Crocs Shoes - the Imperfect Supply Chain

Abstract

Crocs shoes, started in 2002, took the footwear industry by storm and within six years had yearly revenues that exceeded $720 million. Much of their success is attributed to their revolutionary supply chain model which challenged key industry assumptions of supply and demand. This strategy allowed Crocs to achieve product differentiation, lower production costs, and create buyer value. Facing a highly competitive Red Ocean industry, Crocs soon propelled itself into Blue Ocean territory thru its unique value innovation process. The problem with success though is that it's sometimes fleeting. Crocs journey from an unknown startup to industry superstar was swift and calculated. Its fall from grace was uncalculated, but just as swift. Was, or is, the Crocs phenomenon just a passing fad that was pre-destined to fail, did management decisions ultimately hasten the fall, and can Crocs ultimately survive as a company are some of the questions answered in this paper.

Crocs: The Imperfect Supply Chain

Company Background

CROCS INC - 6328 Monarch Park Pl - Niwot, CO 80503-7119

Established in 2002, Crocs Inc. primarily designs, manufactures, and markets footwear for men, women, and children under the Crocs brand. The company's footwear products incorporate its proprietary injection molded closed-cell resin material, which enables production of a colorful, soft and lightweight, non-marking, slip- and odor- resistant shoe. The company currently has 9 manufacturing plants around the world. Thru 14 distribution channels Crocs sells its products in over 6,500 retail locations in the U.S. alone. It also has begun selling its products in over 90 additional countries.

Starting with a single model, Crocs' current product line includes 31 different models in a multitude of colors. The company intends to continue diversifying its footwear portfolio with new-model introductions, along with branded apparel and accessories. The company went public in February of 2006. As of Dec 31 2008, the company, in addition to its normal retail outlets, also operated 177 domestic and international retail kiosks, 70 domestic and international retail stores, and 32 domestic and international outlet stores. 2008 revenues topped $721 million (Hoover, 2009).

Strategy

The company started in 2002 when three friends decided to start selling foam clog shoes that one of them had purchased while on vacation in the Caribbean. Produced by a Canadian company, these shoes were made from a special material that was non-slip, easy to wash, resisted odor, and were extremely comfortable. They ended up naming the shoes Crocs.

The shoes were an immediate success, and word of mouth quickly expanded