By: Matthew HindyArthur GreySwithin MurickalStephanie Haertling
Competitive Profile Matrix • Compares firm with major competitors • Measures critical success factors • Three main competitors: ▫ Footlocker ▫ Ebay ▫ Bluefly Inc. • Footlocker’s total weighted score of 3.35 • Ebay’s total weighted score of 2.95 • Bluefly Inc.’s total weighted score of 2.20 Arthur
External Factors Evaluation• Assessment of current business conditions• Measures Opportunities and Threats• Zappos Opportunities: ▫ Growing popularity of name brand shoes ▫ Expansion through acquisitions ▫ Growing e-commerce sales• Zappos Threats: ▫ Dependent on vendors ▫ Strong competition ▫ Economic downturn Arthur
Internal Factors Evaluation• Strengths Outweigh Weaknesses• Ten Core Values• Zappos Derived from Customer Service• Given a 3.71 Market Rating Matthew
Internal Factors Evaluation Internal Factors Weight Rating Score Internal Strengths Superior Customer Service 0.15 4 0.6 Importance of Culture 0.12 4 0.48 Benefits of Refund Policy 0.12 4 0.48 Family Environment 0.12 4 0.48 Strong Financial Position 0.12 4 0.48 Growing Company 0.14 3 0.42 Solid Market Position 0.15 3 0.45 Internal Weaknesses No Retail Stores 0.6 2 0.12 Worn/Damaged Product 0.2 1 0.2 Total 1 (1-4) 3.71 Major Weakness (1), Minor Weakness (2), Minor Strength (3), Major Strength (4) Matthew
Internal/External Matrix Strong Average Weak 4.0 - 3.0 2.9 - 2.0 1.9 - 1.0 High 4.0 - 3.0 Grow* and Build The Medium IFE 2.9 - 2.0 Hold and Maintain Score 3.71 Low 1.9 - 1.0 Harvest or Divest The EFE Total Score 3.03 Matthew
Internal/External Matrix• Zappos should GROW the business ▫ Has strong market share ▫ Assets will create power ▫ Stay strong with foundation & culture Matthew
Top Three Strategies• Increasing the number of physical locations ▫ Multiple warehouses over the country ▫ Multiple offices affiliated with Amazon• Introduce latest fashion trends ▫ Using the product-differentiated approach ▫ Sales regardless of higher prices• Expand product range ▫ Market for electronics ▫ International brands like French connections and united colors of Benetton Swithin
Final Recommended Strategy• Move Beyond Shoes & Apparel ▫ Continue with Strong Foundation ▫ Compete with Amazon and eBay ▫ Sustain Competitive Advantage Matthew
SWOT Matrix Strengths Weakness Effective Communication Small Amount of Locations Innovation No Price Comparison Online Growth Loyal Customers Pricing Unique Products Customer Service Great Shipping Strong Brands Unique Company Culture Opportunities Threats Innovation External Changes Online Product Substitution Takeovers Acquisition by Larger Companies Matthew
Organizational Culture1. Deliver WOW Through Service2. Embrace and Drive Change3. Create Fun and A Little Weirdness4. Be Adventurous, Creative, and Open-Minded5. Pursue Growth and Learning6. Build Open and Honest Relationships With Communication7. Build a Positive Team and Family Spirit8. Do More With Less9. Be Passionate and Determined10. Be Humble Stephanie
• Free Lunch• Pet insurance• Paid time off to volunteer• Monthly team outings• Carpool program• Nap rooms• Ex: Conference RoomsStephanie
