Introduction to Operation Management: Crocs Case Study and Analysis

This assignment analyzes a case study on Crocs, focusing on its core competencies, including its proprietary Croslite material, flexible supply chain, and marketing strategies. The analysis explores how Crocs exploits these competencies through vertical integration, acquisitions, and product extensions. It evaluates the fit of these alternatives with Crocs' core strengths, considering potential benefits and drawbacks such as increased control over raw materials, market expansion, and diversification. The case study also examines the impact of these strategies on the company's focus, considering potential risks like overproduction, market saturation, and the challenges of integrating acquisitions. The analysis provides a comprehensive overview of Crocs' business strategies and their implications for future growth and competitive advantage, based on a case study from the Department of Business Administration, 1st Semester 2018-19, focusing on Introduction to Operation Management.

Department of Business Administration
Semester 1st , 2018-19
Course Name: Introduction to Operation Management
Assignment No: 1:
Submission Date by students: Before the end of Week- 7t
Place of Submission: Students Grade Centre
Weight: 5 Marks
Learning Outcomes:
Demonstrate the concept of operations functions, supply chain strategy and issues required for a new
production design (LO 1.1)
Demonstrate core competencies of organization, Inventory Control System and customer services and
cost (LO 1.7)
Student’s Name: ………………………………………………..
Studentls ID: ……………………………………………………
CRN: ……………………………………………………………
Grade :……………………………………………………………

Read the attached case study and answer the following questions:
1. What are Croc’s core competencies? what are their advantages
for the company?
Ans:There exists three major core competencies of Crocs and this
mainly includes the following:
a. Its proprietary “croslite” material
b. The highly flexible supply chain
c. The marketing campaign
This three core competencies have been described in brief below:
a. Croslite: The formula of the proprietary resin which is also
called croslite is owned by Crocs that is generally used for eth
purpose of producing shoes as their own property. This products
are of extreme comfort and are resistant to odor. This is a closed
cell foam material are generally molded in accordance to the
shape of the customers foot which in turn provides comport of
extreme level. Along with this the shoes are extremely light in
weight, does not skid resistant to odor and also does not mark
the surfaces.
b. Supply chain: Another major competitive advantage is provided
by the highly flexible supply chain that Croc’s is having. Unlike
the other shoe companies existing in the market, Crocs was
capable of responding to the different kind of demands of eth
customers is extreme quick and efficient way. The major
executives of Croc like the Snyder coming from the
manufacturing background and for this reason they are
accustomed to produce in accordance to the needs of the
customers or whenever it is need or whenever responding to the
changes in the demand in a repid manner.

Unlike the other competitors Crocs have also been associated
with owning some manufacturing facilities in Mexico as well as
in Italy which has been associated with allowing a much greater
degree of vertical integratoion than its peers. Besides this in the
year of 2006 the organization has been associated with creating
a state-of-the-earth compuding facilitis in Canada, as well as in
China and Mexico.
All this have been associate dwith allowing the organization to
meet the demands of the customer in a flexible way at the
selling seasons. Contararily all other shoe companies are
associated with placing bulk orders for each season before many
months prior, along with being not capable of adjusting in
accordance to the changes in the demand at the time of selling
seasons.
Which means that during the selling seasons they generally
overestimate or are associated with underestimating the
demands and ths initiakky leads to the lst of sales or an inability
of unloading the inventory excess in amount. But in case of
Crocs they are capable of filling new orders at the time of
selling seasons along with being capable of shipping new
products to the retail stores as well.
Additionally the flexible supply chain of crocs has been
associated with allowing it to develop new relationship with the
retailers looking for partners who are reliable. The organization
was capable of becoming more important for the retail partners
which was initially responsible for making the other retailers get
their entire store areas dedicated towards the production of
Croc. All this were initially responsible boosting the presence of
croc even more.
c. Markettig: The organization has been getting more amount of
benefits from the marketing strategy adopted by them and

