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Zappos

IS 300 Group Project Winter 2012
by

yahya gazzaz

on 3 January 2014

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Transcript of Zappos


Case 9.2
Zappos:
Making Human Resource the Key to Customer Service
About the Company
History
Discussion Questions
Why shoes?
Gazzaz yahya ahmed 1121200095
Sufian ahmed jawarne 1121200079
Saber majdi abdul hadi 1121200056
Ahmed Mohammed Alsuwat 1111200164
Founded in1999 by Nick Swinmurn and currently is run by CEO Tony Husien.
Based in Henderson, Nevada.
2009 Amazon bought Zappos at price $1.2 billion
Save time
Doesn’t need to learn customers about the product
2 billion are sold via mail every year where margins are good.

Happy Employees
=
Happy Customers
The use of social media
Customer Service Make Zappos Especial
Strength
Weakness
Opportunities
Threats
Selection
Convenience
Training employees and satisfied
Returning Customers
Teaming with Amazon
Widespread use of smartphone
Hacker
Internal competition
There are many online shoppers today and the number is still growing, Zappos is unable to reach the majority of retail shoppers by only having the online outlet channel
Q1: What are some key points/traits that make Tony Hsieh and Zappos so successful?
Customer service
Social media
Human resources
Encourage the employees
Q2: How would you describe Zappos's approach to HRM? Do you think Zappos's approach to HRM is unique to Zappos. or do u think many of the polices Zappos has adopted could be use successfully in other firms?
First of all Zappos define its culture with ten values.
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"

A training team trains employees in each core value.
Zappos approach to HRM is without a doubt
After the training program ends the hire will be given whats know in zappos culture as
Each employee contributes to a
The company decision to move to Las Vegas from San Francisco is playing a dual role
Bars and restaurants are open 24hrs
Avoid paying taxes as well low living costs.
"THE OFFER"
"UNIQUE"
"CULTURE BOOK"
Zappos approach can be seen lately in:
But it might not work for other firms as A powerful article in made this point:
Culture, like brand, is misunderstood and often discounted as a touchy-feely component of business that belongs to HR. It’s not intangible or fluffy, it’s not a vibe or the office décor. It’s one of the most important drivers that has to be set or adjusted to push long-term, sustainable success. It’s not good enough just to have an amazing product and a healthy bank balance. Long-term success is dependent on a culture that is nurtured and alive. Culture is the environment in which your strategy and your brand thrives or dies a slow death.”
"FAST COMPANY"
"THE FIT"
Zappos or uses an array of unique activities and questions (‘‘On a scale of 1 to 10, ’’) in its hiring process to ensure each candidate is going to be ‘‘one of them.
"how weird are you?"
An interview by HR Magazine with senior HR manager Hollie Delaney, PHR, Zappos.com Inc.
It was big and impersonal, with thousands of employees and so many rules between unions and nonunion. There was a rule for everything—even that I had to wear pantyhose if I worked in HR. It made it difficult to be yourself. At the time, I thought HR was not for me.
Before Zappos, you worked in HR at a casino. What was that like?
Application Questions
Q1: What can state-ups learn about building a successful company culture by familiarizing themselves with Zappos and Zappos’s story?
Having a core set of values is essential for any company, and it is even more important for start ups.
Moreover, this should be the laying foundation of the startup itself. If the co-founders don’t think alike and share the same values the conflicts later on will tear the startup apart.
1. Have a core set of values
2. Make company culture a priority
No matter what stage you are at, company culture needs to be a top priority. It sets the general tone for the co-founders, the team members and later on (when you scale) for potential employees as well.
As it needs to be a priority, company culture is something you just have to spend time on.
3. Never compromise company values
It is rather evident that if you have a core set of values that all of you share and you make company culture a priority then you should never compromise these values.
Tony Hsieh, CEO of Zappos has a very interesting approach about company culture as a priority. “Our philosophy at Zappos is that we’re willing to make short-term sacrifices (including lost revenue or profits) if we believe that the long-term benefits are worth it. Protecting the company culture and sticking to core values is a long-term benefit.”
4. Hire fit, not skills.
While the team is the foundation of a startup, common values, goals and complementary skills are the key features that make it work. Why is this so important? Because there are always people out there with the skills capable of doing the job, but you need to hire people who would work well in your organization. You don’t just need someone who just gets the job done.
5. Be productive
You cannot mandate productivity, you must provide the tools to let people become their best.” - Steve Jobs
If you want to avoid having underperforming and unhappy team members you have to motivate them and push them towards a higher stage of productivity. A good culture definitely helps the process.
Q2: Spend several days following Tony Hsieh's Twitter account. Describe your reaction to what you read also access Zappos Youtube channel. what seems to be the purpose of this initiative? watch several of the videos that zappos has posted. what did you learn about Zappos by watching these videos?
Much like the Zappos website, the YouTube channel conveys the companies USP in a very obvious manner in their “about” section at the top right of the page: “Zappos.com offers free shipping and free return shipping with a 365-day return policy. Choose from over 1000 brands, over 100,000 styles, and over 3 million items from their warehouse full of shoes, clothing, handbags, and accessories!”
The channel has a fairly small amount of subscribers (3,800 in comparison to TopShop’s 6,000) and seems to be experimenting with a variety of videos with different themes in order to find what works within their market and what may gain a viral following.
Many of these videos are centred on community involvement issues such as drinking and driving, fitness and current events which may inspire sharing from subscribers or portray a more positive image.
In addition, the videos do not seem to be attracting many views, but eventually it would seem that this may increase if the proper positioning tactics can be found.

