CROCS: REVOLUTIONIZING AN INDUSTRY’S SUPPLY CHAIN FOR COMPETITIVE ADVANTAGE BHOOSHAN PARIKH CBS FTMBA 2008-09 OPERATIONS MANAGEMENT TERM PAPER 3/16/2009 Case Study This paper analyses and discusses the supply chain process of Crocs Inc. in a competitive and dynamic footwear industry. The paper critically evaluates the existing supply chain of the company against its current performance and changing market conditions and explains reasons for loss of competitive advantage of the company. The paper ends with recommendations for a change of supply chain strategy by supporting the arguments with relevant theories and models and how Crocs Inc. can regain its competitive advantage. INTRODUCTION Crocs, Inc. was established in …show more content…
This paper has been structured to critically evaluate the footwear industry in generally and the supply chain of Crocs Inc. (Appendix A) in particular and provides insights into possible drawbacks and improvement areas in the strategy adopted by the organisation in the years leading up to its present position. In the latter half, the paper describes my views on how Crocs, Inc. can better their position in the footwear industry and become a more stable competitor to its major challenges in the environment. I have used a number of theories and models, both in analysing the system prevalent at Crocs, Inc. and in providing insights into how they can build up on their successes and create a more stable and extended future for the company. Of course, it cannot be claimed that this paper will provide a foolproof solution to the issues of today‟s footwear industry and Crocs Inc in particular, but it does portray a different perspective especially by providing arguments against vertical integration as a means to achieve competitive advantage. This paper contradicts the theoretically sound and widely accepted principle of vertical integration to achieve competitive advantage. The paper highlights the probable drawbacks and bottlenecks plaguing the supply chain of Crocs Inc. The paper begins with a brief overview the footwear industry based on Porter‟s Five Forces model (Porter,
Businesses especially those that operate in the same industry always try to emerge the best in the market by adopting different strategies so as to become more competitive. In the retail industry where goods move in volumes, proper management of the inventory can make a big difference by making a company to be more competitive as compared to the others. In most retail business, manipulation of the supply chain functions is one of the strategies that are used to give a retailer a competitive edge over its competitors. This research paper will compare how TJ Maxx and Ross manipulate their supply chain functions to gain a competitive edge over each other. Based on the available facts, the paper will make a determination on which of the companies
Crocs, Inc. obtained many core competencies throughout the various phases of their supply chain model. Their leading competency apparent in the mid-2000s, was their ability to be efficient and flexible within their supply chain model. This afforded them competitive advantage to revolutionize the footwear supply chain during this time period, in addition to only making injection molded shoes. “Much of this growth had been made possible by highly flexible supply chain which enable the company to build additional product to fulfill new orders quickly within the selling season, allowing it to respond to unexpected high demand.” A second core competency was the ownership of the formulas for the proprietary material resin “croslite”, the primary raw material in their product.
The flexibility in the Crocs supply chain has been in the company’s ability to provide additional products within the
A highly flexible supply chain allowed Crocs to be reactive to variations in demand. The first phase included their purchase of the manufacturer of Crocs shoes, so they could own Croslite and control the manufacturing. The second phase was
The value chain is a concept developed by recognized Harvard business management expert Michael Porter in his book "Competitive Advantage (1985)." It breaks up the various elements of producing and
One of the industry categories where the demand always exists is the footwear market. Raw materials like rubber, leather, cotton and nylon are used majorly for the manufacturing of Athletic shoes. The manufacturing process adds to their value as these materials are classified as commodities. Due to this suppliers have limited bargaining power, and little impact on profit potential.
This report objective is to analyse the footwear industry regarding it main characteristics and features, pointing out the most important issues related to demand, supply and industry structure. Environmental analysis at a Macro and Micro level, analyse the global demand trends and factors affecting it as well as a market segmentation and geographical distribution of the demand.
The supply chain has evolved over the years. With new businesses that are on the rise in the competitive world it is important to stay on top. Different merchants create better deals that cause relationships between the suppliers and their customers to the end. I wanted to explore those relationships and research the history of the “supply chain”. I wanted to know how things were ran and how they are able to sustain business when the economy changes.
Many research work and articles have been written over the footwear industry. This report is mainly inspired and catalyzed by my own thinking process and personal experience. However, some reports were consulted.
Zappos.com owns a consistent share of shoe buyers’ market and maintain a solid and prominent position in online retailing. Although the numbers suggest that the company serves the US market like no other company, an expansion of its current share should be considered. Even thou the investments that this would require, we agree that Zappos could expand and build a stable source of competitive advantage by producing its own shoes line, followed in the future by it’s own shoe related wear line.
Chris Fraser, President, Supply Chain International, VF Brands is faced with a challenge to create a competitive advantage for the company by making its supply chain more efficient and robust in terms of speed to market, material utilisation, lower inventories, less work in process and lower cost to quality. VF’s coalitions were pleased with the quality and reliability of service they received from sourcing. VF had driven down cost by continually expanding their supplier base to ever lower cost locations enabling VF to hit corporate margin targets of 10-15%. At his juncture, Fraser and Green began exploring the next possible actions to take for making the supply chain more efficient.
An option to turn these threats into opportunities could be to manage to set-up agreements with smaller shoe manufacturers. The manufacturers’ activity would be sustain by producing some on-order shoes while the independent retails would benefit from both higher margins and better opportunity to differentiate the offer.
Supply chain has gained importance in the current world of business. With the advent of globalization and competitive advantage being key aspects of organizational existence, it is essential to look into sustainability of the same. This research paper focuses on the need for this sustainability and how supply chains can make a difference to the sustainability of the planet. It will also explore supply chain practices that could be a source of competitive advantage.
Business generally is frosted with various challenges, and that facing supply chain seems not to have gained adequate attention. Challenges could force early exit on firms’, thus imposing loses on investments. Therefore to ensure effective and efficient minimization of loses, improve profit, and operate competitively, it then becomes imperative to critically research on the challenges and proffer solutions that would minimize the impact on the chain.
Supply chain performance has never been as important as it is today. In a global economy where supply chains, and not companies, battle one another, how a supply chain performs determines who will win the battle. To achieve maximum benefit from a supply chain, a supply chain must be performing at its best or anything it has gained will be short-lived. Yet, many companies are not aware of how their supply chains are performing or even what supply chain they are in.