Boo hoo Learning from the largest European dot-com failureThi

Boo hoo: “ Learning from the largest European dot-com failure
This in-depth case study of Boo.com features in the last few
editions of my book Digital marketing: Strategy,
Implementation and Practice - it's based is based on story of
Boo.com failure from the excellent book "Boo Hoo - a dotcom
story"
"Unless we raise $20 million by midnight, boo.com is dead"
So said boo.com CEO Ernst Malmsten, on May 18th 2000. Half
the investment was raised, but this was too little, too late, and
at midnight, less than a year after its launch, Boo.com closed.
The headlines in the Financial Times, the next day read:
"Boo.com collapses as Investors refuse funds; Online Sports
retailer becomes Europe's first big Internet casualty".
The boo.com case remains a valuable case study for all types of
businesses, since it doesn't only illustrate the challenges of
managing E-commerce for a clothes retailer, but rather
highlights failings in E-commerce strategy and management that
can be made in any type or organization.
Company background
Boo.com was a European company founded in 1998 and
operating out of a London head office, which was founded by
three Swedish entrepreneurs, Ernst Malmsten, Kajsa Leander
and Patrik Hedelin. Malmsten and Leander had previous
business experience in publishing where they created a
specialist publisher and had also created an online bookstore,
bokus.com, which in 1997 became the world's third largest book
e-retailer behind Amazon and Barnes & Noble.
They became millionaires when they sold the company in 1998.
At boo.com, they were joined by Patrik Hedelin who was also
the financial director at bokus, and at the time they were
perceived as experienced European Internet entrepreneurs by
the investors who backed them in their new venture.
Company vision

The vision for Boo.com was for it to become the worlds first
online global sports retail site. It would be a European brand,
but with a global appeal. Think of it as a sports and fashion
retail version of Amazon. At launch it would open its virtual
doors in both Europe and America with a view to "amazoning
the sector". Note though that in contrast, Amazon did not launch
simultaneously in all markets. Rather it became established in
the US before providing local European distribution through
acquisition and re-branding of other e-retailers in the United
Kingdom and England for example.
The boo.com brand name
According to Malmsten (2001), the 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", they managed to procure the domain for $2,500 from a
domain name dealer.
According to Rob Talbot, director of marketing for Boo.com,
Boo 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".
Target market
The audience targeted by boo.com can be characterized "young,
well-off and fashion-conscious"18 to 24 year olds. The concept
was that globally the target market would be interested in sports
and fashion brands stocked by Boo.com.
The market for clothing in this area was viewed as very large,
so the thought was that capture of only a small part of this
market was required for boo.com to be successful.
The view at this time on the scale of this market and the basis
for success is indicated by New Media Age (1999) where it was
described as "The $60b USD industry is dominated by Gen
X'ers who are online and according to market research in need
of knowing what is in, what is not and a way to receive such
goods quickly. If boo.com becomes known as the place to keep
up with fashion and can supply the latest trends then there is no
doubt that there is a market, a highly profitable one at that for

profits to grow from."�
The growth in market was also supported by retail analysts,
with Verdict predicting online shopping in the United Kingdom
to grow from £600 million in 1999 to £12.5 billion in 2005.
However, New Media Age (2005) does note some reservations
about this market, saying "Clothes and trainers have a high rate
of return in the mail order/home shopping world. Twenty year
olds may be online and may have disposable income but they
are not the main market associated with mail order. To date
there is no one else doing anything similar to boo.com"�.
The Boo.com proposition
In their proposal to investors, the company stated that "their
business idea is to become the world-leading Internet-based
retailer of prestigious brand leisure and sportswear names".
They listed brands such as Polo Ralph Lauren, Tommy Hilfiger,
Nike, Fila, Lacoste and Adidas. The proposition involved sports
and fashion goods alongside each other. The thinking was that
sports clothing has more standardized sizes with less need for a
precise fit that designer clothing.
The owners of boo.com wanted to develop an easy to use
experience which re-created the offline shopping experience as
far as possible. As part of the branding strategy, an idea was
developed of a virtual salesperson, initially named Jenny and
later Miss Boo. She would guide users through the site and give
helpful tips. When selecting products, users could drag them on
to models, zoom in and rotate them in 3D to visualize them
from different angles. The technology to achieve this was built
from scratch along with the stock control and distribution
software. A large investment was required in technology with
several suppliers being replaced before launch which was 6
months later than promised to investors, largely due to problems
with implementing the technology.
Clothing the mannequin and populating the catalogue was also
an expensive challenge. For 2000, about $6million was spent on
content about spring/summer fashion ware. It cost $200 to
photograph each product, representing a monthly cost of more

