Zappos.Com- Developing a Supply Chain to Deliver Wow!

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Case: Zappos.com: Developing A Supply Chain To Deliver WOW!
Name:
Date: 7 February 2013
Introduction and Problem Definition
Zappos.com provides extensive online products, delicate call-center service, free and rapid delivery, and at the same time, it keeps optimizing its operational model. However, with the prolonged recession, the company’s margins are decreasing, and it now has to seek a solution to maximize its profit.
External Analysis (Please see Appendix 1, SWOT Table, pg5) Both U.S. and international markets remained unsaturated, in spite of Zappos’ rapid expansion. It is still very promising for online retailors to expand its customer base. Besides, the facts of customers’ increasingly
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* Would be far less competitive than the brick-and-mortar store, as Zappos fails to bring customers the instant gratification. 3. Improve the inefficient supply chain to save cost, and filing for IPO as well. * Advantages: * Streamlined supply chain could help reduce unnecessary costs. * IPO could be an effective way to generate the capital to fund the company’s future development, esp. maintain high quality of service. * Disadvantages: * Streamlined supply chain require a lot of time and efforts negotiating with channel members. * The cost of complying with regulatory requirements can be very high for small companies to file an IPO.
Recommendation
I think Zappos should improve its supply chain to save unnecessary costs and then file for IPO to generate the capital needed to expand.
The first alternative is appealing, but it requires even more workforce and budget to explore the foreign country’s market and build its own distribution center and call center to provide great service. Given a huge untapped customer base in domestic market, it is unnecessarily for Zappos to expand its current business into international market. The second option could save significant amount of money, but it might hurt the company’s brand equity. As customers are also become more and more demanding, discounted service would probably make Zappos lose its core competencies, and eventually its customers. The third choice is

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