Define SCM and how it can benefit Zappos. Explain CRM and why Zappos would benefit from the implementation of a CRM system.Demonstrate why Zappos would need to implement SCM, CRM, and ERP for a connected corporation. Analyze the merger between Zappos and Amazon and assess potential issues for Zappos customers. Propose a plan for how
Zappos can use Amazon’s supply chain to increase sales and customer
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Management Information System MIS 201
Semester 2 (2018-2019)
Prepare an in-depth analysis of four case studies during the semester. Here are some guidelines:
This is an individual assessment, which is a part from your course score. It requires effort and
This assignment will worth 25 mark (Case Study Questions 15 Marks/ Presentation 10
Answer all the questions listed below for each case.
The ‘answers’ to the questions are best formulated by reviewing the case and the reading
materials up and including the current week in the course.
The questions are worded to help you apply the readings to the case, so don’t limit yourself
to the case’s terminology and perspective. The best analysis will abstract the case content by
applying the reading materials to draw broader lessons about the material
As for the Presentation you should summarize your analysis of only one case study in a set
of PowerPoint slides
Case Study 4: Zappos
1) Define SCM and how it can benefit Zappos. (1 Mark)
2) Explain CRM and why Zappos would benefit from the implementation of a CRM system.
3) Demonstrate why Zappos would need to implement SCM, CRM, and ERP for a connected
corporation. (1 Mark)
4) Analyze the merger between Zappos and Amazon and assess potential issues for Zappos
customers. (1 Mark)
5) Propose a plan for how Zappos can use Amazon’s supply chain to increase sales and
customer satisfaction. (1 Mark)
Case Study 4: Zappos
Tony Hsieh’s first entrepreneurial effort began at the age of 12 when he started his own custom
button business. Realizing the importance of advertising, Hsieh began marketing his business to
other kids through directories, and soon his profits soared to a few hundred dollars a month.
Throughout his adolescence, Hsieh started several businesses, and by the time he was in college
he was making money selling pizzas out of his Harvard dorm room. Another entrepreneurial
student, Alfred Lin,bought pizzas from Hsieh and resold them by the slice, making a nice profit.
Hsieh and Lin quickly became friends. After Harvard, Hsieh founded Link Exchange in 1996, a
company that helped small businesses exchange banner ads. A mere two years later, Hsieh sold
Link Exchange to Microsoft for $265 million. Using the profits from the sale, Hsieh and Lin
formed a venture capital company that invested in start-up businesses. One investment that
caught their attention was Zappos, an online retailer of shoes. Both entrepreneurs viewed the $40
billion shoe market as an opportunity they could not miss, and in 2000 Hsieh took over as
Zappos’ CEO with Lin as his chief financial officer.
Today, Zappos is leading its market and offering an enormous selection of more than 90,000
styles of handbags, clothing, and accessories for more than 500 brands. One reason for Zappos’
incredible success was Hsieh’s decision to use the advertising and marketing budget for
customer service, a tactic that would not have worked before the Internet. Zappos’ passionate
customer service strategy encourages customers to order as many sizes and styles of products as
they want, ships them for free, and offers free return shipping. Zappos encourages customer
communication, and its call center receives more than 5,000 calls a day with the longest call to
date lasting more than four hours. Zappos’ extensive inventory is stored in a warehouse in
Kentucky right next to a UPS shipping center. Only available stock is listed on the website, and
orders as late as 11 p.m. are still guaranteed next-day delivery. To facilitate supplier and partner
relationships, Zappos built an extranet that provides its vendors with all kinds of product
information, such as items sold, times sold, price, customer, and so on. Armed with these kinds
of details, suppliers can quickly change manufacturing schedules to meet demand.
Along with valuing its partners and suppliers, Zappos also places a great deal of value on its
employee relationships. Zappos employees have fun, and walking through the offices you will
see all kinds of things not normally seen in business environments—bottle-cap pyramids, cottoncandy machines, and bouncing balls. Building loyal employee relationships is a critical success
factor at Zappos, and to facilitate this relationship the corporate headquarters are located in the
same building as the call center (where most employees work) in Las Vegas. All employees
receive 100 percent company-paid health insurance along with a daily free lunch.
Of course, the Zappos culture does not work for everyone, and the company pays to find the
right employees through “The Offer,” which extends to new employees the option of quitting
and receiving payment for time worked plus an additional $1,000 bonus. Why the $1,000 bonus
for quitting? Zappos management believes that is a small price to pay to find those employees
who do not have the sense of commitment Zappos requires. Less than 10 percent of new hires
take The Offer.
Zappos’ unique culture stresses the following:
1. Delivering WOW through service
2. Embracing and driving change
3. Creating fun and a little weirdness
4. Being adventurous, creative, and open-minded
5. Pursuing growth and learning
6. Building open and honest relationships with communication
7. Building a positive team and family spirit
8. Doing more with less
9. Being passionate and determined
10. Being humble
Zappos’ Sale to Amazon
Amazon.com purchased Zappos for $880 million. Zappos employees shared $40 million in cash
and stock, and the Zappos management team remained in place. Having access to Amazon’s
world-class warehouses and supply chain is sure to catapult Zappos’ revenues, though many
wonder whether the Zappos culture will remain. It’ll be interesting to watch!19
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