Assesment Zappos
Case Analysis: Zappos.com 2009: Clothing, Customer Service, and Company Culture
1) Identification of the Problem
-Zappos wants to grow as a company faster than their current rate. Zappos expanded into the clothing portion of the online retail market, as well as diversifying into other business, but are not satisfied with the rate of growth. Hsieh and Lin must decide whether or not to recommend a merger proposed by Amazon to their board of directors.
2) Identification of the Causes of the Problem
-One major cause of Zappos’ lack of rapid growth is a lack of capital to fund investments in new lines of business. Their current ratio fell from 1.52 in 2007 to 0.99 in 2009. Zappos available cash assets fell from $8,590k in 2008 to $4,470k in 2009. Having a lack of working capital can make it expansion difficult
-The name “Zappos” itself is a problem for the company in trying to pursue growth in the online apparel market. The founder chose the word “Zappos” for its similarity of the word ‘Zapato’ which is Spanish for shoes. It is understandably hard for existing customers to associate Zappos with a different product and even harder to bring new customers to “Zappos” for anything other than shoes. A analogy would be if “Wienerschnitzel” tried to branch out and gain market share in the Burrito market
-Zappos’ almost obsessive clan culture does not have a strong correlation in regards to subjective or objective growth (figure 2-4).
-Since the 2009 recession, Zappos, being a largely customer service oriented company, had let go of %8 of their employees. It is not stated in the case study, but it could have had an affect on the “employee first” clan culture of the company to which it attributed as a large factor in their success. When you make an employee family, then you lay off an e,ployee, you lose a family member.
-Since Zappos introduced apparel into their line of products, changes needed to be made in their warehousing operations. They also sought to
1) Identification of the Problem
-Zappos wants to grow as a company faster than their current rate. Zappos expanded into the clothing portion of the online retail market, as well as diversifying into other business, but are not satisfied with the rate of growth. Hsieh and Lin must decide whether or not to recommend a merger proposed by Amazon to their board of directors.
2) Identification of the Causes of the Problem
-One major cause of Zappos’ lack of rapid growth is a lack of capital to fund investments in new lines of business. Their current ratio fell from 1.52 in 2007 to 0.99 in 2009. Zappos available cash assets fell from $8,590k in 2008 to $4,470k in 2009. Having a lack of working capital can make it expansion difficult
-The name “Zappos” itself is a problem for the company in trying to pursue growth in the online apparel market. The founder chose the word “Zappos” for its similarity of the word ‘Zapato’ which is Spanish for shoes. It is understandably hard for existing customers to associate Zappos with a different product and even harder to bring new customers to “Zappos” for anything other than shoes. A analogy would be if “Wienerschnitzel” tried to branch out and gain market share in the Burrito market
-Zappos’ almost obsessive clan culture does not have a strong correlation in regards to subjective or objective growth (figure 2-4).
-Since the 2009 recession, Zappos, being a largely customer service oriented company, had let go of %8 of their employees. It is not stated in the case study, but it could have had an affect on the “employee first” clan culture of the company to which it attributed as a large factor in their success. When you make an employee family, then you lay off an e,ployee, you lose a family member.
-Since Zappos introduced apparel into their line of products, changes needed to be made in their warehousing operations. They also sought to