Chapter 8, Problem PVAYKBP

To determine

(1)

Definition of SCM and the way it can help Zappos.

Answer to Problem PVAYKBP

Solution:

Supply chain management refers to the management of the flow of services and products, movement, storage of raw materials and finished products. It interconnects different links with manufacturer, supplier and ends up on the customer. Zappos can ensure manufacturing of required products and inventory management as well.

Explanation of Solution

Given:

A demand and supply management strategy.

Supply chain management is a strategy of management of demand and supply. It includes the management of flow goods and services, raw material, finished product, inventory management. Supply chain management interconnects the company, supplier, and partners. It is interpreted as designing, planning, operation, control and continuous monitory of delivery chain activities with the sole objective of creating total value, fabricating a competitive infrastructure and setting up synchronization between supply and demand.

Zappos can take advantage of supply chain management to continuously compete for the demand with adequate supplies. An extranet will help the supplier and partner vendors of Zappos to let them access the number, cost, model of the ordered product, so that they can align with the demand to maintain the adequate supply. This will prevent the chaotic situation of not meeting with the demands.

Conclusion:

SCM confirms the adequate demand and the adequate supply. Zappos can ensure that its supply of products is aligned with demand.

To determine

(2)

Definition of CRM, and the way it can help Zappos to take advantage of it.

Answer to Problem PVAYKBP

Solution:

CRM helps the company to maintain relations with the current customers and suppliers, and make relations with new customers and suppliers. It helps the company to maintain human resources and inventory as well.

Explanation of Solution

Given:

A customer service and customer relationship execution strategy, CRM.

Customer Relationship Management is a corporative strategy which is employed to compete in the market. It helps to attract new customer and vendors. It also maintains a healthy relationship with current customers and vendor. A CRM not only makes new relations but also gives a measure of the required products to meet the demand. Hence, manufacturing and inventory can be managed. Also, CRM helps to determine the requirement of human resources required to manage operations without complexity and conflict.

Zappos invested marketing budget in CRM. It can take an advantage by implementing an adequate customer support plan. Most of the customers like to talk to a human to know about the product they are about to purchase. Hence by doing so, Zappos can take advantage of CRM.

Conclusion:

In conclusion, CRM will not only help the company to make new customers and profits but also help the company to maintain the SCM. Also, it will give the measure of the requirement of human resources.

To determine

(3)

Zappos’ need for implementing SCM, ERP, and CRM to make the company an interconnected corporation.

Answer to Problem PVAYKBP

Solution:

Supply chain management helps to determine the requirement of material and supplies and CRM helps to add the new customers and guesses the requirement of products. ERP determines that the resources are being utilized. It processes the data collected from the SCM and CRM. It analyzes that it can interpret the results.

Explanation of Solution

Given:

Three strategies to make an institution as connected corporations.

SCM helps the company and its vendors to ensure the demand and supply. But for making a supply, estimation of demand is required. CRM helps the company to guess the number of required products. It sends the data to ERP. ERP is a middle unit. It interprets the data and guesses the number of required products. ERP sends instructions to vendors and SCM about the requirements and delivery stats.

All departments included make a corporate organization as a whole and connected.

Conclusion:

SCM ensure the adequate demand and adequate supply, CRM estimated the demand and ERP analyzes the data collected to make a managerial decision.

To determine

(4)

A conditional analysis of merger between Zappos and Amazon and also mention the potential bugs for Zappos clients.

Answer to Problem PVAYKBP

Solution:

The merger has disclosed a potential market for both the companies but there are some issues related to patents and professional objectives.

Explanation of Solution

Given:

A merger between Zappos and Amazon.

The merger of Zappos and Amazon will have extended economy scale for both those organizations. Because of the merger, the brand power and task size of organizations will turn out to be more broad and bigger, and items can be sold with a higher rebate if it was set on Amazon. Correspondingly, a blended organization can deliver to appropriate its merchandise and ventures on a substantial scale.

