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Zappos com Developing a Supply Chain to Deliver WOW Case Solution

Solution Id Length Case Author Case Publisher
2871 1550 Words (7 Pages) Michael Marks, Hau Lee, David W. Hoyt Stanford Graduate School of Business : GS65
This solution includes: A Word File A Word File

Zappos is a big online store for shoes and clothes. The case focuses on when the company faced problems with its supply chain. In the beginning, Zappos used other companies to send out orders placed by customers. However, the company later built its own warehouse and supply facilities to manage the orders placed by customers to have increased control over the entire process. Zappos faced challenges like having many different items. The company found a good way to manage stock, and used machines and technology for the same purpose as well. The company also decided to stop using drop-shipping and instead started controlling its own inventory. This was aimed at giving better service to the customers. Zappos grew its supply network more, giving way to the development of "Powered by Zappos" to help sellers make more direct sales. The firm smartly handled extra stock with computer-driven markdowns, specialty stores and links like 6 pm and Overstock. Even with cash challenges and revenue problems, Zappos kept growing. The case highlights how the company had fast shipping and never stopped making customers happy, which made them different from others.

Following questions are answered in this case study solution

  1. What are Zappos’ core competencies and sources of competitive advantage? How sustainable are they? What role does corporate culture play in these questions?

  2. How important is next day air shipment to the customer experience? Is it worth the cost?

  3. How would you expand the business? Would you add more products, more geographies, or by selling private labels? As you expand the business, how can the company become more profitable, particularly in light of the costs associated with the focus on service?

  4. Do you think Zappos is an interesting company for Amazon? Why?

Case Analysis for Zappos com Developing a Supply Chain to Deliver WOW

1. What are Zappos’ core competencies and sources of competitive advantage? How sustainable are they? What role does corporate culture play in these questions?

Zappos has special competencies and advantages that help it succeed and stand out in the market. Its strength comes from always giving great service to its customers. It offers free shipping, easy returns and offers customer service all day long. This increases customer loyalty and ensures that people keep coming back over time. The company is doing a good job of managing its supply chain problems as well, which is another competency. It has moved from early difficulties to making distribution centers work well. The company's skill in handling many different goods well, using modern computers and always improving its systems highlights good supply chain knowledge as well as increased efficiency on the part of the company. Zappos has invested a large number of resources into new acquiring and incorporating updated technology, especially for the purpose of making its own software to meet its special needs. This also highlights that Zappos is flexible and skilled with the use of new technology and gadgets.

The key to Zappos staying successful over time is that the company culture adapts to the changing needs of the business and external environment as well. The company focuses on making the employees happy and works on improving their creativity as well. Zappos shares what the employees value as a team and attracts great people who can keep getting better. This cultural focus not only strengthens its current benefits, but also helps make the business survive a changing, evolving, and often turbulent marketing environment. The company's skills and benefits are greatly affected by Zappos' business culture. The promise to give top-notch service and always get better is deeply ingrained in the company's genes. Giving attention to making employees satisfied through challenging roles, training and effective reward management leads to building a team that works hard. This results in better job performance, too.

2. How important is next-day air shipment to the customer experience? Is it worth the cost?

Next-day air shipment is an important part of the Zappos customer experience. This shows how dedicated the company is to giving improved, and exceptional service to customers in a very competitive online shopping world. The promise of exceptional customer service is deeply ingrained in Zappos' central service promise and idea - where fast delivery of orders is a big part of meeting and going beyond what customers expect.

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