than $500,000.
Although the user experience of boo.com is often criticized for
its speed, it does seem to have had that wow factor that
influenced investors.
Analyst Nik Margolis writing in New Media Age (1999)
illustrates this by saying: "What I saw at boo.com is simply the
most clever web experience I have seen in quite a while. The
presentation of products and content are both imaginative and
offer an experience. Sure everything loads up fast in an office
but I was assured by those at boo.com that they will keep to a
limit of 8 seconds for a page to download. Eight seconds is not
great but the question is will it be worth waiting for?"�
Of course, today, the majority of European users have
broadband, but in the late 1990s the majority were on dial -up
and had to download the software to view products.
Communicating the boo.com proposition
Early plans referred to extensive "high impact"� marketing
campaigns on TV and newspapers. Public relations were
important in leveraging the novelty of the concept and human
side of the business “Leander was previously a professional
model and had formerly been Malmsten's partner.
This PR was initially focused within the fashion and sportswear
trade and then rolled out to publications likely to be read by the
target audience. The success of this PR initiative can be judged
by the 350,000 e-mail pre-registrations who wanted to be
notified of launch. For the launch Malmsten (2001) explains
that "€œwith a marketing and PR spend of only $22.4 million
we had managed to create a worldwide brand"€�.
To help create the values of the Boo.com brand, Boom a lavish
online fashion magazine was created which required substantial
staff for different language versions. The magazine wasn't a
catalogue which directly supported sales, rather it was a
publishing venture competing with established fashion titles.
For existing customers the Look Book, a 44 page print
catalogue was produced which showcased different products
each month.

The challenges of building a global brand in months
The challenges of creating a global brand in months are
illustrated well by Malmsten et al. (2001). After an initial round
of funding, including investment from the JP Morgan, LMVH
Investment and the Benetton family, which generated around $9
million, the founders planned towards launch by identifying
thousands of individual tasks, many of which needed to be
completed by staff yet to be recruited. These tasks were divided
into twenty-seven areas of responsibility familiar to many
organizations including office infrastruc ture, logistics, product
information, pricing, front-end applications, call centres,
packaging, suppliers, designing logos, advertising//PR, legal
issues, and recruitment.
At its zenith, boo.com had 350 staff, with over one hundred in
London and new offices in, Munich, New York, Paris and
Stockholm. Initially boo.com was available in UK English, US
English, German, Swedish, Danish and Finnish with localized
versions for France, Spain and Italy added after launch. The
web site was tailored for individual countries using the local
language and currency and also local prices. Orders were
fulfilled and shipped out of one of two warehouses: one in
Louisville, Kentucky and the other in Cologne, Germany. This
side of the business was relatively successful with on-time
delivery rates approaching 100% achieved.
Boo possessed classic channel conflicts. Initially, it was
difficult getting fashion and sports brands to offer their
products through boo.com. Manufacturers already had a well -
established distribution network through large high street sports
and fashion retailers and many smaller retailers.
If clothing brands permitted boo.com to sell their clothes online
at discounted prices, then this would conflict with retailers
interests and would also portray the brands in a negative light if
their goods were in an online "bargain bucket". A further
pricing issue is where local or zone pricing in different markets
exists, for example lower prices often exist in the US than
Europe and there are variations in different European countries.

