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Crocs Case Study

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Karen McNeely

on 9 July 2013

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Transcript of Crocs Case Study

On a boat in the Caribbean in 2002...
Standard Shoe Supply Chain Model:
Forecast & Prebook
Phase One: Taking Over Production
Purchased Canadian "Foam Creations" in 2004
Raw material shipped to Italy for compounding
Compounded, colorized pellets shipped to Canada
Finished products shipped to Denver for packaging/storage
1. Croslite Material
2. Marketing
3. Highly Flexible Supply Chain
Core Competencies

Large vs. Small Retailers
Building the brand
Negotiating position
By mid-2007, 75% of revenue from large retailers
Ability to add capacity
Ability to adjust to demand location
"Launch the world at once"
In-store reps/grassroots
Holes increase air flow
Croslite is odor
and bacteria
Material cushiony for long-wearing comfort
Heel straps to hold feet in or fold in front for easy slip-on
Small nubs on the
inside help
prevent slipping
and increase blood
Soles are slip-resistant and non- marking
Total Vertical Integration?
Not likely to create greater success (mining resin is not a core competency)
Expanding at retail has potential
Exploiting Competencies:
Growth By Acquisition:
Foam Designs 2004
Fury 2006
EXO Italia 2006
Jibbitz 2006
Ocean Minded 2007
Continue to expand on Crocs model, acquire other brands/ideas
Growth By Product Extension:
Continue product expansion using Croslite
Now 350+ different models of shoes for men, women, boys and girls, continue partnership with:
Crocs Rx, college-themes, Disney, Mario Batali, etc.
Continue perception/branding expansion, new possibilities in unique world markets
2. Marketing
3. Highly flexible supply chain
Phase Two: Global Production via
Contract Manufacturers
Manufacturers in: China, Florida, Mexico, Italy
Market entry into Asia and Europe
Phase Three: In-House Global Supply Chain
Maintained Chinese 3rd party manufacturer
Took control of compounding activity in 2006 (China, Canada, Mexico compounding facilities added)
Cut out Colorado as bulk order warehouse
Factors Affecting Gross Margin
Increased vertical integration
Product Expansion
1. Croslite Material
Crocs Today
"A Shoe for Every You"
Full transcript