Crocs (A): Revolutionizing an Industry's Supply Chain Model for Competitive Advantage SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Crocs (A): Revolutionizing an Industry's Supply Chain Model for Competitive Advantage
This case discusses the astounding growth of Crocs, Inc., a manufacturer of plastic shoes, from 2003 through early 2007. Much of the company's growth was made possible by a highly flexible supply chain that enabled Crocs to build additional product within the selling season. The normal model used within the fashion industry was to take orders well in advance of each selling season, and produce to those orders, with relatively little additional production. If demand was far in excess of this production, there would be stockouts and the company would lose the ability to capture revenue for that season. The product might or might not be in fashion the following year, when production would again be based on preseason orders. Crocs' ability to build additional shoes within the season enabled it to take advantage of strong customer demand, resulting in the company filling in-season orders totaling many times that of the initial prebooked orders. The case describes the Crocs supply chain. It asks students to assess the company's core competencies and how those can be exploited in the future. The case was revised in March 2011 to present information on the company's results in 2007 and prepare students for discussions of problems that would be faced in 2008 (covered in the B and C cases).
Authors :: Michael Marks, Chuck Holloway, Hau Lee, David W. Hoyt
Swot Analysis of "Crocs (A): Revolutionizing an Industry's Supply Chain Model for Competitive Advantage" written by Michael Marks, Chuck Holloway, Hau Lee, David W. Hoyt includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Crocs Season facing as an external strategic factors. Some of the topics covered in Crocs (A): Revolutionizing an Industry's Supply Chain Model for Competitive Advantage case study are - Strategic Management Strategies, Manufacturing, Strategy, Supply chain and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Crocs (A): Revolutionizing an Industry's Supply Chain Model for Competitive Advantage casestudy better are - – geopolitical disruptions, increasing energy prices, talent flight as more people leaving formal jobs, supply chains are disrupted by pandemic , there is increasing trade war between United States & China, there is backlash against globalization, increasing commodity prices,
cloud computing is disrupting traditional business models, increasing transportation and logistics costs, etc
Introduction to SWOT Analysis of Crocs (A): Revolutionizing an Industry's Supply Chain Model for Competitive Advantage
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Crocs (A): Revolutionizing an Industry's Supply Chain Model for Competitive Advantage case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Crocs Season, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Crocs Season operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Crocs (A): Revolutionizing an Industry's Supply Chain Model for Competitive Advantage can be done for the following purposes –
1. Strategic planning using facts provided in Crocs (A): Revolutionizing an Industry's Supply Chain Model for Competitive Advantage case study
2. Improving business portfolio management of Crocs Season
3. Assessing feasibility of the new initiative in Strategy & Execution field.
4. Making a Strategy & Execution topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Crocs Season
Strengths Crocs (A): Revolutionizing an Industry's Supply Chain Model for Competitive Advantage | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Crocs Season in Crocs (A): Revolutionizing an Industry's Supply Chain Model for Competitive Advantage Harvard Business Review case study are -
Highly skilled collaborators
– Crocs Season has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Crocs (A): Revolutionizing an Industry's Supply Chain Model for Competitive Advantage HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
High brand equity
– Crocs Season has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Crocs Season to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Innovation driven organization
– Crocs Season is one of the most innovative firm in sector. Manager in Crocs (A): Revolutionizing an Industry's Supply Chain Model for Competitive Advantage Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Superior customer experience
– The customer experience strategy of Crocs Season in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Crocs Season digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Crocs Season has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Low bargaining power of suppliers
– Suppliers of Crocs Season in the sector have low bargaining power. Crocs (A): Revolutionizing an Industry's Supply Chain Model for Competitive Advantage has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Crocs Season to manage not only supply disruptions but also source products at highly competitive prices.
High switching costs
– The high switching costs that Crocs Season has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Sustainable margins compare to other players in Strategy & Execution industry
– Crocs (A): Revolutionizing an Industry's Supply Chain Model for Competitive Advantage firm has clearly differentiated products in the market place. This has enabled Crocs Season to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Crocs Season to invest into research and development (R&D) and innovation.
