Crocs Supply Chain

Topics: Supply chain management, Supply chain, Footwear Pages: 9 (2027 words) Published: September 2, 2011
1. What are Crocs core competencies?

* Highly flexible supply chain
* Innovative and proprietary material: crosslite
* Innovative product development
* Efficient manufacturing processes that allows the company to produce more than 250 styles of shoes * Global Marketing & Distribution; the company is selling its products in 125 countries

2. How do they exploit these competencies in the future? Consider the following alternatives:

a. Further integration into materials

Crocs has taken advantage of its manufacturing capabilities to add more variety to its products by incorporating traditional materials such as fabrics and leather into many of their styles.

The company should explore creating blends of Croslite with other materials to develop new products such as the creation of Croslite rt (relaxed technology) by blending Croslite with cotton to make sweat resistant clothing.

b. Growth by acquisition
As seen in the table below, Crocs has expanded very rapidly since the company started thru several acquisitions:

Company| Year| Price (in M)| Description| |
Foam Creations Inc| 2004| $6.90 | Manufacturer of Croslite foam clog shoes| | Jibbitz, LLC| 2006| $20.20 | Decorative charms for Crocs shoes| | Fury Hockey, Inc| 2006| $1.50 | Hockey, soccer and lacrosse equipment manufactured with Croslite| Discontinued| EXO Italia| 2006| $8.10 | Designer of ethylene vinyl acetate (EVA) products for footwear industry| | Ocean Minded, Inc| 2007| $5.50 | Manufacturer of leather sandals for beach/action sports| | Bite, LLC| 2007| $4.80 | Manufacturer of performance shoes and sports sandals| Discontinued| Tidal Trade, Inc| 2008| $4.60 | Crocs distributor in South Africa| | Tagger International| 2008| $2.00 | Manufacturer of messenger bags| Discontinued|

| | | | |

The following brands were discontinued by Crocs shortly after acquisition:

Fury Hockey was discontinued in 2008 since the company wasn’t able to extend their Croslite technology in their products since the integration didn’t work out as planned.

Bite was a shoe manufacturer whose products were very similar to Crocs. Crocs bought out the company in 2007 but decided to discontinue that line in 2008 after integrating all of Bite’s designs and development know-how into their own Crocs’ sports products.

Tagger International was discontinued by Crocs in 2009.

Due to the recent failures in acquisitions, the company should approach any future acquisitions very carefully by ensuring that the intended goals are indeed attainable. I believe that it would be more beneficial for the company to concentrate on product innovation and enter into partnerships or licensing agreements in order to expand the appeal of the brand always leveraging their key competitive advantage which is the proprietary Croslite material.

c. Growth by product extension

Owning the formula for the Croslite material used to produce their footwear is a key competitive advantage that the company has exploited in producing kneepads, socks, purses, and other products that include Croslite.

The company should exploit this technology further by developing other products or licensing the Croslite material to manufacture new products such as:

For Consumer Market:
* Children’s toys
* Garden supplies

For Business Segment:
* Boat parts/components
* Sporting goods
* Sports stadium and gym flooring

This would allow the company to branch out to a more stable business-to-business segment instead of being completely dependent on the consumer market.

3. To what degree does each of the alternatives fit the company’s core competencies? To what degree do they defocus the company away from their core competencies?

Alternatives| Focus on Core Competencies| Defocus from Core Competencies| | | |
Further integration into materials| Croslite in new...
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