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

Case Crocs: revolutionizing an industry's supply chain model for competitive advantage

1. What are croc’s core competencies

Flexible supply chain: Croc’s supply chain is extremely flexible. Other companies have to plan the volume they produce well ahead of time, while Croc’s is very flexible at producing more if the demand effectively exceeds the forecasts. Therefore, Crocs has less unsold goods than other companies and they can profit more from a potential higher demand. This supply chain is also good for small retailers because they can order small quantities to not take a too big risk, but if the demand is high, they can flexibly order more.

Croslite material: The main material of Crocs is Croslite. They bought the company that invented this material and therefore they are the intellectual property owner of this material now. It is unique and very good because it is light, comfortable and doesn’t start smelling bad.

Management: The people in charge of leading the company are very experienced, especially the CEO at that time has a lot of experience already in the retail industry. He was an executive at an electronics company.

Close relationship to sellers: Crocs has very good and very close relationships with sellers such as retail stores. This results in higher trust and puts Crocs in a better position to make contracts with retailers. For example usually big retailers have financial penalties if some delivery is late. Since crocs has good relationship, it often does not have financial penalties in their contracts.

Marketing: Crocs is very strong in Marketing and goes to many roadshows. Since it also produces in many countries it can leverage its “Made in country XYZ” effect, for example especially in Canada this is good. Because of its global network, their value chain with local presences in many countries, it can launch a product easily at once all over the world.

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

Acquire companies: Crocs can acquire even more companies and vertically integrate them into their supply chain. Especially companies with the raw materials or such that own injection machines. This would make Crocs even more flexible and they would be even more in full control of their supply chain.

Develop skills themselves: Instead of acquiring companies, Crocs can also try to get the knowledge and the skills themselves to do more steps of the supply chain themselves. However, it probably takes longer than just acquiring a company.

Develop new products: The Croslite material is one of Croc’s main competencies. What they could do is to extend their product range to even more products and make more money by that. Most sales are coming from shoes at the moment, but maybe they can be even more creative and use the material for more products. They can also invest more into partnering up with big companies. They are already doing that with Disney for example, but they can also think of Bollywood in India or other partners.