Operational resilience
– The operational resilience strategy in the Crocs (A): Revolutionizing an Industry's Supply Chain Model for Competitive Advantage Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Learning organization
- Crocs Season is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Crocs Season is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Crocs (A): Revolutionizing an Industry's Supply Chain Model for Competitive Advantage Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Successful track record of launching new products
– Crocs Season has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Crocs Season has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Cross disciplinary teams
– Horizontal connected teams at the Crocs Season are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Weaknesses Crocs (A): Revolutionizing an Industry's Supply Chain Model for Competitive Advantage | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Crocs (A): Revolutionizing an Industry's Supply Chain Model for Competitive Advantage are -
Aligning sales with marketing
– It come across in the case study Crocs (A): Revolutionizing an Industry's Supply Chain Model for Competitive Advantage that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Crocs (A): Revolutionizing an Industry's Supply Chain Model for Competitive Advantage can leverage the sales team experience to cultivate customer relationships as Crocs Season is planning to shift buying processes online.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Crocs Season is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Crocs (A): Revolutionizing an Industry's Supply Chain Model for Competitive Advantage can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Interest costs
– Compare to the competition, Crocs Season has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Low market penetration in new markets
– Outside its home market of Crocs Season, firm in the HBR case study Crocs (A): Revolutionizing an Industry's Supply Chain Model for Competitive Advantage needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Crocs (A): Revolutionizing an Industry's Supply Chain Model for Competitive Advantage, it seems that the employees of Crocs Season don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Crocs Season supply chain. Even after few cautionary changes mentioned in the HBR case study - Crocs (A): Revolutionizing an Industry's Supply Chain Model for Competitive Advantage, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Crocs Season vulnerable to further global disruptions in South East Asia.
Slow decision making process
– As mentioned earlier in the report, Crocs Season has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Crocs Season even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Crocs (A): Revolutionizing an Industry's Supply Chain Model for Competitive Advantage, in the dynamic environment Crocs Season has struggled to respond to the nimble upstart competition. Crocs Season has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High bargaining power of channel partners
– Because of the regulatory requirements, Michael Marks, Chuck Holloway, Hau Lee, David W. Hoyt suggests that, Crocs Season is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Skills based hiring
– The stress on hiring functional specialists at Crocs Season has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Products dominated business model
– Even though Crocs Season has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Crocs (A): Revolutionizing an Industry's Supply Chain Model for Competitive Advantage should strive to include more intangible value offerings along with its core products and services.
Opportunities Crocs (A): Revolutionizing an Industry's Supply Chain Model for Competitive Advantage | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Crocs (A): Revolutionizing an Industry's Supply Chain Model for Competitive Advantage are -
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Crocs Season can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Crocs Season in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Strategy & Execution segment, and it will provide faster access to the consumers.
Creating value in data economy
– The success of analytics program of Crocs Season has opened avenues for new revenue streams for the organization in the industry. This can help Crocs Season to build a more holistic ecosystem as suggested in the Crocs (A): Revolutionizing an Industry's Supply Chain Model for Competitive Advantage case study. Crocs Season can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Manufacturing automation
– Crocs Season can use the latest technology developments to improve its manufacturing and designing process in Strategy & Execution segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Crocs Season can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Crocs Season to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Loyalty marketing
– Crocs Season has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Building a culture of innovation
– managers at Crocs Season can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Strategy & Execution segment.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Crocs Season can use these opportunities to build new business models that can help the communities that Crocs Season operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Developing new processes and practices
– Crocs Season can develop new processes and procedures in Strategy & Execution industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Crocs Season in the consumer business. Now Crocs Season can target international markets with far fewer capital restrictions requirements than the existing system.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Strategy & Execution industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Crocs Season can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Crocs Season can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Buying journey improvements
– Crocs Season can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Crocs (A): Revolutionizing an Industry's Supply Chain Model for Competitive Advantage suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Threats Crocs (A): Revolutionizing an Industry's Supply Chain Model for Competitive Advantage External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Crocs (A): Revolutionizing an Industry's Supply Chain Model for Competitive Advantage are -
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Crocs Season will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Crocs Season.
Increasing wage structure of Crocs Season
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Crocs Season.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Crocs Season in the Strategy & Execution sector and impact the bottomline of the organization.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Crocs Season can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Crocs (A): Revolutionizing an Industry's Supply Chain Model for Competitive Advantage .
Easy access to finance
– Easy access to finance in Strategy & Execution field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Crocs Season can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Crocs (A): Revolutionizing an Industry's Supply Chain Model for Competitive Advantage, Crocs Season may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Strategy & Execution .
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Crocs Season needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Crocs Season in the Strategy & Execution industry. The Strategy & Execution industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Crocs Season business can come under increasing regulations regarding data privacy, data security, etc.
Environmental challenges
– Crocs Season needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Crocs Season can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
High dependence on third party suppliers
– Crocs Season high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Weighted SWOT Analysis of Crocs (A): Revolutionizing an Industry's Supply Chain Model for Competitive Advantage Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Crocs (A): Revolutionizing an Industry's Supply Chain Model for Competitive Advantage needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Crocs (A): Revolutionizing an Industry's Supply Chain Model for Competitive Advantage is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Crocs (A): Revolutionizing an Industry's Supply Chain Model for Competitive Advantage is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Crocs (A): Revolutionizing an Industry's Supply Chain Model for Competitive Advantage is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Crocs Season needs to make to build a sustainable competitive advantage.
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