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Link 1: http://docdro.id/12rko
Link 2: http://www.docdroid.net/12rko/zappos-case-2.pdf.html
How would you expand the business? Would you add more products, more geographies, or by
selling private labels? As you expand the business, how can the company become more
profitable, particularly in light of the costs associated with the focus on service?
Solution
Introdution to the Company Zappos:
World’s largest online retailer of shoes and had an outstanding customer service and loyalty.
Founded by N. Swinmurn in the year 1999 by raising capital from the investors Hsieh, Venture
Frogs and Sequoia.
After the success and hard work by the year 2008, the company had expected sales of $1 billion.
The major strengths of the company was customer loyalty and high level of services that was
provided to them.
Return policy, shopping experience, product information and rapid delivery gave them a
competitive advantage over their competitors.
Expansion strategies:
Innovate and diversify their range of products
Cater to different sectors of audience
Develop and distinguish the models of shoes by creating different segment
Open showrooms to have a direct contact with the customers
Build click and mortar model of business
Enhance the promotional and advertising activities
Yes, the company should focus on diversifing the products into different geographies. This will
help in achieving the profitability and growth to the organsiation as the brand enjoys huge
loyalty and image amongst the customers. They have achieved economies of scale and
specialised skills such that the cost factor will not be a burden for the company to achieve
success.

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