besides this it has also been associated with playing a vital role
in the supply chain that is higly flexible. In the beginning the
company was associated with selling its product to small
retailers who were having the will of taking more amount of risk
than the large retailers. This helped the organization in
developing a brand along with building the presence of this
brand. After gaining success while working with the small
retailers the company proceeded towards the larger retailers.
During this time the organization was at a position where it had
much stronger negotiation power and was capable of
negotiating with the different kind of favrourable terms
provided by the larger retailers. Almost 70% of the revenue was
gatered from the larger retailers in the mid 2007.
Besides this the organization was also associated with practicing
a marketing approach which was highly flexible similar to the
supply chain. The organization also spent as much as they culd
afford. Which menas when the sales went they increased their
spending and the opposite thing happened when the sales went
down.
2. How do they exploit these competencies in the future?
Consider the following alternatives: a. Further vertical
integration into materials b. Growth by acquisition c. Growth
by product extension
Ans:
The core competencies of Crocs would be exploited in the future in the
following ways:
a. Furthur vertical integration into the materials: The Vertical
integration opportunity for Crocs generally lies in the process of
purchasing the suppliers of raw materials which might be including
the pellets as well. Raw materials which might be including the

pellet are not very expensive during a certain time, however with
the growth of the company along with the increased demand relted
to the raw materials might be responsible for moving the price of
the raw materials to move upward. By purchasing the raw material
suppliers it would be made sure that the organization is having an
control over the production in the future. Crocs own the croslite
but certainly this would not stop the other competitors from
purchasing the pellets or stop them from coming up with an
alternative technology by slight modifications. Purchasing of the
raw material providers, would be helping ib being sure about the
fact that Crocs is having an exclusive excess to the raw materials.
b. Growth by acquisition: This is associated allowing the organization
Croc to expand its various markets along with diversifying the
various kind of offerings related to the products. The new products
might not be consisting of eth Croslite but it might be capable of
buying or acquiring a company with some kind of new material or
process that would be becoming the core aspect of the business.
But it is essential that the organization Croc, does the reseach in a
careful way along with makes the plan regarding this acquition so
as to make sure that it is possible to fold the acqutition with the
supply chain existing along with making sure that the new
companies can be integrated into the supply chain of Crocs.
c. Growth by product extension: this would be associated with
allowing the organization Crocs to exploit all the existing core
competencies for the new and the diverse products. But despite of
this it is essential for Crocs to balance this growth along with being
cautious about the various diminishing returns, overcrowding of
the market, and not growing sales but just moving them away from
current product.

3. To what degree do the alternatives in question 2 fit the
company’s core competencies, and to what degree do they
defocus the company away from its core competencies?
Ans: The alternaties provided in the above question is associated with
fitting into the core competencies of the company. It is seen that the the
fitting of the Vertical integration in the core competencies of Croc has
been allowed which in turn provides with the flexibility and the needed
control so as to take actions in accordance to the changes taking place in
the fashion industry in accordance to the changing demands taking place
in the industry. Besides this, the existence of the exclusive rights to the
Croslite along with the Croc’s extensive capabilities of manufacturing is
associated with providng the organization Crocs with a competitive
advantage. This is generally done by effective creation of a barrier of
entry for new competitors entering the market. In addition to this the
Vertical integration might also be associated with defocusing the core
competencies of the organization. Along with this the large
manufacturing capacity that the organization is having might be
resulting in the over production with respect to the quick changes taking
place in the fashion industry. There also exists the other suppliers of the
organization who are present outside the company umbrella are still
cheap along with having the capability of responding in a well manner to
the demand schedule of Croc. Till now it has been identified that the
vertical integration might be leading to the various type of inefficiencies
along with higher costs. However the growt by acquition is well fitted
for the organization as this is associated with allowing the access to
several new technologies. Acquisition that the organization is having
might help in obtaining a lot more competitive advantage and besides
this further acquition might be leading to getting access to the other
technologies which might become the core competencies of the
organization in the future. This acquition can also be used by the
organization for the purpose of reducing the competitors along with
helping in expansion of the current product line that they are having.

However the Acquisitions might be also be responsible for defocusing in
case if the acqution is located to far from the core competency that the
organization is having.in the process of acquition it is essential for Crocs
to be aware of the various kind of problems that might arise due to the
differences existing in the new culture of the organization which might
be integrated in the processes of Crocs in an easy way.
Addition of diversity in the product line is very much helpful in making
the Growth by product expansion get fitted to the Croc’s core
competencies. By having product expansion it is possible for the
organization to market itself amongst a larger number of customers and
besides this the product expansion would also be helping the
organization in staying a step ahead amonst its competitors who are
cpying their design. Hawever the major drawback that it is having is the
increase in the cost of production, which means that there would be
existing more amount of demand relted to the production capacity. This
might be leading to less amount of flexibility in the process of
production.