Case Analysis Description

Complex Problem Solving Team Case Analysis For Marketing Strategy

Introduction 

You will be completing two team cases for this class. Information below outlines the approach you will use for the cases. You instructor will assign you to a team by the end of Unit 1. All teams should start working on the cases prior to the week they are due.

A case is a summary of a business situation. Just as in an actual business environment, cases do not focus on a single problem, rather they describe a business situation at a particular point in time. Your case analysis must be centered on your use of the course marketing strategy concepts and terms used to analyze complex marketing problems faced by businesses.

Click here for Learning Outcomes

For this course, your case analysis will focus on complex problem solving methods through:

Updating the case.

Use the relevant unit concepts and terms to conduct an analysis.

Relevant concepts should include using the concepts outlined in the unit assignments as appropriate. 

1. Critical Analysis
2. Identifying problems and/or opportunities

Surface alternatives to address the problems and/or opportunities

• Evaluating the pros and cons of the alternatives

1. Make recommendation based on the above analysis.

Develop a tactical GANTT Chart

• The ability to solve complex problems is a highly sought skill. The following sources provide background on this complex problem solving process.
• American Society of Quality, What Is Problem Solving? (Links to an external site.)
• Sage Publications: Creative Problem Solving and Decision Making (Links to an external site.)

1. For those of you who want to go much deeper: Oxford University Press: Solving Problems and Making Decisions (Links to an external site.)

This case methodology is not writing intensive, but it is thinking intensive.  DO NOT WAIT UNTIL A FEW DAYS BEFORE THE CASE IS DUE TO START unless you don’t mind staying awake at night. Most of your time should be spend in brainstorming and developing outlines.

After the case is assigned, read the case. Then reread the case and make notes using the analysis framework outlined above. Your team should brainstorm opportunities and problems you see in the case. In your team list all of the problems/opportunities, determine which are clustered, what is relevant, and actionable.

• Cases

Click each case for the submission page.

Each case is available in your textbook.

• 

Zappos: Delivering Happiness

• Due by 11:59 p.m., Sunday, CT end of Unit 3

Netflix Fights to Stay Ahead of a Rapidly Changing Market

Due by 11:59 p.m., Wednesday, CT of Unit 8

• Grading

Please refer to the Schedule page for rubrics and the Course Overview page for point distribution. 

Directions and Format

Below you will find the format your team should use for case analysis. Keep in mind that your research and analysis should be linked to the unit content and terms and come from credible sources. You should use APA formatting within the case citations and in your references. You should use the headings below to help focus your approach to the case write-up. Students often ask how long assignments should be. Suggestions are given below, but this can be adjusted based on the size of your team. An example of a previous case can be seen in this file: Group_4_Case_3_MBA_630.docx Download Group_4_Case_3_MBA_630.docx 

Case #1 is found in Unit 4. You should not wait to start on this case. For Case #1, there are three components. The first will be your case analysis. For your instructor, will be a written case following the case format like the Group 4 Case 3 MBA 630.docx above. The second will be your team’s recorded Zoom PowerPoint presentation of the case (record this to the cloud so you can obtain the link to the video). Your team leader will post this recording (only one Zoom link is needed) into the Unit 5 Discussion for your assigned team to review and post questions. Your team members will then need to respond to the discussion posts. The goal of this process is to expand your team’s understanding of other team’s perspectives on the case. This should help you improve your team’s submission for the final case.

Case Update (1-2 pages)

Cases are always a snapshot in time. Your first task will be to provide a brief update of the current situation given the major changes (identified and justified by your team). Relevant material should be cited. For example, if you were doing a case on USA Today, this would need to be updated to reflect current trends in media consumption through electronic media and the overall general decline in newspaper circulation. Do not just give a summary of the case.

Unit Concepts for Case Analysis (this will vary by case)

Case analysis can take you in many directions, but remember that you are focusing on the unit concepts as outlined in the textbook chapters, Unit Learning Outcomes (ULOs), and the topics covered in your discussions and unit assignments. Be sure to conduct research and cite credible sources using an APA format.

Each case should conduct an analysis based on the relevant units as indicated below:

Case #1 will focus on the concepts and terms in Units 1-3.

Case #2 will focus on the concepts and terms in Units 4-6.

Case #3 will focus on the concepts and terms in Units 1-8.

For example, in Case #1 you will focus on the concepts and terms in Units 1-4. One such example is in Unit 1, ULO 3: Evaluate business models to understand how businesses create value for customers. Your case may require an analysis of alternative business models. This should include and analysis of the current business model as well as other feasible business models used by competitors, in other industries, or emerging trends. Each business model alternative will have pros and cons. Other relevant concepts should include using the concepts outlined in the unit assignments as appropriate.

