Five forces for Zappos

Substitutes: The threat of substitutes is high. The threat of online apparel stores has the potential of destroying the traditional retail industry business model (Bandt, 2000). The ecommerce platforms allow retailers expand their consumer base across national and global markets with lower capital requirements and improved efficiency.

Zappos is an online shoes retailer that started its business in the year 1999. Later on the company had expanded its business to include the beauty products, clothing and even the housewares within its leading e-commerce website. This case emphasizes on the customer service department of Zappos Company and initially the business focused only on the drop ship method. Later on the company also increased the variety of the products. The company had also created a bricks and mortar storefront to expand the business and increase the sales of the business.

Costco has impacted the retail shopping industry. Use five- force model to outline how Costco impacted the grocery and nongrocery marketplace.

Macy’s Department Stores Incorporated or Macy’s is an American based retail chain of departmental stores. It is currently operating under two brand names the Macy’s and Bloomingdale in over forty five states of America. The company specializes in the range of products including jewelry, furniture, house hold items, footwear, clothing and other related items.It also offers online shipping services to the clients in large numbers of countries. The company currently operates in four business segments including Macy’s, macy.com, Bloomingdale’s and Bloomingdales.com (one source, 2011).

The owners of Zappos did an amazing job coming up with the idea of selling shoes to from online. There was a market that was created by Zappos. Zappos has been able to continue to grow due the advancing in technology that has made it must easier for customer to shop online. A lot of people know what kind of shoes they like and what size shoes they wear. If a customer does need a product in the next few days and can be patient then Zappos is a great store for that customer. Zappos makes it very easy for the customer because of it policies and customer service. Zappos offers free shipping. Zappos also give

CEO Tony Hsieh and the successes of his world-class customer service are know around the world for the insane things they will do to please their customers like buying shoes from a competitors store because they ran out of stock or sending a free pair of shoes to a best man who arrived to a wedding with no shoes (Edwards, 2012). Although they are well known for there customer service, it does cost them a substantial amount to be the best, to make up for these cost there are things that Zappos can do to reduce and offset its cost of customer service. Zappos has a large warehouse and within this warehouse there are several ways efficiency may be improved to reduce costs. First, Zappos can look to simplify processes to determine if product

The core concept of Zara 's business model is they sell "medium quality fashion clothing at affordable prices", and vertical integration and quick-response is key to Zara 's business model.  Through the entire process of Zara 's business system: designing, sourcing and manufacturing, distribution and retailing, they presented four fundamental success factors: short cycle time, small batches per product, extensive variety of product every season and heavy investment in information and communication technology.  These four elements are involved in every aspect of the business.

Customer’s bargaining power: The bargaining power of customers is medium. There a huge number of customers, not well organized to defend their interests. Additionally, the

Unfortunately, many online retailers have begun to catch up with many of these core competencies. The concepts of next-day delivery and “above and beyond” customer service are no longer the “WOW” factors that they may have been five years ago. However, the relationships that make up “Powered by Zappos” are tough to beat and give the company a competitive advantage through its supply web. At the time of this case, Zappos still holds the niche of being an online shoe expert, but companies

Zappos.com, established in 1999, has rapidly become a strong competitor in online apparel and footwear sales. With the original corporate vison of offering the absolute best selection in shoes; the vision has evolved over the past several years to include the goal of being the retailer that “provides the absolute best service online -- not just in shoes, but in any category” (Zappos, 2014). The online retailer stocks millions of reasonably priced footwear products; carrying thousands of hard to find brand named shoes, handbags, apparel and accessories via the company website and 7,000 affiliate partners. In recognizing their rapid success, Zappos credits it to their commitment to the customer, stating,

The company started to keep its own inventory. They also purchased retail stores. Along with this Zapposs.com also maintained the traditional “Drop-Shipp” approach with some of their partners.

The Zappos has developed into a powerhouse of e-business their business strategy is a example to follow, however e-business can be a saviour but also a downfall of a company. When Zappos first set up the business online there was no competition, it’s crazy how times

Zappos’ is based on the providing customer with happiness while purchasing process and their philosophy is that if they will keep strong customer relationships then they will be delivering the customer satisfaction. The profitability of business depends lot on the customer satisfaction and this is the reason behind putting much efforts in maintaining the customer relationship and providing them best services and this is one of the greatest strengths of the company. Another strength of Zappos’ is the honestly dealing the customers this also helps building the customers’ confidence on the website.

Zappos is an online retail company founded in 1999 by Nick Swinmurn. Initially, the firm used the domain name shoesite.com to sell its products. However, this was seen as a limiting factor because it would be confined to selling shoes using this domain name. This resulted in the change of name to Zappos. This name is a variation of zapatos, the Spanish name meaning shoes. In its second year of operation, the organization made $1.6 million in sales. The management had two objectives. The first was to ensure the company grossed over $1 billion by 2010. The second was to appear on fortune’s list of best companies to work in the same time. Employees achieved these objectives before the set timeline. Sales target were achieved in

Zara has the potential for sustainable growth due to its competitive advantage and its ability to face the challenges of the apparel industry. The company keeps its operating income elevated, has a strong and unique business model, and has various opportunities for expansion in the retail industry (Craig et al, 2004).