Zappos.com: Developing a Supply Chain to Deliver Wow Harvard Case Solution & Analysis

Problem

Zappos.com is an online retailer with an extensive portfolio has helped the company obtains extensive revenue and sales growth. Despite the success of the company, there are still some certain issues that are important to address that include the inefficiencies that exists in its supply chain that may hinder its future growth. Besides that,the company is also planning to expand globally, but with the presence of these inefficiencies in supply chain and operations, this question is also difficult to address.

Analysis

This section will highlight the key strengths and weaknesses of the company and will highlight the possible opportunities and the threats that the company may encounter.

Strengths

The key strengths of the company are vivid, but there are few that have played a vital role in establishing Zappos.com one of the largest online retailers in shoe category. First of all, the company has an extensive focus towards customer service which is also regarded as its competitive advantage.

This competitive edge of the company also lies in its culture and values as the company has established a strong corporate culture which is also being appreciated by its employees. Furthermore, the delivery is quick and rapid as the majority of the clients or customers receive their product within 2 days.

All these factors have played an essential role in developing a strong customer centric culture and provide impressive customer service. On the other hand, the company has offered uniqueness leveraging innovation in every aspect that has created a strong market fort the company to cater.

Weaknesses

Although the company has some interesting and impressive attributes, but there are some major weaknesses that are present in the internal structure of the company. Since its inception the company has only relied on online retailing and neglected the bricks and mortar aspect or opening physical outlets. This is one of the weaknesses of the company as it limits the company in its approach. Furthermore, the company’s customer base is still very low which hints towards declining profits in the future and is also due to the limited approach of the company.

Besides that, the company inbound logistic is also inefficient that makes the delivery cost high and maintaining the rapid delivery time challenging. Furthermore, the company has only one distribution channel and the presence of UPS supports the rapid delivery as it is located close to the distribution center. However, the company is highly dependent on UPS, which makes the position of the company weak in terms of catering distribution in the long run.

Opportunities

The first and the major opportunity that the company can exploit is global expansion, which is also on the cards, but there are few decisions that are essential to address. Besides that, the company can leverage innovation and technology to enhance its supply chain network and bring enhancements in its inbound logistics.

The company has so far leveraged technology and innovation efficiently and further gaining expertise in this area will open new opportunities for the company. Besides that, the company can expand its customer base and increase its presence in other markets by collaborating or bringing synergy in operations with competitors and other online retailers. The company needs to expand its presence online in order to leverage the opportunities that will emerge due to the emerging concept of e-commerce.

Threats

The first threat is the economic crisis faced by the world in the current scenario and is passing some major threats that may incur harsh results. With the economic crisis, it will become difficult for the company to cater price conscious clients as spending from the consumer’s end will decline rapidly.

Furthermore, using innovative methods like next-day shipping through will be a costly affair as the return on investment is not guaranteed. On the other hand, the company will also have to cater threats like competition as it is expected to increase and with such situation sustaining themarket share and revenues will become difficult for the company.

Alternatives

Alternative 1:Import Directly of Foreign Manufactures

The first alternative suggests to contract with low cost manufacturers in low cost countries like China and South America and start importing from them. This strategy will provide the company flexibility, especially while dealing with cost conscious customers.

Secondly, the company will be able to remove the inefficiencies present in its inbound logistics as the company will be receiving the products directly and the role of middleman will be eliminated. The company may increase its supply chain cost while dealing with manufacturers and can face trouble in maintaining inventory levels, but this strategy will reduce the lead time drastically................

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