Developing a Supply Chain to Deliver WOW Harvard Case Solution & Analysis

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

The main business of the Zappos is its products that are offered to sell on its website, however, in theory; the focus of the Zappos is to improve its reputation as a service provider rather than a retailer. Therefore, its core competencies mainly lie in its services section, i.e. in customer service system and inventory management. The company has motivated a unique corporate culture where teamwork, innovation, socializing and effective communication is highly appreciated. As per the CEO of the company, everything at Zappos could be copied by the competitors such as its policies, various brands that the company is selling and website format, however, its culture is something that cannot be copied easily. In this regard, the management focused on building a unique corporate culture, where everyone will be in a strong relationship with each other. The major sources of the competitive advantage of Zappos are its customer service and inventory management system.

In the business model of, customer service and inventory management has a unique value and position. Zappos invested too many efforts in finding, recruiting and training of its customer service staff in order to create an emotional relationship with its customers. Customer service employees are free in making decisions and measures in order to cultivate the unique reputation of Zappos among its competitors. The company’s focus lies in creating a memorable shopping experience for its customers that will compel them to say “WoW”. Zappos used its customer service as an effective and unique marketing tool which has not only boosted its sales, but also retain its customers by offering long life values. Similarly, in building its core competencies, its warehouse management also played a vital role. The company has updated its warehouse system to ensure a speedy and on time delivery, which has also compelled its customers to say “WoW.” It seemed that these competencies are sustainable enough unless they maintain the quality of their services and procedures. However, to be successful in the long run, Zappos should focus on the clarity of its strategic intents in order to maintain a centralized corporate culture because a huge amount of freedom to employees can result in some serious threats. Corporate culture played a very important role in the development of Zappos core competencies because it helped the management and employees to build a strong brand image to cultivate strong relationships and connections with its customers. Moreover, it motivates the employees to work in an independent way in building relationships with customers.

2.      How important is next day air shipment to the customer experience? Is it worth the cost? How may you change it in the cost-conscious environment facing the company in late 2008? Developing a Supply Chain to Deliver Wow Case Solution

The importance of the next day shipment to the customer experience can be imagined by the assessment of the excitement and delight of receiving a pair of shoe without any charges that the customer had ordered late night. Zappos’s immediate processing of orders made it possible for them to ship their products within 24 hours, which had automatically reduced the waiting period of the customers. In this way, Zappos compelled their customers to say “WoW.” Zappos always followed their next day shipment policy, however, on their website they claimed that delivery would be made within 4-5 days. This had also contributed in building a strong and pleasant customer experience and improved the brand image through word of mouth. The next day air shipment policy worth the cost because this policy helped Zappos in building a strong customer base of repeat customers. This resulted in high customer satisfaction and had created a strong bond between the company and the customers. Moreover, customer published positive reviews about their experience with Zappos, which further improved the reputation of the company. In the current situation, customer service, quick delivery and inventory management had turned to the core competencies of Zappos and it would cost high to its competitors to imitate. With these few competencies, Zappos could achieve world’s leadership therefore; they should not disrupt it for reducing costs. In terms of cost conscious environment, Zappos should not change their delivery system because it was also acting as their marketing tool without demanding for..................

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Zappos was founded in 1999, during the Internet boom, selling shoes online. The fundamental idea of the company was to provide the ultimate in choosing their clients, all brands, styles, sizes and colors. Zappos organized all aspects of the business (including the recruitment, culture, call center, inventory, web site and supply chain), to provide the best service she would "wow" anyone who interacted with the company employees to corporate clients partners. Zappos grew rapidly, and by 2008 was profitable with net sales (after his return), about $ 650 million. The company faced a number of issues as he hopes. While it penetrated only about 3 percent of the U.S. market for shoes, Zappos has been expanded and production lines for items such as camping and video games. This is necessary to identify those elements of the strategy have contributed to its success in the shoe, and whether he will be able to replicate that success in other product lines. You also need to determine how it can scale the business, many efforts he made to "wow" their customers was time consuming and expensive, it might be appropriate to the company with revenue in the tens of billions? Finally, the economic landscape has changed dramatically in late 2008 with the collapse of the financial markets and the recession. intensive service business was based on the sale at a minimal discount, unlike many sites that relied on sale at a low price. Whether the company will need to make changes in response to the changed economic environment, and if so, what were the changes? Case provides an opportunity to assess core competencies Internet Retailer, that there is a quick, initial success. The case allows students to consider the supply chain issues that are critical to the success of the company, in the broader context of business. The basis of success Zappos », its core competencies, culture and competitive environment" Hide

by Michael Marks, Hau Lee, David W. Hoyt Source: Stanford Graduate School of Business 28 pages. Publication Date: February 13, 2009. Prod. #: GS65-PDF-ENG

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