Case Study On Amazon Acquisition Of Zappos

Question 1. Compare walmart.com with amazon.com. What features do the sites have in common? Which are unique to Walmart.com? To Amazon.com?

It can be served as a competitive advantage, which attracts more customers shifting from Amazon’s online retailer competitors into buying their products, thus increasing the market share.

How would you define Amazon’s industry? What difficulties do you encounter identifying primary competitors and key lines of business?

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.

Although it is the most established because of its long history and early start, competitors such as Alibaba Group Holding Ltd, AutoZone Inc., eBay Inc., Rakutenchi Inc., Netflix Inc., Jet.Com, Wal-Mart and Time Warner Cable among others exist (Yahoo Finance, 2015). Notably, apart from Jet.com, Amazon’s competitors are segmented according to products and services offered; for instance, Wal-Mart stores Inc. offers competition in general merchandise and electronics segment while eBay, Time Warner Cable and Apple offers competition in the media segment. Among the competitors, Apple Inc. and Google Inc. have the highest market capitalization; however, the Amazon’s dwarfs all other competitors. Amazon has a high market capitalization at $254.82 billion (Nassauer, 2015). The table below shows Amazon’s major competitors based on their market capitalization and 52-week share price range

Due to the growing competition and diminishing market share, companies are opting for different strategies to achieve their survival objectives as well as growth. Companies are thus executing grand strategies to provide their businesses with a clear direction for its strategic actions. These strategies, therefore, aim at both short term and long term sustainability and growth, and they include innovation, market development, product development, and concentration.

Its diversification and low cast strategy will help it build up an image and goodwill which will pay its fruits in near future. The strategy to partner with traditional retail partners in which amazon.com will utilize its retailing technology to build and host the traditional retailer’s online store will also be helpful as it enables Amazon to enable various brick stores to go virtual. IT innovations done in order to provide services like customer service, inventory management, fulfillment and logistics service in its already established state of the art digital infrastructure will also help them in creating a difficult entry barrier for competitors. Use of long-term debt to cover its cash expenses requirement though causes financial stress in short term, in long term economies of scale achieved will generate more benefits than expenses incurred. I would suggest Bezos to maintain its market leadership position both in terms of technological innovation as well as customer

Founded in 1999 by Nick Swinmurn, Zappos.com, initially named ShoeSite.com, has grown from an inventory-less, “drop-ship” shoe sales website that connected customer orders with shoe suppliers to an Internet shoe mega-retailer that recorded a reported $2.1 billion in revenue in

Zappos has created a very structural attractive company. There is a lot of room for growth with the recent purchase by Amazon.

Amazon continues to grow, expand, and improve the goods and services the company provides through strategic mergers and acquisitions. In recent years Amazon has focused on acquiring a variety of companies that bring with them technologies from fields such as: robotics, education, voice recognition, and e-reader displays. One of Amazon’s most significant recent acquisitions came in March 2012 when Amazon purchased Kiva Systems, a Massachusetts based robotics company. The deal worth $775 million dollars was made in hopes that Amazon will be able to improve profit margins though the use of the robotic packing system produced by Kiva System’s. The robotics created by Kiva allows companies to manage inventory and streamline the order

The objective of this case study is to outline and provide a brief overview of Amazon.com’s (Amazon) mission, strategic direction, core competencies, relied technologies and their future impact of new technologies, and how management and use of consumer data will impact future business.

Zappos started out by selling shoes online to become the world’s largest online retailer of shoes. Subsequently, in their quest to boost sales, they moved beyond footwear to become an E-tailer that sells ‘anything and everything’.

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.

Throughout the past several years, since our companies merged, both organizations have benefitted from each other’s pool of core competencies. As a result, consideration has been made to move the merger further by combining our two web presences. Up until now, we have been able to share each organization’s strengths while keeping each company dynamic separate to allow us both to succeed in terms of what we do best. For example, although Amazon.com is fantastic in its ability to provide vast product lines, speedy delivery, and customer convenience, Zappos.com prides itself on a different approach. Zappos.com prefers to focus upon developing rapport and deep customer

Jeff Bezos looked out the open doorway of his office and stared at the “problem of the day,” which his assistant Sarah had posted on the whiteboard in the hallway. It was Friday, September 13, 2002, and the whiteboard read: ”You have 10 bottles with 100 pills each in them. In nine of the bottles, each pill weighs 10 mg. In one bottle, each pill weighs 9 mg. These pills are poisonous. You have a digital scale that reads out in mg. Can you determine which bottle contains the poison with only one weight measurement?” Bezos—founder, chairman, and CEO of Amazon.com—normally enjoyed trying to solve these brainteasers. But today his mind