Zappos.Com Case Essay

1. Sources of competitive prefer lay in the field of their first offer. * First of all they willd a huge selection of styles, colors and sizes of shoes as it was one of the biggest problems of traditional retailers. * At the first stage of their entering of the market, Zappos was the first-mover, which eventually supported its succeeder as the market for on-line order of shoes was estimated to be intimately $2 billion. * High take aim of customer satisfaction was also one of the important factors to indicate proper operations of the Zappos.Company achieved such a success due to its corporate refining and a value of extreme concentration on its customers. In the retail business on of the indicators of retailer success is the level of customer return and Zappos succeed to attain this indicator on a very high level. Corporate culture was about delivering impress effect by dint of dish and hiring pot who were passionate about suffice was the most important concerns of the top- managers.This WOW effect was delivering through many ways from the speed of site loading, all-around(prenominal) telephone support, al poorance for 365 days of return, extensive information about the products and fast site loading. Thats why customers were willing to make purchases more often. In my opinion, service is a very important part of providing sustainable sales growth for the union as it creates an image of reliable company which operates in the internet and helps people to choose between traditional shopping and e-shopping. This image while managed properly was a sustainable competitive advantage for Zappos.As it was mostly mentioned features of a corporate culture which provide this competitive advantage than we lav say that corporate culture is a background for it. 2. According to the position of the company to retain loyalty of the customers and provide WOW effect through service, it became more important to expend UPS as a reliable logistics provider and organize 1 -day air delivery with no surplus price. Therefore, I can assume that reducing marketing costs for gaining new customers were the right decision as long-term partnership with previous customers was able to dedicate profit and new customers in the long run perspective.From an opposite side, Zappos was able to keep transportation costs on the constant level partly from the scale of the collaboration with UPS (as it was mentioned, Zappos has become one of the top three UPS shippers). And as it was estimated, UPS ground shipping was able to reach only 11% of Zappos customer within 1 day. Knowing the fact that consumers got used to high qualitative and fast delivery, this could significantly harm the perception of the brand by loyal customers. This is the reason why company didnt refuse to provide one-day air shipping. . First of all, we should understand that in situation of crisis people are decreasing their spending on high-end products if they previously had opportunities for that . Thats why it can be suggested, that company should slim down more on mass market products and decrease costs while being very circumspect about scalable expansion. As it was mentioned in the case, Zappos searched for opportunities to improve its supply chain without harmful effect on customer satisfaction.From this point of view, company can concentrate more on retaining loyal customers and acquiring new customers partly by providing promotional discount actions, but at the like time keep prices on the same level, other(a)wise it can create a sense of discounter among Zappos clients. 4. The most important concern while expanding such business as Zappos is retaining this WOW effect. There are many factors which could affect this service oriented culture negatively, so that company should understand that rapid expansion in the situation of crisis can be very risky.From the other hand, there is no need to add more product to its product range as its already sell shoes, clothing, handbag, accessories, minor products, beauty, entertainment, eyewear, home, jewelry, sporting goods, and watches. In my opinion, company can diversify its businesses by developing other e-platforms with mentioning that they are powered by Zappos. That means that company could partly parry risks connected with brand perception and increases sales level by selling more products. 5. The environment of a more cost-conscious consumer can harm the business if it wont be careful about its costs.The main idea here is to provide at least the same level of quality in service with constant rates. Zappos can lower transportation costs through developing closer relationships with transport companies (for ex. try to reduce shipment costs from UPS or use ground shipment when it wont extend delivery time). Company can also provide selective discounts (for ex. providing promotion discounts for loyal customers or creating advance promotional events). They could also take into consideration competi tors activities and offers in order to make sure that they provide the best prices or better opportunities for their clients.Zappos must take advantage of its other core competencies to ensure that the customer will choose to buy from Zappos as long as they are not paying more for the product. Probably, other variant to boost sales would be testing the system when customer have an opportunity to enjoy free shipping for a bit high price, while company could gain profitability from a scope of the shipments. 6. First thing which comes to a mind is preserving Zappos corporate culture and brand on the same level as these things made Zappos that successful.In my opinion, it would be better to leave Zappos as an independent entity with its charismatic top-manager and founder Tony Hsieh while his forces led company to the leading position. some other thing to concern is a cost structure. One of the ways that Amazon tries to deliver a great customer experience is by offering low prices, wh ereas Zappos wasnt ever been concentrated on price competition. This policy also shouldnt be excluded from the Zappos future strategy as Zappos brand is more about service, but not a lowest price.Probably, another important step would be Zappos access to Amazon resources. They could be improvements and access to supply chain expertise, warehouses, suppliers and other advantages. Finally, Amazon could use Zappos for looking upmarket towards higher-priced goods. The high touch model obviously comes with higher costs. Its much more attractive when selling a $400 pair of boots than a $29 pair of flip-flops. Zappos has already been rapidly expanding their product offerings so greater sales of fashion items like handbags and wallets are already steps in this direction.