Zappos Case Analysis
Andy Crummel
MGT 337
Professor McCammon
4/8/2013
Zappos’ Case Analysis
1. What are Zappos’ core competencies and sources of competitive advantage? How sustainable are they? What role does corporate culture play in these questions?
I identified quite a few core competencies within Zappos that allow them to distinguish themselves from their competitors. First off, they have a very unique return policy, such that they allow the customer 365 days to return the product, in addition to paying for the customer to ship the item back to them. They also have a much faster web interface, as well as extensive online product information. Adding to the technical side of things, Zappos’ also has trained call center operators, and the ability to call toll free. Aside from all those traits, Zappos has really focused on their customer service, and being “a service company that sells shoes.” They are always striving to WOW their customers, or just make sure every customer they deal with is more satisfied with their company as opposed to another. The CRM that Zappos is using is also very successful in making the customers say WOW. Such a strategy of using technology to organize and synchronize sales, marketing, customer service, and technical support helped Zappos get a 75% repurchase rate with their customers, which is another reason their sales are constantly improving. The company’s culture is about growth, both personally and professionally. Because of this company culture, Zappos executives are continuously looking for ways to “sustain” their competencies on their website, in their customer service call center, and distribution center. The company has made many adjustments over the years to “sustain” these competences and there is every indication that they will continue to do so in the future.
2. How would you expand the business? As you expand the business, how can the company become more profitable?
Although Zappos was acquired by Amazon in 2009, the company
MGT 337
Professor McCammon
4/8/2013
Zappos’ Case Analysis
1. What are Zappos’ core competencies and sources of competitive advantage? How sustainable are they? What role does corporate culture play in these questions?
I identified quite a few core competencies within Zappos that allow them to distinguish themselves from their competitors. First off, they have a very unique return policy, such that they allow the customer 365 days to return the product, in addition to paying for the customer to ship the item back to them. They also have a much faster web interface, as well as extensive online product information. Adding to the technical side of things, Zappos’ also has trained call center operators, and the ability to call toll free. Aside from all those traits, Zappos has really focused on their customer service, and being “a service company that sells shoes.” They are always striving to WOW their customers, or just make sure every customer they deal with is more satisfied with their company as opposed to another. The CRM that Zappos is using is also very successful in making the customers say WOW. Such a strategy of using technology to organize and synchronize sales, marketing, customer service, and technical support helped Zappos get a 75% repurchase rate with their customers, which is another reason their sales are constantly improving. The company’s culture is about growth, both personally and professionally. Because of this company culture, Zappos executives are continuously looking for ways to “sustain” their competencies on their website, in their customer service call center, and distribution center. The company has made many adjustments over the years to “sustain” these competences and there is every indication that they will continue to do so in the future.
2. How would you expand the business? As you expand the business, how can the company become more profitable?
Although Zappos was acquired by Amazon in 2009, the company