Critical Analysis

Under this section, you will:

Identifying problems and/or opportunities,

Surface alternatives to address the problems and/or opportunities, and

Evaluating the Pros and Cons of the Alternatives.

Each of these will be explained below followed by the format you should use for this section.

DO NOT PREDETERMINE THE RECOMMENDATIONS YOU THINK FIT THE CASE! This will bias your analysis. It is best to develop your recommendations after completion of the case analysis. The cases can be fun because they make you think, but this can also be a great struggle. By the end of the semester the process should become second nature, but only if you practice your abilities to analyze. 

Identifying problems and/or opportunities
After you have updated the business case, you must develop a framework from which to look at developing strategic alternatives. The first step is to brainstorm problems and/or opportunities and then turn these into problem/opportunity statements. You should not focus on alternatives to these statements at this point because this can limit your brainstorming analysis.

A problem/opportunity statement is a two sided coin. In example above Unit 1, ULO 3: Evaluate business models to understand how businesses create value for customers. You may have analyzed alternative business models. If in your team’s brainstorming process, you feel that the business should evaluate alternative business models, you could frame this as:

Problem #1: Business X needs to consider alternate business models. (This should be used to if the business’ current model is no longer viable.) You should include a brief justification of this problem related to your case analysis.

Opportunity #1: Business has an opportunity to consider alternate business models. (This should be used to if the business wants to shift or add to its current model.) You should include a brief justification of this problem as stated in your case analysis.

You can brainstorm a series of problem and opportunity statements. For your Case #1 and Case #2 you should limit your problem and opportunity statements to four. These should be what your team considers to be the most important issues to be addressed. If you have more than four, you can list additional statements at the end of your case, but do not conduct alternative analysis or include in your recommendations. For Case #3, since this covers all units (and is worth almost twice the points), you should have no more than eight problem/opportunity statements.

Surface alternatives to address the problems and/or opportunities
After identifying each problem or opportunity, your next step is to determine alternatives to solve the problem. When surfacing alternative strategies to a problem, you must identify more than one alternative. If you limit yourself to one alternative you limit the choices you can make and limit your thinking proces­ses. If a problem has only one solution, it isn’t really a problem it is just something that has not been acted upon.

The approach you should use to identify alternatives is to brainstorm all of the possible alternatives you or your group can surface and then determine what alternatives are relevant. Use course and unit concepts and your knowledge base for suggestions. This requires looking at the problem and finding out how marketing strategy principles would provide a solution. Alternatives should be statements. They don’t need to be justified, they are evaluated in the Pros and Cons.

Evaluating the Pros and Cons of the Alternatives
Each alternative will have its own pros and cons. These are strengths and weaknesses associated with the alternatives. The pros and cons provide the information that will be used by you to decide which of the alternatives will be recommended.

Pros and cons should be fact based and ideally linked to cited research (using APA 7th edition). Note that in this class there is no expectation of primary research so your focus should be on secondary research. In your actual business’ environment, you may need to conduct or use primary research to justify action.

For example, assume that an opportunity exists to change the business model outlined above and Alternative #1 is: Reposition the company’s product image to be higher quality than competitors.

Pros can include (these are generic because they are not linked to research sources):

Differentiates your products from competition (could require your team using positioning maps).

Allows for higher prices increasing your margins (could require an analysis of competitive prices and break even points).

Will allow for higher quality products with higher quality materials (you may want to link this to the consumer decision process).

Cons can include:

May require an increase in promotional budget to reposition products (use case related details if provided).

Higher quality products could require a new sales approach for distributors (use case related details if provided).

This may require targeting new market segments resulting in increased costs (use case related details if provided).

Critical Analysis Section Format

(Each problem/or opportunity with alternatives plus pros and cons should result in 1-2 pages of content. Four problems or opportunity is a max of 8 pages.)

The write-up should outlined as follows:

Problem/Opportunity #1 Statement: Short paragraph with statement and justification.

Alternative Solution #1 (Statement)

Pros:

#1) Short Sentence or sentences justifying as a pro with citations as needed.

#2) Short Sentence or sentences justifying as a pro with citations as needed.

#3) etc.

Cons:

#1) Short Sentence or sentences justifying as a con with citations as needed.

#2) Short Sentence or sentences justifying as a con with citations as needed.

#3) etc.

Alternative Solution #2 (Statement)

Pros:  As above

Cons: As above

Alternative Solution #X.

