There is also no support for a distributed order management hub or application to coordinate the global supply chain. This leads to significant duplication of effort over the long-term.
Opportunities />
4.034
1. The company is excellent at creating partnerships and alliances, and needs to use the Disney model to grow the business globally.
2. Acquisitions in the sports equipment and footwear market have been managed well from an organizational integration standpoint, yet have not made significant revenue contributions. There is the potential to grow this area of the Crocs business beyond 4% as mentioned in the case study.
3. The manufacturing processes Crocs uses are based on injection molding techniques that have the potential for significant cost reduction over time. The company needs to look at these process areas and find additional savings by streamlining these production strategies.
4. Based on the evidence in the case, the company has significant potential for offering build-to-order or custom shoes. The made-to-order market for Crocs could be very significant.
5. Deciding to place compounding facilities build in Canada, China and Mexico could serve as the basis for significantly growing sales of their shoes in these markets. Crocs management needs to look at these as markets, not just low-cost production centers.
6. Global order fulfillment is an evolving core strength of the company.
Threats
1. Spreading itself too thin with the shoe style variations and the many different approaches to managing product lines has the potential to cost the company tits cost advantages due to contract manufacturing efficiencies.
2. Financial condition as of 2009 makes the company a relative easy target for a hostile takeover.
3. Significant threat of tariffs and higher production costs based on purchasing a manufacturing center in Mexico, as the U.S. government charges duties between 3% to 37.5% on inbound goods. The greater to complexity and cost in the shoe, the greater the tariff. This is a major threat for the company.
4. Risk of having too much manufacturing in one nation as manufacturing partners in China contribute 55% of global units sold.
References
Bruell, A.. "Crocs gets animated in push to highlight product breadth "
PRweek 1 Jul 2010
Finnegan, C., E. Olson, and S. Slater. "It's More Than Green to be Keen. " Marketing Management 18.5 (2009): 26.
Appendix
TABLE 1: COMPARATIVE ANNUAL RATIO REPORT
(RATIO, EXCEPT AS NOTED)
WOLVERN WW
DECKERS OUT
CROCS INC
MADDEN ST
K-SWISS
ROCKY BRAND
ICONIX BRAN
LACROSSE FT
Dec09
Dec09
Dec09
Dec09
Dec09
Dec09
Dec09
Dec09
LIQUIDITY
Current Ratio
3.790
5.165
3.084
3.655
10.164
8.263
2.118
4.562
Quick Ratio
2.440
4.151
1.784
2.785
8.274
3.781
1.994
2.602
Working Capital Per Share
7.475
10.883
2.108
5.069
7.389
16.916
2.071
8.507
Cash Flow Per Share
1.570
3.289
(0.145)
2.069
(0.664)
1.345
1.162
1.297
ACTIVITY
Inventory Turnover
3.650
4.850
2.604
9.262
2.453
2.205
2.960
Receivables Turnover
6.639
8.812
9.572
10.279
6.313
4.214
6.313
Total Asset Turnover
1.604
1.502
1.492
1.712
0.651
1.274
0.137
1.607
Average Collection Per (Days)
54.227
40.852
37.610
35.023
57.027
85.426
89.238
57.025
Days to Sell Inventory
98.639
74.225
38.867
Operating Cycle (Days)
73.890
PERFORMANCE
Sales/Net PP&E
14.889
22.944
9.085
22.001
10.916
10.123
34.318
16.406
Sales/Stockholder Equity
2.284
1.655
2.245
1.955
0.798
2.782
0.243
2.121
PROFITABILITY
Oper.Margin Before Depr (%)
12.456
23.665
4.654
16.351
(11.620)
6.888
67.703
9.048
Oper.Margin After Depr (%)
11.009
22.412
0.055
15.085
(13.348)
4.134
64.082
7.104
Pretax Profit Margin (%)
7.783
22.532
(7.529)
15.433
(15.437)
0.807
52.981
5.900
Net Profit Margin (%)
5.623
14.362
(6.516)
9.572
(11.423)
0.512
33.939
3.960
Return on Assets (%)
8.745
19.495
(10.269)
15.330
(7.990)
0.719
4.167
6.220
Return on Equity (%)
12.844
23.768
(14.630)
18.712
(9.112)
1.425
8.262
8.400
Return on Investment (%)
12.815
23.742
(14.583)
18.712
(9.089)
0.854
4.881
8.400
Return on Average Assets (%)
9.020
21.572
(9.721)
16.387
(7.439)
0.652
4.661
6.364
Return on Average Equity (%)
13.578
26.675
(14.641)
21.141
(8.778)
1.438
9.866
8.677
Return on Average Invest.(%)
13.562
26.646
(14.618)
21.141
(8.701)
0.769
5.468
8.677
LEVERAGE
Interest Coverage Before Tax
(208.398)
(31.522)
(37.871)
1.247
3.845
Interest Coverage After Tax
95.957
(132.470)
(27.146)
(27.764)
1.157
2.822
Long-Term Debt/Common Eq.(%)
0.223
0.000
0.317
0.000
0.247
66.781
62.600
0.000
Long-Term Debt/Shrhldr Eq.(%)
0.223
0.000
0.317
0.000
0.247
66.781
62.600
0.000
Total Debt/Invested Cap.(%)
0.334
0.000
0.538
0.000
1.391
40.414
43.042
0.000
Total Debt/Total Assets (%)
0.228
0.000
0.379
0.000
1.222
34.024
36.745
0.000
Total Assets/Common Equity
In addition to these accomplishments, the company also branched into over a dozen businesses and has successfully created one of the most successful supply chains globally today (Barrett, 2003). Along the way to these stellar accomplishments however Nike has been accused of going too easy on suppliers who violate child labor laws and having questionable ethics (Doorey, 2011). It has also been experiencing high legal costs due to the