Zappos Case Study Analysis
Zappos Case Study Analysis
Started as a pure shoes E-tailer in 1999 in San Francisco under shoesite.com, Zappos went from $1.6M in gross sales to more than $2 billion in 2011 including apparel, footwear and accessories (Figure:1). The customer service dedicated company created and fostered a great business model that puts the company culture in the driver’s seat. During the recession of 2008 the company laid off 8% of its workforce. Therefore, in 2009 Hsieh, the CEO was forced to sell the company to Amazon in order to keep growing this Las Vegas company without veering from the core values the company developed. It was the best move to stay focused on providing superior customer service while operating almost independently from Amazon.
Figure 1: Zappos.com abridged income statement from FY2007 to FY2011.
SOURCE1: PrivCo.com
Hsieh’s success in using the culture as a lever to align it with the company’s strategy was seamless. With his participative management and leadership style —that inspires and engages employees— he created and developed a synergetic, collaborative culture that aligns with the customer intimacy strategy the company holds.
Right after moving the company to Las Vegas, Hsieh developed ten core values —based on the employees’ insights— that will provide a framework to the company’s culture. In my opinion Harvard alumni, Hsieh was influenced by the Harvard literature regarding leadership. As a matter of fact, the CEO sees leadership as a process that whereby an individual influences a group of individuals to achieve a common goal. Therefore, he used the culture of the company to inculcate this thought in order to serve the community. Thus, the common goal is not to sell shoes or to make money but to serve and this was illustrated by their strategic credo Zappos: Powered by Service. Serving others is a transferable skill that will work in any domain if applied properly and intentionally. For instance, where can you find free overnight shipping,
Started as a pure shoes E-tailer in 1999 in San Francisco under shoesite.com, Zappos went from $1.6M in gross sales to more than $2 billion in 2011 including apparel, footwear and accessories (Figure:1). The customer service dedicated company created and fostered a great business model that puts the company culture in the driver’s seat. During the recession of 2008 the company laid off 8% of its workforce. Therefore, in 2009 Hsieh, the CEO was forced to sell the company to Amazon in order to keep growing this Las Vegas company without veering from the core values the company developed. It was the best move to stay focused on providing superior customer service while operating almost independently from Amazon.
Figure 1: Zappos.com abridged income statement from FY2007 to FY2011.
SOURCE1: PrivCo.com
Hsieh’s success in using the culture as a lever to align it with the company’s strategy was seamless. With his participative management and leadership style —that inspires and engages employees— he created and developed a synergetic, collaborative culture that aligns with the customer intimacy strategy the company holds.
Right after moving the company to Las Vegas, Hsieh developed ten core values —based on the employees’ insights— that will provide a framework to the company’s culture. In my opinion Harvard alumni, Hsieh was influenced by the Harvard literature regarding leadership. As a matter of fact, the CEO sees leadership as a process that whereby an individual influences a group of individuals to achieve a common goal. Therefore, he used the culture of the company to inculcate this thought in order to serve the community. Thus, the common goal is not to sell shoes or to make money but to serve and this was illustrated by their strategic credo Zappos: Powered by Service. Serving others is a transferable skill that will work in any domain if applied properly and intentionally. For instance, where can you find free overnight shipping,
References: Brook Manville and Josiah Ober (2002). Beyond Empowerment: Buidling a Company of Citizens, HBS. Echivaria et al. (2014).To Provide the Best Customer Service Possible. Internally, We Call This Our Wow. wedreambusiness.org/Zappos published June 2, 2014, accessed March 20, 2015. George Anders, (2014). Gurus Gone Wild Does Zappos Reorganization Make Any Sense? forbes.com http://www.sociocracy.info Noah Smith, (2014). Zappos Chief Loses a Las Vegas Bet. BloombergView. OCT 9, 2014 Röll Martin, (2015). Organisations Running On Holacracy. Structureprocess.com. Retrieved 20 March 20, 2015. William Tincup, (2014). The Six Problems With Holacracy. Fistful of talent, 01.09.2014.