Trends and Change: Zappos

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Assignment 4: Trends and Change

Abstract
The Zappos company was founded in 1999, built on a solid foundation of a unique culture and core values. Current CEO Hsieh believes "if we get the culture right, then everything else, including the customer service, will fall into place” (Taylor, 2009, article, p.3). In 2009, Amazon acquired the firm and the combination of Amazon’s prominent position and Zappos company culture led to the creation of the largest online shoe and apparel shop. Using a loyalty based business model and relationship marketing; repeat customers, word of mouth and viral marketing became its primary resource of revenue.

UPCOMING TRENDS AND CHANGE TOOLS

Introduction

Although Zappos presently provides an appealing culture environment, Zappos will require a solid understanding of the key future trends in the next 10 years. As efficient as Zappos may be, they must be prepared to handle any challenges, risks or even opportunities that may come their way. Based on our readings and research, we can predict the scope of future changes and how they will affect Zappos. In the article “The 10 Trends You Have to Watch”, authors Eric Beinhocker, Ian Davis and Lenny Mendonca suggest several major anticipated trends including declined trust, management delegation, acquisitions, innovation and questionable price stability. The following paper discusses the four most important trends that are anticipated to affect Zappos organization. The first two are suggested from our readings while the last two proposed changes are presented from research. The discussion also explores the kinds of change management tools and skills required to address each trend.

Major Trends

Declining trust is anticipated to rise over the upcoming years, no matter what company or industry we are in. “The Edelman Trust Barometer found that 62% of adults in 20 countries trusted corporations less in December 2008 than they had a year earlier” (Beinhocker et al.,2009, p1). I selected this trend because a loss of trust will significantly affect Zappos power of providing an online shopping platform. “For an individual company, loss of trust leads to higher transaction costs, lower brand value, and greater difficulty attracting, retaining, and managing talent.” (Beinhocker et al., 2009, p.2). I believe maintaining trust is valuable as it can differentiate a firm while building strong relationships.

UPCOMING TRENDS AND CHANGE TOOLS

Trust encompasses several areas, from customers, employers to stakeholders. To sustain a trustworthy relationship, there must be open communication, a high level of employee morale, respect and honesty. In addition, benefits, compensation, rewards, culture and community events all build and develop a sense of trust. To address this concern, Zappos should continue to implement change management tools and continually seek new ways to build and sustain trust. With an effective change leader in place, “Corporate leaders need to demonstrate to civil society that they understand popular and political concerns related to executive compensation, risk management, board oversight, and the treatment of employees facing layoffs.” (Beinhocker, et al., 2009, p3). In addition, “Regaining trust also means dispensing with the view that the only objective of management is to increase shareholder value. Broadening the list of key stakeholders to include employees, customers, suppliers, communities, the press, unions, government and civil society will help companies rebuild creditability.” (Beinhocker et al., 2009, p3).

Trust also entails the company’s culture environment. Since Zappos is ahead of the curve, they have already set the bar by providing a warm and friendly environment. Zappos appreciates diversity, individuality, communication and encourages open and honest...
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