Problem #2 Statement:

Alternative Solution #1 (Statement)

Pros:  As above

Cons: As above

Alternative Solution #X…

Opportunity #X Statement:

Alternative Solution #1 (Statement)

• Pros:  As above
• Cons: As above
• Alternative Solution #X… Recommendations (Max 2-3 pages with GANTT Chart)
  You must give a recommendation for the case based on the above analysis. This will most likely be a combination of various alternatives to solve the identified problems and/or opportunities. You do not need to restate the reasons for recommending individual alternatives; their strengths and weaknesses are outlined in the case analysis pros and cons. If you state a problem, be sure you recommend a solution to that problem in your recommendation.You do however, need to justify the combination of alternatives you recommend and the order of your approach. This could be justified in terms of the synergies created or value creation for customers.

Zappos: Delivering Happiness*

Synopsis: This case examines Zappos’s unique marketing strategy and corporate culture, both of

which focus on delivering happiness to the company’s varied stakeholders. Despite a few stumbles

along the way, Zappos has been a role model of success since its founding in 1999. The company

survived the dot-com collapse because its charismatic CEO, Tony Hsieh, created a corporate culture

that put its customers and employees ahead of financial success. The case looks at Zappos’s

business model and how it influences the company’s relationships with customers, employees, the

environment, and its communities. The case also discusses some of the challenges the company

faces and how it plans to move into the future.

Themes: Marketing strategy, ecommerce, branding, long-term customer relationships, customer

satisfaction, corporate culture, employee relations, social responsibility, customer loyalty, corporate

reputation

Can a company focused on happiness be successful? Zappos, an online retailer, is

proving that it can. Tony Hsieh, Zappos’s CEO, says, “It’s a brand about happiness,

whether to customers or employees or even vendors.” Zappos’s zany corporate

culture and focus on customer satisfaction has made it both successful and a model

for other companies.

THE HISTORY OF ZAPPOS

Nick Swinmurn founded Zappos in 1999 after a fruitless day spent shopping for

shoes in San Francisco. After looking online, Swinmurn decided to quit his job and

start a shoe website that offered the best selection and best service. Originally called

ShoeSite.com, the company started as a middleman, transferring orders between

customers and suppliers but not holding any inventory. The website was soon

renamed Zappos, after the Spanish word for shoes (zapatos).

In 2000, entrepreneur Tony Hsieh became the company’s CEO. Hsieh, 26 at the

time, was an early investor in Zappos, having made $265 million selling his startup

company to Microsoft in 1998. Hsieh wasn’t initially sold on the idea of an Internet

shoe store. He told Inc. Magazine, “It sounded like the poster child of bad Internet

ideas … but I got sucked in.” After becoming CEO, Hsieh made an unconventional

decision to keep Zappos going, even selling his San Francisco loft to pay for a new

warehouse and once setting his salary at just $24.

Zappos struggled its first few years, making sales but not generating a profit. The

dot-com crash forced Zappos to lay off half its staff, but the company recovered. By

the end of 2002, Zappos had sales of $32 million but was still not profitable. In 2003,

the company decided that in order to offer the best customer service, it had to control the entire value chain—from order to fulfillment to delivery—and began holding

its own inventory. Zappos moved to Las Vegas in 2004 to take advantage of a larger

pool of experienced call center employees. The company generated its first profit in

2007 after reaching $840 million in annual sales. Zappos also started to be recognized

for its unique work environment and approach to customer service.

CASE

13

*

Harper Baird, Bernadette Gallegos, Beau Shelton, and Jennifer Sawayda developed this case under the

direction of O.C. Ferrell and Linda Ferrell. It is intended for classroom discussion rather than to illustrate effective or ineffective handling of administrative, ethical, or legal decisions by management. All

sources used for this case were obtained through publicly available materials. ©O.C. Ferrell and Linda

Ferrell, 2015.

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In 2010, Amazon bought the company for $1.2 billion. Although Hsieh had

rejected an offer from Amazon in 2005, he believed that this buyout would be better

for the company than management from the current board of directors or an outside

investor. Hsieh said, “With Amazon, it seemed that Zappos could continue to build its

culture, brand, and business. We would be free to be ourselves.” Amazon agreed to

let Zappos operate independently and to keep Hsieh as CEO (at his current $36,000

annual salary). Hsieh made $214 million from the merger, and Amazon set aside $40

million for distribution to Zappos employees. After the merger, the company restructured into 10 separate companies organized under the Zappos Family. Zappos was

able to keep its unique culture and core values.

