Zappos Case Study This Case

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.

SWOT Analysis


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

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.

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