Zappos' Values-Based Culture

  
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Case Details:

Case Code: HROB150
Case Length: 25 Pages
Period: 2004 - 2012
Organization: – Zappos.com, Inc.
Pub Date: 2012
Teaching Note: Not Available
Countries: USA
Industry: E-retailing

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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Delighting Customers and Employees Contd...

The training for the new recruits was designed to introduce them to the culture of the company and make them understand it. Irrespective of the new employees’ position in the company, they were trained on customer service. Training was a continuous process, and every session reinforced the values of the company. The appraisals were based on an individual’s ability to follow the core values in their day to day work. With continuous emphasis on values, Zappos was able to sustain its unique work culture, and the culture also grew stronger with the company. Even after it was acquired by another leading e-retailer Amazon.com in 2009, Zappos continued to operate as an independent entity, maintaining its unique work culture.

According to Hsieh, "If we get the culture right, most of the other stuff, like the brand and the customer service will just happen. With most companies, as they grow the culture goes downhill. We want the culture to grow stronger and stronger as we grow."9

Background Note

In 1999, Nick Swinmurn (Swinmurn), who was working as a webmaster for Silicon Graphics10 , was disappointed when he could not find a pair of Vans11 in the style, color, and size he was looking for, while shopping at a mall in San Francisco. He then unsuccessfully tried to buy the shoes online. However, he discovered that while there were a number of small retailers selling shoes online, there were no major online shoe retailers. Swinmurn immediately saw a business opportunity in this. He said later, "I'd worn Vans my whole life and they just happened not to carry this certain style any more. And I started thinking that if what happened to me was a common experience, there might be a business in trying to solve it."12

In 1999, the footwear industry was worth around US$ 40 billion, and about 5% of the sales were through mail order catalogs. Swinmurn estimated that the online shoe business would be worth more than US$ 2 billion. He decided to quit his day job13 and start an online shoe retailing business.

By June 1999, he managed to raise US$ 150,000 in initial capital from friends and family. In July 1999, the website, shoesite.com, was launched. Swinmurn entered into a tie-up with a few small shoe stores in his neighborhood to provide him with the shoes to sell online. He went to the shoe stores, took pictures of the shoes, and uploaded them on the website. Whenever shoes were ordered, he bought the shoes from the stores and sent them to customers....

Excerpts - Next Pages >>

9] Jena McGregor, "Zappos' Secret: Its an Open Book," BusinessWeek, March 30, 2009.
10] Silicon Graphics, founded in 1982 by Jim Clarke and Abbey Silverstone, is a company providing a range of computing solutions for data storage and security.
11] Vans is a US-based manufacturer of shoes.
12] "Focusing on Service – Nick Swinmurn's key Move", www.startupnation.com, 2004.
13] Swinmurn graduated from the college in 1966. Then he worked as a group-ticket salesperson for San Diego Padres of Major League Basketball. In 1997, he was working as a sales manager for successful online automotive retailer called autoweb.com. In 1998, he joined Silicon Graphics and worked as a webmaster.

 

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