...Strategic Analysis for Crocs, Inc. To Increase Competitiveness in Shoe Industry Unit Code and Name: MGW1010 Introduction to Management Lecturer: Dr Esther Chong Tutor: Ms Aziana Word Count: 3300 word, excluding header and reference Contents Executive Summary i 1.0 Introduction 1 1.1 Purpose 1 1.2 Company Information 1 1.3 Assumption 1 1.4 Methodology 1 1.5 Plan of Report 1 2.0 SWOT Analysis 3 2.1 Identification of Strengths 3 2.1.1 Well recognized and financially sound 3 2.1.2 Have propriety rights over CrosliteTM material 3 2.2 Identification of Weaknesses 3 2.2.1 Expansion is a dilemma 3 2.2.2 Seasonal usage 3 2.3 Identification of Opportunities 4 2.3.1 Further exploration of the Asian market 4 2.3.2 Online sales 4 2.4 Identification of Threats 4 2.4.1 Replicas and imitation 4 2.4.2 Anti- Crocs Sentiment 5 3.0 Evaluation of Alternative Strategies 6 3.1 Proposed Alternative Strategies 6 3.1.1 Pursue diversification 6 3.1.2 Pursue vertical integration 7 3.2 Selection of Best Strategy 9 4.0 Implementation of Selected Strategy 10 4.1 Controlling Function 10 4.1.1 To implement feedforward control 10 4.1.2 To implement concurrent control 10 4.1.2 To implement feedback control 10 4.2 Organising Function 11 4.2.1 To introduce departmentalization 11 4.2.2 To execute formalisation 12 4.2.3 To implement decentralization 12 5.0 Conclusion 13 6.0 Reference List ii Executive Summary The purpose...
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...The Strategic Move of Crocs, Inc. By Jennifer von Briesen, Founder & Principal, Frontier Strategy, LLC Crocs, Inc. Overview Crocs, Inc. is a U.S. based shoe designer, manufacturer, and retailer that launched its business in 2002 selling Crocs™ brand casual plastic clogs with straps in a variety of solid, bright colors. Love them or hate them, the tremendous popularity of Crocs™ shoes is an undeniable business success story. Crocs’ bold strategic move allowed it to break out of the red ocean and achieve both differentiation and low costs to create a blue ocean. The result was rapid growth and global expansion to reach US$847 Million in revenues and US$168 Million of profits in 2007, just six years after launch. Crocs store in Boston, MA. © J. von Briesen, Frontier Strategy, LLC (2009) Unfortunately, after that, instead of remaining true to the principles of blue ocean strategy, Crocs started to compromise on the very foundation that made it a success. It lost its focus on a few simple styles and started offering a wide range of complicated styles and expanded too aggressively. The result was declining performance and higher costs. In the rest of this article, the story of Crocs’ strategic move will be explained and will conclude with some perspectives on the company’s current situation. Crocs Entered A Red Ocean Industry When It Launched in 2002 The U.S. footwear industry in 2002 was $49.3B in annual sales1, split about 60%-40% between fashion and...
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...outdoor/hiking boots) * Children’s athletic footwear (Incl sneakers & outdoor/hiking boots) Crocs footwear product range is divided into 3 categories: everyday, style and sport. From the everyday category, Crocs started in the Men’s, Women’s and Children’s footwear segment. Through its style category, which includes various dress shoes, Crocs is present in the Women’s Footwear and Men’s Footwear segment. Crocs expanded its Croslite products to include a variety of new styles and products and have extended product reach through the acquisitions of new brnads Jibbitz, YOU, Bite nd Ocean Minded. With the acquiring of Jibbitz, which produces unique charms specifically suited to fit into Crocs shoes, Crocs expanded into the Children’s footwear market. Through Ocean Minded, which produces sandals primarily for the beach, action and adventure market, Crocs deepened its presence in the Women’s, Men’s and Children’s footwear segment. By way of acquiring Bite, a manufacturer of performance shoes and sports sandals sold worldwide in five categories, including golf, adventure, healthy lifestyle, travel and watersports, Crocs within the sports category added the Athletic Footwear segment for Women, Men and Children to its target market. Closing out is YOU by CrocsTM, a women’s fashion line that combines the comfort of Croslite with fashionable styles, which strengths crocs...