Making the business case to investors
Today it seems incredible that investors were confident enough
to invest $130 million in the company and at the high point, the
company was valued at $390 million. Yet much of this
investment was based on the vision of the founders to be a
global brand and achieve "first mover advantage". Although
there were naturally revenue projections, these were not always
based on an accurate detailed analysis of market potential.
Immediately before launch, Malmsten (2001) explains a meeting
with would be investor Pequot Capital, represented by Larry
Lenihan who had made successful investments in AOL and
Yahoo!
The boo.com management team were able to provide revenue
forecasts, but when unable to answer fundamental questions for
modeling the potential of the business, such as "How many
visitors are you aiming for? What kind of conversion rate are
you aiming for? How much does each customer have to spend?
What's your customer acquisition cost. And what's your payback
time on customer acquisition cost?".� When these figures were
obtained, the analyst found them to be "far fetched" and
reputedly ended the meeting with the words. "I'm not interested.
Sorry for my bluntness, but I think you're going to be out of
business by Christmas."�
When the site launched on 3rd November 1999, around 50,000
unique visitors were achieved on the first day, but there were
only 4 in 1000 placed orders (a 0.25% conversion rate).
Showing the importance of modeling conversion rate accurately
in modeling business potential. This low conversion rate was
also symptomatic of problems with technology. It also gave rise
to negative PR. One reviewer explained how he waited:
"Eighty-one minutes to pay too much money for a pair of shoes
that I still going to have to wait a week to get?" � These rates
did improve as problems were ironed out “ by the of the week
228,848 visits had resulted in 609 orders with a value of
$64,000.
In the 6 weeks from launch, sales of $353,000 were made and

conversion rates had more than doubled to 0.98% before
Christmas. However a relaunch was required within 6 months to
cut download times by 6 months and to introduce a "low -
bandwidth version" for users using dial-up connections. This
led to conversion rates of nearly 3% on sales promotion.
Sales results were disappointing in some regions with US sales
accounting for 20% compared to the planned 40%.
The management team felt that further substantial investment
was required to grow the business from a presence in 18
countries and 22 brands in November to 31 countries and 40
brands the following spring. Turnover was forecast to rise from
$100 million in 2000/01 to $1350 million by 2003/4 which
would be driven by $102.3 million in marketing in 2003/4.
Profit was forecast to be $51.9 million by 2003/4.
The end of boo.com
The end of boo.com came on May 18th 2000, when investor
funds could not be raised to meet the spiraling marketing,
technology and wage bills.
· Questions
1) Discuss which strategic market assumptions and decisions led
to Boo.com’s inevitable failure?
2) Compare and contrast the marketing strategy of Boo.com
with successful online travel and leisure retailer
lastminute.com. Suggest what made the difference between
success and failure
3) Use the framework of the marketing mix to appraise the
marketing strategy and tactics of Boo.com
4) In many ways the vision of Boo’s founders was ‘ideas before
their time’. Give examples of e-retail techniques adopted by
boo.com that are now common place.
Source: Prepared by Dave Chaffe y from original sources
including Malmsten et al (2001) and New Media Age (1999).
Malmsten, E., Portanger, E. and Drazin, C. (2001) boo hoo. A
dot.com story from concept to catastrophe. Random House,
London, UK. New Media Age (1999) Will boo.com scare off the

competition? Author Budd Margolis. New Media Age. July 22
1999. Online only. By Dave Chaffey: Digital strategist Dr Dave
Chaffey is co-founder and Content Director of online marketing
training platform and publisher Smart Insights. Dave is editor of
the 100+ templates, ebooks and courses in the digital marketing
resource library created by our team of 25+ digital marketing
experts. Our resources are used by our Premium members in
more than 100 countries to Plan, Manage and Optimize their
digital marketing. Free members can access our free sample
templates here. Dave is a keynote speaker, trainer and
consultant who is author of 5 bestselling books on digital
marketing including Digital Marketing Excellence and Digital
Marketing: Strategy, Implementation and Practice. My personal
site, DaveChaffey.com, lists my latest Digital marketing and E-
commerce books and support materials including a digital
marketing glossary. In 2004 he was recognised by the Chartered
Institute of Marketing as one of 50 marketing ‘gurus’ worldwide
who have helped shape the future of marketing. Please connect
on LinkedIn to receive updates or ask me a question.
PMG IT GOVERNANCE AND PROCEDURES PLAN
8
Course Name
Course Number
PMG IT Governance Policies and Procedures Plan
Student Name
Date

