...Over the past forty years a new growing trend has been detected. This coincides with the desire of businessman to dislocate their production and companies outside the domestic market. Such phenomenon, known as “delocalization of production”, can be defined as the social/ managerial/ organizational process through which firms not only deploy their sales on foreign markets, but they also draw supplies like raw materials, technology, facilities, equipment, financial resources and manpower. The aim of this paper is to provide an analysis on winning internationalization strategies, that will help a company to successfully penetrate a new market. Further on we will see a little case study on the shoes and accessories company Geox, performing an overview of its presence on international markets, providing a little historical background of the company and evaluating its competitiveness. Competition intensification on the global scale has lead an increasing number of companies, in the last decade, to seek new job opportunities on international markets. Internalization, today, is not only a way to increase the firm’s value, extends its competitive advantage and access to new opportunities. In our current economic environment it has become an useful and practically necessary way that may guarantee a firm’s outliving. Going international for a company means going through a tough and long process, that will change its assets completely and with no coming back. It involves quite...
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...Geox Executive Summary Since the early 1900’s Mario Polegato had the idea of a shoe that had breathability. After coming up with the idea of a sole that “breathes” he tried to sell his invention to several manufacturers but none were interested. Once that failed Mario began to manufacture the shoes on his own. Geox’s product was like none out there and before long Geox had become a global name. Geox started out in 1995 with Mario and five other businessmen making children’s shoes. Just five years after getting started, in 2000, Geox expanded internationally. Then in 2002 they entered into the apparel industry with breathable jackets. They were a private company until 2004 when they went public. It wasn’t until 2008 that the company entered into the sports shoe market. Geox took a risk launching its golf shoes because the industry was highly competitive but Mario believed in Geox. In 2009, just after 14 years of being a company Geox was known throughout the globe. After gaining knowledge of Geox during the time period of 2005-2009 and their competitors and markets I have developed recommendations that will help Geox grow even more in the world. My recommendations are as follows: Recommendation 1: Develop a new brand for the sporting industry Recommendation 2: Continue to globalize I have given my recommendations in the following section. Following the recommendations is an appendix, which includes an analysis break down of the industry, their competitors, and...
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...Case Analysis: Geox and the Footwear Industry 4410B – Strategic Management – Professor Deane April 30, 2011 Jacob Clelland 250 422 823 EXECUTIVE SUMMARY The Geox group is an Italian footwear company has made its mark through technology innovation in fabrics and materials. It has been operating since the 1990s and became public in 2004. Geox focuses on providing its costomers with high comfort through technological innovation. They focus heavily on research and development in order to produce cutting edge technology that will differentiate their brand within the footwear market. The footwear industry is a mature market with many international competitors. In Europe, the footwear is dominated by many small & medium enterprises, which gives firms more flexibility to cater to specific consumer needs. The basic drivers for consumers buying decisions include demography, disposable income, basic needs, style and new materials. Fashion trends have a major influence on the footwear industry as well as new technology. The industry is very labor intensive and most companies follow a delocalization manufacturing strategy to capture lower labor costs. The primary market segments include Sport/Athletic, Work and Brown. Geox competes mostly in the Brown market but acts as a competitor in the Athletic market because of their focus on technology. Competition is harsher in the Sport/Athletic market as it is the largest market in the footwear industry. Geox should continue to...
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...1. Geox was using the type of Incremental and technology innovation, which provided the small improvement in current product line. With the slogan “the shoe that breathes”, Geox created the innovation of rubber soles and leather soles patent which could let shoes waterproof and breathable made people felt more comfortable to wear it. 2. Geox used the blue ocean strategy that created a new market place rather than competed with others in the existing industry. They also redefined the market space with its unique proposition, slogan (breathing shoes) all around the world and for all the market segments to marketing its value and specialty. They were also customer oriented, created value by listening carefully to customer’s needs. They also tried to be a family brand that covers most of the market segments not only adult (men, women) but also children, with full ranges of models for different uses (casual, sports, fashion…) 3. Because Geox is the first company entered the field, they don’t have competitor in the breathable shoe market when they first came in. They not only don’t have competitor but also have the opportunity to apply for the original patent and corollary patents which made the competitor hard to copycat their technology. They also researched cross-market to position for products, and expanded the production to include sports footwear to diversity the market. 4. I think Geox did enter an attractive industry because shoes are the kind of product that people will...