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...Direccion estrategica y control de gestion Yara sleiman 19/12/2014 crocs case Direccion estrategica y control de gestion Yara sleiman 19/12/2014 crocs case Introduction Crocs was created by three friends Scott Seamans, Lyndon "Duke" Hanson and George Boedecker in 2003 after discovering a comfortable plastic that was light weighted, easy to wash and did not produce any odors. Crocs produced shoes in different categories from sandals to flip flops to heels for men, women and children. They produced different styles and categories up to 300 four-season footwear styles with many colors. Rapidly this company grew and evolved and was able to sell around 100 million pairs in seven years. The innovative technology of having such comfortable material in so many different colors that can last long enough is what was advantageous for this firm at the beginning of its business. They achieved a huge success in the US footwear with around $49.3 billion in annual sales. They expanded their market and their production went global by owning manufacturing plants in Mexico and China and distribution centers in Japan and Netherlands. Even though crocs were popular in the US but actually more than half of the production was sold outside the US. Just like any other trend, this fashion had to come to an end. Consumers were not interested in buying crocs anymore and the sales dropped and the recession started. The demand fell and inventories were stacked and unsold and the losses started...
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...assignment will be the Crocs, the product will be an adjustable high heels. The company will be analyzing based on their internal and external analysis which includes competitors, environment, consumers, market segmentation, targeting and positioning. Besides that a budget of RM 1 million will be given to spend for implementing the marketing channel within a 12 months period Table of Content No. | Title | Page No. | 1 | Executive Summary | 1 | 2 | Introduction | 3-4 | 3 | Situational Analysis | 5-8 | 4 | Creative Strategy | 9 | 5 | Campaign Objective & IMC Mix | 9-11 | 6 | Media Choice | 12-13 | 7 | Synergy between Media & Scheduling | 14 | 8 | Costing | 15 | 9 | Conclusion | 16 | 10 | References | 17 | I. Introduction About Crocs Crocs were founded in Boulder, Colo in the year of 1999. Project a simple, comfortable boat shoe image, Crocs footwear comes along with 120 styles and more for men, women and children. Colorful, lightweight comfort for all kind of occasion and all season has become Crocs distint collections & trademark. (About Crocs, 2012) All Crocs shoes are special designed and manufactured with the company's proprietary closed-cell resin- Croslite, an unique technology that makes each pair of shoes with soft, comfortable, lightweight, non-marking and odor-resistant qualities. Crocs footwear is ideally for casual wear, as well as for professional use and recreational activities. (About Crocs, 2012) Crocs footwear products...
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...2013 Croc’s Operational Case Study Introduction In examining, the case study on Crocs; it displays an overview of the company’s objectives in operations to include the supply chain. This examination reveals the success behind how the company thrives in times when others are unable. Part of Crocs leading objectives and primary function is to reinvent the supply chain to provide less shortages and increase awareness and customer satisfaction. This paper will outline a brief overview of company history, Crocs two primary core competencies and in which manner do they exploit them; continued evaluation will cover vertical integration, acquisition, or product extension growth. Further discussion consists of company production and inventory as well, as how margins affect their decisions. History and a Foundation for Core Competencies Lyndon Hanson, Scott Seamans, and George Boedecker created Crocs, INC. in 2002 out of Boulder Colorado. The idea came from a trip taken by the three, where one of them had purchase a pair made from a company out of Canada. The decision to start a business selling the shoes was realized after they leased a warehouse in Florida; when sales took off, they contacted Ronald Synder a college friend who which was employed for Flextronics (electronics manufacture) in an executive position. The addition of Snyder was positive as he helped invent their supply chain strategy (Schroeder, Goldstein & Rungtusanatham, 2011). In historical industry practice...
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...CROCS CASE STUDY COMPETITION AND STRATEGY IN FASHION SHIHUI FU FEB 20TH Crocs Case Study What are Crock’s Core Competencies? The rapidly success of Crocs thanks to its core competencies: flexible supply chain model, well controlled the product cost, and the extremely comfortable product character. First and foremost, the design of distribution and supply plan contribute to Croc as a core competitive advantage. The advanced and flexible supply chain could reduce a lot of time and cost for the whole process of business. The electronics contract manufacturing system allows the company to adjust the volume of production in-season. The retail store could provide the database about the sales of each type of shoes, they could analysis the data to redesign the production structure according to the feedback from the customers. For example, they could enhance the manufacture of the best sale to replenish the shelves; If the shoes didn’t achieve a good sales number, they could reduce the amount to manufacture and advanced the inventory turnover. Second, the raw material of plastic shoes is less expensive, so the cost of the good could be controlled easily, which lead the marginal profit to be relatively higher than the competitors. The last core competitive advantage is the comfortable product trait appealing many customers to keep consuming the brand. Comfortable is a requirement for some specific professionals and the traveler when they making the purchase decision, those...
