Rcrocs Case Study: Evolutionizing an Industry's Supply Chain Model for Competitive Advantage

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- To what degree do the alternatives fit the company's core competencies, and to what degree do they defocus the company away from its core competencies?

Acquire companies: Acquiring companies to have more control over the supply chain and being even more flexible does completely fit their core competencies. It would make them even stronger in it. It will also make the supply chain even more stable. However, the current supply chain is also very flexible and a lot more flexible than any of Croc’s competitors. What would also come on top of that is that they would lose good deals of suppliers and eventually they would become competitors.

Develop skills themselves: This has the same benefits as acquiring companies. However, it takes a lot more time to develop a new skill, to find and also then educate skilled workforce. It would definitely also be a good idea, but take a lot longer. Therefore, acquiring companies is probably a better idea for Crocs and it would also fit their core competencies better, which is having a flexible and also fast supply chain.

Develop new products: Crocs is mainly famous for its shoes. Developing new products could on one hand open up new revenue opportunities, but it might also cannibalize or harm their current image. People know Crocs because of the shoes and not because of other products. They should watch out not to confuse their customers.

- How should Crocs plan its production and inventory? How do the company's gross margins affect this decision?

Production strategy: Crocs should continue to do it already like they did also with estimating sales for summer in the northern hemisphere based on the sales of the summer in the southern hemisphere. On top of that, it would make Crocs a lot more flexible to postpone the coloring to later in their production process. An example would be the company “United Colors of Benetton” that produces white t-shirts and then colors them according to their customers demand. They are also constantly changing the colors and this makes them very flexible in the t-shirt industry. Crocs should do the same with their shoes and color them as late in the production process as possible. The only question is, if this change in the production process would make it more costly to produce the shoes. If so, then it would lower the company’s gross margins a little bit.

What Crocs has to do as well is having very easily transferring molds. This will make them faster and ultimately lower their costs which will then increase their gross margins.

Inventory strategy: Crocs could do more drop shipping. Drop shipping means that when they have order for example from retailers, that they would send their products directly from the factory to the retailer. This would make their supply chain even faster and it would lower costs since they need less warehouses. However, they will have less control over their products. Nevertheless, it would be beneficial to do that for Crocs since it would also lower their costs and therefore increase their gross margins.