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...Breathing Shoes and Complementarities: How Geox has rejuvenated the footwear industry Arnaldo Camuffo, Andrea Furlan, Pietro Romano, and Andrea Vinelli MIT-IPC-05-005 June 2005 Breathing Shoes and Complementarities: How Geox has Rejuvenated the Footwear Industry Arnaldo Camuffo, Andrea Furlan, Pietro Romano and Andrea Vinelli MIT IPC Working Paper IPC-05-005 June 2005 We apply the related notions of complementarities and performance landscapes to study strategic positioning in the footwear industry. We use this theoretical framework to analyze Geox, an Italian footwear manufacturer that, in less than a decade, has grown to be one of the world largest brown shoe manufacturers, outperforming the industry in terms of market and financial results. We describe Geox’s choices within four stages along its value chain: product design, marketing and communication, production and supply chain, distribution and retail. We show that, though grounded on product innovation (the Geox breathes® patented system which allows ventilation in waterproof rubber sole shoes), Geox’s competitive advantage has not grown out of operational excellence in single activities in the business, but, rather, derives from a unique and consistent configuration of complementary activities. Such configuration represents an innovative strategic position and corresponds to a high performance peak in the footwear industry performance landscape. The case study provides anecdotal evidence in support of complementarity-based...
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...Copenhagen Business School Cand. Merc. M. Sc. IBS - International Business Department of International economics and management, 15 June 2012 Strategic Analysis of the Geox Group Councellor: Bersant Hobdari, Copenhagen Business School Student name: Valeria Serra N. of pages: 79.7 Total n. of characters: 181,415 N. of characters (without figures): 165,415 N. of figures: 20 Executive Summary The purpose of this thesis is evaluating the sources of the extraordinary success of the Italian company Geox S.p.A. in order to assess whether its triumph is sustainable or not in the future. Geox S.p.A. is an Italian company based in Montebelluna (Treviso, Italy). It produces high quality and innovative shoes and apparels, and it is considered one of the most successful Italian firms. The company was born thanks to an innovative idea of its founder, Mr. Mario Moretti Polegato, and its fast growth has been due not only to the knowledge of the district, but also to its strong management and its strategies. All these factors have contributed to Geox’s fast growth in a market that was already mature. Notwithstanding Geox’s leadership position in Italy, the company is not immune from the negative effects of the economic and financial crisis and of globalization. The main challenges that the company is facing are mainly constituted by increasing and labour and raw material costs. The crisis, which has been particularly strong in Italy, has made people poorer. Thus, consumers have became...
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...What do creativity and innovation signify and entail? What are the key types of innovation? Historically, creativity and innovation have been thought to been tied to new products that stimulate economic growth. Over time, these views were thought to have been narrowand new ideas of innovation came about. Karl Marx associated innovation to economic growth cycles. After World War II, much thought was given to innovation being a result of higher spending on research and design. Economists soon realized there was no direct correlation between innovation and R&D. Newer contemporary thought notes that innovation is a result of acquiring knowledge and being able to harness it into the development of new processes and products. Innovation is a complex process itself, having many facets making up what it is,and what it provides. Entrepreneurship comprises taking a risk on something, and quite often innovation requires faith. Design is the development and creation of something. It is becoming synonymous with innovationand an increasingly important part of the business world today;From Board Room layouts to the structure of a manufacturing line, all the way down to how a product may be used by a customer. Invention is another important part of innovation. It is the eureka moment or the concept of a new idea. Innovation takes invention and transforms it into something useful and commercialized. There are several types of innovation. Product innovation is the development of a new or...
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...Company Background ECCO, the world leading brand of shoes, was found in Denmark by Karl Toosbuy in1963. ECCO’s philosophy -“the shoe must follow the foot”. Karl was the shoemaker realizing that shoes had to be made to fit the foot, as a result, functional, comfortable ECCO shoes were launched in the 1970s and became a huge success. ECCO is the only major shoe manufacturer to own and manage every step in the shoemaking process. ECCO produces leather and has its own tanneries, their design and production team innovate products, introduce pioneering and high-tech production methods, shoes are made in their own factories and are sold in ECCO retail shops globally. They constantly pressed for improvements to meet customer expectations. Throughout the shoe production process, quality inspectors control every aspect - from leather thickness to stitching accuracy, in order to ensure high quality and uniform products. Quality of shoes is the brand value of ECCO, shoes are guaranteed to lightness, softness, flexibility, durability, comfort and fit. ECCO shoes are designed for women, men and kids, they also further categorized into casual, formal, as well as sports line for golf, running, training and explore. Marketing Audit Marketing audit provides a complete review of marketing strategy and performance of a company. By using STEEPLE to analyze the external environment of ECCO, in terms of technology, ECCO has an opportunity in this area. Many ECCO’s shoes have applied...