There are some potential issues for Zappos customers:

1. The controversy of Patent:

A controversy of the patent; for example, a patent is a privilege, fumed to Zappos which was designed to allow the garment's maker to avoid others from making, offering or utilizing the development for a time-frame.

2. Clashing Professional Objectives:

Clashing item: for instance, Zappos may have an alternate key objective particular from Amazon's. Zappos points on growing into new markets, while Amazon hangs on the goal of diminishing expenses. The obstruction you meet is, as you attempt to spend on showcasing activity, it can undermine your endeavors.

Conclusion:

The merger of two companies may be both fruitful and harmful. The merger of Amazon and Zappos will enlarge the market of both the industries but there exist some clashes on professional objectives. Amongst them, a controversy of patent and clash of the objective are fundamental.

To determine

(5)

A plan for Zappos to utilize Amazon’s supply chain in order to increase sales and customer satisfaction.

Answer to Problem PVAYKBP

Solution:

Amazon has a broad supply chain as it sells goods online in various countries and it also offers items on discount. Further, the customers of Amazon are reliable. Hence, Zappos can get greater customer satisfaction in the name of Amazon. Also, the company has good customer service of its own.

Explanation of Solution

Given:

A company Zappos, utilizing the Amazon’s supply chain.

Amazon is definitely a principal player in the field of supply chain. It has a huge capacity for storage. Last year the company opened a “supply chain service” as another business. Although Amazon has not upgraded its delivery system for delivering products in one night, it has good warehousing and it is focused on reducing prices. Also, Amazon's supply chain is centered.

Zappos can now use Amazon’s warehouses where their own warehouses are not available. Hence, the market of Zappos will increase which will lead to a direct increase in sales. Cheap warehousing will push the limits of the company to cut prices. Hence, it will result in more sales.

Zappos has started importing some of the goods from other manufacturers. Hence, they can now import from those manufacturers who deliver goods to Amazon.

In initial days, Zappos own delivery system used to be very bad. They took some outsourcing servicing but that failed too. Hence, the company took its delivery service in own hands and now they have better services. While the merger between Amazon and Zappos will enable the company to use Amazon’s reliability among customers to manipulate customers, so it can be called that they are now a subsidiary of Amazon. Hence, Amazon will make sure that their customers are getting good services.

Conclusion:

Amazon has cheap warehousing and it offers good delivery services. Now Zappos can use Amazon’s supply chain to deliver products and ensure customer satisfaction and increased sales.

To determine

(6)

An argument following or opposing the statement that in the current electronic age, customer relationships are far more significant than ever, and all the corporations should follow the new benchmarks that Zappos has set up.

Answer to Problem PVAYKBP

Solution:

In the current age of the internet, everything is available online. If you are not able to provide good services, customers will move other companies. Hence, maintaining the customer relationship is significant for the companies to survive.

Explanation of Solution

Given:

A statement saying that in the current electronic age, customer relationships are far significant than ever, and all the corporations should follow the new benchmarks that Zappos has set up.

Current age is the age of the internet. Most of the people like to purchase things and make their other businesses, online. If one company cannot provide a satisfying customer relationship, customers will move to another company.

Zappos has set up new benchmarks in the field of customer satisfaction after a lot of ups and downs.

It ensures overnight delivery of the goods. To make the delivery quicker, it has merged with Amazon in order to use it cheaply available warehouses. Also, the company ensures customer satisfaction by taking various surveys from customers and providing 24/7 customer support. They have implemented a 365-days return policy to make their customers feel that they are delivering fine goods.

A customer relationship management system not only retains existing customer but also makes a relationship with other customer and other manufacturing firms as well. It helps the company to ensure human resources and suggest changes in customer services.

Hence, the success of Zappos has established a benchmark for other companies that they should follow Zappos, in order to retain their customers by providing better customer satisfaction and customer support.

Conclusion:

In the competitive environment, if a company wants to survive they will have to deliver good customer service to retain their customers and increase sales. Hence, they should follow the new benchmarks that Zappos has set up to survive in the age of electronics.