Table of Contents
The Project Outline 2
Company Description 2
Summary of the Company IT System 3
Governance Framework 4
Accountability IT Governance Framework 4
Why the Accountability Framework for PMG Company 5
Business and IT Goals 5
IT and Information Security Governance 6
Policy and Procedure Governance 6
Computer Use Policy 7
Examples 7
Enforcement 8
The Project Outline
Company Description
PMG is a privately held New Orleans, Louisiana-based
enterprise that specializes in a number of IT-oriented services
and products provided. Featuring prominently in the company’s
product and services list is the development of financial
management software, supply of Wi-Fi internet to rural
communities, local area network design and management and
online marketing services. The company was founded in 2008,
and in 2009 raised $77 million from Oak Investment Partners in
funding and has since penetrated the IT industry effectively to

open branches in Baton Rouge, Lake Charles and Houma all in
Louisiana. The company has also gained favorable expansion
journey in the state of Mississippi has opened three branch
offices located in Jackson, Tupelo, and Columbus respectively.
The company’s current annual revenue stands at $175 million
with a gross annual turnover value of $665 million. Key
investment strategies are underway with the primary objective
being an expansion to the northern states and finally the
Canadian market as a gateway to the international market.
Summary of the Company IT System
The company’s IT infrastructure has exponentially expanded
over the few years the company has been in active business.
With a total of six branches located in six cities spread across
two states, the company had to find an efficient way of
installing and managing the massive IT infrastructure to their
advantage. Currently, the company owns three most advanced
routers by latest technology, the Asus ROG Rapture GT-
AC5300, an infinite data center in the New Orleans
headquarters, over 750 PCs spread across all the branches and
offices, Wi-Fi ISP infrastructure, printers, sophisticated
enterprise management system and other accompanying network
devices such as printers, switches, intelligent hubs and many
more.
Regarding data use, the company categorizes its data into three
main categories: client data, third party data, and the company’s
internally generated data. The data generally use in the
company addresses activities such as access to the data, legal
data manipulation for a specific goal and the storage of the
same data. Inside the company, all employees have the freedom
of using company data to make their own decisions. The
relationship between the management and its employees is
totally based on trust since there are no rules and regulations
put in place to govern data use and liabilities in case of
impropriety. There is one data center belonging to the company.
Each and every employee has unrestricted access to the
datacenter hence may access all kinds of data and manipulate

them as they wish. The general belief shared by the management
and the employees is that every decision made by an employee
is guided by the principles of ethical correctness hence no bad
characters can think of harming the firm in whatever way.
Governance Framework
The IT Governance Framework, which basically is a conceptual
structure meant to issue guidance and controls to current and
future use of the IT infrastructure inside PMG Company.
Ordinarily, the main pillars of the IT Governance Framework
are individual decision making and being accountable to the
decisions made. There are different types of frameworks of IT
Governance that a company can adopt. The most popular types
include authorization framework, IT controls framework,
accountability framework and process-based framework. Given
the company’s background, which embraces freedom and trust
to individual abilities to make the right decisions, the PMG
Company chooses to adopt the Accountability IT Governance
Framework.
Accountability IT Governance Framework
Good governance practice demands accountability for various
outcomes of a process while at the same time maintain mutual
respect for the decisions that were made to come up with such
an outcome. The framework focuses on the clarification of the
roles and responsibilities each member of a system played to
deliver certain results. Going ahead, the framework issues
guidance on who can be charged with the responsibilities of
leading the process of achieving the next set of goals and
objectives basing such undertakings on audit findings of the
previous assignment. The same mechanism can be used in
effecting value correction steps. In the most justifiable manner,
the operating model helps in separating out responsibilities
while identifying the so-called “touch-points” among processes
and processes’ area responsibilities. Normally, numerous
processes and process areas are usually caused to interact to
offer necessary support to the operating model. In such
circumstances, the objective of an excellent IT governance

