HOMEWORK2

SELECTED CASE STUDIES ANALYSIS

This document has a few short case studies that are considered classic. They are older but have
timeless lessons. In addition, the case studies in the relevant textbook chapters are good.
Please read and analyze the suggested case studies as specified in the table below. It is best to
use a table of the following format for this analysis. You will need this table for the exam.

Assignments
Read the Boo.com Case 
Study
Read the GE Case Study
In Chapter 4 (Umar), please
read section 4.4 and section
4.5 and answer the questions
listed in the next column.
Please read Section 5.3 and
5.7 of Chapter 5 (Umar) and
section 6.3 of Chapter 6
(Umar). Then answer the
questions listed in the next
column.
Questions
 What are the 5 key lessons learned from this case study
What is the relationship to Other Case Studies (common
lessons, new lessons)
 What is this company doing now (Fast Forward: one
sentence)
 What are the 5 key lessons learned from this case study
 What is the relationship to Other Case Studies (common
lessons, new lessons)
 What is this company doing now (Fast Forward: one
sentence)
 What is the main idea of the opening vignette of Chapter
4 (one sentence)
 List 5 lessons learned (one line each) from Chapter 4
(section 4.4)
 List 5 lessons learned (one line each) from Chapter 4
(section 4.5)
 Visit www.panmore.com site and review the Apple
Business Analysis by using Porter’s Five Forces Model.
What are the main recommendations (2-3 sentences)
 Find 2 more case studies by visiting www.panmore.com
site and explain the main recommendations (2-3
sentences per case study)
 What is the main idea of the opening vignette of
Chapter 5 (one sentence)
 List the case studies and also 5 lessons learned (one
line each) from Chapter 5 (section 5.3 and 5.7)
 What is the main idea of the opening vignette of
Chapter 6 (one sentence)
 List names of the case studies and also 5 lessons

Suppose that you are
planning to start a company
that is very similar to the
Connie’s Clothing Store
Case Study in Chapter 3
(Umar). Review the case
study and answer the
following questions
Review Project2 and answer
the following questions
learned (one line each) from Chapter 6 (section 6.3)
 Read the “CASESTUDY5. SMART ERPs ON THE
MOVE -- FEW SNIPPETS “ at the end of this
document and identify the most interesting ERP
development in your case.
 Will you address business issues before technology
issues (yes or no)
 Who could be your main competitors (name one)
 What could be the new entrants
 What could be the substitute products
 What will be your product strategy (new products to
new customer or existing products to new customers)
 What will be the main Business Processes (list 10)
 What will be the most critical Business Processes (list
3)
 Go to the SPACE site (www.space4ict.com) and
identify one game that could be of value to this case
study.
 Does Project2 include technology considerations
 Which parts of Project1 are expanded and refined in
Project2.
 How many attachments are in Project2 Description.
 Your powerpoint deliverable must have annotations
and explanations. Yes/No
 You need to specify the references used and the effort
(percentage contribution) of the team members.
Yes/No
 Can a team submit multiple files. Yes/No.
 Which case studies that you have reviewed in this
homework will be of help in Project2 (identify only 3,
with one sentence explanation for each)
 Does Project2 involve SPACE experiments
CASESTUDY1. CAN GE REMAKE ITSELF AS A DIGITAL FIRM?

