哈佛商学院案例材料.pdf

_________________________________________ Professors Frances X. Frei and Robin J. Ely and S developed solely as the basis for class discussion. C effective or ineffective management. Copyright © 2009 President and Fellows of Harvard write Harvard Business School Publishing, Boston, M photocopied, or otherwise reproduced, posted, or tra FRANCES X. FREI ROBIN J. ELY LAURA WINIG Z 2009: C Company Culture On July 17, 2009, Z handbags and accessories, learned online retailer of books, electronics, approval to offer to merge the two both companies). “As someone who approval—Zappos spoke for itself,” Amazon had been courting Zapp and strengthen its market share in s the company considered strategical interest intrigued Zappos’ senior exe CFO, they had not felt the time wa (valued at $807 milliona), $40 million promise that Zappos could operat financial advisor, Morgan Stanley, e million and $905 million; this estima the high end of Zappos’ estimated online and footwear retailers). Hsie value, had been due to the company 2009, they were focusing on the three to the company’s continued growth recommend the merger to Zappos’ b Zappos and the Rise of Onl In late 1998, Nick Swinmurn, a 2 went to a San Francisco area shoppi a Stock value based on the average closing pri N9 OCTO ______________________________________________________________ Senior Researcher Laura Winig, Global Research Group, prepared this case . Cases are not intended to serve as endorsements, sources of primary data, o ard College. To order copies or request permission to reproduce materials, cal , MA 02163, or go to www.hbsp.harvard.edu/educators. This publication may transmitted, without the permission of Harvard Business School. : Clothing, Customer Service m (Zappos), a privately-held online retailer of shoe d that A, Inc. (Amazon) a $19 billion m cs, toys and other merchandise, had won its Board o o companies (see Exhibits 1, 2, 3 and 4 for selected fin ho was at the Board meeting, I don’t think they had t said Michael Deal, vice president of legal at Amazon. ppos since 2005, hoping a merger would enable Amazon n soft line retail categories, such as shoes and apparel— cally important to its future business growth.1 While executives, Tony Hsieh, CEO, and Alfred Lin, Chairman was right, until now. Amazon’s offer—10 million shar ion in cash and restricted stock units for Zappos’ emplo rate as an independent subsidiary—was on the tab , estimated the future equity value of an IPO to be be ate skewed the Amazon offer—at least in financial term ed market value (see Exhibit 5 for market values of sieh and Lin knew that much of Zappos’ growth, an ny’s strong culture and obsessive emphasis on custome ree C’s—clothing, customer service and company cultur th. Hsieh and Lin had only a few days to consider board at their July 21st meeting. nline Footwear Retailing a 26-year-old marketing manager for an online car-buy ping mall to purchase a pair of Airwalk shoes but cou price of Amazon shares for the 45 trading days ending July 17, 2009. 9-610-015 TOBER 20, 2009 _______________ ase. HBS cases are , or illustrations of call 1-800-545-7685, ay not be digitized, ce and oes, clothing, multinational of Directors’ financials for d to ‘win’ our zon to expand —categories ile Amazon’s an, COO and hares of stock ployees and a able. Zappos’ between $650 erms—toward f comparable and hence its er service. In ure—the keys er whether to uying service, ould not find 610-015 Z 2009: Clothing, Customer Service and Company Culture 2 any in the color, style and size he wanted. Swinmurn turned to the Internet but was frustrated by the lack of online footwear-only retailers: “[There were] a bunch of little sites but nothing that jumped out at you,” he said.2 His experience inspired him to create an online footwear retail site, and in June, 1999, Swinmurn launched . “We are taking a more dynamic approach to what has been a poorly presented category online,” said Swinmurn, who soon renamed the site Z because, he explained, it was easy to remember and there was a “recognizable relation” to zapatos, the Spanish word for shoes.”3 Zappos initially secured inventory through independent shoe stores, but by October 1999, the company had begun creating direct relationships with footwear manufacturers. By the end of 2000, Zappos offered more than 100 brands, including Bostonian, Sperry, Dexter, GH Bass and Tommy Bahama.4 The manufacturers agreed to ship orders directly to Zappos’ customers so the company could avoid carrying inventory. In 1999, there were more than 1,500 retailing sites on the Internet with footwear offerings—though most were apparel retailers stocking a handful of complementary shoe styles.5 U.S. online shoe sales were just under $48 million—less than one tenth of 1% of the $37 billion U.S. footwear market. By contrast, mail-order catalog sales were 6.4% of U.S. footwear sales.6 The online footwear industry gained a。