structure is to efficiently and effectively avail the IT resources
towards the achievement of the strategic objectives set by the
organization.
Why the Accountability Framework for PMG Company
As indicated earlier, the business strategy of the PMG Company
is to decide on goals and objectives to be met, assign the
available workforce responsibilities, give each employee the
necessary freedom and resource support to work towards the
achievement of such goals and objectives. The IT Governance
Framework yet to be adopted by the organization exactly agrees
with such a position. The only important business management
element the framework adds is being accountable to decisions
made during the process of operation. The accountabili ty
element silently activates the principles of controls and
authorization in a kinder manner.
Business and IT Goals
In the current contemporary society, which is largely
characterized by complexity and constantly changing ways of
doing business, every business executive thinks of how best IT
can be aligned to business to escalate the pace of achieving core
business objectives (Murtagh et al., 2018). In view of the same,
the PMG critically explores options of having its strategic plan
reflect on the company’s business goals aligned to its IT goals
for the sole purpose of achieving its mega expansion plans of
going international. Being an IT based firm, its common
knowledge that the biggest department in the company is that of
IT. Putting the above into perspective, the company therefore,
have had its IT department set goals such as eliminating all IT
related redundancies by first quarter of the year, implement a
pure One Shortest Path First (OSPF) and Enhanced Interior
Gateway Routing Protocol (EIGRP)-based network to halve the
cost of company network maintenance cost by the end of second
fiscal quarter. The IT department goals go hand in hand with the
general company business goals of cutting the cost of internal
operations to save as much money as possible for the
implementation of core business objective which is running

aggressive marketing that would result to international market
invasion.
IT and Information Security Governance
The IT information security management and IT information
security governance is usually two different concepts
mistakenly used interchangeably. The former concerns itself
with decision making processes that result to addressing
concerns of security to the organization’s IT infrastructure
while the latter points to responsibilities of individuals
mandated to ensure IT information security agenda are well
undertaken (Pol, 2016). The PMG Company IT Department is
headed by competent fellows with a wealth of experience in
information system security matters. The mandate of the
individuals concerned with such responsibilities is guided by
old company information policy rules which details
accountability framework and oversight to risk mitigations.
However, the rules remain behind of time; therefore, a review
exercise is long overdue.
Policy and Procedure Governance
Ideally, information governance details the step by step process
through which company information can be handled. The policy
particularly concerns itself with special category information
like client data, employee data, and many others. Further, the
policy and procedure provide a framework containing a
provision of how confidential information can be dealt with
both legally and securely. The purpose of policy and governance
procedure document is to ensure the establishment of a
governance framework where the company and its stakeholders’
engagement is properly defined and guided by policies known to
all the parties with the intention of reinforcing the
accountability and individual responsibility in making
decisions.
Computer Use Policy
In support of the company’s mission of providing a solution to
every human problem technologically, the company has in place
an elaborate computer use policy that focuses on rights and

responsibilities pegged on existing legal policies. Putting it into
perspective, the application of this policy is largely based on
the ethical spirit of doing what is universally accepted at all
times (Maras, 2015). However, the policy cites common
mistakes that people find themselves making almost on a daily
basis which are in total contradiction of what is legally
permissible as gross misconduct and may bear legal action or
invite internal disciplinary action.
Examples of such include:
• A user is opting for a computer account that he or she is
prohibited from using.
• Illegally acquiring a password of a computer account
without the owner’s knowledge or authority.
• Using the PMG Company network to acquire illegal access
to other computer systems within any of the branch offices.
• Intentionally indulging in an act with known capability of
subverting normal operation of computers, terminals,
peripherals, or networks.
• Deliberately running unauthentic programs on a computer
system or network of the company, or granting access to another
user, which can damage the company computer system or
network.
• Attempting to circumvent data protection schemes or
uncover security loopholes.
• Violating terms of applicable software licensing agreements
or copyright laws.
• Intentionally damaging computing resources.
• Engaging in bullying or harassing others through the use of
electronic mail or social media.
• Hiding the identity of an account or machine.
Enforcement
The policy also addresses itself adequately on matters of
enforcing it which includes internal disciplinary mechanism
with defined eventual possibilities depending on the outcomes
and also a legal action if crime can be detected from the act.

