so they are more likely to use the site and return to it. 2. Brand Image The ability to build up a brand name for the e-commerce business, and its products and services, using online and offline brand-building techniques. The more awareness a business can generate for its site, the greater the volume of traffic and potential for sales. 3. Interaction The means of relationship-building with individual customers by providing timely pre-sales information and excellent after-sales support. The business builds up a critical mass of loyal customers. Reference: 1. e-business infrastructure: Lessons from failure, Computer Finance, Dec 2000, p11 2. Mack, Ann M., Stayin' Alive, Adweek Eastern Edition, 06/12/2000, Vol. 41 Issue 24, p68 3. Turban, Efraim, King, David., Lee., Warkentin, Merill., Chung, H.Michael. (2002) "Electronic Commerce 2002: A Mangerial Perspective", Prentice Hall. 4. www.staples.com (Search within this site) 5. www.boo.com (Search within this site) 6. www.molecular.com/clients/caseStudies/staples.aspx (Search within this site) 7. Mori / National Consumer Council. August 2000. "E-commerce and Consumer Protection; A Report by the National Consumer Council" 8. (www.boston.internet.com/news/article.php/494001) (Search within this site) Assignment ...read more.

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