This document contains an analysis of Zappos, including its competitive profile compared to Footlocker, eBay, and Bluefly. It evaluates Zappos' external opportunities and threats, and internal strengths and weaknesses. Zappos receives strong ratings for customer service, culture, and financial position. Strategies proposed include expanding product categories and locations. Metrics like the balanced scorecard are suggested to connect activities to Zappos' vision and evaluate strategies.

1. By: Matthew Hindy
Arthur Grey
Swithin Murickal
Stephanie Haertling

2. 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

3. 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

4. Internal Factors Evaluation
• Strengths Outweigh Weaknesses
• Ten Core Values
• Zappos Derived from Customer Service
• Given a 3.71 Market Rating
Matthew

5. 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

6. Financial Analysis
Swithin

7. 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

8. Internal/External Matrix
• Zappos should GROW the business
▫ Has strong market share
▫ Assets will create power
▫ Stay strong with foundation & culture
Matthew

9. 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

10. TOWS Matrix
Swithin

11. Quantitative
Strategic Planning
Swithin n

12. Final Recommended Strategy
• Move Beyond Shoes & Apparel
▫ Continue with Strong Foundation
▫ Compete with Amazon and eBay
▫ Sustain Competitive Advantage
Matthew

13. 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

14. Stephanie

15. Stephanie

16. Organizational Culture
1. Deliver WOW Through Service
2. Embrace and Drive Change
3. Create Fun and A Little Weirdness
4. Be Adventurous, Creative, and Open-Minded
5. Pursue Growth and Learning
6. Build Open and Honest Relationships With
Communication
7. Build a Positive Team and Family Spirit
8. Do More With Less
9. Be Passionate and Determined
10. Be Humble
Stephanie

17. • Free Lunch
• Pet insurance
• Paid time off to volunteer
• Monthly team outings
• Carpool program
• Nap rooms
• Ex: Conference Rooms
Stephanie

18. 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
Repair
CEO: 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

19. Product Structure (Actual)
Merchandising – Steve Hill
New Arrivals All Products Gift Ideas Clearance
Men Women Kids
Swithin n

20. Product Structure (Proposed)
Merchandising – Steve Hill
New Arrivals All Products Clearance
Gift Ideas Coupons
Latest In-stock
Trends
Men Women Kids
Swithin n

21. Product Positioning Map
Stephanie

22. Proposed Product Positioning Map
Stephanie

23. Target Market
• Online Shoppers
• Current Customers
• Diversity
Stephanie

24. 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

25. 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

26. Strategic Evaluation Report
Balanced 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

27. Questions?

28. 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.

29. • 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