General Electric (GE) is the world's largest diversified manufacturer. Fortune named GE
"America's Most Admired Company" in 1998, 1999, and 2000. Jack Welch, GE's CEO and
chairman since 1981, is often cited as the most admired CEO in the United States.
Headquartered in Fairfield, Connecticut, the company consists of 20 units, including
Appliances, Broadcasting (NBC), Capital, Medical Systems, and Transportation Systems.
With the acquisition of Honeywell, announced in October 2000, GE became a company of
$155 billion in revenue and 460,000 employees in 100 countries. Despite GE's size and old-
economy businesses, Internet Week named GE its e-business company of 2000. Did GE
transform itself into a digital firm?
At a January 1999 meeting of 500 top GE executives in Boca Raton, Florida, Welch
announced a new initiative to turn GE into an Internet company. Earlier initiatives transformed
GE and are partially responsible for its phenomenal rise in profit over the past two decades.
Those initiatives were globalization of GE in the late 1980s, "products plus service" in 1995,
which placed emphasis on customer service, and Six Sigma in 1996, a quality program that
mandated GE units to use feedback from customers as the center of the program.
Welch announced that the Internet "will forever change the way business is done. It will
change every relationship, between our businesses, between our customers, between our
suppliers." By Internet-enabling its business processes, GE could reduce overhead costs by
half, saving as much as $10 billion in the first two years. Gary Reiner, GE's corporate CIO,
later explained "We are Web-enabling nearly all of the [purchasing] negotiations process, and
we are targeting 100 percent of our transactions on the buy side being done electronically." On
the sell side Reiner also wanted to automate as much as possible, including providing
customer service and order taking.
GE had quietly been involved with the Internet years before the Boca Raton meeting,
conducting more purchasing and selling on the Internet than any other noncomputer
manufacturer. For example, within six months after beginning to use the Internet for
purchasing in mid-1996, GE Lighting had reduced its purchasing cycle from 14 to 7 days. It
also reduced its supply prices by 10 to 15 percent because of open bidding on the Internet. In
1997, seven other GE units began purchasing via the Net. The company even sold the concept
to others, including Boeing and 3M.
Polymerland, GE Plastic's distribution arm, began distributing technical documentation over
the Web in 1994. It put its product catalog on the Net in 1995 and in 1997 established a site for
sales transactions. Its on-line system enables customers to search for product by name,
number, or product characteristics, download product information, verify that the product
meets their specifications, apply for credit, order, track the shipment, and even return
merchandise. Polymerland's weekly on-line sales climbed from $10,000 in 1997 to $6 million
in 2000.
Welch ordered all GE units to determine how dot.com companies could destroy their
businesses, dubbing this project DYB (destroy your business). Welch explained that if these
GE units didn't identify their weaknesses, others would. Once armed with these answers,
managers were to change their units to prevent it from happening. Each of GE's 20 units
created small cross-functional teams to execute the initiative. Welch also wanted them to
move current operations to the Web and to uncover new Net-related business opportunities.
The final product was to be an Internet-based business plan that a competitor could have used
to take away their unit's customers, and a plan for changes to their unit to combat this threat.
Reiner ordered GE units to "come back with alternative approaches that enhance value to the
customer and reduce total costs."
The Internet initiative started by trying to change GE's culture at the very top. GE's internal
newsletters and many of Welch's memos became available only on-line. To give blue-collar
workers access to the Net, GE installed computer kiosks on factory floors. One thousand top
managers and executives, including Welch (who also had to take typing lessons), were
assigned young, skilled mentors to work with them three to four hours per week in order to
make them comfortable with the Web. They had to be able to evaluate their competitors' Web
sites and to use the Web in other beneficial ways. Every GE employee was given training.
Welch announced in 2000, that GE would reduce administrative expenses by 30 to 50 percent
(around $10 billion) within 18 months through use of the Internet.
Many projects came out of the initiative. For example GE Medical Systems, which
manufactures diagnostic imaging systems, such as CAT scanners and mammography
equipment, identified its DYB threat as aggregators, such as WebMD, which offered unbiased
information on competing products as well as selling those products. GE products on these
sites looked like just another commodity. The GE unit's major response was iCenter, a Web
connection to customers' GE equipment to monitor the equipment operation at the customer
site. iCenter collects data and feeds it back to each customer who can then ask questions about
the operation of the equipment through the same site. GE compares a customer's operating
data with the same equipment operating elsewhere to aid that customer in improving
performance. In addition customers are now able to download and test upgraded software for
30 days prior to having to purchase it. The unit also began offering its equipment training
classes on-line, allowing clients to take them at any time. The aggregators were also
