Crocs Value Chain
Crocs entered the shoe market with a new style of brightly colored footwear. Crocs designed and manufactured footwear for all age groups. Utilizing an innovative value chain supported the phenomenal growth of the company. This paper will discuss the company’s leadership, flexible supply chain and product diversification and how these aspects contribute to the overall value chain of the company.
Crocs began in 2002 by introducing a revolutionary boat shoe. The shoes became successful very quickly and the company founders decided to work with an old friend, Ronald Snyder, who had experience in manufacturing, purchasing companies, and merging the ...view middle of the document...
Many of the manufactures in Europe were not comfortable with this system. The supply chain model envisioned by Crocs needed nimble manufacturers. This time of “just-in-time” (p 37) manufacturing as explained by Womck and Jones (2003), allowed Crocs to quickly respond to demands. Finally, Crocs decided they would need to develop manufacturing operations owned by the company (Crocs: Revolutionizing, 2007).
Crocs changed the way shoes were purchased by suppliers. Instead of suppliers making bulk orders months before each season, Crocs supported orders throughout the year. By owning manufacturing sites, the company was able to rapidly manufacture more shoes of the hottest colors with amazing efficiency (Alsever, 2006). Snyder and the rest of the leadership team identified the supply chain as a value and committed to supporting the model.
Now that Crocs had the ability to shift manufacturing needs rapidly, customers were able to order a hot product and increase the sales throughout the season. The footwear industry typically had 2 ordering seasons. Retailers made bulk orders for the entire season and hoped the shoes chosen were fashionable for current trends (Crocs: Revolutionizing, 2007). Customers did not have to take the risk of ordering too many shoes and having to make deep discounts to the shoe prices at the end of the season if the shoes did not sell well. Crocs also offered retailers the ability to purchase shoes in custom configurations (Crocs: Revolutionizing, 2007).
Offering flexible ordering options built a positive relationship between retailers and Crocs. Crocs continued relationships with small as well as large retailers. Crocs maintained the relationship with the small retailers, these retailers provided an important place in the marketplace (Crocs: Revolutionizing, 2007). As the collaboration between the manufacturer and the customer improves, all aspects of the value chain benefit (Robbins & Coulter, 2009). With the commitment Crocs has shown to the wide range of customers, the company has secured long term relationships.
Crocs initially began distributing 2 models of shoes. The two models accounted for approximately 62 percent of the company’s footwear sales in 2006 (Crocs: Revolutionizing, 2007). The company made a strategic decision to design shoes for particular professions, special needs as well as licensing...