Zappos Strategic Hrm

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BE2601-Principles of Management
Group Assignment:
Zappos Planning & HRM
SEM 1, AY 2012/13

Contents
Executive Summary3
Introduction3
Mission Statement3
Strategic Planning3
SWOT Analysis3
Recommendations to SWOT4
Corporate Level Strategy5
Business Level Analysis - Point of Differentiation5
Human Resources Management (HRM)5
Recruitment and Selection6
Training and Development6
Performance Appraisal and Feedback7
Pay and Benefits7
Labor relations7
Overall Analysis and Recommendation8
Appendix9
Diagram 1: Zappos Family Core Values9
Diagram 2: BCG Matrix9
References9

Introduction
Zappos is a blooming online shoe retailer that has made its name by being “unconventional”. As the company grows, it is vital to define the core values from which they develop their culture, brand, and business strategies. Some of the 10 core values that all the employees live by are: Deliver WOW through service, Pursue growth and learning, and Be Humble. This report focuses on how these values have helped Zappos plan their market tactics strategically. Mission Statement

Zappos does not have a formal mission statement, as their CEO believes that Zappos does not need one. Zappos appeases consumers by delivering “WOW through service” and appeases shareholders by pursuing “growth and learning” and doing “more with less.” Zappos employees live by the 10 core values (refer to Diagram 1).

Strategic Planning
SWOT Analysis
Strength
Excellent Customer Services
Zappos’ aim is to deliver extraordinary customer service. Unlike conventional start-ups that focus on their budget for marketing, Zappos made a very thoughtful decision to re-direct its budget towards delivering exceptional customer service, helping the business to thrive where others have failed when it was first incorporated. CEO of Zappos, Tony Hsieh highlighted many deliberate decisions that the company made for the long-run, such as encouraging customers to order as many products as they wanted in order for them to “try them on”, and offering free return shipping for a full 365 days. These efforts have been proven to work as the company reports that around 75% of its sales are derived from repeat business. Hiring Only Employees that Suit the Culture

To ensure that their vision is displayed properly in their brand proposition, it is vital to recruit employees that match their corporate culture. This is why regardless of their position; all new employees must go through a 4-week training focusing on customer service. At the end of the first week of training, Zappos offers employees a payment for the time they spent plus a bonus of $2,000 to leave the company, if they find that the company does not suit them. This practice gives employees an opportunity to make educated choices about their own happiness, and whether they can fully commit to Zappos’ standards. Weakness

Culture mismatch with Amazon
Amazon acquired Zappos in 2009. However, whether or not the fun and playful culture of Zappos that contributes to their success, will match with the culture of Amazon remains a question. Furthermore, Amazon also has their own products lines selling shoes which might create cannibalization or internal competition. This merger might also affect the company’s supply chain since Zappos offers overnight shipping. No Physical Storefront Presence

Although with a growing number of online shoppers, majority of people would prefer to buy products at a physical store where they can try on the products. Thus, Zappos is in a disadvantageous position as they lack the storefront publicity, with the current online outlet as the only channel for customers. Opportunities

Innovation on Product Offerings
As an online retailer, Zappos could also expand their product line, offering other fashion products such as handbags or accessories. With the strong brand name created by providing excellent customer service...
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