Crocs SWOT Analysis the Intent

CROCS SWOT Analysis

The intent of this analysis is to evaluate the strengths, weaknesses, opportunities and threats (SWOT) of Crocs Company (CROX; NASDAQ). This analysis is based on the Stanford Graduate School of Business case study, Crocs: Revolutionizing an Industry's Supply Chain Model for Competitive Advantage. Additional resources have also been used for completing the analysis as well from EBSCO Host.

Strengths

The following are the key strengths of Crocs Company during the time period of the case study:

The ability to define and execute strategies that lead to cost-effective vertical integration of their supply chain while at the same time driving down production and manufacturing costs. The acquisition of Foam Designs in 2004 to gain control over Croslite is a case in point, as the decision to purchase production centers in Europe to gain greater control over production facilities.

Intuitive sense of when to use contract manufacturing to expand production capacity while penetrating new markets, as is the case in Asia.

3. Rapid innovation cycles from defining a new shoe or an entire line of new shoes and apparel, and the ability to transform the product designs into strong pull-through demand through distribution channels (Bruell, et.al.).

4. Custom configuration of orders and their fulfillment that gains Crocs market share in smaller stores, which lead to larger chains seeking them out as suppliers.

5. Strong product management and supply chain management coordination in the company is evident in how quickly Crocs reaches 31 models that span across all age groups and demographics.

6. Latent product customization and mass customization capability demonstrated in the ability to quickly design, machine tool for extrusion-based production and deliver entirely new product designs within weeks (Finnegan, Olson, Slater, 26).

7. Effective use of marketing strategies to gain pull-through of their unique show designs led to rapid and profitable growth (Bruell, et.al.). Crocs Marketing understands differentiation and the unique experience their shoes provide, and use that as the center of their marketing and channel management strategies with retailers.

Weaknesses

1. Crocs Company is too reliant just on their shoe product lines with 96% of total revenue coming from these products and only 4% from accessories and sporting goods.

2. Forecasting of existing shoe styles, accessories, and the corresponding supply chain management (SCM) transactions were problematic as the industry had very static order cycles. Over the duration of years covered by the case study, Crocs is able to transform the push-based supply chain to a more demand-driven one however.

3. New product forecasting, inventory management and the reliance on legacy systems that are not integrated with each other all lead to major delays in fulfilling orders and launching new products.

4. Lack of supply chain optimization from an order fulfillment and logistics standpoint as all warehousing is managed in Colorado originally. The company moves to alleviate this weakness by creating warehouses in each production center however.

5. Inefficiencies in Italian compounding operation impacts the global supply chain and production functions, leading to delays in production scheduling and order fulfillment.

6. Reliance on a homegrown database system that was failing to scale to the needs of the global supply chain Crocs has created. 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

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.