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BSC (Hons.) Business Information Systems
Cohort: BIS/13/FT
Examinations for 2015 - 2016 / Semester 2
MODULE: E-Business
MODULE CODE: ISM2104C
Duration: 2 1/2 Hours
Instructions to Candidates:
- Answer all questions.
- Question 1 is based on the case study.
- Questions may be answered in any order but your answers must show the question number clearly.
- Always start a new question on a fresh page.
- Total marks 100.
This question paper contains 4 questions and 6 pages.
Zappos.com case study
If you like shoes and shop online, you probably have heard of Zappos.com. Nick Swinmurn was inspired to found the firm after a frustrating shopping excursion in San Francisco where he failed to find a properly fitting pair of shoes in the right size, style and colour. Swinmurn translated his unpleasant shopping experience into new business expressly designed to meet the demanding needs of serious show shoppers. As a result of his entrepreneurial zeal and his shrewd exploitation of the tools of e-commerce, Zappos grew from its start in 1999 to over $1 billion in gross annual sales by 2008 (with more than 3.3 million items, from 1200 vendors), and was such a success that Amazon.com decided to “acquire” the firm for $ 1.2 billion in 2009.
The company’s strategy was to offer such a huge selection that the customers would say WOW! The company’s initial business model was to sell only online, and only shoes. This model has evolved to also sell several related products ranging from jewellery to clothes and to also sell via a few physical outlets. Believing that the speed at which a customer receives an online purchase plays a very important role in customer retention, Zappos constructed huge warehouses containing everything it sells. The logistics designers worked with the Zappos warehouse automation team to design a world-class “direct-to- customer” fulfilment system. This high-speed material handling system is fully automated and housed in a Kentucky, US, 800,000 square foot warehouse. The system allows rapid delivery to customers no matter where they are located. The company offers free shipping with domestic orders, and often delivers the next day.
The Zappos shopping experience also features extensive Website search options and clear views of every product. Unlike most other online retailers, Zappos does not offer an item for sale unless it is physically available in its warehouse. Once the last size or colour of a shoe is shipped out, it is no longer
with its vendors, and Amazon.com will continue to maintain its relationships it has with its own vendors.
ANSWER ALL QUESTIONS
QUESTION 1: (40 MARKS)
Please refer to the case study
(a) “Zappos operates under the theory that providing an excellent shopping experience (instead of maximizing profits) will be followed by sales growth” Based on this statement, what are the success factors that contributed to enable Zappos.com to achieve this? (10 marks)
(b) Are the marketing strategies efficiently used? Justify your answer. (10 marks)
(c) With the help of a diagram, describe the different processes (with flow of data) that take place in and out of the warehouse to enable “a world-class direct-to-customer fulfilment system”. (10 marks)
(d) According to you, how would zappos.com evolve strategically to sustain its leadership worldwide? (10 marks)
QUESTION 2: (20 MARKS)
(a) You are designing and implementing a website for XYZ Co. Ltd which sells adults clothing online. (i) What techniques will you use to record the customers’ behaviour online? (5 marks) (ii) Design the database to help the organisation log the right information in order to help in the marketing of its products efficiently, for example, to display the right products on its main page. (5 marks)