auctioning off used equipment that was in demand in poorer countries. Medical Systems
established its own site to auction its own used equipment, thus opening new markets (outside
the United States). GE Aircraft adapted iCenter and now monitors its customers' engines while
they are in flight.
GE Power Systems then developed its Turbine Optimizer, which uses the Web to monitor any
GE turbine, comparing its performance (such as fuel burn rate) with other turbines of same
model anywhere in the world. Their site advises operators how to improve their turbines'
performance and how much money the improvements would be worth. The operator can even
schedule a service call in order to make further performance improvements.
Late in 1999 GE Transportation went live with an Internet auction system for purchasing
supplies. Soon other units, including Power and Medical, adopted the system. GE later
estimated the system would handle $5 billion in GE purchasing in 2000, and the company
would do at least 50 percent of its purchasing on-line in 2001. The system lowers prices for
GE because approved suppliers bid against each other to obtain GE contracts. It also results in
fewer specification errors and speeds up the purchasing process. GE estimates it saves
between 10 and 15 percent of purchasing costs altogether.
GE Appliances realized that appliances are traditionally sold through large and small retailers
and that the Internet might destroy that model, turning appliances into commodities sold on
big retail and auction sites. GE wanted to maintain the current system, keeping consumer
loyalty to their GE brand (versus Maytag, Whirlpool, and Frigidaire). Appliances developed a
point-of-sale system, which they placed in retail stores such as Home Depot, where customers
enter their own orders. The retailer is paid a percentage of the sale. The product is shipped
from GE directly to the customer. GE Appliances claims it can now take products from its
factories and get them shipped anywhere in the United States virtually overnight on a cost-
effective basis. In 2000 Appliances reported 45 percent of its sales, totaling $2.5 billion, took
place on the Internet. It estimates 67 percent of its sales will be on the Internet in 2001.
The corporation and its units have issued a blizzard of press releases touting the successes of
each of GE's Internet initiatives and the consequent positive effect on financial results. "In
1999, 30 percent of our orders came in via the Web," announced Marian Powell, the senior
vice president for e-business at GE Capital Fleet Services. And in 2000 "we'll have over 60
percent. That's over a billion dollars in orders." CIO Reiner said, "We are not talking about
incremental change. We're talking total transformation."
A January 2001 article by Mark Roberti of The Industry Standard was skeptical. Roberti
commended GE for embracing the Internet so quickly. He also noted that "these endeavors are
unlikely to make GE vastly more profitable . . . because the company isn't using the Internet to
reach new markets or create major new sources of revenue." Roberti questioned the great
savings through Internet-based cost cutting that GE claimed. To cut costs by moving business
processes on-line, a firm "must eliminate—or redeploy—a significant number of employees"
and "GE hasn't." For example, Roberti says, 60 percent of orders to GE Capital Fleet Services
are now placed on-line, but it has not reduced its call center staff. GE reports that its selling,
general, and administrative expenses as a percentage of sales fell for the first nine months of
2000 from 24.3 in 1999 to 23.6, a minor drop at best. Moreover, he notes caution coming from
GE executives themselves. For example, although Reiner had projected a $10 billion saving
over the next 18 months in 1999, in December 2000 he revised the 2001 savings to about $1.6
billion—not an insignificant sum, but far from the gigantic savings predicted. Reducing costs
by having customers and employees serve themselves via the Web has proved elusive at other
companies as well, such as IBM and UPS. Roberti claims that the Internet has not brought GE
a significant number of new customers.
Overall, Roberti points out, "Through the third quarter of 2000, GE still hadn't demonstrated
any significant improvement in its financial results that can be directly attributed to e-
business." Although GE has achieved genuine progress and even leadership, the company
could not be generating the savings management had been predicting. He speculates that the
purpose of the continuous declarations of great savings may be to boost the price of GE's
stock. Perhaps, most importantly, Roberti claims that although GE's Internet activities will
give the company a boost, it will take its competitors only a few months to catch up, leaving
GE without any competitive advantage.
Sources: Mark Roberti, "General Electric's Spin Machine," The Industry Standard, January
15, 2001; Meridith Levinson, "Destructive Behavior," CIO Magazine, July 15, 2000; Diane
Brady, "GE's Welch: 'This is the Greatest Opportunity Yet,' " Business Week, June 28, 1999;
Jon Burke, "Is GE the Last Internet Company?" Red Herring, December 19, 2000; Geoffrey
Colvin, "How Leading Edge Are They?" Fortune, February 21, 2000; Cheryl Dahle,
"Adventures in Polymerland," Fast Company, May 2000; David Bicknell, "Let There Be
Light," ComputerWeekly.com, September 7, 2000; David Drucker, "Virtual Teams Light Up
GE," Internet Week, April 6, 2000;David Joachim, "GE's E-Biz Turnaround Proves That Big
Is Back," Internet Week, April 3, 2000; Mark Baard, "GE's WebCity," Publish, September
2000; Faith Keenan, "Giants Can Be Nimble," Business Week, September 18, 2000;

