Crocs Shoes Itself in Global Supply Chain

The objective of these establishments, apart from achieving labor cost savings, was to spread risk. Initially, the various production sites were capable of producing the same types of shoes, indicating an insignificant degree of specialization in the production units. However, in recent years ECCO had strived to narrow each unit and capitalize on its core competencies.

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

Unlike its competitors, Crocs had a highly responsive and flexible supply chain. Owing to the Crocs executives’ experience in electronics industry, they were accustomed to producing what the customer needed and when it was needed. Thus the business model was focussed on customer needs and responded promptly to changes in demand and trends. The retailers of shoes, therefore, had neither the pressure to forecast exact demand nor the obligation to order bulk orders several months before the selling season.

flexible, retailer focused supply chain system enabling Crocs to support a boarder retail base than competitors;

Traditionally, the shoe industry was seasonal and based on projections of future trends. Retail stores would need to place orders several months before the shoes would even hit the shelves. As orders were made early in the year, manufacturers would begin production for shipment later in the year. Since inventory supply depended on expected sales, stock could not be quickly replenished as it ran out. The executives at Crocs decided to branch out from the traditional production schedules and develop a lean production model. As sales increased or decreased, Crocs managed to speed up and slow down production throughout the year to quickly replenish depleted inventory. Since the shoes were easily made with the foam mold design, rapid production and order fulfillment came easily for Crocs. This approach attracted the attention of many footwear retailers. With Crocs shoes being made to order, stores could more easily control inventory without worrying about a

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.

Be more aggressive in their marketing strategy. One of the reasons why Crocs got so ahead because they were very aggressive in terms of sales and marketing strategies. They need to target more overseas clients, as North America is already dominated by Crocs. They should also work harder at distributing to more retail stores in North America.

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

* Continued investing in TQM quality control to reduce manufacturing costs of Extreme Kicks’ footwear.

The new technological advances have made it easier for even small time stores to come out with some unique idea like designing your shoe online. For an example, Customix offers 3 billion

High demand for quality and reduced lead times led the company to a self-sufficiency approach on streamlining its entire value chain from raw hides to finished shoes unlike its major competitors who only designed and marketed their products without in house manufacturing.

Despite this inefficient system, Crocs was one of the first companies to successfully streamline different aspects of the manufacturing and supply chain to create a new customer-centered value chain.

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,

Threat of Substitute Products: Atheletic shoes are designed for comfort, fit and personal safety during periods of iintense or increased movement. The existence of close substitute products increases the propensity of consumers to switch to alternatives in reponse to price increases. The availability of substitutes in the athletic shoe industry, invites customers to make price, quality and performance comparisons. If the athletic shoe is used for a specific sports, there maybe relatively few substitutes. If the shoe is used because of comfortability, they are interchangeable with minimal switching cost. This holds true for athletic shoes worn for fashion. Overall the threat of substitute products is moderate and depends on the motivation for purchasing the product. The impact to profit potential is moderate to high.

Q1: Consider which comparable peers are good matches and use them to perform a multiples analysis, calculating and defending an estimate of Crocs value. Soln: Comparable companies analysis – Done to determine appropriate valuation multiple for Crocs, Inc. • • Selected peer group based on industry, business and financial characteristics Included explosive growth stocks such as Lulelemon & Under Armour having similar prospects for growth and ROIC as Crocs, Inc. and some