Operation Management: Crocs' Core Competencies and Exploitation Plan

This case study provides an in-depth analysis of Crocs' core competencies and advantages in operation management. It explores the company's innovative use of Croslite material, its flexible supply chain, and its marketing strategies. The study further examines how Crocs can exploit these competencies in the future through vertical integration, acquisitions, and product extensions. It also assesses the degree to which these alternatives align with the company's core competencies and potential drawbacks, such as financial aspects, integration concerns, and increased production costs. The case study concludes by discussing the importance of inventory management and the challenges Crocs faces in a competitive market.

RUNNING HEAD: Introduction to Operation Management
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Croc’s
Introduction to Operation Management

Introduction to Operation Management 1
Contents
Core competencies and advantages............................................................................................2
Exploitation of the competencies in the future..........................................................................2
Degree of the core competencies...............................................................................................3
References..................................................................................................................................4

Introduction to Operation Management 2
Core competencies and advantages
Croc’s is a footwear brand aiming to provide comfort to feet everywhere. The company was
founded in 2002. The company introduced innovative shoes which are made up of a
revolutionary material known as Croslite. The Crocs are manufactured in Mexico and Italy.
Croc’s has established an innovative supply chain system which allows dealers to place
smaller pre-books and order within the period. It is popular and a global strategy and provides
the company with a competitive advantage. The company is flexible enough to meet the
unpredicted demands and the low inventory level. The adjacent relationship with the traders
enables to maintain proficient and flexible dissemination model. Croc’s has gained
competency in the marketing as it works with the small retailers after successfully
approaching the large retailers. It enables the company to negotiate favorable terms. The
material used by the company is also one of its core competency. Croc uses a unique croslite
material which is comfortable, light and odor resistant. The company has a wide range of
product line and 96% of sales come from shoes only. It has also license agreement with the
Disney, Universities and sports teams (Xiao and Gang, 2017).
Croc’s has gained an advantage as good shock absorption. These are available in the wide
colors and are favored by the young and old for its lightweight, comfortable and waterproof.
The cushioned shoes protect the feet, ankles and back from impact at the time of walking on
the hard floors. These shoes are perfect for the wide feet. These are easy to clean and are
suitable for trips like beach and gardening, as crocs can be worn roughly. The company has
launched its range offering support and comfort known as CrocsRX which is APMA
supported and are recommendable to people who have certain foot problems like diabetic and
post-surgery patients (Chander, Morris, Wilson, Garner and Wade, 2016).
Exploitation of the competencies in the future
Croc’s can acquire useful companies in order to increase the efficiency of the supply chain.
 The vertical integration in the supply chain allows the company to acquire delivery
channels, injection machine, and the raw materials. It has a highly flexible supply
chain.
 It matches the competencies of the company and has ownership of intellectual
property which is Croslite resin.

Introduction to Operation Management 3
 Croc’s can exploit the competencies in the future through information sharing with
the material suppliers.
 The company has reduced ‘bullwhip’ effect and reduced raw inventories through just
in time system (Ellitan, 2017).
Croc’s can grow with the help of the acquisition of the smaller competitors.
 It does not match the different culture of the companies may cause challenges.
 The acquisition can be completed in order to expand huge market share, upsurge
profits, and approachability to greater resources and improved business growth.
 It matches the ability in a few senses as Croc’s is capable of acquiring a company
which caters to the niche market.
 Croc’s can purchase all the contract manufacturers and can have full control over the
manufacturing process.
 The acquisition can result in decreasing variability in the demand and lowering cost of
the manufacturing.
Growth with the help of product expansion in the future. The company can enter new markets
by announcing new products and directing research and development.
 Croc’s have the opportunity to enter the new markets by introducing a new range of
shoes.
 It is helpful to the company when it decides to branch out and add more products.
Entering the new markets is helpful in increasing profits and brand awareness.
 The new products are helpful in improving brand visibility. Croc’s can also add
clothes, bags, accessories, and socks in its product range (Gokula, Gaspar, King,
Moore and Li, 2015).
 Croc’s can also expand through licensing agreements like Disney.
The degree of the core competencies
The core competency of the vertical integration is helpful to the Croc’s in attaining higher
control over the value chain. It assists economies of scale and lower production costs. The
vertical integration provides better quality control. It enables the company with an effective
barrier to the entry (Jena, Singh, Mishra, Gandhi and Singhal, 2016). The supply chain is

Introduction to Operation Management 4
capable enough to negotiate with the suppliers and buyers. The factors which defocus the
away from its core competency is the lack of efficiency and capacity balancing issues.
The growth by acquisition has advantages in the form of a reduction in competition and
resistance against the substitute products. It is helpful inaccessibility to the developed
technologies. The acquisitions enable the ability to meet different customer expectations. The
disadvantages of the acquisitions are a financial aspect and the integration concerns (Alshaali,
Bodolica, and Spraggon, 2014).
The production expansion has advantages in the form of the economies of scale and ability to
meet customer’s expectations. The product extension makes a product obsolete even before
the competition tries to copy it. The weakness faced in the product expansion are increased
production cost, less flexible supply chain and the use of other materials. Croc’s also faces
drawbacks of having more or less inventory. The more inventory is obtainable for the sale
and more petition in new place. The fewer inventories are less to manage (Marques, Guedes
and Ferreira, 2016). It is more beneficial to test in a new market. The fewer inventories
reflect that supply chain is malleable and is able to encounter demand. The high and low
margins affect the inventory decisions of the company. Croc’s is a high margin company and
faces rivalry from companies like Adidas, Reebok, Puma, and Nike. More inventories are
available for more sales and more petitions in more places. Fewer inventories are
comparatively less to accomplish. It is helpful only if trying a new market. The fewer
inventories depict that the supply chain is capable enough to encounter the demand (Wang,
2016).

Introduction to Operation Management 5
References
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Undertakings. In Managing Organizations in the United Arab Emirates (pp. 75-110).
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Chander, H., Morris, C.E., Wilson, S.J., Garner, J.C. and Wade, C., 2016. Impact of
alternative footwear on human balance. Footwear Science, 8(3), pp.165-174.
Ellitan, L., 2017. The role of business enviromental and strategy alignment in the
optimization of business performance of small scale manufacturing companies in
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Gokula, M., Gaspar, P., King, B., Moore, C. and Li, X., 2015. Effect of Implementation of
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Jena, A., Singh, R.K., Mishra, R., Gandhi, P. and Singhal, H., 2016. Influence of Operations
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Marques, A.M.D.R., Guedes, M.D.G. and Ferreira, F., 2016. Open innovation in the fashion
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Wang, Y.S., 2016. Dynamic capabilities in fashion apparel industry: emergent conceptual
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Xiao, C. and Gang, Z., 2017, July. How Do Innovation Capabilities of Industrial Cluster
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