Zappos Value Chain Analysis

The concept of the value chain first came into being when Michael Porter described it in his 1985 best selling novel “Competitive Advantage: Creating and Sustaining Superior Performance”. The value chain is a model that describes a series of value adding activities connecting a companies supply side with its demand side. The value chain model gives managers the opportunity to analyze and redesign their internal and external processes to improve the firms effeciency and effectiveness. The main objective of the value chain model is to identify vital processes and information that exchanges between suppliers and customers and to improve the information flows through the various processes. This ideology was built upon the insight that an organization

Zappos was not constrained by space for the new seasons inventory like “brick and mortar” shops so they often kept inventory and only lowered price if the shoe style was not popular and didn’t sell. Marketing and Sales concerns activities that inform buyers about products and services, induce buyers to purchase them, and make it possible for a buyer to purchase. These activities are in place to ensure that the product targets the right area of customers. When Zappos started out they found it very difficult to get some top brands to sign up for online distribution, as most retailers saw the internet as “the place where everything would be discounted, and their brand would be ruined”. So because of this Zappos just focused on the specific brands that the customers requested in order to ensure customer satisfaction. Zappos soon found that certain brands actually began to contact them as consumers became more confident with online shopping and eventually consumers became so comfortable with Zappos that they began asking Zappos to stock products other than shoes. This lead to Zappos branching out and adding additional products based on the “passion displayed by its customers and

This would include customer service with was one of the things that Zappos prides itself on. Their call centre operatives had permission to go “above and beyond” and to do anything to get maximum customer satisfaction. An example of a Zappos employee that went above and beyond is when a call centre worker was following up on shoes that should have been returned, only to find out that the customers sick mother who the shoes were for, had passed away. The call centre worker arranged for UPS to go and pick up the shoes and to send flowers and a card of condolance to the customer. This went down very well and the customer wrote this on their blog and Zappos received great praise due to