ZAPPOS’S BUSINESS MODEL AND OPERATING PHILOSOPHY

Zappos has 10 core values that guide every activity at the company and form the

heart of the company’s business model and culture:

• Deliver WOW through service.

• Embrace and drive change.

• Create fun and a little weirdness.

• Be adventurous, creative, and open-minded.

• Pursue growth and learning.

• Build open and honest relationships with communication.

• Build a positive team and family spirit.

• Do more with less.

• Be passionate and determined.

• Be humble.

Zappos’s core values differ from those of other companies in a couple of ways. In

addition to being untraditional, the core values create a framework for the company’s actions. This is exemplified in the company’s commitment to their customers’

and employees’ well-being and satisfaction.

ZAPPOS’S CUSTOMER-FOCUSED BUSINESS MODEL

The Zappos business model is built around developing long-term customer relationships. Zappos does not compete on price because it believes that customers will

want to buy from the store with the best service and selection. The company strives

to create a unique and addicting shopping experience, offering a wide selection of

shoes, apparel, accessories, and home products, free shipping to the customer, free

shipping and full refunds on returns, and great customer service.

Shopping and Shipping

Zappos strives to make the shopping experience enjoyable. The website is streamlined for an easy shopping experience. Products are grouped in specialized segments, with some (like outdoor products) on their own minisites. Customers can

view each product from multiple angles thanks to photographs taken at the company’s studio, and Zappos employees make short videos highlighting the product’s

features. Zappos analyzes how customers navigate the site to improve features,

adapt search results, and plan inventory.

This spirit of simplicity, innovation, and great service extends to Zappos’s inventory and distribution systems as well. Zappos has one of the few live inventory systems on the web. If the Zappos website displays an item, it is in stock. Once the

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company sells out of an item, the listing is removed from the website. This helps to

reduce customer frustration. Its inventory and shipping systems are linked directly

to the website via a central database, and all its information systems are developed

in-house and customized to the company’s needs. Their warehouses operate around

the clock, which allows them to get a product to the customer faster. Fast shipping

creates an instant gratification that is similar to shopping in a physical store.

Most companies have a negative view toward returns, but Zappos’s mentality is

the complete opposite. It sees returns as the ability to maintain customer relationships and to increase its profits. Zappos offers a 100% Satisfaction Guaranteed

Return Policy. If a customer is not satisfied with a purchase, he or she can return it

within 365 days for a full refund. The customer can print a prepaid shipping label that

allows all domestic customers to return the product for free. This return policy

encourages customers to order several styles or different sizes and return the items

that do not work out.

While this strategy seems expensive, it actually works to Zappos’s advantage.

The average industry merchandise return rate is 35 percent, but Zappos’s most profitable customers tend to return 50 percent of what they purchase. The customers

who have the higher return percentages are the most profitable because they have

experienced Zappos’s customer service and return policy, which create loyalty to

the company. These customers are likely to make purchases more often and to

spend more on each purchase. This is what makes Zappos so successful.

Customer Service

What really makes the Zappos business model unique is the company’s focus on customer service. The company has established a method of serving customers and

handling their issues that is distinctive from the rest of the industry. Zappos believes

great customer service is an opportunity to make the customer happy. Customers

are encouraged to call Zappos with any questions. The number is displayed on

every page of the website. Hsieh says, “… At Zappos, we want people to call us.

We believe that forming personal, emotional connections with our customers is the

best way to provide great service.” Customer service representatives also actively

use social media sites such as Facebook and Twitter to respond to customer

issues.

Another key aspect of Zappos’s customer service model is that nothing is

scripted. Employees have free reign in their decision-making and are expected to

spend as much time as they need to “wow” customers. They help customers shop,

even on their competitors’ websites, encourage them to buy multiple sizes or colors

to try (since return shipping is free), and do anything it takes to make the shopping

experience memorable.

Zappos’s customer service representatives try to develop relationships with their

customers and make them happy. Stories about great customer service include customer support calls that last for hours, sending flowers to customers on their birthdays, and surprise upgrades to faster shipping. Some extreme cases have included

Zappos hand-delivering shoes to customers who have lost luggage and to a groom

who forgot the shoes for his wedding. Zappos has even sent pizzas to the homes of

customers who have tweeted to the company about being hungry.

Zappos believes that great customer experiences encourage customers to use

the store again. In addition, Zappos’s long-term strategy is based on the idea that

great customer service will help them expand into other categories. While around

80 percent of Zappos’s orders come from shoes, the markets for housewares and

apparel are much larger. The company says it will expand into any area that it is passionate about and that meets their customers’ needs.

