Why AMAZON acquired ZAPPOS?
AMAZON acquired ZAPPOS for a whopping $850 million. ZAPPOS.com is an online shoes and clothing store based in Las Vegas. They were exclusively dealing in shoes and now they have expanded to eyewear, watches, clothing, handbags etc. But 80 % of their revenue comes from shoes. They had annual revenue of $630 million before Amazon acquired the company.
It was a surprise for everyone because Amazon is a behemoth with revenue of over $45 billion. So why should they acquire another smaller online store?
The answer that Jeff Bezos gave was that Amazon was interested in Zappos because of the unique culture of the company. The other reasons may be:
Zappos is a fast growing company. Their customer service is legendary and
…show more content…
They give at most importance to the fact that the employee should be a cultural fit. The employees are expected to live their values. The hiring process is sometimes called “courtship”. A long time takes between initial interview which is used to check the cultural fit and the final job offer. The interviewees are asked behavioural questions. If the candidate passes the test, he/she is invited to meet with multiple employees and to cultural events of the company so that the candidate gets a chance to see the prospective employee family.
Zappos pays the employees to leave the company. They pay $3000 dollars as a one-time payment. This system is based on the fact that if the employees are not happy working in the company or is not interested in the work, it is better that the employee leaves the company.
Managers promote Zappos culture, almost 10 -20 % of their time is spending on team building activities. Activities are of various kinds, sometimes Easter Egg Hunt, cook outs, family events. Instead of performance evaluations, cultural assessments are done. They are also given feedback on their cultural fitness and tips for improvement. Pay raises are based on passing of skills
This is due to Amazon being able to collect payments immediately for sales, therefore generating a large amount of working capital. Amazon made use of the partnerships and affiliation agreements to supplement its own product lines, with retailers like The Gap, Target, Eddie Bauer, Nordstrom, and Toys “R” Us. The company’s competitive market position within its industry
company, by critically assessing the pros and cons associated with Zappos operating on a holacracy structure.
Zappos is an online shoes retailer that started its business in the year 1999. Later on the company had expanded its business to include the beauty products, clothing and even the housewares within its leading e-commerce website. This case emphasizes on the customer service department of Zappos Company and initially the business focused only on the drop ship method. Later on the company also increased the variety of the products. The company had also created a bricks and mortar storefront to expand the business and increase the sales of the business.
The owners of Zappos did an amazing job coming up with the idea of selling shoes to from online. There was a market that was created by Zappos. Zappos has been able to continue to grow due the advancing in technology that has made it must easier for customer to shop online. A lot of people know what kind of shoes they like and what size shoes they wear. If a customer does need a product in the next few days and can be patient then Zappos is a great store for that customer. Zappos makes it very easy for the customer because of it policies and customer service. Zappos offers free shipping. Zappos also give
Amazon investments have included technological products, websites, mergers and the most recent addition to the Amazon family is Whole Foods. Amazon has been wanting this expansion for a while. In the late 90’s Amazon tried expanding into the food market with a website called HomeGrocer.com but failed to succeed. When purchasing Whole Foods, they made the bid for 13.7 billion. Making Whole Foods his largest acquisition for Amazon. Many say that Whole Foods Market is showing a positive profit, due to lower prices of organic foods and making it available to a whole new online market through Amazons platform. His second largest acquisition was in 2009, when Amazon purchased online shoe website Zappos for $1.2 billion. The bar chart below (figure
the mindset of the CEO is that there is no limit to what Zappos can accomplish with the right leadership, which can make or break a company. A company that attempts to move their company into another industry, without doing research or contact customers to get feedback on what new product they want to sale in their stores. Keeping in mind that they have to answer to their stakeholder also executive members (Ferrell & Hartline, 2013).
