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Presentation Case Study ECCO Shoes

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Alexander Achatz

on 22 January 2016

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Transcript of Presentation Case Study ECCO Shoes

Analysis of the case study
Let us introduce you to ECCO
SWOT- Analysis
Porter's Five Forces
Direct competitive environment
Direct competitive environment
Porter's Five Forces & SWOT
Important factors for evaluation
Evaluation of global value chain management @ ECCO A/S

What you need to know at the beginning
Case Study Analysis
Direct competitive environment
Porter's Five Forces & SWOT
Global value chain management
Approach for improvement
Ramifications, resources and major challenges
Conclusion and prospects

Lecture Global Markets
SCM 1 bb
Porter's Five Forces
Threat of new entrance
KPIs @ ECCO Shoes
"For those who don’t know which harbor to sail to, no wind is the right one.” (Seneca)"

Example KPIs

Operating margin
Number of complaints
Total process costs

Porter's Five Forces
The bargaining power of suppliers

In the case of ECCO the bargaining power of suppliers is low, because...

... value chain is managed in-house
... only raw materials are bought from suppliers
... power of suppliers only affects the beginning of the value chain

Challenges and required resources

Time: Plan - Do - Check - Act

Human Resources: best employees --> best result

Capital: Expenditures for staff, IT-systems, consulting, implicit costs, etc.

Intangible resources: Knowledge transfer, Licences, etc.

Ramifications on the company
Increase in:

Turnover and Revenues
New customers
Operating Margin
Porter's Five Forces
Intensity of competitive rivalry

Strong competitors (Clarks, Reebok, Nike, Timberland, etc.)

Heavy competition has led to cost reduction (Automization, etc.)

E-sales has contributed to an increase in transparency
Approach of improvement
Value Chain Analysis
Important factors for going global
Strategical aspects
Establishing on the global market/ on new parts of the market
Increase in flexibility
Possibility of competitive advantage due to lower costs

Economic aspects
Possibility to reduce costs (wages, lower prices for commodities, etc.)
Advantage of well-developed infrastructure
Lucrative market with perfectly-fitting target group

Value Chain Analysis
Thank you for your attention!

Let's walk comfortably into a successful future

Conclusion and prospects
Today is the past of tomorrow

Adapting is always necessary in today’s dynamic markets

Empiric analysis necessary for solving problems (SWOT, etc.)

Trends of the 21st century make it more difficult for companies

Digital economy: → New role of consumer

Much more to be kept in mind

Value Chain Analysis
How to measure success
→ Necessity of defining KPIs

→ Which KPIs are “the right ones” ?

→ How can they be measured?

→ Who measures, where, how and how often?

What happens with the gathered insights?
Porter's Five Forces
Strengths and Weaknesses
Opportunities and Threats
The bargaining power of buyers
Porter's Five Forces
Threat of substitutes
Threat of entry is pretty low, due to...

General saturation of market
Product differentiation
Many big players (Nike, Reebok, Timberland, Geox, ECCO, Clarks, etc.)

Range of high-quality-products (+)
Established brand, strong presence (+)
Family-owned firm - More strategic flexibility (+)
Strong dependance on the main product (-)
Distribution of facilities (-)
Recent decrease in productivity (-)

Decrease in:

Production Costs
Capital Employed

ECCO’s buyers have a relatively high bargaining power
Strong influence of the retailers
Decrease in brand loyalty
Impacts of digitalization (e-commerce, social media, etc.)
Increasing market transparency
Increase in price-sensibility
The biggest threat of substitutes are the products of already existing competitors
• Clarks
• Geox
• Timberland
• Nike
• Reebok

The role of Change Management
People are generally sluggish; therefore, change management becomes vital for any kind of change or undergo

Change --> Uncertainty --> Fear --> Resistance

Change Management is necessary to avoid resistance

All parts of the company need to work in concert

Cost reduction by outsourcing

Expanding the outsourcing strategy
Increase investment in the Chinese plants
Reduction of plants and employees in the EU
1. New marketing strategy
2. Investment in R&D
3. Increase in productivity
Improvement #1 - Marketing
Marketing Task Force
Implementation of a CMO
Green marketing campaign
New marketing plan
Improvement #2 - R&D
Improvement #3 - BP-redesign
Increase in productivity and efficiency by
employee training
Process improvement by process management
Continuous Improvement Process

China as fast growing market (O)
Sustainable production could lead to comp. advantage (O)
Development of new technologies (O)
Threat of counterfeiting (T)
Rising global competition (T)

Main activities

Inbound Logistics --> potential for competitive advantage

Operations --> Technological advantage (unique production process)

Outbound Logistics --> Also high potential for increasing efficiency

Marketing & Sales --> Major point for improvement (!!!)

Service --> Currently not really required
Support Activities

Firm Structure --> flat hierarchy, family business

HR- Management --> short distances, low wages

Technology Development --> Major strength of ECCO

Procurement --> uncompromising approach (quality)
Approach of improvement
Approach of improvement
Product development
Investment in R&D
New products
Creation of independence
Approach of improvement
Full transcript