Fast Forward (2016): GE Uses Machine Learning To Restore Italian Power Plant

Since the strategic decisions made in the late 1990s and early 2000s, GE has gained a
prominent position as a digital enterprise. See the following lightly edited abstract from a
June 16, 2016 press release.

“GE's Digital Power Plant for Steam suite was introduced at the Minds + Machines
conference in Paris June 14, 2016, where GE executives also revealed the results of a
hardware and software upgrade using the technology at the Chivasso power plant in
Northern Italy. The plant was restarted in November 2015 after a three-year shutdown.

Digital Power Plant for Steam is one of the first application suites to sit atop GE's Predix
machine data analytics platform and yield practical, industrial results. The GE suite's
applications include Digital Asset Performance Management for the Digital Steam Plant,
and Operations Optimization for the Digital Steam Plant. The latter application features:
 Boiler Optimization, designed for boiler reliability and efficiency through improved
combustion and soot-cleaning processes
 Coal Analyzer, for the ability to plug coal properties, such as its moisture content, into
the ongoing operation of the plant
 Plant Optimization, to watch key performance indicators that measure the gap
between ideal and actual operational practices
 Smart Start, that concentrates on matching a plant's output to the power needs of the
grid, reducing inefficiencies that consume fuel and shorten the life of equipment.

According to GE, the software can collect data from 10,000 sensors in a power plant and
interpret it for streamlined operations. In addition to the other gains, doing so will result
in a 5% reduction in downtime.

