Zappos Businness Strategy

Zappos was founded by Nick Swinmurn in 1999. The initial inspiration came when he couldn’t find a pair of brown Airwalks at his local mall. That same year, Swinmurn approached Tony Hsieh and Alfred Lin with the idea of selling shoes online. The company was officially launched in June 1999, under the original domain name “ShoeSite.com. A few months after their launch, the company’s name was changed from ShoeSite to Zappos so as not to limit itself to selling only footwear.

In January 2000, Venture Frogs invested additional capital, and allowed Zappos to move into their office space. During this time, Hsieh found that he “had the most fun with Zappos” and came on board as co-CEO with Nick Swinmurn. After minimal gross sales in 1999, Zappos brought in $1.6 million in revenue in 2000 (Chafkin, 2006). Culture of Zappos

Culture can be defined as the set of key values, assumptions, understandings, and norms that is shared by members of an organization and taught to new members as correct. Your culture or work environment will form based on all of the values, experiences, knowledge, and education of your existing workforce. How people work together and especially, the values of the company’s founders or leaders forms the culture you have. Zappos consciously creates and reinforces its corporate culture. The work environment provided for employees won’t attract every job searcher and it’s not for every employee.

The people who fit the corporate culture thrive working for Zappos. In an interview with Rebecca Henry, the former Director of Human Resources for Zappos, two key factors stood out. The company consciously decides what the corporate culture needs to look like and it consciously reinforces and supports that culture through all Human Resources and management work systems. At Zappos.com, they decided a long time ago that they didn’t want the brand to be just about shoes, or clothing, or even online retailing. It decided that they wanted to build our brand to be about the very best customer service and the very best customer experience.

Zappos has a very strong believe that customer service shouldn’t be just a department; it should be the entire company. Advertising can only get your brand so far. If you ask most people what the “brand” of the airline industry as a whole is (not any specific airline, but the entire industry), they will usually say something about bad customer service or bad customer experience. If you ask people what their perception of the US auto industry is today, chances are the responses you get won’t be in line with what the automakers project in their advertising (Zappos Corporate. (2009-2013).

At Zappos, the company’s belief is that if you get the culture right, most of the other stuff like great customer service, or building a great long-term brand, or passionate employees and customers will happen naturally on its own. It’s said to believe that your company’s culture and your company’s brand are really just two sides of the same coin. The brand may lag the culture at first, but eventually it will catch up.

Signs

One of the challenges in workplaces today is keeping employees engaged. In the Zappos Family of Companies, the culture enables employees to live and work according to their personal values. Zappos hire based on alignment with their 10 Core Values and fit for the culture. This helps increase productivity, communication, and creativity, while reducing sick time and turnover.

Here are five ways Zappos’ work environment fosters naturally engaged employees who are passionate about what they do: let employees be themselves, let employees explore their passions and express creativity, empower employees with tools to succeed, provide opportunities for continuous learning and inspire and allow employees to fulfill their higher purpose. These signs of culture show that Zappos don’t just care about customers, they also make sure that their employees are working in a comfortable environment (Zappos Corporate. (2009-2013).

Factors

The best thing about the Zappos Family is the unique culture. As the company grows they don’t want to lose that culture, as well as wanted a way to share it with all employees and anyone else who touches Zappos.com. Zappos created ten core values to more clearly define what exactly the Zappos Family culture is (Zappos Corporate. (2009-2013). They are reflected in everything we do and every interaction we have. The core values are always the framework from which make all of decisions.

Leader Role

Becoming a leader at Zappos the individual will indeed need to pass certain qualifications. Because of the company high profile and outstanding works, a leader will need to know these few pointers: Deliver Wow Through Service, Embrace and Drive Change, Create Fun and a Little Weirdness, Be Adventurous, Creative and Open-Minded, Pursue Growth and Learning, Build Open and Honest Relationships with Communication, Build a Positive Team and Family Spirit, Do More with Less, Be Passionate and Determined and Be Humble. If he or she has these qualities I think they will suite the leadership duty at Zappos.

Decline in Product

Eventually, technological advances, changing customer demographics, tastes, or lifestyles, and development of substitutes result in declining demand for most product forms and brands. As a product starts to decline, managers face the critical question of whether to divest or liquidate the business. Unfortunately, firms sometimes support dying products too long at the expense of current profitability and the aggressive pursuit of future breadwinners (Mullins. (2013).

An appropriate marketing strategy can, however, produce substantial sales and profits even in a declining market. If few exit barriers exist, an industry leader might attempt to increase market share via aggressive pricing or promotion policies aimed at driving out weaker competitors. Or it might try to consolidate the industry, as Johnson Controls has done in its automotive components businesses, by acquiring weaker brands and reducing overhead by eliminating both excess capacity and duplicate marketing programs (Mullins. (2013).

Alternatively, a firm might decide to harvest a mature product by maximizing cash flow and profit over the product’s remaining life. The last section of this chapter examines specific marketing strategies for gaining the greatest possible returns from products approaching the end of their life cycle (Mullins. (2013).