However, the company needs to be cautious of putting too much power in the customers hands.
5. Competitive Rivalry between Existing Players
Direct competitors are currently not able to match Zappos capabilities, especially in terms of customer service. But this does not mean they should be dismissed as viable competitors. In fact all direct competitors should be watched very closely.
Outstanding customer service
Free overnight shipping
Wide variety of products
Happy, dedicated employees
Cannot afford deep discounts
Transportation problems with half-full trucks
Expansion into other markets
Developing niche customer bases
Eventually going overseas
Changing customer behaviors on the internet
Possibility of new entrants
Over-diversification of product offerings
My recommendation for problem 1 is to exert somewhat more control over what the customer service representatives are permitted and encouraged to do. This does not mean that they have to suddenly start reading scripts or giving rehearsed responses to their customers. The randomness of the operation is one of its greatest appeals. But at the same time, executives need to keep in mind that randomness and uncertainty can also be ticking time bombs in the business world.
Therefore, training employees how to react to certain situations without actually stripping them of their creative freedom would be the ideal scenario.
My recommendation for problem 2 is ship products manufactured overseas directly to Zappos Kentucky distribution center to eliminate the proverbial “middle man.” My recommendation for problem 3 is to do a cost-benefit analysis regarding purchasing and managing its own trucks, and act according to the results of that analysis. Finally, my recommendation for problem 4 is to add content to the site such as SEO-rich articles (search engine optimization) that will draw customer directly there.
Beaudry, J.E. (2009, May 4) Zappos milestone: Customer service, Footwear News, Retrieved from http://about.zappos.com/press-center/media-coverage/zappos-milestone-customer-service
Bessant, J & Lamming, R. (1999) Managing successful total quality relationships in the supply chain. European Journal of Purchasing and Supply Management, 1(1), 7-18
Irani, Z, Love, P.E.D. & Li, H. (2000) Gaining a competitive advantage in a virtual supply chain. International Journal of Logistics and Physical Distribution 30 (3), 64-71
Lee, H.L. (2000). Creating value.