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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 placed the most priority on serving its customers and made it as its core competency. The CEO Hsieh referred to Zappos as “a service company that sells shoes” but not a shoes company, which would provide its customers an exceptional shopping experience and always deliver “wow! ” to its customers. In support of its core competency, Zappos made efforts on several aspects as sources of its competitive advantage to combat with those brick-and-mortar stores.

First, to deal with the issue of fit and make customers get the same service as they have in brick-and-mortar stores, Zappos provided a Free Return Policy extending to 365 days through which customers could thus purchase several pairs of shoes, of different styles and fits, keeping those they wanted while returning those that did not fit. Although they had a higher return rate, Zappos also made more net purchases. Second, to cover the weaknesses of online-shopping, Zappos organized a professional photography team to take pictures from several angles for each style and color in order to show every detail to customers in support of their decisions. In addition, the comments from the customers who had purchased the same shoes would be provided to customers without any edition. Third, Zappos had a call center which focused on customer service instead of efficiency. That is to say, the objective of the call center was to provide the customer with the best possible experience and deliver “wow!” to customers. The forth way Zappos adopted was free and rapid delivery. Zappos worked with the ninth biggest logistics company UPS and initially guaranteed next-day delivery for all orders with no fees, which gave a surprised feeling to customers. However, the next-day delivery gradually upgraded customers’ expectations and thus once Zappos didn’t keep...
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