The availability of substitutes increases the importance of product positioning, brand recognition and product differentiation for Crocs. In earlyCrocs made its first step into a product line that was not predominantly resin with the acquisition of Ocean Minded.
Though any consumer product company cannot forget Customers, Customer Intimacy is probably the area of least strategic focus within Crocs. Crocs Management has to determine how to continue their successful operating model with a more complex product line.
While a third party was integral to the foam creation process, Crocs owned proprietary rights to the creation of Croslite. Crocs uses multiple distribution partners, which minimizes leverage of any single supplier.
The focus on these narrow uses initially helped Croc mitigate the risk of consumer preference for substitutes. Crocs differentiates itself from other shoes via the closed cell resin used to make their shoes that is colorful, non-marking, non-skid, comfortable and odor free. Consumer trends have a significant impact on Crocs.
Crocs is primarily focused on Product Leadership, which is apparent through their focus on marketing, brand awareness and their ability to deliver product to their customers within a relatively short timeframe, based on specific product demand successful sell through to consumers.
The size of the industry and lack of dominant global players within the specific product categories Crocs plays in benefits the company. To maintain their competitive advantage, Crocs needs to figure out how to continue to deliver their products to customers under their highly successful delivery model.
The business grew rapidly, through both organic and acquisitive efforts, going public in early If not carefully managed, Crocs could face supply availability and cost issues as they continue with their flexible manufacturing model, which is unique in the shoe industry.
Crocs are not inexpensive relative to many of their substitutes, so brand awareness and loyalty is critical to the company.
While Crocs began as simply a distributor of a novel product invented and manufactured by another firm, within two years of their inception, they began a journey to develop a supply chain model unique within the shoe industry.
Additionally, companies enter and exit the shoe market regularly, with varying degrees of success. They stay close to their customers to the extent required to be responsive to changes in demand, but given the number of customers and breadth of retailers they sell to, they did not have a high concentration of sales within any one customer or customer group where they would benefit from a sharper focus in this area to the detriment of Product Leadership and Operational Excellence.
While their 1 focus is clearly Product Leadership, Crocs has also focused on Operational Excellence, which is critical to their ability to be responsive sudden changes in customer demand.
As they expand into new product lines, they will need to carefully manage their raw material requirements and vendor development efforts to maintain minimal supplier leverage.
Resins are a widely available raw material that is relatively low cost, which does not allow raw material suppliers to have significant leverage over the company. Establishing a larger scale operation increases the barrier to entry.
They closely protect the tooling used to mold their shoes, even maintaining ownership and control of the molds used by their manufacturing partners to minimize the risk of knock offs entering the market.
The shoe industry is large and global, with lots of companies, big and small, regional and multi-national. Crocs continued to tweak its operations, including strategic partnerships and wholly-owned facilities, as sales grew globally through marketing efforts and acquisitions.
Additionally, Crocs holds intellectual property, acquired through Foam Creations, for the compounding of their closed cell resin, which makes their product uniquely non-marking and odor free. Low Power of Customers: Low Power of Suppliers: Having a significant number of diverse customers across the globe minimizes customer leverage.
Moderate Threat of New Competitors: Love it or hate it, Crocs has a high level of brand recognition globally, which is critical to their success and makes it more difficult for others to compete with them globally. The introduction of products that were not manufactured solely from Croslite presented a new challenge to their historically successful flexible manufacturing and distribution model.
Assembly efforts were relatively minimal, entailing of gluing a couple pieces and snapping on one or two straps. Low Intensity of Existing Rivalry: High Threat of Substitutes:Crocs Case Study Words | 6 Pages Crocs made a splash in when they introduced their funny looking, brightly colored, plastic clogs that the whole family could wear (Hoyt & Silverman, ).
Q2: Use the FCF Valuation Template below to modify the analysis in the case, Ex. 6 (incorrectly labeled Ex.
5), calculating and defending an estimate of Crocs value. Soln: The preferred method to determine a company’s going-concern value by.
Crocs Inc. Case Solution,Crocs Inc. Case Analysis, Crocs Inc. Case Study Solution, This case forces students to learn the value drivers, in particular, growth and profits. It is also effective in drawing attention to the relationship betw. Blu Sabrina Bonnie Ivy Iris Tracey Frank Strength & Weakness Internal Environment Analysis-7S 7s Crocs supply chain Examples of our arguments Lessons learnt.
Crocs uses multiple distribution partners, which minimizes leverage of any single supplier. Crocs initial product was manufactured out of % resin, which was compounded by a third party who has a strategic relationship with Foam Creations, the original.
Crocs Case - Correct Answers 1. What are Crocs core competencies? • A vertically integrated supply chain • Highly flexible supply chain allows for fulfilment in-season and allows Crocs to be more responsive to fluctuations in demand.
• Crostlitematerial was unique and important to Crocs because it gave the company a competitive advantage. .Download