...ECCO Case Study - Question 1 ECCO has a fully integrated vertical value chain. What are the pros and cons of that strategy? What economic and strategic factors should be analyzed to answer this question? The pros of a having a fully integrated vertical supply chain for Ecco include the following: * Improved supply chain coordination between tanning, manufacturing and distribution. This would ultimately help maintain quality and improve operational efficiencies such as logistics. * There is also an increase in the areas possible for differentiation, as Ecco can control more inputs. An example might be in the tanning process, in which their competitors may have less control over. * Ecco can also create greater barriers of entry for competitors. By differentiating competition out of the market such as marketing their strict in house controls of the tanning process. * Ecco can also access downstream distribution channels that may otherwise have been inaccessible if they were to just sub out distribution and be at mercy to what the market can provide. * Opportunities for control over investment or innovation both upstream or downstream which may otherwise not be possible will be advantageous for Ecco. * Facilities in different countries can take advantage of local resources and expertise in different areas like the leather research center in Denmark. * Overseeing operations throughout the whole value chain. * Better control and...
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...-The competitive environment of ECCO is quite high due to the other of producing shoes such as NIKE, Adidas and Puma etc are the big brand as well. However, the way they positioned themselves is interesting. ECCO positioned itself to be concerned in the quality rather than fashion 1) Describe the 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...
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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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...ECCO A/S – Global Value Chain Management Reading assignment questions 1. Describe the competitive environment of ECCO and determine how well ECCO is positioned (compared to competitor) to take advantage of changes in the industry. Answer The competitive environment of ECCO is quite high due to the other of producing shoes such as NIKE, Adidas and Puma etc are the big brand as well. However, the way they positioned themselves is interesting. ECCO positioned itself to be concerned in the quality rather than fashion 2. Analyze ECCO global value chain. How well does this configuration match the drivers in the industry? Answer The ECCO value chain 3. ECCO has a fully integrated vertical value chain. What are the pros and cons of this strategy? What economic and strategic factors should be analyzed to answer this question? 4. How is family ownership affecting ECCO? Comment on the corporate ownership structure and its implications for strategy-making and implementation. What alternatives exist? 1) Describe the 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. (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...
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...Derek Mitchell Ecco Supply Chain & Operations Analysis Policy & Strategy Atlanta Module-Summer 2012 ECCO Vertical Integration Cow to Shoe • • • • Ecco value chain is actually rawhide to shoe Purchases raw hides and transforms into leather used in shoe production Owns tanneries in Netherlands, Indonesia and Thailand Processes 3,500 raw hides a day equalling 1 million cows per year ECCO Value Chain What is the future of ECCO's leather manufacturing? Full Scale Bench marking Prototype Ramp-up Laboratory Production Product Development (R&D) Design Leather Manufacturing Shoe Production Distributing Raw hides Tannery Operations Post Tannery Operations Finishing Operations Discontinue-"blow it up" Sell it ECCO Value Chain What is the future of ECCO's leather manufacturing? Full Scale Bench marking Prototype Ramp-up Laboratory Production Raw Material Procurement Product Development (R&D) Design Shoe Production Distributing But let's stop to reconsider......... ECCO Value Chain What is the future of ECCO's leather manufacturing? Full Scale Bench marking Prototype Ramp-up Laboratory Production Raw Material Procurement Product Development (R&D) Design Shoe Production Distributing Leather manufacturing Value Add Global top five leather producer Leather centre developing leading technology Supplies automotive and furniture industry Quality Materials Resources Leather...
