Crocs Value Chain Essay

sale of Nike’s high-margin products to high-end customers. Regardless of the low cost of the World Shoes, they

Crocs Inc. is a U.S based shoe designer, manufacturer and retailer. It was founded in 2002 by three friends - Lyndon “Duke” Hanson, Scott Seamans and George Boedecker. Crocs shoes are manufactured from “Croslite”. They are comfortable & light weight, odour resistant, do not skid, easy to wash and do not mark surfaces. Owing to the properties of the resin, Croslite, the shoes could be manufactured in any colour. The company, however, chose bold colours.

With revenue from Crocs shoe sales reaching to $680 million in 2007, it is clear that the company has developed a successful strategy. Not all of the success can be contributed to the design of the product. Although their products were in high demand, there are more underlying factors that have paved the way for Crocs to be competitive in the shoe market. Crocs’ supply chain design and use of vertical integration revolutionized speed and quality of order fulfillment.

The value chain, made by Michael Porter, is really important to see how a company structure is created. The value chain is constituted by two parts: support activities (firm infrastructure, human resource management, technology development, procurement) and primary activities (inbound logistic, operations, outbound logistic, marketing and sales, service). (Johnson et al. 2011, p.97-99)

Customers make purchasing decisions based on the information they have among products and the values of goods a company offers. For that reason, companies have to promote their products to increase products awareness. In order to achieve organizational goals, companies must understand the market’s needs to ensure the success of their businesses. Such information can be gained through research. The industry that will form the basis of this paper is Western Canadian Shoe Association. The three brands under study are Reebok, Adidas, and Nike.

1. Which of the comparable companies appears to be a good match to Crocs at the time of

Costco is among the leading global retailers which provide customers a wide range of merchandise, ranging from small to well-known brands. The company began operations in 1983. Over the years, Costco has been a retailer in low cost membership-only leader, in warehouse club of merchandise. Moreover, Costco does not offer frills warehouse business models as its competitors do.  Costco’s major competitors are BJ’s Wholesale Club and Sam Club (Costco, 2010).

The primary target market of TOMS is males and females between the age of 19-24 that want to combine the creativity of being a trend-setter with the satisfaction of being socially responsible. This age range is a part of what is known as Generation Y, or the Millennials. Generation Y has brought a trend of social awareness and activity. From 2002 to 2005 the number of people volunteering went up 25%. This generation is all about giving back to the people, so Toms allows this group to give back by purchasing their shoes. TOMS has also done its homework on this group as well. Utilizing social media, TOMS reaches out to over 488,000 twitter followers, 280,000 Facebook fans, and several thousands of YouTube users. TOMS understands that generation Y prefers hands on involvement. In order to make that happen, TOMS fans are allowed to take part in a yearly One Day Without Shoes movement to understand what it is like to be shoe-less. In addition to the giving back and the social movements, TOMS shoes let young adults be expressive in their style. The plain shoe design makes way for creative minds to manipulate the shoe as anyone may please. TOMS is mainly focused in the U.S., but the shoes are available in over 30 countries globally

Differentiation was achieved by creating a completely new type of fashionable and functional shoe that was extremely comfortable to wear and fun because of its bright colors. in addition, because of Crocs’ innovative inventory replenishment system, which allowed retailers to order what they needed and get new stock in a couple of weeks, retailers did not need to

The athletic shoe industry is made up of companies that produce footwear for athletic use. This is a strong industry and has been around for over 100 years. The athletic shoe industry is one of the fastest growing footwear industries and have top growing sales compared to other footwear industries (NDP Group, 2016). The key players that currently dominate the market are Nike, Adidas, and Puma (Kates & Bolduc, 2013). This paper will use the porter five forces, industry life cycle, and the key players to understand the industry. Over these years the athletic shoe industry has grown into a competitive market.

Crocs’ value chain management system allowed it tremendous advantage in meeting customer needs (Business Pundit, 2008). By controlling all aspects along the value chain, Crocs could quickly adjust to customer demand, building additional shoes and fulfilling extra orders within a single selling season (von Briesen, 2009). This allowed retailers to order smaller

Unfortunately, many online retailers have begun to catch up with many of these core competencies. The concepts of next-day delivery and “above and beyond” customer service are no longer the “WOW” factors that they may have been five years ago. However, the relationships that make up “Powered by Zappos” are tough to beat and give the company a competitive advantage through its supply web. At the time of this case, Zappos still holds the niche of being an online shoe expert, but companies

Zappos.com, established in 1999, has rapidly become a strong competitor in online apparel and footwear sales. With the original corporate vison of offering the absolute best selection in shoes; the vision has evolved over the past several years to include the goal of being the retailer that “provides the absolute best service online -- not just in shoes, but in any category” (Zappos, 2014). The online retailer stocks millions of reasonably priced footwear products; carrying thousands of hard to find brand named shoes, handbags, apparel and accessories via the company website and 7,000 affiliate partners. In recognizing their rapid success, Zappos credits it to their commitment to the customer, stating,

Low-cost, time-efficient manufacturing of goods is a key feature of a successful production company in today’s competitive global economy. Operations management, often abbreviated in the business world as OM, is defined as “...the set of activities that creates value in the form of goods and services by transforming inputs into outputs (Heizer and Render, p. 4).” Every day, factories take in raw materials and use the labor hours and skills of their employees to transform those same materials into a variety of consumer products,

SUBMITTED TO PROF. NEIL COHEN School of Business and Public Management The George Washington University