At the Paris event, GE also introduced Predix-based software aimed at wind farms and
gas-fired generating plants.”

Source: Babcock, C., “GE Uses Machine Learning To Restore Italian Power Plant”,
Information Week, June 16, 2016; Link: http://www.informationweek.com/iot/ge-uses-
machine-learning-to-restore-italian-power-plant/d/d-id/1325918?
2. RAND MCNALLY MAPS OUT A TRIP TO A DIGITAL FUTURE

In 1856 William Rand and Andrew McNally founded a small printing shop in Chicago, which
they called Rand McNally. The company did not begin printing maps until 1916, but it has
been the leader in maps ever since, credited with creating the mapping conventions for our
current numbered highway system. In 1924 Rand McNally published its first Rand McNally
Road Atlas. The various versions of this atlas have sold 150 million copies in the years since,
making it the all-time best selling map product from any publisher. Today Rand McNally has
1,200 employees, mostly at its Skokie, Illinois, headquarters.
Through the following decades the company continued to develop and maintain its position as
the most well known and respected publisher of geographic and travel information. As
recently as 1999 it sold 46 million maps, which accounted for more than half of all printed
maps sold in the United States. Of course Rand McNally also produces many other products
such as globes, a wide range of geographic educational materials, travel-planning software,
and products for trucking fleet route planning and optimization. Its products are currently sold
in more than 46,000 outlets, including 29 of its own retail stores.
As the digital economy developed at the beginning of the 1990s, Rand McNally's
management did not understand the full impact of the new Internet and other computer-related
developments. The company did respond to changing business conditions by producing travel
and address location software it then sold on CD-ROMs. It also established a modest Web site
in 1994 in order to support its customers' use of its CDs. However, the Internet soon offered
many other opportunities, and Rand McNally failed to maintain its leadership and pioneering
spirit.
AEA Investors purchased Rand McNally in 1997 expecting the company to modernize itself
using new technologies such as the Internet. Despite new ownership and leadership, little
changed as the company remained staid and unwilling to take risks, apparently because of fear
of losing money. "We proposed putting maps on-line, but senior management was not
interested," observed Jim Ferguson who later became director of product management for
Rand McNally.com.
When they realized that nothing was changing, the investors intervened and, in July 1999,
appointed Richard J. Davis as president and CEO. Davis already had 25 years of experience
managing emerging high-tech companies, including seven years with Donnelley Cartographic
Services and GeoSystems. (GeoSystems was the company that established MapQuest, Rand
McNally's chief competitor in the new on-line environment.) Davis said his goal was to
develop technology solutions and corporate growth rising above the historical 5 to 6 percent
range.
Davis immediately brought in Chris Heivly to head up the recently created RandMcNally.com
group. Heivly promptly put Rand McNally maps and address-to-address driving directions on
the Web. Prior to the arrival of Davis and Heivly, management had feared that putting the
company's maps on-line would undercut the sales of the company's traditional paper maps,
something MapQuest, then still known as GeoSystems, had risked doing in 1996.
The most important goal of the new management was to transform Rand McNally from a map
company into a travel planning and advisory service so that it would not become obsolete.
Management plans included:
 Making Rand McNally's Web site indispensable to travelers.
 Updating map products for the fast-growing Net environment.
 Linking the company Web site and products to other services on the Net.
 Generating more bricks-and-mortar store business from Web site visitors.
 Remaining overwhelmingly a business-to-consumer company and not try to become a
business-to-business company.
To accomplish these objectives, the company had to address two needs that all types of
travelers experience: the need for quick information about travel conditions and
recommendations on meeting those needs along the way. To accomplish this, the Web site
must not only help travelers to plan the trip but travelers must also be able to bring the Internet
with them as they travel. Travelers need on-line road maps, detailed driving instructions, and
road condition updates while they are on the road, which means they will have to be delivered
through wireless technology as soon as it matures. The Rand McNally Web site also needed to
work with third parties to provide other travel information, such as timely weather and hotel
reservations. The site also had to have a very user-friendly interface, one that could be used
comfortably by people who are not highly skilled Internet users. Profitability remained a
critical goal for both management and the investors. Profitability requires services that are
good enough that customers will be willing to pay for them.
Rand McNally's main on-line competition was MapQuest whose Web site has been highly
successful. In March 2000, the site had 5.5 million visitors who viewed and printed its
electronic maps. During the same period Rand McNally had only 255,000 visitors. In addition
MapQuest had partnered with many corporate and Internet business forces whose visitors
need to use maps on their sites, for example to locate their stores. These giants include AOL,
Excite, Yahoo, Ford, Wal-Mart and many, many others. "We put out more maps in 36 hours
than are sold in the United States in a year," proclaimed MapQuest CEO Mike Mulligan. At
the end of 1999, the company was sold to AOL for $1.1 billion.
Davis understood that he needed to shake up the very staid and conservative corporate culture
dominating Rand McNally. He wanted to make the company agile again so it would be able to
resume its leadership in the digital age. He tried to give all employees the feeling that they had
a stake in the success of the entire company, both the print and digital arms. In the process he
personally met with more than 900 employees to sell his vision of the company's future. He
responded personally to e-mails he received from employees, and as he walked through the
halls, he greeted employees by name. He also made opportunities for longtime employees to
join the new Internet group, although few took advantage of the opportunity.
As Rand McNally tried to become a major force on the Internet, its advantages were clear. It
was an old, very well known and highly respected name in the field of travel and maps. The
company was profitable and, therefore, had income from existing sales, enabling it to take the
necessary time and spend the needed funds to design and develop its new businesses. Some of
the technology that Rand McNally wanted to use, such as wireless travel services, was still not
well developed, so no company had yet achieved a genuine lead. Also the need for on-line
maps to aid and orient people was growing extremely rapidly.
Heivly and Davis both believed that MapQuest had weaknesses, and these too were Rand
McNally advantages. They believed that Rand McNally maps were more accurate than those
of MapQuest. Moreover, they concluded, MapQuest driving instructions were overly detailed,
contained much information that was out of date, and usually did not select the most
appropriate route to travel. Nor, in their minds, did MapQuest have the reputation and respect
of and the personal relationship with the American people that Rand McNally had. "We've
been on the backseat of everyone's car in America," said Heivly.
Davis reorganized the company into three divisions: RandMcNally.com, a unit that services
businesses, and a unit that services consumers. However, the key to the future in the eyes both
of management and of the investors was Rand McNally.com. In order to break into the
Internet competition and become a force rapidly, Davis decided to create an auto club similar
to the American Automobile Association (AAA) with its more than 40 million members to
entice Internet visitors to pay something for their use of the Rand McNally Web site.
Management's expectation is that once customers pay for one service, they will be willing to
pay for other products and services as well. The auto club was planned to provide standard
services, including emergency roadside service and a network of repair shops. Rather than
taking on AAA head on, management chose to create affinity groups such as recreational
vehicle drivers and Corvette owner clubs. Management also wanted to create links for users
while they were on the road using Net-capable mobile phones, car navigation systems, and
other wireless devices when they become mature enough.
The Web site is linked to the RandMcNally.com store where visitors can purchase the more
than 3,500 products that are sold in the bricks-and-mortar stores. Visitors can print customized
free maps and address-to-address driving instructions. The "Plan a Trip" section has an
improved ability to search out what travelers want on their trips. For example the site can
answer such questions as "name art museums within 25 miles of the trip." Visitors can also
store their personalized trip plans and information on-line. At the time of launching, the site
carried information on more than 1,100 U.S. cities, 379 national parks, and 4,000 other points
of interest and local events. The site also supplies continuously updated weather information
and twice monthly updates on road construction projects that might interfere with travel.
Finally, it contains trip-planning checklists as well as a section that offers materials and ideas
on traveling with children.
The print products have been affected as well. The Rand McNally Road Atlas has changed its
rear cover so that it no longer advertises other companies' products. It gave up the revenue in
order to advertise its own Web site. A travel atlas for children is one of a number of new print
products growing out of the development of its Web site. Rand McNally has also jumped into
the GPS (global positioning system) market in a big way, selling GPS products to visitors who
want to keep track of their current position for various reasons. For example, they sell a device
that attaches to the Palm computer and another that attaches to a laptop PC. Both will pinpoint
one's current location.
The early experience at Rand McNally is that the Web site is drawing more visitors.
Consumers attracted to RandMcNally.com have also shown up at the firm's retail stores. But
Rand McNally still has a long way to go to catch up to its more Net-savvy competitors. Has it
found the right success formula for the Internet age?
Source: Miguel Helft, "A Rough Road Trip to the Net," The Industry Standard, June 5, 2000;
Bruce and Marge Brown, "Rand McNally TripMaker Deluxe 2000," PC Magazine,
November 17, 2000; and Rand McNally press releases, July 29, 1999; September 6, 2000;
September 20, 2000; November 14, 2000.

