What is eToys.com?eToys is the popular e-commerce site that sells toys. It launched in 1997. It emphasis on toys and it aims to sell parents several of things that their children might want or need. It was selling children's books, videos, music, and software, as well as toys via internet.
eToys had a highly successful Initial Public Offering (IPO) in 1999. Shares issued at $20 rose to $76 on the first day of trading. At its peak, the company was valued at more than $8 billion. E-marketer was once quoted as saying; "Put simply, eToys is the benchmark against which all other toy sites are measured."
Ethical issue and Lawsuit against eToy.com
In late 1999, eToys attempted to buy eToy.com as it was confusingly similar to its own domain. etoy turned down the offer, so on November 29, 1998, eToys obtained a court injunction preventing etoy from operating a website at www.etoy.com. To obtain the injunction, eToys told the judge that etoy.com was confusing customers, and furthermore that it contained pornography and calls to violence.
In response to eToys' greedy and unethical conduct, a team of toy designers invented the etoy Fund online game which realistic intent was to make eToys' stock value go as far down in value as possible. The eToy Fund's fast and furious action and thrilling multi-user game play set thousands of users' hearts pounding as they helped to lower the value of eToys stock by using many methods.
The eToys' stock value falls dramatically from year 1998 to 1999. So on December 29, 1999, eToys made an announcement about that they had decided to give up this unpopular dispute and fight. However, it was not true that eToys stop the lawsuit. Furthermore, its stock value dropped to 9 cents per share in February 2001.
Terrible negligence on service
etoys.com decided to use a third party, Fingerhut, in order to fulfill lots of orders for the 1999 Christmas season. However, eToys.com failed to achieve one of its initial goals: speedy and reliable. Thousands of customers complained that their orders were either late in arriving at their destination or contained the wrong merchandise. This event had seriously destroyed the first image of eToys for new customers and impairs its goodwill.
Wrong strategy against Competitive Environment
Unfortunately, eToys went into another market battle while Toys 'R' Us and Amazon.com were forming a partnership in August 2000. Etoys.com faced a strong competitor during the 2000 holiday shopping season. Thus, eToys’ customers were reduced. Nevertheless, eToys.com adopted a strategy to offer more products that beyond their primary production line, Toys.
Failed in forecasting
In order to avoid the shipping missteps of 1999, the company spent heavily to build two large warehouses to handle inventory and delivery. However, the total $ 120 million income of sales for the 2000 season was just half of the company’s expectation. Short of money and other funding options exhausted, eToys.com filed for bankruptcy finally in March 2001.
List of top 10 failure on E-commerce: Click here.
References:
(1) http://en.wikipedia.org/wiki/Initial_Public_Offering
(2) http://www.rtmark.com/etoy.html
(3) http://www.wired.com/politics/law/news/1999/12/33330
(4) http://www.etoy.com/
(5) http://www.cnet.com/1990-11136_1-6278387-1.html
eToys had a highly successful Initial Public Offering (IPO) in 1999. Shares issued at $20 rose to $76 on the first day of trading. At its peak, the company was valued at more than $8 billion. E-marketer was once quoted as saying; "Put simply, eToys is the benchmark against which all other toy sites are measured."
Ethical issue and Lawsuit against eToy.com
In late 1999, eToys attempted to buy eToy.com as it was confusingly similar to its own domain. etoy turned down the offer, so on November 29, 1998, eToys obtained a court injunction preventing etoy from operating a website at www.etoy.com. To obtain the injunction, eToys told the judge that etoy.com was confusing customers, and furthermore that it contained pornography and calls to violence.
In response to eToys' greedy and unethical conduct, a team of toy designers invented the etoy Fund online game which realistic intent was to make eToys' stock value go as far down in value as possible. The eToy Fund's fast and furious action and thrilling multi-user game play set thousands of users' hearts pounding as they helped to lower the value of eToys stock by using many methods.The eToys' stock value falls dramatically from year 1998 to 1999. So on December 29, 1999, eToys made an announcement about that they had decided to give up this unpopular dispute and fight. However, it was not true that eToys stop the lawsuit. Furthermore, its stock value dropped to 9 cents per share in February 2001.
Terrible negligence on service
etoys.com decided to use a third party, Fingerhut, in order to fulfill lots of orders for the 1999 Christmas season. However, eToys.com failed to achieve one of its initial goals: speedy and reliable. Thousands of customers complained that their orders were either late in arriving at their destination or contained the wrong merchandise. This event had seriously destroyed the first image of eToys for new customers and impairs its goodwill.
Wrong strategy against Competitive Environment
Unfortunately, eToys went into another market battle while Toys 'R' Us and Amazon.com were forming a partnership in August 2000. Etoys.com faced a strong competitor during the 2000 holiday shopping season. Thus, eToys’ customers were reduced. Nevertheless, eToys.com adopted a strategy to offer more products that beyond their primary production line, Toys.Failed in forecasting
In order to avoid the shipping missteps of 1999, the company spent heavily to build two large warehouses to handle inventory and delivery. However, the total $ 120 million income of sales for the 2000 season was just half of the company’s expectation. Short of money and other funding options exhausted, eToys.com filed for bankruptcy finally in March 2001.
List of top 10 failure on E-commerce: Click here.
References:
(1) http://en.wikipedia.org/wiki/Initial_Public_Offering
(2) http://www.rtmark.com/etoy.html
(3) http://www.wired.com/politics/law/news/1999/12/33330
(4) http://www.etoy.com/
(5) http://www.cnet.com/1990-11136_1-6278387-1.html
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