Amazon and Boo.com: e-commerce success and failure analysis

¶ … 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.

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.

Another recommendation for Boo would have been the availability of many different types of goods which are favored by different age groups. Since it mainly appealed to 18 to 24-year-olds, most of which are students and do not prefer to buy online. Targeting towards a more mature audience of 25 to 40 could have resulted in more buyouts since they are the working professionals and earners who can buy more than students. Boo should have expanded in other equipments such as household items, food, electronics and so forth. It should have also focused on introducing more cheap items than the expensive ones in order to increase its buyout rate.

Besides the mentioned two reasons, one other reason which might have saved Boo was investment, during its final hours of operation it required some 20 million dollars to survive but only managed half of the amount from investors. Therefore getting venture capital on easy terms should have been the priority for Boo from the beginning.