Product Structure (Actual) Develop Vendor MERCHANDISING Relationships, Purchas ‘NO TITLE’ STEVE HILL e Products, introduce FRED MOSSLER New Brands CFO and COO Finance and CHRIS NIELSEN Fulfillment Operations Software Quality CTO Assurance, Website ARUN RAJAN Troubleshoot, Hardware Vendor Agreement RepairCEO: TONY Contracts,HSIEH LEGAL Brand/Property MILLIE CHOU intellectual issues, Corporate governance issues PROD., EDW and ANALYTICS JENEEN MINTER Technical Management, ENGINEERING New Prod. Development, BRENT CROMLEY JAVA Architecture Recruiting, Benefits Human Resources and Employee Relations Swithin n
Product Structure (Actual) Merchandising – Steve HillNew Arrivals All Products Gift Ideas Clearance Men Women Kids Swithin n
Product Structure (Proposed) Merchandising – Steve Hill New Arrivals All Products Clearance Gift Ideas CouponsLatest In-stockTrends Men Women Kids Swithin n
Target Market Description• Geographic: United States• Age: Young and older adults, male and female• Occupation: Students and professionals• User status: Regular or first time user• Usage rate: Light- medium• Loyalty status: Strong• Attitude towards product: Positive Stephanie
Rumelt’s 4 Criteria• 4 Criteria for evaluating business strategies ▫ Consistency ▫ Consonance ▫ Feasibility ▫ Advantage• Zappos has enacted long-term financial growth strategy ▫ Improve customer service ▫ Faster delivery to customers ▫ Free exchange for up to a year ▫ Pay all medical and dental costs of all employees Arthur
Strategic Evaluation ReportBalanced Scorecard• Used to connect business activities to vision statement• Must know 3 key components of Zappos: ▫ Strategic Plan ▫ Mission ▫ Vision• Contains four perspectives: ▫ Financial ▫ Internal business processes ▫ Learning and growth ▫ Customer Arthur
Sources• Bryant, A. (2010, January 9). Tony Hsieh of Zappos - Celebrate Individuality - NYTimes.com. NY Times Advertisement. Retrieved April 29, 2012, from http://www.nytimes.com/2010/01/10/business/10corner.ht ml?pagewanted=2&_r=1• Chapman, Alan. “The Balanced Scorecard Tool in Strategy Evaluation Process.” Advanced Performance Institute: 04 May 2012.• Graedal, T.E., Braden Allenby. “EFE Matrix: External Factor Evaluation.” New York: 2003.• Kainzbauer, W. “CPM: Competitive Profile Matrix.” New York: Munchen Press, 2011.• Parker, Jeffrey. “Rumlet’s 4 Criteria Model.” University of Delaware: 05 May 2012.
• Unknown. (n.d.). Zappos Family Core Values | about.zappos.com. Home | about.zappos.com. Retrieved April 29, 2012, from http://about.zappos.com/our-unique- culture/zappos-core-values• Unknown. (n.d.). Our Benefits | about.zappos.com. Home | about.zappos.com. Retrieved May 5, 2012, from http://about.zappos.com/jobs/why-work-zappos/our-benefits• Unknown. (n.d.). Zappos Meet-Our-Monkeys. Home / about.zappos.com. Retrieved may 4,• 2012. from http://about.zappos.com/meet-our-monkeys/tony-hsieh-ceo• Unknown. (n.d.). Zappos Family Core Values / about.zappos.com. Home / about.zappos.com. Retrieved May 4, 2012, from http://about.zappos.com/our-unique- culture/zappos-core-values• Unknown. (n.d.). eBay Inc.’s Global Portfolio of Businesses. eBay Marketplace-Who We Are.Retrieved May 5, 2012. from http://www.ebayinc.com/who• Unknown. (n.d.). Meet Zappos Family / about.zappos.com. Zappos Inc. / about.zappos.com.Retrieved May 4, 2012, from http://about.zappos.com/meet-zappos- family/zapposcom-inc• Unknown. (n.d.). Amazon.com Inc. Annual Data. AMZN Balance Sheet. Retrieved May 4 2012.from http://finance.yahoo.com/q/bs?s=AMZN+Balance+Sheet&annual• Unknown. (n.d.). Bluefly Inc. Annual Data. BFLY Balance Sheet. Retrieved May 4 2012.from http://finance.yahoo.com/q?s=BFLY&ql=0
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