Strategic Management: Zappos

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STRATEGIC MANAGEMENT: ZAPPOS
Introduction
Strategic management is the monitoring, continuous planning, assessment and
analysis of all the aspects of an organization to meet their objectives and goals. Strategic
management helps the leaders of the company to assess the problems that is currently running
in the company and to create insightful strategies that might help to overcome the problem
that is currently residing in the company. strategic management involve the analysis of the
strengths and weakness of the company internally and externally, coming up with effective
plans and to execute the plans successfully, evaluating the plans and to check what measures
are working for the company that are being taken or implemented. Strategic planning is
important for a company to address their short term as well as long term goals that helps to
plan the future of a company. This essay sheds light on the ways in which Zappos achieves
sustainable competitive advantage through strategic management.
Discussion
Zappos is an online clothing and shoe retailer, based in Las Vegas, Nevada. Nick
Swinmurn founded the company in the year 1999. The current CEO of the company is Tony
Hsieh. Initially the key people in the company were skeptical about the business proposition
made by Nick Swinmurn of selling shoes online as the internet was booming during this time.
The company garnered success because of their shoe products that were available in multiple
sizes and colors. The company later expanded due to their growth in the market and their
good reputation for excellent customer services. Zappos has managed to make a mark in the
market because of its uniqueness as it started the business of online shopping long time ago

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and had forecasted the future of the internet that is one of the most important innovations in
today’s world. The key factor of the success of Zappos is the happy and loyal fan base that
they had garnered (Kopelman et al. 2012). The company Zappos follows the resource-based
theory to pave way for the sustainable competitive advantage. This theory states that an
organization should strategically position themselves based on their resources and capabilities
rather than their products and services only. The important aspects of the resource-based
theory are tangible resources, intangible resources and capabilities (Hitt et al, 2016).
Under the tangible resources falls the physical aspects of the company like the
infrastructure, the cash, equipment’s and many more. The company expected sales of $1
billion in the year 2008. They had about 9 million customers that made them a high grossing
company. Zappos has not been affected by a major impact from economic slowdown and the
collapse in the financial market. This majorly affected the behavior of the customer but still
customers were buying from Zappos through different channels. The changing economy had
an impact on sales but the company was more focused on how prepare0 for difficult times
and improve the business,
Intangible resources include a company’s culture, reputation and the presence of
skilled employees. Different factors have contributed to the success of the company are their
culture and values. The company has very strong cultural values that the management has
raised and nurtured. According to the CEO, the culture meant the innovation of new products
that cater to the consumers, to create a health work atmosphere, build relationships like
family, the teamwork and a workplace where employees are not in pressure. The company
hires and provides a training to make sure the employees are well equipped with the
company, which becomes a positive aspect, as it is necessary for employees to understand the
work process of the company in order to provide fruitful outputs (Warrick, 2017). Zappos
reputation has helped the company to sustain their customers and get new buyers mainly
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because of their services and the operations carried out by the employees. The services
include the extraordinary shopping experience, shipping and return policy, the call center.
The company has provided an extraordinary shopping experience by providing them with an
easy to handle website, by providing the details of the products and by the availability of
products in multiple colors and sizes that is not available everywhere in the shops. The
shipping of the products are free and fast that has made the customers happy while shopping
here. The call center is one of the reasons of customer satisfaction. The communication
process and handling of queries shows the loyalty of the company towards their customers.
Capabilities are the primary concept of the resource-based theory. Capabilities usually
arises over time as the company takes action that are built on their strategic resources.
Capabilities here means the company’s capabilities in strategic management. These
capabilities can be classified in different categories like the ability to compete, to thrive in the
market, to identify critical competencies and to analyze the strategic values. Zappos has an
ability to equip the capabilities, skills and resources to acquire competitive advantage. This
helps them to increase the company’s value and to survive over time. Zappos has the ability
to compete with internal and external issues that arise in the company because of the strong
management and the dedicated employees. With effective inputs and meticulously working
of the employees have helped the company reach this position. It is necessary to grow and
remain financially viable despite of competition in the market. The capability of the company
thriving in a market is commendable, as Zappos has faced competition by many brands like
Sketchers, Aldo, and JustFab to name a few in the market. Many elements contribute to the
company’s strategic capability. Elements that include organizational structure, human
resources and employee skills and leadership qualities all contribute to a company’s
competitiveness. Thus, while hiring employees certain values are assessed like how they
embraced change, their service delivery, how creative were they, how they pursue growth,
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