Crocs
9
THE EVOLUTION OF CROCS, INC.:
WILL CROCS FACE EXTINCTION?
Scott Droege, Western Kentucky University
Lily C. Dong, University of Alaska-Fairbanks
CASE DESCRIPTION
The primary subject matter of this case concerns the four “Ps” of marketing—product, price, place, and promotion. Secondary issues examined include entrepreneurship and business strategy.
The case has a difficulty level three, appropriate for junior level courses. The case is designed to be taught in one class hour and is expected to require one hour of outside preparation by students.
CASE SYNOPSIS
Crocs, Inc. was founded in 2002 by three avid boaters who began a small company to make shoes specifically designed for boating. The owners were surprised by their own success; Crocs rapidly moved from a boating shoe to a fashion statement. After taking the company public in 2006,
Crocs has come under increasing shareholder pressure to diversify. The fear was that Crocs limited product line was a “one trick pony” and as soon as consumer fashion tastes changed, Crocs sales would quickly decline. Crocs has responded to this pressure by moving beyond shoes to increase the variety of its product line, but in doing so the firm has encountered entrenched competitors that have fought back against Crocs’ market encroachment. Management is well aware that competition and shifting consumer tastes could make Crocs extinct. These threats will drive Crocs to further hone its product, place, pricing, and promotion decisions. Exactly how Crocs will manage this, however, remains to be seen.
BACKGROUND: THE BIRTH OF CROCS
The birth of Crocs began in May of 2002, when three friends from Boulder, Colorado went sailing in the Caribbean. This was a rather unremarkable event in itself. However, soon their names,
Lyndon "Duke" Hanson, Scott Seamans, and George Boedecker, would become well-known in the footwear industry.
The thing that made this sailing trip stand out lay in the hands of one of the
THE EVOLUTION OF CROCS, INC.:
WILL CROCS FACE EXTINCTION?
Scott Droege, Western Kentucky University
Lily C. Dong, University of Alaska-Fairbanks
CASE DESCRIPTION
The primary subject matter of this case concerns the four “Ps” of marketing—product, price, place, and promotion. Secondary issues examined include entrepreneurship and business strategy.
The case has a difficulty level three, appropriate for junior level courses. The case is designed to be taught in one class hour and is expected to require one hour of outside preparation by students.
CASE SYNOPSIS
Crocs, Inc. was founded in 2002 by three avid boaters who began a small company to make shoes specifically designed for boating. The owners were surprised by their own success; Crocs rapidly moved from a boating shoe to a fashion statement. After taking the company public in 2006,
Crocs has come under increasing shareholder pressure to diversify. The fear was that Crocs limited product line was a “one trick pony” and as soon as consumer fashion tastes changed, Crocs sales would quickly decline. Crocs has responded to this pressure by moving beyond shoes to increase the variety of its product line, but in doing so the firm has encountered entrenched competitors that have fought back against Crocs’ market encroachment. Management is well aware that competition and shifting consumer tastes could make Crocs extinct. These threats will drive Crocs to further hone its product, place, pricing, and promotion decisions. Exactly how Crocs will manage this, however, remains to be seen.
BACKGROUND: THE BIRTH OF CROCS
The birth of Crocs began in May of 2002, when three friends from Boulder, Colorado went sailing in the Caribbean. This was a rather unremarkable event in itself. However, soon their names,
Lyndon "Duke" Hanson, Scott Seamans, and George Boedecker, would become well-known in the footwear industry.
The thing that made this sailing trip stand out lay in the hands of one of the
References: Anderson, Diane. 2006. When Crocs attack. Business 2.0, November 1. Bosley, Elisa. 2004. Crocs rock. Footwear News, February 9. Crocs, Inc. 2006. S.E.C. 10K Filing. December 31. Fidelity Investments. 2007. Company research highlights: Crocs, Inc. August 8. First Call. 2007. First Call earnings valuation report: Crocs, Inc. August 1. Matson, Tia. 2007. Crocs names U.K. Footwear Brand of the Year. Crocs, Inc. Press Release. July 7. Crocs, Inc. 2007. S.E.C 10Q Filing. March 31. Hudson, Kris. 2007. Crocs on the catwalk. The Wall Street Journal, Feb, 13. Jackson, Candace. 2006. Clogs put their best foot forward. The Wall Street Journal, July 22. Pickett, Debra. 2006. Flip-flopping on Crocs. Chicago Sun-Times, June 30. Russak, Brian. 2006. Marketing highs. Footwear News, Sept. 15. Scardino, Emily. 2006. Brand of The Year Award. Footwear News, December 5. S&P Compustat. 2007. Company reports: Crocs, Inc. July 9. Thomson Financial. 2007. Crocs, Inc.: Company in context report. July 21. Journal of the International Academy for Case Studies, Volume 15, Number 3, 2009 Reproduced with permission of the copyright owner