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...ECCO A/S GLOBAL VALUE CHAIN MANAGEMENT Executive Summary: ECCO A/S is one of the most prominent player in the global shoe industry and is also one of the leading footwear manufacturer in the world. Since its inception in 1963 it aspires to produce top quality, casual comfort shoes with a perfect fit which are pleasant to wear in all weather conditions. The company s USP is top quality of its product with a coupled production of, manual and machine. The production of their leather was in-house and they had a unique direct injection technology. ECCO is a financially strong family owned enterprise and as corporation they focus on constant innovation and high quality products. They started it operations from Denmark, and in a continuous pursuit to gain a global foothold and to optimize its value chain, they have expanded their operations in Portugal, Slovakia, Indonesia and Thailand. They soon plan to invest heavily in China, to setup up a world class manufacturing unit which will cater to at least 25% of its forecasted global demand. ECCO, being a successful and closely knit family owned enterprise had a strong culture of bonding and attachment and it percolated down in the management strategies as well. They strongly encouraged that at least 80% of company s leader should come from inside the company. They were conscious of the fact that in their journey to be global leader, employees were their biggest asset and thus they invested heavily on employee trainings and career development...
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... crepe, and ecotan natural leather | Ultralight, waterproof, durable rubber sole (current Geox breathes® technology) | Heel padding and soft cushion padding at the front | Flats/Heels | Snap on shoe designs (Refer to Appendix 8) | Durable pure cotton insoles + breathable technology (cotton breathable technology?) | Soft processed leather e.g. Nappa leather | Gel cushioning at blisters prone area | Vegan product line with faux leather | Direct attach technology with permanent bonds | Shock absorption footbed and heels | Flats and Heels | Stick-on skins with protective layer | Disposable Insoles | Soft fabric materials mixed with leather | Moleskin padding | Waste reduction | Hardwearing soles that offer long-lasting support | Insole with bumps to massage the aching sole when wearing heels | Convertible design (flats or heels anytime you want) | Zipping the designs (Refer to Appendix 8) | Cotton insole cover (to wrap the leather insole) and just remove the cotton cover for washing | Key Dimensions | Softness | Blisters Prevention | Eco-friendly | Durable soles | Heel comfort | New Product Type | Interchangeable Exterior Design | Removable Insoles (to allow washing) | Lambskin + leather + wool lining | Advanced heeling blister cushion | Using natural materials such as organic cotton, crepe, and ecotan natural leather | Ultralight, waterproof, durable rubber sole (current Geox breathes® technology) | Heel padding and soft cushion padding at the front | Flats/Heels |...
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...competitive environment of ECCO and determine how well ECCO is positioned (vis-à-vis competitors) to take advantage of changes in the industry. Use Porter’s five-forces model, the PEST model, and a SWOT analysis to explain your answer. ECCO produces mainly casual footwear with an intense focus on high-quality production.In order to deliver the highest quality product, ECCO maintained a fully vertically integrated value chain situated in various countries leveraging local expertise.Because of this unique situation, competitors found it very difficult to sustain a comparable level of quality. As noted in the case, ECCO finds itself in a highly competitive industry. The primary competitors identified in the case are: Timberland, Clarks, and Geox. For a brief analysis of the strengths of each of these competitors, please refer to Figure 3.As ECCO has recently entered the golf shoe market, they also face stiff competition from firms such as Nike, Rebok, and Adidas. ECCO stands in a unique position among the competitors in that it is the only non-branded manufacturer.The primary competitors of ECCO identified in the case outsource the majority of their manufacturing then uniquely brand the end product. These firms depend on brand recognition and marketing to drive consumer decision, not intrinsic quality. By contrast, ECCO is very focused on quality, and maintains control of 80% of manufacturing in-house. Because ECCO is uniquely positioned with full control of manufacturing and distribution...
