Zappos' organizational culture and competitive strengths before Amazon acquisition

Zappos History (Zappos, N.d.)

Zappos Core Values (Zappos, N.d.)

The Secretes to Zappos' Success (Palmer, 2010)

Here's Why Amazon Bought Zappos (Parr, 2009)

The first two sources are from the company's website and talk describe the founding and culture while the second two sources give independent accounts of the culture and why it is effective. Since this paper will focus on the strengths of the culture and why this might be an issue for the Amazon acquisition, the sources are relevant. The sources could also be cross checked by finding more accounts of the culture within Zappos. The Sarbanes-Oxley Act could help by providing public financial records that can attest to the company's success. I am confident that a cultural clash between Zappos and Amazon is entirely possible.

Business Overview

Core Values

Although the company does not seem to publish their mission statement, they activitely promote a set of core values in which they attempt to define their culture through (Zappos, N.d.) These are the ten core values that Zappos operates by are:

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

Strengths

Zappos.com has developed a plethora of strengths that have all contributed to the company's success and rapid growth over the last decade. A strength that Zappos possesses is that the organization focuses on the company culture and hiring passionate high-quality employees. This has undoubtedly led to the organizations ability to provide a high level of customer support which in turn is closely related to customer satisfaction. They also believe the importance and impact of "feeling good," for both the employee and customer, is key. Thus the company believes that customer satisfaction is driven, at least in part, by employee satisfaction. Making sure that the employees are more than satisfied with their positions in the company will allow the organization to maintain world class service.

Weaknesses

A weakness that has recently emerged for Zappos is that they were recently acquired by Amazon for about $1 billion. Although there may be various opportunities for the company to take advantage of Amazon's enormous amount of resources, it is likely that the ownership by Amazon will provide management of the company in a way that inconsistent with the company's culture and history. Zappos will no longer be able to operate with full independence and could be subjected to Amazon's will for future operations. The cultural differences that are found within the two companies may cause some friction among the leadership and visions for Zappos and its individual goals.

Opportunities

Zappos strategy is innovative and unique. Zappos focuses on happiness for all the stakeholders that are involved in the organization. Therefore the company has the opportunity to use Amazon's vast resources to support their mission. For example, Amazon has developed some of the most advanced support technologies of any organization on the planet. If Zappos could tap into these vast resources to support their mission then they could improve the "happiness" of all the stakeholders by growing its consumer base and improving its customer service even more. The opportunities for both companies are highlighted in a letter that was released from Zappos in regard to the acquisition (Parr, 2009):

"Several months ago, they reached out to us and said they wanted to join forces with us so that we could accelerate the growth of our business, our brand, and our culture. When they said they wanted us to continue to build the Zappos brand (as opposed to folding us into Amazon), we decided it was worth exploring what a partnership would look like.

We learned that they truly wanted us to continue to build the Zappos brand and continue to build the Zappos culture in our own unique way. I think "unique" was their way of saying "fun and a little weird."

Over the past several months, as we got to know each other better, both sides became more and more excited about the possibilities for leveraging each other's strengths. We realized that we are both very customer-focused companies -- we just focus on different ways of making our customers happy."

Thus if the two companies can create a synergy, while pursuing their own missions independently, then a tremendous opportunity exists in the partnership.

Threats

The biggest threat to Zappos is that Amazon's ownership will slowly dissolve the organizations independence and water down their core competencies. While Zappos focuses on "weird" competencies, Amazon is a more traditional organization that has efficiency and effectiveness built into its culture. Therefore if Zappos ever begins to slip in its success, it is possible that Amazon would try to inject some of its leadership strategies into the company. There could certainly be mixed results from an Amazon intervention, but the real threat for Zappos is that it will be more limited to pursue its own objectives independently and will be subjected to the will of its parent company.