Iom 581 Supply Chain Management

Case study: Zappos.com

1. What are Zappos’ core competencies and sources of competitive advantage? How sustainable are they? What role does corporate culture play in these questions?

In my opinion, the idea of service-oriented business is the core competency and identity of Zappos. Depending on it, the company develop a series strategies to improve the shopping experience. In order to make shopping experience online beat the brick-and-mortar shopping, Zappos offer free overnight shipping and return and as much product information as they can. To do so, Zappos corporates highly with the UPS, build their own inventory and warehouse management system and develop a smart supply web. Besides that, the call center is another core part of Zappos’ service. All the call center operators are trained to exceed customer expectations, which results in great positive comments.

These strategies are sustainable. We can find the percentage cost of shipping and return are constant with the growing of sales, that's to say the cost of logistics would not result in an unbearable burden of the company. And the company keeps evolution on their operations. However the challenge of financial collapse make the sustainment of labor-intensive activities like call center not affordable, that means some changed must be made.

Corporate culture is a strong influence on all aspects of the business, including supply chain. Some products are introduced because they will interest the Zappos’ employees. Vendors can deliver their goods on an elastic time.

2. About the next-day shipment.

As I mentioned, the rapid shipment is the most important part of Zappos’ service, which can be regarded as the identity of Zappos. Overnight shipment makes the experience of shopping online similar with shopping in real store and will surprise the customers-exceeding customer’s expectation is what we want. So I think it cannot be give up, even facing the financial collapse. From data we get the percentage...