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Faisal - Operational and process management - Essay Example

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Abstract This paper critically analysed and discussed the supply chain activities at Crocs Inc. in a very dynamic and competitive industry of foot wear production. The paper was critically evaluated the existing supply chain of Crocs in relation to its current performance and the every-changing market environment…
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Faisal - Operational and process management
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Faisal - Operational and process management

Download file to see previous pages... The paper also described views on how this company can better their stand in the crowded footwear industry and end up being a stronger competitor to its key challenges in its business environment. The paper presented a number of models and theories for both the analysis of the prevalent systems at Crocs, and offered insights on how they can integrate into success and create a more stable company. The paper also portrayed different perspectives by providing postulations against vertical integration as strategy to gain competitive advantage. 1.0 Introduction Crocs, Inc. was initiated in the year 2002 in Colorado and is arguably one of today’s fastest growing brands and organisations at the world level. The company initially produced footwear for all age categories under the same brand and is now sold well in over 100 countries. The brand features a special kind of plastic that is softened by body heat of the individual wearing the shoe, resulting in high degree of comfort. Sales for the company jumped 256% in 2006 (Thompson, 2006). There has been much discussion about Crocs’ success and besides the popularity of its shoes, the major reasons for the enormous growth of the company has been its efficient chain supply management. Crocs, Inc. has shown that being flexible and being focused on digressing from the conventional norms of the industry, they could achieve more success and profits than their peers (Ashkanasy and Wilderom). This efficiency was the result of their Chief Executive Officer’s vision of satisfying customers by developing an ultra efficient process of production that would facilitate the company to make and supply at short notice, hence creating a competitive advantage in the industry. The Crocs supply chain has been revolutionary in footwear production but there is need to evolve in line with changes in the global industry environment. In the long run, a conventionally thinking organisation has no future. Alteration in technology, delivery procedures, customer demands, and legislative policies demand that a company focuses on its core competencies rather than venturing into all possible diversification schemes. 2.0 Industry analysis By the use of the Product Life Cycle (PLC) concept (Waters and Water, 1999), it is quite visible that the footwear industry as a whole is near saturation and this is likely to run for a long time. It is least likely that the demand for footwear will fall significantly but there are possibilities that with the development of cheaper and more durable products, the industry’s profitability will decline after some time. Using the following Five Forces Model analysis of the global footwear market, the following observations can be made. 2.1 Entry Barriers Entry barriers are engineered to elbow out potential starters from entering a market. These barriers seek to serve the monopoly powers of the incumbent organisations in that industry, thereby maintaining monopoly margins. Some known barriers include limit pricing, patents, cost advantages as well as marketing and advertising among others. This industry appears to offer relatively easy entry for new participants. The advantages of cost are fairly low with quite a large number of players locally and globally. However, it is worth noting that the manufacturers have significantly easy access to factors of production, particularly raw ...Download file to see next pagesRead More
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