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...Consumer Behaviour Report Crocs : A brand in need of repositioning in India. Sushree Panda FT13180 • Section A • Great Lakes Institute of Management, Chennai 1 TABLE OF CONTENTS Introduction................................................................................................................03 Crocs in India : To reposition or not? ............................................................................04 The best way to reposition ...........................................................................................06 Conclusion.................................................................................................................07 References..................................................................................................................08 Sushree Panda • Consumer Behaviour Report • Great Lakes Institute of Management 2 INTRODUCTION You know your brand needs a repositioning when a fashion consultant like Tim Gunn makes a statement "...the Croc - it looks like a plastic hoof. How can you take that seriously?" Well, being taken seriously is definitely not what CROCS INC. is looking for as the brand itself stands for innovation, fun and comfort for the people who want shoes that conform to their personalities and lifestyles, as well as to their feet. Crocs introduced an innovative shoe made of a revolutionary material called Croslite. The technology was unique as it allowed the shoe to perform both on land...
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...THE GEORGE WASHINGTON UNIVERSITY CROCS, INC. Case Study Report ¹ SUBMITTED TO PROF. NEIL COHEN School of Business and Public Management The George Washington University BY Anil Kumar Cheerla FINA 6224 FINANCIAL MANAGEMENT WASHINGTON, DC January 26, 2011 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 mature, stabilized businesses with stable industry growth rates – Nike, Deckers & Timberland. This mix will help us provide valuation from an aggressive sales growth and maturing sales context. Some characteristics used in selection include – o Primary or at least significant portion of business revenue comes from footwear & apparel – analogous to Crocs primary business o Has product appeal to large group of customers o Has distinct product attributes (innovative/creative) and differentiation from competition o Has wide range of distribution channels o CAGR Sales growth, COGS to Sales & Significantly less debt exposure on their balance sheets o Have characteristics of high octane growth and show signs of maturity and stabilizing long-term growth...
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...Crocs: Revolutionizing an Industry’s Supply Chain Model for Competitive Advantage Q 1) What are Crocs core competencies? Ans: I think that some of the core competencies of Crocs are as follows: a. Well co-ordinated supply chain: This is one thing that sets apart Crocs from the other show manufacturers. After acquiring Foam Creations, they actively opened more production stores in different parts of the world and currently have a capacity which is much larger than the demand expected. This helps them fulfill the orders which are generated very fast. Also, because of this, they have the capability to manage their supply more efficiently depending on the demand of the market. For example, if a particular type of product if very well received, they can ramp up the production of that particular product and supply it within six weeks. Thus, minimizing stockouts and over production wastes. b. Globalized Market Demand and First Mover Advantage: Immediately after Snyder took over as the CEO of Crocs, they aggresively expanded themselves into new territories and were a significant market player in the Asian and European markets. This has enabled them to get the advantage of the first mover and establish crucial relationships with the retailers and the consumers in those markets. This has substantially decreased the threat of new entrants and is a core strategic asset for Crocs. c. Raw Materials Used, Croslite: The raw materials which are used by Crocs in the manufacture of the shoes...
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...This case discusses the astounding growth of Crocs, Inc., a manufacturer of plastic shoes, from 2003 through early 2007. Much of the company’s growth was made possible by a highly flexible supply chain which enabled Crocs to build additional product within the selling season. The normal model used within the fashion industry was to take orders well in advance of each selling season, and produce to those orders, with relatively little additional production. If demand was far in excess of this production, there would be stockouts and the company would lose the ability to capture revenue for that season. The product might, or might not, be in fashion the following year, when production would again be based on pre-season orders. Crocs’ ability to build additional shoes within the season enabled it to take advantage of strong customer demand, resulting in the company filling in-season orders totaling many times that of the initial pre-booked orders. The case describes the Crocs supply chain. It asks students to assess the company’s core competencies and how those can be exploited in the future. The case was revised in March 2011 to present information on the company’s results in 2007 and prepare students for discussions of problems would face in 2008 (covered in the B and C cases). Crocs: Revolutionizing an industry’s chain model for competitive advantage Executive Summary: Crocs, Inc. experienced astonishing growth within a short period of time and managed its highly...