The company also considers word-of-mouth marketing to be the best way to

reach new customers. With over 75 percent of purchases made by repeat customers,

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it is evident that Zappos’s mission to “provide the best customer service possible” is

working well for the company.

CORPORATE CULTURE AND WORK ENVIRONMENT

The corporate culture at Zappos sets it apart from nearly every other company. As

Amazon’s CEO, Jeff Bezos, says, “I’ve seen a lot of companies, and I have never

seen a company with a culture like Zappos.” Zappos’s unorthodox culture is the

work of CEO Tony Hsieh, an innovative and successful entrepreneur. Hsieh built

the culture on the idea that if you can attract talented people and employees enjoy

their work, great service and brand power will naturally develop.

Zappos is famous for its relaxed and wacky atmosphere. Employee antics

include Nerf ball wars, office parades, ugly sweater days, and donut-eating contests.

The headquarters features an employee nap room, a wellness center, and an open

mic in the cafeteria. Other quirky activities include forcing employees to wear a

“reply-all” hat when they accidentally send a company-wide e-mail. This environment

isn’t just fun; it’s also strategic. According to Zappos, “When you combine a little

weirdness with making sure everyone is also having fun at work, it ends up being a

win-win for everyone: Employees are more engaged in the work that they do, and the

company as a whole becomes more innovative.”

Hiring and Training

The key to creating a zany work environment lies in hiring the right people. The job

application features a crossword puzzle about Zappos and asks employees questions

about which superhero they’d like to be and how lucky they are. They may also

check how potential employees treat people like their shuttle driver. Zappos is looking for people with a sense of humor who can work hard and play hard. Potential

employees go through both cultural and technical interviews to make sure they will

fit with the company. However, even Hsieh admits that finding great employees is

tough. “One of the biggest enemies to culture is hyper-growth. You’re trying to fill

seats with warm bodies, and you end up making compromises,” says Hsieh.

All new employees attend a 5-week training program, which includes 2 weeks on

the phones providing customer service and a week fulfilling orders in a warehouse.

To make sure that new employees feel committed to a future with the company, Zappos offers $2,000 to leave the company after the training (called the “The Offer”).

Amazon has since adopted a similar practice. Even after the initial training is over,

employees take 200 hours of classes—with the company covering everything from

the basics of business to advanced Twitter use—and read at least nine business

books a year.

Benefits

Another aspect of Zappos that is unique is the benefits that it provides to its employees. The company has an extensive health plan, where it pays 100 percent of employee’s medical benefits and on average 85 percent of medical expenses for employees’

dependents. The company also provides employees with dental, vision, and life

insurance. Other benefits include a flexible spending account, prepaid legal services,

a 40 percent employee discount, free lunches and snacks, paid volunteer time, life

coaching, and a car pool program.

Along with the extensive benefits package, Zappos has developed a compensation model for its “Customer Loyalty Team” (call center representatives) that incentivizes employee development. At Zappos the goal is to answer 80 percent of customer

inquiries within 20 seconds, although employees are encouraged to take the time

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needed to ensure quality service. Initially, employees were paid $11 per hour for the

first 90 days. After 90 days, the employee moved to $13 per hour. To move beyond $13

an hour, employees had to demonstrate growth and learning by completing specific

skill set courses that allow employees to specialize in certain areas of the call center.

Employees were given freedom to choose the shifts they wanted based on seniority.

Although the reasoning for Zappos’s compensation model is to motivate employees

and promote personal growth, the base pay was less than the national hourly average

of $15.92 earned by call center representatives.

Zappos determined that the pay structure and the process for employee shift

sign-ups were inefficient for the company’s needs. With Hsieh’s encouragement, the

company adopted scheduling software called Open Market. Under this new system,

call center employees would be given 10 percent time flexibility to pursue their own

projects. Employees could decide when to work, but the compensation system was

revamped to mimic the surge-time pricing of popular ride-sharing service Uber. With

this compensation system, call center employees working during periods of high

demand would receive higher pay. In other words, Zappos hourly compensation for

its call center employees would be based on demand. Zappos hopes to expand this

system to all departments eventually. For seniority-based jobs, this system holds

risks. For instance, seniority-based incentives also take into account company loyalty, camaraderie with co-workers, and dedication that are also important to work

productivity. However, Zappos believes the system works well for its call center

employees because many are employed for shorter periods.

Work–Life Integration

One of Zappos’s core values is “Build a positive team and family spirit,” so the compan