Ch 1 -- P&A 1 & 8

Zappos Case Study (Please complete problems 1 & 8)

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Zappos Case Study Zappos (www.zappos.com) is a Las Vegas-based on- line retailer that has been cited in Fortune's list of the Best Companies to Work For and Fast Company's list of the world's most innovative companies. In fact, its remarkable success resulted in Zappos being bought by Amazon for $850 million in 2009. Zappos was founded in San Francisco in 1999 and moved to Las Vegas for the cheap real estate and abundant call center workers. The company sells a large variety of shoes from nearly every major manufacturer and has expanded its offerings to handbags, apparel, sunglasses, watches, and electronics. Despite the crippling economic downturn, sales jumped almost 20 percent in 2008, passing the $1 billion mark two years ahead of schedule. The company's first core value is Deliver WOW through service," which is obvious if you've ever ordered from Zappos. It provides free shipping in both directions on all purchases. It often gives customers surprise up- grades for faster shipping. And it has a 365-day return policy. In 2003, Zappos made a decision about customer service: It views any expense that enhances the customer experience as a marketing cost because it generates more repeat customers through word of mouth. CEO Tony Hsieh never outsourced his call center because he considers the function too important to be sent to over- PROBLEMS AND ACTIVITIES 1. Describe a customer experience you have personally encountered where the good or service or both were unsatisfactory (e.g., defective product, errors, mistakes, poor service, service upsets). How might the organization have handled it better, and how could operations management have helped? 2. Interview a manager at a local company about the work he or she performs. Identify (a) the aspects of the job that relate to OM (as in the OM activities in the box "What Do Operations Managers Do?") and (b) an example of primary, support, and general management processes. 3. Evaluate how the activities described in the box What Do Operations Managers Do?" can be applied 8. Draw the customer benefit package (CBP) for one of the items in the following list, and explain how your CBP provides value to the customer. List a few example processes that you think would be necessary to create and deliver each good or service in the CBP you selected, and briefly describe issues that must be considered in designing these processes: a trip to Disney World a new personal computer a credit card a fast-food restaurant a wireless mobile telephone a one-night stay in a hotel . . . . to a student organization or fraternity to improve its