Fast Forward: What is Rand McNally Doing Now?

Assignment: Based on an Internet search, give a short description (one or 2 paras) to show
what is Rand McNally doing now
CASESTUDY3. BOO.COM: POSTER CHILD FOR DOT.COM
FAILURE?

Boo.com arrived on the Internet scene promising its investors and on-line shoppers the treat of
a profitable Web site offering high-quality, stylish, designer sportswear that could be
purchased easily from the office or home. Thanks to advanced widespread publicity, Boo.com
became, perhaps, the most eagerly awaited Internet IPO (initial public offering of stock) of its
time. However, the company declared bankruptcy only six months after its Web site had been
launched and before the company could ever undertake an IPO. Investors lost an estimated
$185 million, while shoppers faced a system too difficult for most to use. Many people are still
wondering how it could have all gone so wrong so swiftly.
The idea for Boo.com came from two 28-year-old Swedish friends, Ernst Malmsten and Kajsa
Leander, who had already established and later sold Bokus.com, which is the world's third-
largest on-line bookstore after Amazon.com and Barnes&Noble.com. The two were joined by
Patrik Hedelin, an investment banker at HSBC Holdings.
Boo.com planned to sell trendy fashion products over the Web, offering such brands as North
Face, Adidas, Fila, Vans, Cosmic Girl, and Donna Karan. The Boo.com business model
differed from other Internet start-ups in that its products would be sold at full retail price rather
than at a discount. Malmsten labeled his target group as "cash-rich, time-poor."
The Boo Web site enabled shoppers to view every product in full-color, three-dimensional
images. Visitors could zoom in on individual products, rotating them 360 degrees to view
them from any angle. The site's advanced search engine allowed customers to search for items
by color, brand, price, style, and even sport. The site featured a universal sizing system based
on size variations among brands and countries. 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. Those who purchased products from Boo.com earned "loyalty points," which they
could use to obtain discounts on future purchases.
The company offered free delivery within one week and also free returns for dissatisfied
customers. The Web site was fluent in seven languages (two of which were American and
British English). Local currencies were accepted from 18 countries, and in those countries
national taxes were also calculated and collected. "Boo.com will revolutionize the way we
shop. . . . It's a completely new lifestyle proposition, " Ms. Leander proclaimed.
The founders planned to advertise its site broadly both prior to and after launching. "We are
building a very strong brand name for Boo.com," stated Malmsten. "We want to be the style
editors for people with the best selection of products. We decided from day one that we would
want to create a global brand name."
Although many important financial firms rejected investment in Boo.com, J. P. Morgan &
Co., an old-line investment bank, decided to back the project even though it had done no start-
ups for many decades. According to the New York Times, Morgan liked the concept "because
Boo wouldn't undercut traditional retailers with cut-rate pricing as many e-retailers do." The
Morgan bankers were also impressed by the two founders who had previously successfully
launched an Internet company (Bokus.com). They also were impressed by promised rewards
of "55 percent gross margins and profitability within two years," according to the Times.
Morgan found other early-stage investors, including Alessandro Benetton (son of the CEO of
Benetton), Bain Capital (a Boston high-tech venture capital company), Bernard Arnault (who
has made a fortune in luxury goods), Goldman Sachs, and the very wealthy Hariri family of
Lebanon.
With start-up funds in hand, Malmsten and Leander set a target date of May 1999 for
launching the Web site. Boo planned to develop both its complex Internet platform and
customer-fulfillment systems from scratch. Management originally planned to launch in the
United States and five European countries simultaneously but soon expanded the number of
countries to 18. It also wanted a system that would handle 100 million Web visitors at once.
When the launch date began to loom close, management committed $25 million to an
advertising budget, a huge sum for a start-up. The company chose to advertise in expensive
but trendy fashion magazines such as Vanity Fair as well as on cable television and the
Internet. Malmsten and Leander even managed to appear on the cover of Fortune magazine
before the Web site was launched.
With so much technical development to be accomplished, the company moved the target date
back to June 21. As June approached management decided to open satellite offices in Munich,
Paris, New York, and Amsterdam. Several hundred people were hired to take orders from
these offices once the site went live. However, the launch date had to be postponed again
because of incomplete Web site development, and so many of the staff sat idle for months.
"With all those trophy offices, Boo looked more like a 1950s multinational than an Internet
start-up," claimed Marina Galanti, a Boo marketing director.
By September the company had spent $70 million, and Boo undertook more fund-raising.
With the prelaunch advertising campaign completed months earlier, the Web site was finally
launched in early November. The promised mass marketing blitz never materialized. With the
original advertising campaign long over, observers commented that raising people's interest
while delaying the opening resulted in many disappointed and alienated potential customers.
Moreover, the site reviews were terrible. At launch time, 40 percent of the site's visitors could
not even gain access. The site was full of errors, even causing visitors' computers to freeze.
The site design, which had been advertised as revolutionary, was slow and very difficult to
use. Only one in four attempts to make a purchase worked. Users of Macintosh computers
could not even log on because Boo.com was incompatible with them. Users without high-
speed Internet connections found that navigating the site was painfully slow, because the
flashy graphics and interactive features took so long to load. Angry customers jammed