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...1) What are Crocs’ core competencies? Crocs’ competencies are supply chain management and small-retailer level marketing, just in time distribution. Crocs has used its core competencies to build a brand familiarity and popularity and to distribute new models and accessories in mid-season. Their supply chain management has helped the company to create a stronger maturity map for their products, and to extend the maturity map through marketing. (Figrure 1. [write a brief description first]. Taken from the Crocs presentation) 2) How could Crocs exploit their core competencies in the future? Consider the following alternatives: a. Further vertical integration into materials b. Growth by acquisition c. Growth by product extension In the future, Crocs could grow, both by acquisition and by product extension. For product extension, they should use the Japanese product development map what it is called don’t remember any more (this development tree map can be seen below). Focus on the IP (formula) and reuse it on other products [This is a fragment connect it to previous senetence or make it a sentence. I don't understand what do you want to say by it]. This should give them a good map and guidance what product markets they can enter and extend the markets that they can work on. Product extension could create a confusion for the brand if they let it stretch on all product groups but it could be a strength also as its different products could be easily differentiated from...
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...CASE: GS-57 DATE: 06/18/07 (REV. 3/7/11) CROCS (A): REVOLUTIONIZING AN INDUSTRY’S SUPPLY CHAIN MODEL FOR COMPETITIVE ADVANTAGE If the products sell extremely well, we will build more in season, and will be back on the shelves in a few weeks. And we’ll build even more, and even more, and even more, in that same season. We’re not going to wait with a hot new product until next year, when hopefully the same trend is alive. 1 —Ronald Snyder, CEO of Crocs, Inc. On May 3, 2007, Crocs, Inc. released its results for the first quarter of the year. The footwear company, which had sold its first shoes in 2003, reported revenues of $142 million for the quarter, more than three times its sales for the first quarter of 2006. Net income, at $0.61 per share was more than 17 percent of sales, nearly four times higher than the previous year.2 These results far exceeded market expectations, which had been for earnings of $0.49 per share on $114 million of revenue.3 As part of the earnings release, the company announced a two-for-one stock split. Immediately after the announcement, the stock price jumped 15 percent. The growth and profitability of Crocs, which made funky, brightly colored shoes using an extremely comfortable plastic material, had been astounding. Much of this growth had been made possible by a highly flexible supply chain which enabled the company to build additional product to fulfill new orders quickly within the selling season, allowing it to respond to ...
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...CASES IN FINANCIAL STRATEGY Professor J. Schallheim FOR CASE BRIEFS: The answers to the following preparatory questions are not necessary or sufficient for your Case Briefs. Rather, the questions are to serve as a guide for your group discussion of the cases and a help to getting started on each case. Your final solution the case and recommendations should not necessarily be limited to the answers to these question or the assumptions in the case. FOR INDVIDUAL ASSIGNMENTS: For individual assignments, you must answer the questions labeled “Memo.” Individual Memo for Rapid Repair Auto Parts Rapid Repair’s profitability appears good but their cash balance has shrunk. Write a report that provides a financial analysis and summarizes their current situation (Hint: ratios and cash flow analysis). What changes do your recommend, if any, in 2013? Preparatory Questions for Horniman Horticulture Horniman’s profitability appears good but their cash balance has shrunk just like the previous case. Write a report that forecasts the financial outlook for 2006 (including forecasted income statement and balance sheet). How much external funds are needed (EFN), if any, for 2006? Preparatory Questions for Panera Bread Company 1. Complete the financing portion of Panera Bread Company’s 2007 forecast financial statements, and provide a forecast for the next 5 years. A worksheet has been provided for this purpose. As an initial (base case) analysis...
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...cancer. Pricing strategy: Two pricing strategies can be used with new products Skimming and Penetration. Skimming strategy will help us reach our performance objective by covering high costs of development, sacrificing high sales for high profits while capitalizing on the price insensitivity of buyers. A Penetration strategy would not be beneficial because with a lower price and a higher production cost, our profit margins will be negatively affected and our performance objective will not be reached. o (20% – 22%) / 22% = .268 [ < 1 i.e. Price Inelastic] ($.79 - $.59) / $.59 o (15% – 20%) / 20% = .988 [ < 1 i.e. Price Inelastic] ($.99 - $.79) / $.79 Vital-Aid will be sold at the manufacturer price of $0.53 and the MSRP of $.79 per 20 Oz. Bottle. Although pricing 5 flavors at $0.79 manufacturer’s price will maximize profit, The Price Elasticity of Demand At both price points are Inelastic, which means that the consumers at these price points are less price sensitive. Because elasticity is the same, competition plays a large role in the pricing decision. The manufacturer’s price of $0.53 price makes sense because it is high (above other major competition) but below the market leader Croc-Ade, also our retail price will be the highest (equal to Croc-Ade’s), fitting in with our skimming pricing strategy. The manufacturer’s price of $0.66 would place our product $0.06 higher than the leading brand which may discourage retailers from carrying a risky new product when they can...
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