ECCO has a fully integrated vertical value chain. What are the pros and cons of that strategy? What economic and strategic factors should be analyzed to answer this question?
The pros of a having a fully integrated vertical supply chain for Ecco include the following:
* Improved supply chain coordination between tanning, manufacturing and distribution. This would ultimately help maintain quality and improve operational efficiencies such as logistics.
* There is also an increase in the areas possible for differentiation, as Ecco can control more inputs. An example might be in the tanning process, in which their competitors may have less control over.
* Ecco can also create greater…show more content… * More complex organizational structures may increase bureaucratic inefficiencies and complicate management decision making processes.
* Outsourcing manufacturing is typical for most of Ecco’s competitors, to keep costs down, the quality of manufacturing themselves needs to offset these increase costs.