Essay on Zappos

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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
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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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