Mgt311 Introduction To Operation Management Assessment Answers

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

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?

Answer:

1: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. 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 : 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.