Tony Hsieh at Zappos-Structure, Culture and Change
Through this analysis, we analyze the Zabbos strengths, weaknesses, opportunities and threats.
Zappos has the strong brand image having 500 different brands products. The company has strong relations with customers, stakeholders and employees. The working environment is supportive and fruitful. In the United States, the online business of Zappos is very strong. The variety of products is also very high. Tony always believes in effective and innovative organization which are strong in every segment and gain the competitive advantage. The company win many awards and received a lot of appreciations on customer service and organizational culture.
The principal weakness of Zappos was the merger of the company with amazon which creates a negative impression for customers. The profit margin of the company generate them sales is limited. Some unethical ads were promoted by Zappos regarding shoes brand popularity. The online security measure of the company is also not strong.
Zappos increases the product line by adding some western clothes and jackets. The company should do business internationally as it his many products of different brands. Built the customer trust by improving the security of online platforms.
New introduce hierarchy of culture became a major threat for company because employees are switching the company because of changing in culture. The ratio of cybercrimes also increases. Increase in competition in US markets offers high quality in fewer charges.
Porter Five Forces Analysis
Threat of new entrants
The Zappos has the low threat of new entrants because the company delivers hundreds of branded products with high-quality features which satisfy the customers. The Zappos has a strong business model which complete focus on the customer’s satisfaction.
Threat of new substitutes
The company has also less threat of substitutes because the Tony already offers updated and branded new products to the market which beat the new products of other competitors.
Bargaining power of customers
The bargaining power of customers for Zappos is high because the users are high and they bargain strongly for reducing the prices with increasing quality. Customers also wants discount in each interval. Switching cost is also high.
Bargaining Power of suppliers
The bargaining power of suppliers is also high. The suppliers of the Zappos are many brands. They all have their own pricing. Strategies they finished good they provide to the Zappos have higher rates.
The competition is moderate because the Zappos maintain its market share and brand equity with higher customer base. The ratio of satisfied customers in the United States as about 78%. Less aggression of firms towards the Zappos.
Recommendations for Tony Hsieh:
Initially, the Tony must update the vision and mission of the company because the employees are not much focused on the organizational objectives. The company must arrange the seminar regarding new culture that how slowly and gradually the Holocracy Culture create the value for both organization and employees and generate the interest for the employees towards this new culture. As the Tony maintains the open environment so the employees must take time to understand this change and adjust to a completely different culture. Company should offer the employees bonus or increment in salary which increase the motivation of employees towards adoption of new culture. Encourage the employees for Holocracy culture, especially to the IT department, because they are completely unsatisfied with the new culture.
Tony Hsieh is the owner of the company. The employees of the company are not satisfied with this changing and most of the employees switch their jobs from Zappos because they are not comfortable changing. The key issue is identified and analyze by different analysis tool and on that basis we recommend few points to Tony. From those recommendations the most important point is that the Tony gives some space to employees for understanding and adapting the new culture give them some time to understand the value of Holocracy…
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