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...MGSC01 - MIDTERM CASE: ECCO A/S - Global Value Chain Management Analyze the problem Alternatives Decision Criteria Recommendation Good to have a contingency plan (backup plan) Key questions: - If I’m right so far, then what? What are the implications - What is the larger context? - What else do I know? Personal? - What alternatives do I have? - What am I missing? Goals: The plan was to build five closely connected factories over the next four years with a total capacity of five million pairs of shoes per year, serving both export needs and the Chinese market, which was expected to grow in the future. Produce the world’s most comfortable and modern footwear for work and leisure. Increase revenue to 8 billion and to 9 billion by 2013, selling 24 million pairs of shoes a year. Increase production capacity by 15% per year Product Market Focus: aim at becoming better at telling what we stand for. Value Proposition: Core Activities: produced 80% of its shoes in-house Vision – integrating the global value chain - To be the most wanted brand within innovation and comfort footwear. - Position can only be attained by constantly and courageously researching new paths, investing in employees, in core competencies of product development and production technology. 80% of the company’s leaders should come from inside ECCO. 2004 Sales Children 11% Ladies 47 Men 30 Sports 12 (outdoor, walking, running and...
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...ECCO A / S - GESTIÓN DE LA CADENA DE VALOR GLOBAL A pesar del verano, el clima era nebuloso aquel día de mayo de 2004 como el avión despegó del aeropuerto internacional de Hongqiao, Shanghai. El avión era probable que encuentre algo de turbulencia en su camino hacia el aeropuerto de Copenhague en Dinamarca. El jefe de operaciones (COO) de la fabricante de zapatos ECCO de Dinamarca A / S (ECCO), Mikael Thinghuus, no particularmente disfrutar de vuelos con baches, pero el vuelo en bruto no podía eclipsar la confianza y el optimismo que sentía después de su visita a Xiamen, en el sudeste China. Esta fue su tercera visita en tres meses. Durante 2003/2004, ECCO gastado recursos considerables en el análisis de dónde establecer instalaciones de producción en China. En este viaje, junto con Flemming Brond, el director de producción en China, Thinghuus había finalizado las negociaciones con Novo Nordisk Engineering (NNE). NNE poseía una valiosa experiencia en la construcción de fábricas en China, la experiencia adquirida a través de su trabajo para Novozymes y Novo Nordisk. Ahora todo parecía estar en su lugar. La construcción debía comenzar en agosto, las máquinas se instalarán en enero de 2005, y el primer par de zapatos se retiraría de la fábrica por el final de marzo de 2005, si todo ha ido bien. El plan era construir cinco fábricas estrechamente conectados en los próximos cuatro años, con una capacidad total de cinco millones de pares de zapatos al año, atendiendo tanto a las necesidades...
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...environment of ECCO and determine how well ECCO is positioned (vis-à-vis competitors) to take advantage of changes in the industry. Use Porter’s five-forces model, the PEST model, and a SWOT analysis to explain your answer. (400 words) ECCO produces mainly casual footwear with an intense focus on high-quality production. In order to deliver the highest quality product, ECCO maintained a fully vertically integrated value chain situated in various countries leveraging local expertise. Because of this unique situation, competitors found it very difficult to sustain a comparable level of quality. As noted in the case, ECCO finds itself in a highly competitive industry. The primary competitors identified in the case are: Timberland, Clarks, and Geox. For a brief analysis of the strengths of each of these...
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...ECCO A/S – GLOBAL VALUE CHAIN MANAGEMENT | | Report submitted by:Abhas Mangal (GAPR11IT038) | | Contents Executive Summary 3 Company’s Profile 4 PORTER’S FIVE FORCES STRATEGIC ANALYSIS 5 Outcomes of Porter’s Five Forces 5 SWOT ANALYSIS 6 Evaluation of Alternatives 6 Recommended Strategy 7 Executive Summary ECCO, a global manufacturer and a supplier of shoe products, wants to expand into the Chinese market to increase its export to major markets and also increase product sales among Chinese consumers. But many Chinese manufacturers imitated the product design and features of ECCO increasing the intense competition for the company in the Chinese market. Also, ECCO for years has a sole focus on increasing the quality of the shoes manufactured by using its sophisticated in-house “direct injection” technology. But the company cannot only thrive on its quality unless the company’s efforts to ensure quality are not communicated to the consumers. Thus, the company focused less on marketing operations that is evident from its low marketing budgets as compared to its competitors. Also, the most of the products manufactured in four production facilities outside Denmark were distributed through its distribution centre in Tonder, Denmark where only six to nine percent of total production was actually sold. Thus, ECCO became inefficient to fulfil the replenishment orders that had to be delivered within a few days notice. Thus, the main challenge for ECCO is to...
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