Supply Chain for Competitive Advantage
CROCS: REVOLUTIONIZING AN INDUSTRY’S SUPPLY CHAIN FOR COMPETITIVE ADVANTAGE
BHOOSHAN PARIKH
CBS FTMBA 2008-09 OPERATIONS MANAGEMENT TERM PAPER 3/16/2009
Case Study
This paper analyses and discusses the supply chain process of Crocs Inc. in a competitive and dynamic footwear
industry. The paper critically evaluates the existing supply chain of the company against its current performance and
changing market conditions and explains reasons for loss of competitive advantage of the company. The paper ends with
recommendations for a change of supply chain strategy by supporting the arguments with relevant theories and models and how Crocs Inc. can regain its competitive advantage.
INTRODUCTION Crocs, Inc. was established in 2002 in Colorado, USA and is today amongst the fastest growing brands and companies in the world. The company started designing and
manufacturing footwear for all age groups under the Crocs brand, which are now sold in over 100 countries around the world. The Crocs brand shoes feature the proprietary closedcell resin, Croslite, a special kind of plastic that softens up due to the body heat of the wearer resulting in a perfect fit and a high degree of comfort. The innovative, „trade secreted‟ material has been considered as significantly original in the footwear industry and the shoes‟ unique looks and range of brightly coloured designs have made Crocs highly favoured by people who are looking for comfortable, lightweight, slip-resistant, and odour-free footwear. The phenomenal success of Crocs in a short span of less than 10 years has been discussed widely, and besides the skyrocketing popularity of the shoes, one of the main reasons behind this mindboggling growth has been the company‟s efficient supply chain management. Until 2006, Crocs, Inc. had the highest gross profit margin in the footwear industry at 56.5 % as compared to 43.7 % and 47.3 % by the giants of footwear, Nike and Timberland respectively, and the sales revenues
BHOOSHAN PARIKH
CBS FTMBA 2008-09 OPERATIONS MANAGEMENT TERM PAPER 3/16/2009
Case Study
This paper analyses and discusses the supply chain process of Crocs Inc. in a competitive and dynamic footwear
industry. The paper critically evaluates the existing supply chain of the company against its current performance and
changing market conditions and explains reasons for loss of competitive advantage of the company. The paper ends with
recommendations for a change of supply chain strategy by supporting the arguments with relevant theories and models and how Crocs Inc. can regain its competitive advantage.
INTRODUCTION Crocs, Inc. was established in 2002 in Colorado, USA and is today amongst the fastest growing brands and companies in the world. The company started designing and
manufacturing footwear for all age groups under the Crocs brand, which are now sold in over 100 countries around the world. The Crocs brand shoes feature the proprietary closedcell resin, Croslite, a special kind of plastic that softens up due to the body heat of the wearer resulting in a perfect fit and a high degree of comfort. The innovative, „trade secreted‟ material has been considered as significantly original in the footwear industry and the shoes‟ unique looks and range of brightly coloured designs have made Crocs highly favoured by people who are looking for comfortable, lightweight, slip-resistant, and odour-free footwear. The phenomenal success of Crocs in a short span of less than 10 years has been discussed widely, and besides the skyrocketing popularity of the shoes, one of the main reasons behind this mindboggling growth has been the company‟s efficient supply chain management. Until 2006, Crocs, Inc. had the highest gross profit margin in the footwear industry at 56.5 % as compared to 43.7 % and 47.3 % by the giants of footwear, Nike and Timberland respectively, and the sales revenues
References: 17. Harrison, A. and New, C. (2002) The role of coherent supply chain strategy and performance management in achieving competitive advantage: an international survey, Journal of the Operational Research Society, Vol. 53, No. 3, pp. 263-271. 18. Harvard Business Review on Supply Chain Management (2006), Harvard Business School Press. 19. Johnson, E. M. And Pyke D. F., Integration and Globalization in the Age of e-Business, 21st Century Management: A Reference Handbook (2008), Sage Publications. 20. Taylor, D. (1997) Global Cases in Logistics and Supply Chain Management, Thomson. Bhooshan Parikh CBS FT MBA 2008-09 Term Paper-Operations Management Page | 18