Strategic Analysis of Zappos.com
Zappos.com, established in 1999, has rapidly become a strong competitor in online apparel and footwear sales. With the original corporate vison of offering the absolute best selection in shoes; the vision has evolved over the past several years to include the goal of being the retailer that “provides the absolute best service online -- not just in shoes, but in any category” (Zappos, 2014). The online retailer stocks millions of reasonably priced footwear products; carrying thousands of hard to find brand named shoes, handbags, apparel and accessories via the company website and 7,000 affiliate partners. In recognizing their rapid success, Zappos credits it to their commitment to the customer, stating, …show more content…
In 2008, Zappos reported annual revenues exceeding $630 million; and in 2009, the company celebrated its 10th anniversary by reaching $1 billion in annual sales (Twitchell, 2009).
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.
The management team at Zappos must analyze and carefully determine which path will ultimately offer the best growth potential for the company as a whole; whether that is continuing business as usual by remaining independent, or successfully merging with Amazon.com.
Strategic Analysis Tools
As the management team at Zappos analyzes and makes careful determination of which path offers the best growth potential for the company, the following strategic analysis tools will be used for consideration:
• SWOT Analysis
• PEST Analysis
• Boston Consulting Group (BCG) Matrix
As Zappos faces the challenge of determining next steps in regards to maintaining the existing business unit or to enter a new business venture, the SWOT analysis will provide clarity in the firms Strengths, Weaknesses, Opportunities, and Threats. This is an extremely suitable
Target Corporation is an upscale discount retailer whose mission is to provide trendy merchandise to their “guests” or customers (Target Corporation, n.d.). In order to achieve its mission, Target relies on its efficient management team to execute its vision and maintain operations. To learn more about a manager's role at Target, we interviewed Lisa Novgrod, a store manager of Target, on November 3rd, 2017. One of the topics discussed in the interview was the growth of online shopping and the struggle to be competitive online against giant e-commerce companies like Amazon.com and other retail competitors like Walmart. Currently, Target is having difficulty translating their competitive advantages such as a great in-store experience and trendy
This paper starts by the introduction and the background of Zappos Company following with a SWOT analysis of their current situation; it also includes the service marketing mix strategy that they are adopting. It also covers some of the studies and journals that discuss some issues that may face the online shopping retailers. As a result of this analysis we put some recommendations that may help the company to provide better service to their
In the recent past, Amazon has developed an important online payment system that has seemed to improve the customers’ concerns related to online safety and privacy. The approach has become a significant advantage for Amazon over E-bay as the recent struggles to deal with the development of a secure payment platform. On the same note, Amazon has a critical opportunity that is related to the possible development of more products under the entity 's brand, as opposed to using third-party products and goods (Bensinger, 2016). The company has the chance to increase more of the Amazon brand products in the process of reducing stocks from other partners. Amazon can exploit the current online markets and building capacity in new markets that include new countries that have not yet experienced the impact of online markets.
SWOT analysis is a study of the Strengths and Weaknesses (internal factors) of an organization as well as, the study of the Opportunities and Threats (external factors) of an organization (Mind Tools, 2016). After learning the strengths and defining the weaknesses of an organization, the threats can be eliminated making for more opportunities. A strength of CVS is the “pharmacy segment has a diverse network with 7,152 Long drug stores and pharmacy stores generating 68% of the total revenue (Kasi, 2017).” If CVS could team with Wal-Mart pharmacy, the revenue would increase. A weakness of the company is the security. Many robberies have been reported due to the organization and security measures (Kasi, 2017). If the reorganization of the
A “SWOT analysis is a historically popular technique through which managers create a quick overview of a company’s strategic situation” (Pearce & Robinson, 2009, p3). SWOT is an acronym for Strengths, Weaknesses, Opportunities, and Threats. This concept was incorporated as a diagnostic tool for many entrepreneurs to work on their business. It is important as a business owner to be able to analyze forces and trends that can affect a business. The owner of Sivalry Clothing Company will discuss several capacities of the business operations and forces and trends that the business will have to encounter. Such topics include: economic as well as legal and regulatory forces and trends, how well the organization adapts to change, and the supply chain operations of the organization. Also, identification of issues and opportunities that the company faces will be discussed.
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
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).
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 chapter main focus is to assess the techniques to evaluate company’s internal situation with an emphasis on its resources capabilities, relative cost position and its competitive strength in the market. There are typically five questions any company need to evaluate their internal situation and in doing so, should use four valuable analytical tools like SWOT (Strengths, Weaknesses, Opportunities and Threats), Value Chain Analysis, Benchmarking and Competitive Strength Assessment that would reveal company’s competitiveness for helping managers match the strategy to the resources, capabilities and circumstances.
If there was decline in the demand of the products Zappos offered occurred at this very moment I think the culture will change just a little. I foresee the leaders of the company trying to hold on to the original culture but the stress of the decline impacting the fun and free work atmosphere. Some leaders will begin to focus solely on the operations of the company and the how to continue to make the company profitable (Schermerhorn, Osborn, Uhi-Bien, & Hunt, 2012) .Slowly they will all become transactional Leaders rather than transformational leaders focusing on money and not people. The employee would provide wow service and have fun. All that would slowly phase out once the stress from the leaders trickle down to the other staff members. These actions will eventually result in the sales declining and the company being in a bad place financially. If the company response quickly to the decline in the demand the culture could continue to provide expectable wow service to the customer and a great working environment to the employees. In order for this occur the company would have to keep open communication among the leaders and the employees. Zappos would need
As part of developing market strategies, a company should know where it is strong or slack, as well as consider past experiences and future possibilities. One such means is a SWOT analysis. The worth of this tool lies in its simplicity and clarity by scrutinizing the internal
The report provides you an in-depth strategic SWOT analysis of the companies businesses and operations. The profile has been compiled by Global Data to bring to you a clear and an unbiased view of the companies key strengths and weaknesses and the potential opportunities and threats. The profile helps you formulate strategies that augment your business by enabling you to understand your partners, customers and competitors better.
Tony wasn’t initially sold on the concept of an Internet shoe store. He notified Inc. magazine, “It sounded like the poster child of bad Internet ideas…but I got sucked in.” After Tony became CEO he made an unconventional decision to continue operating Zappos, even selling his San Francisco loft to afford a new warehouse and once making his salary at just $24. Zappos didn’t do well for its first few years, making sales but not producing a profit. The dot‐com crash made Zappos lay off half its staff, but the company eventually recovered. By the end of 2002, Zappos generated sales of $32 million but still was not profitable. In 2003, the company decided that it had to control the whole value chain in order to offer the best customer service. They made the whole value chain from
Zara a company founded on just €30 Euros is now worth an estimated €32 billion. It is the flagship retail unit of Spanish parent company, Inditex also found by Ortega. Zara was found in 1975, now having over 1800 stores in 81 countries.
SWOT analysis tries to establish the affirmative strengths and opportunities of a business entity. Alternatively, it also establishes the weaknesses and threats of the very business entity. Most importantly, it analyses the internal environment of a business entity such as Apple. On the other hand, PEST analysis examines the external environment factor that may affect the business operations (Jeynes, 2013). Such factors are the economic factors, political factors, technological analysis and the social factors. These factors analyse the magnitude of impact that the