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...2. 2. ASSIGNMENTS 11 2.1 Marketing 11 2.2 Organization 12 2.3 Communication 12 3. PURPOSE 12 4. CONTENT 13 5. EXTENSION AND SIZE OF GROUPS 13 6. SUPERVISION 13 7. DEADLINES 13 ECCO achieved record results in 2011 (Source: http://www.ecco.com/en-XI/Media-Center/Annual-Report ) In 2011, ECCO achieved the highest surplus in the company’s history with a profit before tax of DKK 904 million. This highly satisfactory result was particularly due to successful new collections and improvements in sales in most of ECCO’s markets. The outcome could have been even better, if ECCO’s shoe factory and tannery at Ayutthaya in Thailand had not suffered catastrophic flooding in October with considerable human and commercial consequences. Many of the 3,500 employees in Ayutthaya lost both their home and all their belongings. Despite this, they all made an enormous effort both for ECCO, usually incompletely unfamiliar roles, and for the local community. For ECCO, the flooding meant the loss of more than a third of the company’s production capacity. The emphasis was therefore placed on quickly establishing increased production at ECCO’s other factories and among external partners. New production capacity has now been established in Thailand, and ECCO expects to be back in full production by the end of 2012. It was particularly positive that ECCO’s tannery in Thailand succeeded in restoring production as early as 1 February 2012. In 2011 ECCO increased its revenue from DKK...
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...for ECCO A/S, who is vertically integrated and manufactures the majority of its products in-house. Conversely, ECCO’s competition simply outsources the majority of their shoe production. Although ECCO boasts a superior products in terms of quality, its prospective customer are largely unaware due to the amount of marketing and branding its competitors spend in a saturated and mature casual footwear market. Analysis of the global footwear industry reveals that ECCO is unique in its decision to own the value chain from Cow-to-Shoe. This unique position offers ECCO a competitive advantage when managing its overall quality and introducing new technologies. At the heart of ECCO’s competitive advantage is the use of “direct injected” technology. ECCO’s culture of emphasizing quality has created a manufacturing process that is hard to mimic even after licensing the techniques and technologies. At the same time, ECCO’s decision to vertically integrate makes changing or scaling their operations very difficult and capital intensive. This analysis will examine: - ECCO’s current situation and strategy with regards to the global footwear industry and ECCO’s most closely aligned competitors. - The internal and external resources that will enable ECCO to foster and sustain a competitive advantage in a highly competitive industry. - The role of ECCO’s fully integrated value chain in all its decision making. Following the discussion of ECCO’s challenges and current strategies, the...
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... 1. How did Philips become the leading consumer electronics company in the world in the postwar era? What distinctive competence did they build? What distinctive incompetency 2. How did Matsushita succeed in displacing Philips as No. 1? What were its distinctive competencies and incompetence? 3. What do you think of the change each company has made to date—the objectives, the implementation, the impact? Why is the change so hard for both of them? Case 2 ECCO A/S Global Value Chain Management 1. Describe the competitive environment of ECCO and determine how well ECCO is positioned (vis-a-vis the competitors) to take advantage of changes in the industry. 2. ECCO has a fully integrated vertical value chain. What are the pros and cons of this strategy? What economic and strategic factors should be analyzed to answer this question? 3. Is ECCO following the inside-out or outside-in strategic perspective? What are the implications of this choice and how can ECCO increase their sales/marketing...
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...ECCO is a successful and closely-knit family owned company and has a strong culture of bonding and attachment and its clearly shown in the management strategies as well. They believe that at least 80% of company’s leader should come from inside the company. They are aware of the fact that to be a global leader, employees were the biggest assets so ECCO invested heavily on training their employees and career development activities, so they could upgrade their skills and capabilities with evolving time. ECCO is a special case in the industry, as they believe that the key to maintain quality standards and products uniqueness is to have an ‘in house production’ strategy, which have been estimated to be 80% of their production. ECCO believes in outsourcing only when it feels that the product is not aligned with their technological expertise. Despite of its success, ECCO as a company had to face declining productivity and stagnant margins from 1999 to 2003, which drove the debt to increase, however in 2004 ECCO showed signs of improvements in its financial capabilities and, is looking to strengthen its integrated value chain from ‘cow to shoe’, by making it more efficient and cost effective. ECCO realized that it needs to focus on long term sustainability and also they understood the importance of moving towards a marketing oriented path, which would help ECCO leverage on its innovation, research capabilities and tis high quality products. Porters five forces Every industry’s...
