Kozmo.Com
Case Study: Kozmo.com
Kozmo.com
History Of The Company
Joseph Park and Yong Kang founded Kozmo.com in 1997. They both left their jobs on Wall Street when Joseph ordered a book on Amazon and did not like that he didn’t receive it on the day the order was made (MIT). The two then launched Kozmo and delivered videos, CD’s, books, DVD’s and other items such as magazines, food, beverages and even had a contract with Starbucks at one point in time. Their plan was to be in more than 35 cities in the United States by the end of 2002, with their start being in New York City. Park and Kang’s business model included delivering these items to customers in the area within an hour of ordering online, and did not charged a delivery fee. Some analysts, stating that the delivery of certain small objects or small orders would be very expensive, and a profit could not be possible, criticized it (Wiki). In 1999, Kozmo had approximately $3.5 million in revenues and lost $27 million with delivery costs running $3.3 million. In 2000, Kozmo’s revenues increased to $30 million with a net loss of $120 million an delivery costs of $35 million (SEC).
Kozmo had two main objectives when it came to a business strategy: “to be the leading online provider of entertainment, food and convenience products with free delivery in under and hour, and to enhance the usage of distribution by providing select detailers an expedited delivery option.” Kozmo served a total of eleven locations, operating from Distribution centers in those areas. The following (MIT) are the cities that Kozmo served and the dates on which it launched:
Kozmo Market Commenced New York City March 1998 Seattle June 1999 San Francisco September 1999 Boston September 1999 Washington, D.C. November 1999 Los Angeles February 2000 Chicago March 2000 Atlanta April 2000 Portland May 2000 San Diego April 2000 – Closed, Feb. 2001 Houston April 2000 – Closed, Feb. 2001
Kozmo.com
History Of The Company
Joseph Park and Yong Kang founded Kozmo.com in 1997. They both left their jobs on Wall Street when Joseph ordered a book on Amazon and did not like that he didn’t receive it on the day the order was made (MIT). The two then launched Kozmo and delivered videos, CD’s, books, DVD’s and other items such as magazines, food, beverages and even had a contract with Starbucks at one point in time. Their plan was to be in more than 35 cities in the United States by the end of 2002, with their start being in New York City. Park and Kang’s business model included delivering these items to customers in the area within an hour of ordering online, and did not charged a delivery fee. Some analysts, stating that the delivery of certain small objects or small orders would be very expensive, and a profit could not be possible, criticized it (Wiki). In 1999, Kozmo had approximately $3.5 million in revenues and lost $27 million with delivery costs running $3.3 million. In 2000, Kozmo’s revenues increased to $30 million with a net loss of $120 million an delivery costs of $35 million (SEC).
Kozmo had two main objectives when it came to a business strategy: “to be the leading online provider of entertainment, food and convenience products with free delivery in under and hour, and to enhance the usage of distribution by providing select detailers an expedited delivery option.” Kozmo served a total of eleven locations, operating from Distribution centers in those areas. The following (MIT) are the cities that Kozmo served and the dates on which it launched:
Kozmo Market Commenced New York City March 1998 Seattle June 1999 San Francisco September 1999 Boston September 1999 Washington, D.C. November 1999 Los Angeles February 2000 Chicago March 2000 Atlanta April 2000 Portland May 2000 San Diego April 2000 – Closed, Feb. 2001 Houston April 2000 – Closed, Feb. 2001
Cited: E-Dreams . Dir. Wonsuk Chin. Perf. Joseph Park, Yong Kang. E-Dreams, 2001. DVD. Gamble, John, and Arthur A. Thompson. Essentials of strategic management: the quest for competitive advantage. Boston: McGraw-Hill Irwin, 2012. Print. "Kozmo.com." SEC.GOV. N.p., 14 Mar. 2000. Web. 29 Oct. 2012. <www.sec.gov/Archives/edgar/data/1075749/0000912057-00-012562.txt>. "Kozmo.com - Wikipedia, the free encyclopedia." Wikipedia, the free encyclopedia. N.p., n.d. Web. 29 Oct. 2012. <http://en.wikipedia.org/wiki/Kozmo.com>. Narayanan, Srinath. "Kozmo.com Case Study." Massachusetts Institute of Technology. MIT Sloan School of Management, 9 Apr. 2001. Web. 29 Oct. 2012. <stuff.mit.edu/afs/athena/course/15/15.823/attach/Kozmo.doc>