Question 1: What are Zappos’ supply chain related core competencies and sources of competitive advantage? How sustainable are they? What role does corporate culture play in these questions?
Zappos consider themselves “a service company that happens to sell shoes”. The main core competency of the company is its customer service. Hsieh considered customer service to be one of the most important aspects of the business. If a business has excellent customer service, then customers are more likely to return to purchase from the business again. Hsieh saw that excelling in customer service and trusting the word of mouth of their customers would build up their customer base and their sales. A 24hour call centre and a toll-free …show more content…
This is a short term saving. From studies UPS estimated that if the air shipping was stopped and ground delivery was focused on for all of Zappos’ deliveries that they would be able to reach 11% of Zappos customers in one day, 49% in two days, 18% in three days, 21% in four days and 1% in five days. However, this goes against the business model that Zappos has spent so much time developing. Customers receiving a delivery the day after placing the order for a 4-5 day shipment surprises and impresses them which encourages them order from Zappos again as well as to encourage friends to use Zappos for future purchases. If next day air delivery was taken away Zappos would lose a large part of the competitive edge they have over their competing sites such as ShoeBuy.com and Endless.com that can deliver within the same time constraints as Zappos and even do next day delivery at a cost. Customers that Zappos would lose doing this render the savings made from removing next day deliveries not worth it.
If there was a case where Zappos wanted to reduce the costs of next day air delivery then they could reduce the number of shipments they do by this method. A suggestion to cut down on the number of next day deliveries would possibly be to only do next day delivery based on customer loyalty, by rewarding customers who have ordered from the site before by giving them next day delivery for free. Also in order to keep
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Retail super-giant Wal-Mart has fought its way to becoming the world's largest company. Wal-Mart’s legendary supply chain technology has allowed them to break the three-day barrier that some economists in the eighties felt that it was unbreakable. In other words, Wal-Mart is often able to replenish items on the Wal-Mart shelf in less than three days – not from the central warehouse to the shelf, but from the manufacturer to the shelf. With quick and reliable 2-day turn around, Wal-Mart is able to maintain lower levels of inventory and still meet customer demand. These lower inventory levels result in either a reduced floor plan with lower carrying costs and lower interest expense – or a greater diversity of products on the store shelves.
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.
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
Although Tony Hseih may keep overall operational control, changes to the company’s infrastructure would seem likely. If the draw to merge was because of Amazon’s extensive warehouse and supply chain operations, it would stand to reason that control and possible staffing in those areas would fall under Amazon. The question would be do the Zappos employees still retain their same benefits?
Adopting a new supply chain strategy to reduce the lead time would get people more excited to go to the store instead of expecting to see the same inventory every time. As I mentioned earlier, Macy’s do not want to lower their prices too much because it would ruin their image in the long
Customers are more willing to purchase from companies that they feel consider their needs when they create products and services. The more loyal customers are to a business, the more likely they are to refer the products or services to friends, family and business associates. Customer service becomes a part of your company's brand when you run a customer-focused business. When customers hear the name of business, they automatically associate it with knowledgeable and friendly sales professionals and a company dedicated to ensuring customers' needs are met. Companies such as online retailer Zappos and Trader Joe's are celebrated for their dedication to being customer-focused businesses and providing superior customer
It is not only distance that causes replenishment lead-times to lengthen in global sourcing. It is the delays and variability caused by internal processes at both ends of the chain as well as the import/export procedures in between. The end result is longer ‘pipelines’ with more inventories in them with the consequent risks of obsolescence that arise.
The whole process comes down to the last mile and because it is also where the majority of shipment’s cost and complexity is, the last mile in the shipping process is where the growing burden on the retailers exist. Retailers and logistics firms are forced to have fast delivery, with low prices and great quality to compete with other retailers in the same industry. With more growth in the industry, there are problems of managing stock. In 2013, products ordered online generated just over one billion deliveries. By 2018, this number is expected to grow by 28.8% to 1.35 billion. Because of that, retailers and logistics firms similarly need to
Hsieh creates and allows fun to take the stress that comes with customer service positions. Even though Zappos doesn’t have the typical working environment, a leader should still stress the important in taking the job seriously to ensure customer retention and great service.
Let’s face it, we’re all in customer service. OK, maybe not ALL, but most of us are. If you are a web designer, your customers are companies who are paying you. If you work in higher education, your customers are the students who attend the school. But even if you are one of the few people who
“Considering present market conditions and the way in which industry demand fluctuates nowadays, firms willing to remain operationally efficient will become more reliant on supply-chain management, This is one of the main reasons for which Wal-Mart has been capable of growing at an annual rate of 15.4%.”（Aleksandrov）
Q6: You mentioned that your company is trying your best to manage supply chain, how your company manage supply chain? Which strategic planning and operational decisions your company should make?
Zara is a Spanish brand of clothing founded by the visionary Amancio Ortega Gaona and Rosalia Mera in Artexio, Galicia. Zara was founded in the year 1975. It is one of the major selling brands of one of the biggest fashion retailer "INDITEX". Zara is now available in 86 countries with total of 1,763 stores worldwide.