Many newly formed DotCom companies around the world failed as the online bubble began to burst in mid-2000. It was predicted that a high percentage of e-commerce start-ups or newly formed pure DotCom companies would fail. The causes of failure can be separated to two main categories – controllable and uncontrollable causes.
Controllable causes that involve strategic causes that is lack of business experience. Most wrong decisions were made because DotCom entrepreneurs lacked a clear understanding
of business fundamentals in the areas of finance, distribution and inventory and were not able to formulate a sound business strategy which was required before the launch of any products or services in the market. Some of the failed DotComs; for example, Furniture.com and Living.com had insufficient back-end operations to support front-end demands.
The controllable causes also included operational causes that is involve poor customer support. Effective communication is deemed vital for the survival of most businesses, and e-mail has become the primary mode of communication. Technical errors on a company's Web site often directed customer inquiries to a Webmaster instead of a corporate representative.
Besides that, uncontrollable causes that involve behavioral causes that is over-expectation. Over-expectation is seen as one of the many factors behind many failed DotComs. Many firms did not have adequate planning when they entered into the market with a dream that the products they were offering were good enough to attract consumers. Many e-commerce companies were slow to realize that buyers were not comfortable with the security, error rate, complexity or confusing navigation embedded in the company's Web site. Others were simply not satisfied with the process of purchasing goods online since they wanted to touch and feel the products before buying, at least for the new products they had not seen earlier.
Technical causes that is Internet security problems. Most of us who have purchased items via the Internet have felt reluctant about the transaction at some point usually when entering our credit card number. Furthermore, some security threats did not come from outsiders, but were instead the work of insiders. Even today, companies that spend a tremendous amount of money on their own security staff are not completely safe. Despite much progress in Internet security, it is still considered a barrier towards e-commerce progress.
Controllable causes that involve strategic causes that is lack of business experience. Most wrong decisions were made because DotCom entrepreneurs lacked a clear understanding
of business fundamentals in the areas of finance, distribution and inventory and were not able to formulate a sound business strategy which was required before the launch of any products or services in the market. Some of the failed DotComs; for example, Furniture.com and Living.com had insufficient back-end operations to support front-end demands.The controllable causes also included operational causes that is involve poor customer support. Effective communication is deemed vital for the survival of most businesses, and e-mail has become the primary mode of communication. Technical errors on a company's Web site often directed customer inquiries to a Webmaster instead of a corporate representative.
Besides that, uncontrollable causes that involve behavioral causes that is over-expectation. Over-expectation is seen as one of the many factors behind many failed DotComs. Many firms did not have adequate planning when they entered into the market with a dream that the products they were offering were good enough to attract consumers. Many e-commerce companies were slow to realize that buyers were not comfortable with the security, error rate, complexity or confusing navigation embedded in the company's Web site. Others were simply not satisfied with the process of purchasing goods online since they wanted to touch and feel the products before buying, at least for the new products they had not seen earlier.
Technical causes that is Internet security problems. Most of us who have purchased items via the Internet have felt reluctant about the transaction at some point usually when entering our credit card number. Furthermore, some security threats did not come from outsiders, but were instead the work of insiders. Even today, companies that spend a tremendous amount of money on their own security staff are not completely safe. Despite much progress in Internet security, it is still considered a barrier towards e-commerce progress.
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