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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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...Porter’s competitive advantage of nations: time for the final judgement? Journal of management studies, 37(8), pp.1189–1214. Dunning, J.H., 1993. Internationalizing Porter’s diamond. MIR: Management International Review, pp.7–15. Porter, M., 1990. The competitive advantage of nations. Harvard Business Review, 68(2), pp.73–93. 2 31.03.2016 Thursday Global value chain • Outsourcing vs offshoring • Global value chain • offshoring • outsourcing • Resource-based view • Transaction costs • Intellectual property infringement Case: Ecco – Global value chain management 1. Describe the competitive environment of ECCO and determine how well ECCO is positioned (vis-a-vis the competitors) to take advantage of changes in the industry. 2. Analyze ECCO's global value chain. How well does this configuration match the drivers in the industry? 3. ECCO has a fully integrated vertical value chain? What are the pros and cons of this strategy? That economic and strategic factors should be analyzed to answer this question?...
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...firm in the world, with a 3.8% market share (Global Wine Manufacturing, 32-36). Refer to chart below. Gallo is the largest wine supplier in the U.S., commanding 22.7% of the market. Also, in comparison with the financial metrics of other firms in the industry, Gallo’s profit over revenue stands at 17.09%, whereas the industry average is 7.6%. Gallo’s sales grew 7% in 2010 as a result of acquisitions and the ongoing success of its Millennial-targeted Barefoot Cellars (up 33.3%) and Twin Valley (10.3%) brands. Twin Valley is described as a “step above” boxed wine (Mintel, Wine-US). With its strong brand and competitive strategy, E.&J. Gallo Winery has been able to weather the economic recession fairly well, capturing over $3.2 billion in revenues last year (Global Wine Manufacturing, 36). Overall, Gallo is certainly a high performer within its industry. Strategy E.&J. Gallo Winery’s strong performance can be attributed to strategic factors which have enabled the firm to achieve a competitive advantage in the marketplace. Since its inception in 1933, Gallo has grown from a small family winery to a dominant incumbent through successful implementation of...
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...product category is being replaced by something better. For example, typewriters experienced declining sales as more consumers switched to computers or other word processing equipment. The product life cycle is tied to the phenomenon of diffusion of innovation. When a new product comes out, it is likely to first be adopted by consumers who are more innovative than others—they are willing to pay a premium price for the new product and take a risk on unproven technology. It is important to be on the good side of innovators since many other later adopters will tend to rely for advice on the innovators who are thought to be more knowledgeable about new products for advice. At later phases of the PLC, the firm may need to modify its market strategy. For example, facing a saturated market for baking soda in its traditional use, Arm ü Hammer launched a major campaign to get consumers to use the product to deodorize refrigerators. Deodorizing powders to be used before vacuuming were also created. It is sometimes useful to think of products as being either new or existing. Many firms today rely increasingly on new products for a large part of their sales. New products can be new in several ways. They can be new to the market—noone else ever made a...
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...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 economic theory, showing how complementarities among activities help understand increasing returns to scale, firm size and business growth even without the standard assumptions about economies of scale. It also confirms that, in the presence of complementarities, rivals find strategy imitation and reverse engineering difficult due to the unique nature of the relationships...
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...Review 4 Branding Strategies of McDonalds in UK 4 McDonalds presence in Social Media 4 McDonalds as a Brand and Customer Loyalty 4 Research Methodology 6 Type of Investigation 6 Data Collection Method 6 Sampling Method 7 Accessibility Issues 7 Ethical Issues 7 Anticipated Findings 8 Conclusion 8 Introduction The term brand can be described not only as a way of imposing a premium price and position in the marketplace but in order to be successful in the market a brand must classify a brand strategy that enable its customers and audience to understand it added value proposition on the basis of quality, efficacy and appeal. The brand name not only helps to identify a product but also its producer or manufacturer. A brand also helps in delivering of the message clearly and confirms the credibility of any business entity. Brand name is also indicator of the characteristics of the product. Branding could be defined as a ‘promise delivered’ and to be successful a business entity must be able to deliver that promise every single time. For branding most of the business entities come up with a short statement that describes the purpose of your brand. The branding strategies help in launching a product in the market and in creating a brand that will expand and mature in a saturated market place. To make effective branding strategies is always crucial for a business entity as they have to live with the decision for a long time. Strong branding strategies can affect the...
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