He started to invest in Zappos which the concept came from Fred. Zappos was also faced with many issues all the time and they tried to eliminate the issues that Tony talks in Chapter 3. Also, he explains the relationship between the poker game and the business strategies. Although, Zappos was growing, they also confronted with the recession, the dot-com stock market crash, and 9/11. Tony solved the issues by selling his properties. He had recovered the business to have a good revenue again. It was a stressful period that Tony talks in Chapter 4. However, Zappos was still doing well. He backed to focus at customer service. Also, Zappos had used the Brand, Culture, Pipeline strategies for managing the organization in the long-term that he describes in Chapter 5. Tony had learned many mistakes from the past and continued developing the services and the stories. Nevertheless, Zappos sold to Amazon in 2009. Tony details the reason why he walks out the board in Chapter 6. In the last chapter, Tony asks the reader about the goal in life. He also summary the details about Zappos is about delivering happiness to the
Nick Swinmurn, who was inspired during an unsuccessful search for shoes, founded Zappos in 1999 (Zappos.com, 2015). He realized the opportunity, as there were no major online shoe retailers, so he quit his day job and started Zappos.com. Nick’s mission was to be a full-service online shoe retailer offering the best variety of shoes. Over the years, Zappos has set a new mission, which is to provide unsurpassed customer service in any category (Zappos.com, 2015).
Through tough hiring decisions, Hsieh ensures that there is always a positive culture at his company. At Zappos, every single employee is put through training that includes the corporate culture and famous ten core values. The core values range from “create fun and a little weirdness” to “build a positive team and family spirit” (Hsieh 154). Hsieh believes that each one of the company’s values are important, so they are “committable core values that we are willing to hire and fire on” (157). As a result, Zappos has thrived in profits and hit its goal of $1 billion in gross merchandise in 2009, the same year the company ranked 23rd on the Fortune magazine “100 Best Companies to Work For” (210). By making culture a backbone of his company, Hsieh
Zappos has created a very structural attractive company. There is a lot of room for growth with the recent purchase by Amazon.
Zappos is an online shoe retailer founded in 1999 by Nick Swinmurn. Swinmurn became tired of not being able to find the right pair of shoes in retail stores or mom and pop stores located on the internet. He discovered that there was no major online retailer that specialized in shoes, so he created Zappos. Zappos has a very distinctive corporate culture. Zappos approach to corporate culture is Great benefits and a workplace that is fun and dedicated to making customers happy.
Zappos is an American online shoe retailer that appeared in 1999 when Nick Swinmurn established it. After the foundation, there was industriousness towards its development and by 2009; it turned into a worldwide online retailer close by Amazon.Com Inc. Because of its accomplishments, it experienced revamping to shape ten organizations. The Zappos Family of Companies deals with the ten organizations. The notoriety of Zappos Family is a direct result of its amazing picture certify to good business conditions and engaging client administration. The organization's HR arranging and usage is affected by its interior surroundings through an execution society. The association's way of life mirrors the ten center values that characterize both the administration
This prevents them from discounting products too early (which the company believes the traditional brick-and-mortar model often does). Zappos has a discounting system that automatically adjusts prices based on demand information. The company also opened outlet stores (under names of companies they acquired) so that it could get rid of its remaining excess inventory without hurting its brand.
Zappos has successfully shaped a one-of-a-kind culture to which it owes its success. While there is not a true “problem” with Zappos.com; the company realizes significant growth potential. Sister company, Amazon.com, recognizing the asset of the renowned customer service Zappos has formed, has approached the Zappos management team with discussions of a potential acquisition.
Zappos.com is an online clothing and shoe company or shop that is currently based in Nevada, Las Vegas. The company was founded in the year 1999 by Nick Swinmurn. The company’s initial inspiration came after he was not able to find one of his favorite pair of shoes, the air walks, at the local mall. The same year, he approached Alfred Lin and Tony Hseih with an idea of selling different types of shoes online. However, Hsieh was skeptical at first and went to the extent of deleting voice mails sent by Swinmurn (Harnish, 2012). After Swinmurn stated that the footwear in United States is