Essay on Zappos

The threat of new entrants into the online shoe/apparel market is relatively small due to the fact that Zappos is such an established brand and has specialized their business model. It would be far too expensive for a new company to copy the characteristics of Zappos including their next day delivery and large overhead. The fact that Zappos was losing money initially illustrates this difficulty. Another issue that would create a high barrier to entry is Zappos commitment to the consumer through overnight shipping. Zappos stated that the overnight shipping caused them to leave their warehouses open for the entire day. Any other company would

Problem: Decline in the market share of Airborne Express in the volume of overnight deliveries.

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.

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.

Draw and describe the customer benefit package that Zappos provides. Identify and describe on primary value creation, one support, and one general management process you might encounter at Zappos.

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

“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）

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

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

Amazon must also ensure that its products are delivered in a timely fashion, given that speed of delivery is yet another significant competitive component of being an online retailer. Amazon has a special algorithm "to determine the best shipping route and method for each item to make sure the consumer good arrives on time as its specified location" (Master 2012). However, the use of this system is not purely

Zappos can increase sales and customer satisfaction by using Amazon’s supply chain, to help lower product pricing. With the increase in warehouse locations and use of Amazon’s existing SCM logistics, Zappos can still offer overnight shipping but save money by no longer outsourcing to UPS. On a larger scale granting added visibility to the supply chain using Amazon’s technology, Zappos could also look to reengineer their entire inventory management strategy and adapt a more ‘real-time’ approach similar to WalMart. Lean inventory management can lower its costs for inventory storage, reduce transportation costs, and products spend less time in transit. These cost savings can then be passed on to the customers through lower prices, increasing sales and growing customer satisfaction.

Zara clothing is Spanish based Inditex Group, and launched in the year of 1975. The contribution of sales of Zara clothing is about 63.8% in the group's whole sales of the previous financial year.

Just-in-time delivery needs good collaboration with vendors of distribution services and of products. The distributor needs a continuity of demand and the chance to define routes, loads and schedules well ahead. By working toward longer-terms, higher-volume procurements with vendors, prices can be cut due to larger transport volume over a long period of time. Just-in-time delivery will cut down the operating costs if the business is substantial for the distribution partner. Just in time delivery needs more frequent deliveries from vendors however it does not voluntarily imply higher transportation costs.

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?

Another reason was a communication gap between U.P.S and retailers, Retailers should have spoken U.P.S officials regarding the volume of the packages That should be shipped in a short span before promising it to the customers, Since retailers are the one’s who were pushing the next day shipping offers in the final hours of the shopping season