An example of an E-Commerce failure and its causes

The example of an E-Commerce failure that we choose is the DrKoop.com.

DrKoop.com was launched in July 1998 by Donald W. Hackett and John F. Zaccaro with $6 million from Superior Consultant Company Inc., a healthcare IT firm in Bloomfield, Michigan. Drkoop.com was a leading global healthcare Network providing measurable value to individuals worldwide. Its mission was to empower consumers with the information and resources they need to become active participants in the management of their own health. He is unlike most dot-com celebrities of the era; Koop owned a famous face before co-founding an Internet company and, indeed, before the Web even existed. As President Ronald Reagan’s surgeon general from 1981 to 1989, Koop and his iconic beard led a well-known anti-smoking campaign.

During the 1998 which in the operating revenues, It notched just $43,000, but that didn’t keep the company from going public in June 1999 and achieving, briefly, a peak market with capitalization of $1 billion. Subsequently, DrKoop.com’s business plan rested on advertising, and in 1999 there weren’t enough healthcare advertisers to support it and the many other healthcare dot-coms trolling for ad buyers.

However, the DrKoop.com fail to achieve complete success and are not able to face the challenges in market via Internet. Due to their unimpressive and non-persuaded marketing capacity as well as other weaknesses, they became bankrupt and failed to achieve success. Later, DrKoop.com, the medical information Web site that was once valued at over $1 billion, was sold to a Florida company for $186,000 in cash. Moreover, their shares, sold to the public in June 1999, rose as high as $45.75 three years ago, before falling with the collapse of the Internet stock bubble. Andrew Zipern (NYT)

There are several points that DrKoop.com fail:

• E-commerce has perceived by the management as important to achieve the goals of the company. However, the DrKoop.com stills an unrealized goal of the health-care industry.
• The Company sank into a cash crisis for the trademark, website and others.
• It is difficult to build the trust and brand value associated with his name to the consumer via internet. Moreover, it is related the health, so the consumer need more approval and confidence.
• Drkoop.com also is the target of several class-action lawsuits.
• The DrKoop.com project has to be building around an important competence of the company.

The DrKoop.com project also has to add value for the user. They need to identify the demands and need of the consumers as well as to understand the market and the needs of the consumers. In conclusion, the DrKoop.com needs to implementation of effective business strategies and a strategic management process for the betterment of the company desirable for achieving long lasting success of an e-commerce company.

Here is some source of E-Commerce Failure