Zappos.Com- Developing a Supply Chain to Deliver Wow!

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Case: Zappos.com: Developing A Supply Chain To Deliver WOW! Name:
Date: 7 February 2013
Introduction and Problem Definition
Zappos.com provides extensive online products, delicate call-center service, free and rapid delivery, and at the same time, it keeps optimizing its operational model. However, with the prolonged recession, the company’s margins are decreasing, and it now has to seek a solution to maximize its profit. External Analysis (Please see Appendix 1, SWOT Table, pg5)

Both U.S. and international markets remained unsaturated, in spite of Zappos’ rapid expansion. It is still very promising for online retailors to expand its customer base. Besides, the facts of customers’ increasingly desire to access a huge selection of product offerings and customers’ growing comforts with online shopping make the Internet become a critical distribution channel. Consequently, more and more high-end brands are eager to partner with online retailors such as Zappos.

But, with the collapse of the financial markets and economic slowdown, customers are more cost-conscious and have higher expectations for the services—they are much more difficult to be delighted. Meanwhile, in such a bad economic time, labor-intensive activities might eventually become unaffordable. As to the international market, business expansion faces a lot of challenges, such as high cost of operation and culture conflicts. Internal Analysis (Please see Appendix 1, SWOT Table, pg5)

Zappos’ fun and customer-oriented culture, together with its passionate employees and extensive product offerings online, brings the company a happy and loyal customer base, even in Canada. Also, as the company’s employees are systematically trained, their outstanding services could always make the customers amazed, therefore, the company has successfully built its brand equity through positive word of mouth and its customers keep coming back (75% repeat customers in 2008)....
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