Boo.com's customer support lines. Sales in the first three months amounted to only about
$880,000, and expenses heavily topped $1 million per month. The Boo plan quickly began
unraveling.
In December, J. P. Morgan's representative on Boo.com's board of directors resigned, leaving
no one from Morgan to advise the company. In late December with sales lagging badly and
the company running out of cash, Malmsten was unable to raise enough additional investment,
causing Boo to begin selling its clothing at a 40 percent discount. This changed Boo's public
image and its target audience. However, Boo's advertising did not change to reflect this
strategy shift.
On January 25, 2000 Boo.com announced a layoff of 70 employees, starting its decline from a
reported high of about 450 persons, a huge number for a start-up. In late February, J. P.
Morgan resigned as a Boo.com advisor. According to reports, it feared being sued by angry
investors. In March, when sales reached $1.1 million, Boo was still spending far more than its
income. In April, Internet stocks plunged on the stock market, and plans for a Boo IPO were
shelved. Finally, on May 17, Malmsten hired a firm to liquidate the company, announcing his
decision the next day. He also indicated that the company had many outstanding bills it could
not pay.
One problem leading to Boo.com's bankruptcy was its lack of planning and control. "When
you strip away the sexy dot.com aspect and the technology out of it, these are still businesses
that need the fundamentals—budgeting, planning, and execution," observed Jim Rose, CEO
of QXL.com PLC, an on-line auction house. "To roll out in 18 countries simultaneously, I
don't think even the biggest global companies like IBM or General Motors would take that
on." Boo's offices were rented in high-priced areas such as London's Carnaby Street and in
New York's West Village. Numerous reports surfaced of employees flying first class and
staying in five-star hotels. Reports even surfaced that communications that could have gone by
regular mail were routinely sent by Federal Express.
Many in the financial community noted the lack of oversight by the board. Management
controlled most of the board seats, with only four being allocated to investors. However, those
four investor representatives rarely attended board meetings. Moreover, none had any
significant retail or Internet experience. The board failed to offer management the supervision
it clearly needed.
Serious technical problems contributed as well. Developing their own software proved slow
and expensive. The plan required rich, complex graphics so visitors could view products from
any angle. The technicians also had to develop a complex virtual inventory system, because
Boo maintained very little inventory of its own. Boo's order basket was particularly intricate,
because items were actually ordered from the manufacturer, not from Boo, so that one
customer might have a basket containing items coming from four or five different sources.
The site also had to enable its customers to communicate in any one of seven languages and to
convert 18 different currencies and calculate taxes from 18 different countries.
Industry analysts observed that 99 percent of European and 98 percent of U.S. homes lack the
high-capacity Internet connections required to easily access the graphics and animation on the
Boo.com site. No Apple Macintosh computer could access the site. Navigating the site
presented visitors special problems. Web pages existed that did nothing, such as one visitors
reported that displayed only a strange message that read "Nothing happens on this page—
except that you may want to bookmark it." Product descriptions were displayed in tiny one-
square inch windows, making descriptions not only difficult to read but also difficult to scroll
through. Boo developed its own, very unorthodox, scrolling method that people found
unfamiliar and difficult to use. Moreover, interface navigation was too complex. The Boo
hierarchical menus required precise accuracy, because visitors making a wrong choice had no
alternative but to return to the top to start over again. Moreover, the icons were miniscule.
One annoying aspect of the site was the constant presence of Miss Boo. Although she was
developed to give style advice to browsers and buyers, she was constantly injected regardless
of whether the visitor desired her. Many visitors reacted as they might have if they were
shopping in a bricks-and-mortar store and had a live clerk hovering over them, commenting
without stop.
On June 18, Fashionmall.com purchased most of the remnants of Boo.com, including its
brand name, Web address, advertising materials, and on-line content. (Bright Station PLC
purchased the company's software for taking orders in multiple languages to market to other
on-line businesses that want to sell to consumers in other countries.) "What we really bought
is a brand that has phenomenal awareness world-wide," explained Kate Buggeln, the president
of Fashionmall.com's Boo division. The company plans to use the Boo brand name to add a
high-end site similar to its long-existing clothing site. The new Boo.com was launched on
October 30, 2000 with a shoestring $1 million budget. The site is much less ambitious than its
earlier incarnation, acting primarily as a portal, and it does not own any inventory. Its design is
much less graphics-intensive and flashy, enabling visitors to browse smoothly and easily
through its pages. It features about 400 items for sale ferreted out by a network of fashion
scouts as appealing to upscale buyers under age 31. Rather than getting bogged down in
taking orders and shipping goods, Boo will direct customers to the Web sites that sell the
merchandise they wish to purchase. Buggeln is optimistic about Boo.com's chances of success
this time.
Source: Michelle Slatalla, "Boo.com Tries Again, Humbled and Retooled," New York Times,
January 11, 2001; Andrew Ross Sorkin, "Boo.com, Online Fashion Retailer, Goes Out of
Business" New York Times, May 19, 2000; Stephanie Gruner, "Trendy Online Retailer Is
Reduced to a Cautionary Tale for Investors," Wall Street Journal, May 19, 2000; Sarah
Ellison, "Boo.com: Buried by Badly Managed Buzz," Wall Street Journal, May 23, 2000;
David Walker, "Talk About a Real Boo-boo," Sydney Morning Herald, May 30, 2000;