References
Kam, H. J., Katerattanakul, P., & Hong, S. (2016). IT
Governance Framework: One Size Fits All?.
Maras, M. H. (2015). Computer Forensics. Jones and Bartlett
Learning.
Murtagh, M. J., Blell, M. T., Butters, O. W., Cowley, L., Dove,
E. S., Goodman, A., ... & Mangino, M. (2018). Better
governance, better access: practising responsible data sharing in
the METADAC governance infrastructure. Human
genomics, 12(1), 24.
Pol, B. H. T. (2016). Information Governance
Policy. Assessment.
COURSE CODE:COURSE NAME: BCO 217 Digital
Business3rd Assignment Task brief & rubrics
Task: You are required to answer the following questions from
the respective CASE in Moodle:
1. Discuss which strategic market assumptions and decisions led
to Boo.com’s inevitable failure?
2. Compare and contrast the marketing strategy of Boo.com
with successful online travel and leisure retailer
lastminute.com. Suggest what made the difference between
success and failure
3. Use the framework of SOSTAC to appraise the marketing

strategy and tactics of Boo.com.
4. In many ways the vision of Boo’s founders was ‘ideas before
their time’. Explain why.
5. Give examples of e-retail techniques adopted by boo.com that
are now common place.
Formalities:
· Wordcount:1500 words
· Cover, Table of Contents, References and Appendix are
excluded of the total wordcount.
· Font: Arial 12,5 pts.
· Group of 2 people
· Text alignment: Justified.
· The in-text References and the Bibliography have to be in
Harvard’s citation style.
· Expected structure: Table of contents, References & appendix.
· The format should be a document in the respective Turnitin
link.
Submission & Weight: Assessment 3 – Week 13 - Sunday
16/01/2022 23:59 CEST – with a weighting of 40%.
Formative assignments: https://euruniedu-
my.sharepoint.com/:f:/g/personal/pablo_gilardini_euruni_edu/E
hsyDvTavqFAu0u-
8bqaA7EBLAitJ85NHqWmXe6phMDgVA?e=8KxEip
It assesses the following learning outcomes: 1. understand the
rise and evolution of the concept and models of digital business;
2. analyze the development of competitive advantage through
digital technology; 3. identify current trends and technology in
digital businesses;4. understand how digital technologies can be
integrated within business;5. describe the digital business and
compare it with non-digital businesses;6. analyze and assess

different approaches to the development of digital platforms.
Rubrics
Exceptional 90-100
Good 80-89
Fair 70-79
Marginal fail 60-69
Knowledge & Understanding (20%)
Student demonstrates excellent understanding of key concepts
and uses vocabulary in an entirely appropriate manner.
Student demonstrates good understanding of the task and
mentions some relevant concepts and demonstrates use of the
relevant vocabulary.
Student understands the task and provides minimum theory
and/or some use of vocabulary.
Student understands the task and attempts to answer the
question but does not mention key concepts or uses minimum
amount of relevant vocabulary.
Application (30%)
Student applies fully relevant knowledge from the topics
delivered in class.
Student applies mostly relevant knowledge from the topics
delivered in class.
Student applies some relevant knowledge from the topics
delivered in class. Misunderstanding may be evident.
Student applies little relevant knowledge from the topics
delivered in class. Misunderstands are evident.
Critical Thinking (30%)
Student critically assesses in excellent ways, drawing
outstanding conclusions from relevant authors.
Student critically assesses in good ways, drawing conclusions
from relevant authors and references.
Student provides some insights but stays on the surface of the
topic. References may not be relevant.
Student makes little or none critical thinking insights, does not
quote appropriate authors, and does not provide valid sources.

Communication (20%)
Student communicates their ideas extremely clearly and
concisely, respecting word count, grammar and spellcheck
Student communicates their ideas clearly and concisely,
respecting word count, grammar and spellcheck
Student communicates their ideas with some clarity and
concision. It may be slightly over or under the wordcount limit.
Some misspelling errors may be evident.
Student communicates their ideas in a somewhat unclear and
unconcise way. Does not reach or does exceed wordcount
excessively and misspelling errors are evident.

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