Comparing business size, financials, and e-commerce strategies across successful and unsuccessful firms

¶ … Businesses

Comparison and Analysis of Businesses

In this paper we will assess two businesses, one successful and the other unsuccessful. We will attempt to contrast the two businesses in features such as their core business functionalities, sizes, financials and global presence. Our main aim will be to assess what has been the reason(s) for their success and failure respectively. We will also analyze some primary reasons for the different outcomes as well as give some recommendations as to how the unsuccessful one could have been made successful. For our choice we will choose the businesses from the field of e-commerce namely Amazon.com as the successful one and Boo.com as the unsuccessful.

Comparison

First, let's have a look at Amazon. It is an American multinational e-commerce firm which was founded in 1995, at first it served as a bookstore available online but soon it expanded its operations by selling different other things such as DVDs, computer software, electronic items, food, toys and many other materials. Its core business function is still as an online retailer and its presence is currently in many different parts of the world. It has a separate website for nations such as Canada, Germany, Italy, China, United Kingdom, France and many others. It is also looking to launch a separate website in other territories such as India and Netherlands.

Looking at its recent financial data available of the past year, its revenues were calculated to be more than thirty four billion dollars, operating income worth 1.4 billion dollars, net income worth 1.15 billion dollars, total assets worth more than 18.5 billion dollars, total equity more than 6.8 billion dollars and an employee force of thirty three thousand seven hundred globally.

Now let's have a brief look at Boo.com, it was an internet firm based in the U.K which was founded in 1998 and was disestablished in 2000. Its business was the selling of many different types of fashion apparel which mainly included sports brands such as Adidas, Nike and others through the use of internet. The firm spent more than one hundred and thirty million dollars worth of venture capital in only eighteen months mainly on things such as technology. At its peak, boo.com had 350 employees which were mainly situated in European markets such as London, Paris and Munich, It also had offices in New York.

Analysis and Comparison

Let's compare the outcome of both of our chosen firms and analyze some of the reasons which were responsible for the different outcomes. The founder of Amazon focused exclusively on getting good venture capital at the start of his business, it also made Amazon more robust and expandable since more investors were ready to invest in it when the firm needed them to. Comparing this to Boo we see that it had a somewhat hard time in collecting venture capital from its investors at different stages of its lifecycle especially when it was about to go bust. Therefore this can be classified as one of the main reason for both of the firm's contrasting outcome. "Many buyers are more attracted towards good offers rather than good quality" (Gray, 2007).

Another reason for different outcome can be attributed to Amazon's publicity factor. Today it is very common to find the banner or advert of Amazon on any common website of the internet, it also uses many different techniques to get the visitors involved in the website even if they do not have to buy anything such as rate certain objects, comment on certain things and so on. "Sellers should offer more products according to the current demand" (Barnes, 2007).

Comparing this to Boo we see that it had to invest a lot on technology and even then it failed to attract huge masses as compared to Amazon. It also lacked the creativity to attract viewers in getting involved in the website.

Third reason for the different outcome can be attributed to the simplicity of Amazon and the complicity of Boo, when Boo was launched a huge portion of the global internet users were using dial-up connection which is very slow as compared to broadband we have today. Boo also used many complex programs which were big in terms of memory and were necessary for the users to download in order to view the products, many of these software programs went on to take a lot of downloading time, there were also some complaints from the users for not finding what they wanted in the website. This made things very difficult at the start for any buyer.

Comparing this with Amazon, we see that the product line-up is easy to access and view. It is also easy to place orders and the delivery rate is also one of the best in the world. The viewers can find many different types of products ranging in many different brands easily. All of this has made Amazon very attractive even for those who don't intend to buy anything from the website.

Amazon also has a huge scope in dealing with many different items and is not concerned with only one field of items, here Boo lacked the creativity and was only interested in selling sports and fashion apparel which was appealing mainly to a certain age group. This greatly limited Boo in the start as well as its potential to expand in future. "Gaining investor confidence is one of the main points which lead towards a successful business venture" (Pokora, 2007).

Recommendations

Let's have a look at few recommendations which might have helped Boo in its survival. Firstly, Boo was thought to be way ahead of its time by many analysts, they viewed it as a complicated site which far exceeded its competitors in terms of usage of technology. It also used its capital wrongly as it could have been used to attract more buyers through publicity. In the start, Boo should have made itself simple enough for everyone to view, analyze and use since at that time the majority of the internet households still preferred to buy goods from stores directly instead of online. It should have used simple but good viewing technology which would have saved users from the hectic software download option.