Zappos Case Study

Zappos.com

Lindsey Clark

Juston Edwards

Katie Parker

Lance Schmitt

Upper Iowa University

Dr. Linda Rose

July 26, 2015

Introduction

Company Overview

        Founded in 1999 after the creator of the business went home frustrated from not being able to find the right shoes neither in store nor online, Zappos.com has evolved from a small online shoe retailer to a well-known retailer of shoes, clothing, bags and accessories for women, men and children (“About”, 2015).  In 2009, Zappos became a part of the Amazon family, selling for $1.2 billion (Baribeau, 2012).  Although constantly growing, Zappos doesn’t see employees as just another number, instead they are considered family.  The Zappos family isn’t just about selling shoes – they know that to be the best, they have to have the best service.  In fact, everything the company does is centered on “delivering happiness” whether it be for a customer or an employee. The executives state that to have happy customers, they must first have happy employees (McNeal, 2013).  

Scope Statement

Zappos will be completely changing the structure of management from a legacy management hierarchy to a teal organization.  A teal organization will allow Zappos to create self-organizing and self-managing business-centric groups instead of service provider groups in order to provide the best customer service and efficiency.  The project will be fully implemented by the end of 2015.

Industry

        E-commerce is a growing trend.  Today, everything imaginable is available at your fingertips through the internet.  Zappos.com is just one of many online retailers in this industry.  There are several benefits and constraints to doing business in this manner.  Benefits include low cost of not having brick and mortar locations, improved efficiency and improved employee satisfaction.   While these are great benefits to have, e-commerce businesses have historically struggled in terms of financial resources, clearly defined goals and objectives and support from external parties (Standing, 2007).

Products

        Although originally only in the shoe business, Zappos.com has grown into an online retailer that specializes in selling not only shoes, but also clothing, accessories and bags for men, women and children.  E-commerce vendors basically have free range to sell any item that customers may be interested in and really has no limitations.  What makes Zappos unique is that they house nearly all of their inventory in their own warehouse instead of using a third party.  This not only reduces cost, but also allows the company to have ownership over the product throughout its entire sale, from the warehouse to the customer’s door.  

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