brands that is neither owned by a larger group nor traded publicly. This is an
enormous achievement but at the same time a challenge. The brand also has
the challenge of finding the right successor(s) to the 72-year-old Giorgio
Armani, when he eventually retires. Giorgio Armani is a master of his craft
and has created both a brand power-name and a power persona. His succes-
sor(s) will require not only an equal level of talent but also a double dose of
personality to sustain the Armani aura.
Business lessons from Armani
1 It is imperative for a luxury brand that wants to remain competitive in the
market to understand everything about its consumers.
2 It is possible to successfully extend a luxury brand into several sub-cate-
gories without diluting the brand equity. This strategy however requires
meticulous crafting, implementation and management.
3 Brand and product stretching beyond ‘traditional’ luxury goods categories
is a viable strategy but needs effective management and an alignment of
all the brand elements across all the offerings.
4 Movie and celebrity endorsement is an effective brand communications
and marketing promotions strategy.
5 The Brand Value of a luxury brand is directly linked to the total offerings
of the brand and not through the accessibility of the products.
The boom and bust of boo.com
The story of boo.com, the largest global e-commerce company to collapse
during the 2000 dotcom crash, is very often told in business circles, especially
to highlight a significant investment error. Boo.com was a major mistake;
there is no doubt about it. History has also shown that the failure of the
company was more than a case of being a casualty of the emerging internet
commercial sector.
Boo.com failed as a result of the adoption of several external unfeasible
strategies and internal management missteps. These errors led to the misuse
of US$130 million of capital investment within the two years of the
company’s existence. The story of boo.com is sensational, engaging, intrigu-
ing and somewhat entertaining. It is also a story that provides invaluable and
relevant business lessons.
Boo.com was a pure virtual e-retail company established to retail fashion
and sports goods online with an aim to eventually extend beyond an e-retailer
to a lifestyle brand. The company was founded by three Swedes, who were
thought to be dynamic and innovative. Their professional backgrounds
ranged across information technology, poetry criticism and modelling. These
are hardly the standard qualifications required in establishing a pioneer
chapter 10 285case illustrations