Fast Forward: What is Boo.Com Doing Now?

Assignment: Based on an Internet search, give a short description (one or 2 paras) to show
what is Boo.com doing now
CASESTUDY4. UBER MODEL (SUCCESSES AND FAILURES)

Many companies are based on Uber X Model (match suppliers to consumers in a convenient and
cost effective way). See the following blog for a discussion of the Uber Model:
 2 blogs “3 Reasons Why Uber For X is For Everyone”, url:
https://jungleworks.com/download/uberforx.pdf?
utm_source=Autoresponder_Ebook&utm_medium=Email&utm_campaign=Uberfor
X.pdf

Then review the following:

 “ 11 Uber for X Startups that Failed – are you making the same Mistakes” at url
https://jungleworks.com/11-uber-for-x-startups-that-failed-are-you-making-the-same-mistakes/

Then answer the following questions:

 What are the 3 main reasons why UberX is so successful
 What are the 3 main reasons that many companies failed that adopted the UberX
Model
 Surf the Net and find 3 more success and/or failures of UberX

CASESTUDY5. SMART ERPS ON THE MOVE -- FEW SNIPPETS

Many ERP systems at the time of this writing are claiming to be “Smart”. In reality, a
Smart ERP system must have a) the knowledge about the customers, suppliers, and
employess, and b) the ability to use this knowledge to detect significant problems,
quickly adjust accordingly and learn to do it better in the next round. Smart ERPs
heavily utilize machine learning and mobile computing technologies to detect, adjust and
learn. Here are some key examples.

Smart Supply Chain Management (SCM) Systems concentrate on the knowledge

about the customers and use this knowledge to detect significant problems with the
suppliers, quickly adjust accordingly (i.e., find alternate suppliers) and learn to do it
better in the next round by using machine learning technologies. An example is the IBM
Smarter Supply Chain Mangement of the Future (https://www-
935.ibm.com/services/us/gbs/bus/html/gbs-csco-study.html) provides the following
capabilities:
 Supply Chain Optimization, powered by IBM Watson AI, enables organizations to
proactively predict, assess and mitigate disruptions and risks in the business partner
network.
 Extensive B2B Collaboration improves the information flow across B2B business
relationships and ensures that critical transactions and data exchange are frictionless
and scalable.
 Order Management and Fulfillment uses intelligent fulfillment to optimize inventory
utilization and fulfillment efficiencies in real time.

Smart Customer Relationship Management (CRM) Systems concentrate on the

knowledge about the customers and use this knowledge to detect significant problems
with customer services (mostly through extensive use of social media technologies),
quickly adjust as needed (i.e., address the customer complaints) and learn to do it better
in the next round by using machine learning technologies. Many CRM systems at present
(e.g., Salesforce.com) have these features with emphasis on social media technologies.
An interesting example is the Social Relationship Management (SRM) systems that
capture, consolidate and analyze a company’s social media efforts in different business
activities for smarter ERPs.

Oracle SRM is a very intriguing example

(file:///C:/Users/aumar/AppData/Local/Microsoft/Windows/INetCache/IE/W8TBXEVA/s
ocial-relationship-mgmt-brief-1915605.pdf). It unifies a company’s marketing,
engagement and monitoring activities for better user experience. In most companies,
“listening” to social is manual, error-prone and produces bad data due to semantic issues.
In many products, listening is usually limited to monitoring with NLP (natural language
processing) but this lacks advanced capabilities based on semantic analysis. Oracle SRM
uses advanced semantic analysis to minimize errors and improve the ERP capabilities in
the areas of learning about problems before they become serious.

Mobile ERPs have become a norm in the modern business settings. Mobile applications
and wireless technologies have been playing an important role in ERPs since 2000. The
common ERP database, typically located on a large server in the cloud, supports multiple
mobile and desktop apps to serve the enterprise needs. For example, in healthcare, a
common EHR database supports multiple mobile apps used by doctors as well as
patients. Smart mobile apps utilize handset capabilities to detect any problems and/or
opportunities, adjust accordingly, and learn to do it better in the next round.

As an early example, mobile technology helped BT Industries, the world's largest

manufacturer of warehouse trucks, simplify its truck maintenance and service system by
using mobile technologies and saved over $3 million a year
(www.computerweekly.com/feature/Case-study-mobile-ERP-Efficiency-in-connectivity).
Companies such as UPS have heavily leveraged mobile technologies in every aspect of
theiir shipping and delivery business. Some studies have focussed on the organizational
aspects of using mobile ERPs ( http://dx.doi.org/10.4301/S1807-17752015000200002).