Zappos started using Twitter to build their culture among employees but along the way they discovered the power to build the culture with its consumers as well…Over 450 Zapponians CEO – 2.833.227 followers.
External-To Customers
CEO Tony Hsieh looks at any opportunity to interact with customers as a chance to burnish his company’s brand, interact with customers, send information, basically being the voice of the company.
More than 450 Zapponians who connect with its followers promoting the brand’s culture and enhancing its image.
Internal-To employees
Hsieh has encouraged his employees to use Twitter, even posting a guide to using Twitter on the Zappos site. He says using Twitter can help employees to get to know one another and create a cohesive corporate identity. “Initially it took a bit of commitment because nobody had used it” he says. ”Twitter has helped with our company culture.” Today, more than 450 employees Twitter at Zappos.
Zappos objective of being active with its Twitter followers is to build long-term relationship with them and to reflect the company’s core values and culture…
Zapponians mostly tweet about their personal lives.
Zapponians build personal relationship with their followers.
Zapponians have no guidelines about how or when to tweet.
Zapponians have the option to take a Twitter course at the company.
Zapponians tweet at work and at their own time. Zapponians reply to its followers.
Zapponians reflect their core values on their tweets.Zapponians connect deeply.
Core Value: Build OPEN and HONEST RELATIONSHIP with COMMUNICATION.
Always connected
Always Building Relationship
Always sharing a Human touch
Always Give
Always Active
Always Available

THANK YOU
Q3: To what extent do you believe the story that Zappos excels because of customer service and its customer service excels because of savvy human resources management? If you believe the story, what can other entrepreneurs learn from Zappos’s experiences?
We do believe that the success caused of having centered attention on Human resources and employees in the company, as well as customer service.
• Things to Learn
a. Seven people-centered practices to be strongly associated with much higher profits and significantly lower employee turnover:
1. Job security (to eliminate fear of layoffs).
2. Careful hiring (emphasizing a good fi t with the company culture).
3. Power to the people (via decentralization and self-managed teams).
4. Generous pay for performance.
5. Lots of training.
6. Less emphasis on status (to build a “we” feeling).
7. Trust building (through the sharing of critical information).
b. Taking Care of your employees will cause taking care of your company.
Q4: Reflect on the two primary challenges facing Zappos identified at the end of the case. How do you think Zappos should respond to those challenges? In your opinion, what is Zappos’s third primary challenge?
Competition in its primary categories, (Shoes & Clothing) in term of High & Low end price, where there are some competitors are focused on low-end and others focused on High-end price, which could threat their competitiveness.
Challenge 1:
Competition in its primary categories, (Shoes & Clothing) in term of High & Low end price, where there are some competitors are focused on low-end and others focused on High-end price, which could threat their competitiveness.
Respond 1:
As the marketing competition get real aggressive Zappos should make something about its competitors in any form of joining forces or having more competitive advantages than others.
Challenge 2:
Zappos current unique culture whereas every employees enjoy the informality of the company culture, However, under Amazon.com if it were to unify the culture of Zappos with its existing culture of Amazon.com. Zappos could lose its uniqueness.
Respond 2:
Zappos company culture is reflecting huge result over short period, however if the joint venture happen to Unify one management it should not change the culture of practice in Zappos on the other hand it should only make little modifications as in the culture to reduce cost.
Challenge 3:
Zappos offers a 365 day free shipping program, which also includes overnight shipping, the big question is whether or not this merger will affect the aspect of the supply chain.
Respond 3:
No doubt that Zappos consider its shipping program as one of its marketing cost and expenses and main activity to gain customer loyalty and from there boost profits. However, to solve the supply chain conflict, it has do deliver its product fast, but return slowly, as it schedules return product after delivering priority.
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