In a 2-3 page paper answer the following questions: What are Zappos’ core compet

Question

In a 2-3 page paper answer the following questions:

What are Zappos’ core competencies and sources of competitive advantage? How sustainable are they? What role does corporate culture play in these questions?

How important is next day air shipment to the customer experience? Is it worth the cost? How might you change it in the cost-conscious environment facing the company in late 2008?

How would you expand the business? Would you add more products, more geographies, or by selling private labels? As you expand the business, how can the company become more profitable, particularly in light of the costs associated with the focus on service?

How would you expect the environment of a more cost-conscious consumer to affect Zappos’ business? What can Zappos do in such an environment to maintain sales growth?

Explanation / Answer

Zappos.com is an online retailer for shoes and is considered one of the largest in the industry with an annual sales of more than $ 1 Billion. The core competencies that Zappos possesses and which make them highly competitive in the market are:

a. High reputation in the market - Zappos has created a very good reputation in the market and are trustwothy.

b. Excellent Customer Service - Zappos has dedicated employees who are passionate about serving their customers and this has helped a lot in Zappos's success.

c. Highly Interactive with customers - Zappos is one product and service provider who are always ready for an interaction with their customers. They provide 24x7 customer service with various options like toll free or chat support to answer and rectify to customer queries.

d. Highly capable supply chain system - The supply chain system of Zappos makes them recommendable to each and every individual in the market they operate. With one of the best supply chain system in place, customers are happy with the products getting delivered as committed.

All the above mentioned competencies are the abse of a strong foundation. Whichever organisation gets their basics right, they are meant to be highly sustainable in the market. With Zappos, all the basic activities are strong and they are growing strength by strength in every passing year.

The competencies can be created in several meetings and discussions and looks very good on paper. But, the actual results come when they are succesfully implemented in the market or ground. To do this, the organisation needs to build a strong culture which helps them educate employees about their mission and vision and how they are focussed and want each and every member of the organisation to be focussed. Thus, corporate culture plays a major role in providing the motivation and zeal to perform and deliver the best results.

The next day air shipment creates a good impact on customer experience for sure, but with surprise deliveries, that is delivering before the committed timelines is even more fascinating. But, next day delivery has become a common phenomena and is followed by most of the e-commerce organisations. But, investing huge money on shipment through air when there is value add, it does not make sense to shell out so much money. In the late 2008 in a cost conscious environment, I would definitely want to cut down the delivery costs rather by moving shipment through a cheaper mode of transport.

It is not advisable to expand the business in the recession period, but otherwise, I would definitely target newer geographies where there is high adoption of change. This will help us create a momentum for expansion. Also, I would look to identify untapped potential areas where I am currently present in to increase my reach within the same terrritory. The expansion of business into newer geographies would mean promoting products that would be suitable to the targeted market. This means that newer product lines will be added. But, to ensure profitability, there has to be strong teams to drive the business. It can be a strong after sales service team, a strong partner network. To make them strong, I need to take care of them and ensure their challenges are resolved on time and they are passionate about doing their business.

In a cost-conscious consumer market, pricing will definitely play a major role, but it is not the only criteria which helps customers decide their purchase. Therefore, in this scenario, there can be exciting discounts that can be projected to selective consumers or selective products, not compromising much on the net margins. Also, the service and awareness to the customer should be made clearly. It is often seen that consumers buy chepaer products and later suffer due to poor after sales service. In a way, their investements have gone for a toss. Therefore, proper education and solution should be provided to cinvince the customer to buy the product even if its higher on price. This will help increase productivity and also thereby increase margins.

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