Revolutionizing an Industry’s Supply Chain Model
Revolutionizing an Industry’s Supply Chain Model for Competitive Advantage Crocs is one of leading manufacturer and the fastest growing company in the footwear industry. While it sold its first shoe in 2003, it has reported revenue of $143 million in the second quarter of 2007. This phenomenal double digit compounding growth rate is because of its policies over its product and supply chain; eventually leading to competitive advantages over its competitors.
The case opens up with a brief discussion of how Crocs came into existence at the very first place. Skipping ahead to the crucial part, the founders of Crocs (whom then were not founders yet) discovered the foam clog shoes that one of them was wearing to be very comfortable, odorless and not slippery. They thought it was likeable and marketable; thus, they decided to start the shoe company only using the foam clog. Unexpectedly it was a huge hit and words of mouth expended the customer base.
With the uncontrollable increase in demand, the founders had to hire a professional to manage their company. This professional is Ronald Synder, a college friend of theirs, who was already an executive in an electronic company. With his help, Crocs has grown astoundingly over the next few years as I have discussed previously. With arrival of Ronald Synder, one of the first things he did was purchase foam creation plant in order to have control over the production.
He then launched the company products worldwide and increased efforts on marketing in a very early stage. These successive attempts have significantly increased the sales revenue eventually. However, these were not his best moves that led to double digit compounding growth over the next few years. With the increase in growing demand, Ronald Synder not only acquired other plants at different locations but also agreed to increase risk with its contracted manufacturers. Such is in the case of their contracted manufacturer in China.
His approach of meeting demand is different from a traditional approach in that he is determined to response even before there is an actual change in the market. Thus, when he is able to pick up signs of growing demand for a specific product, he will the product into assembly even before orders are received. That way, products always meet demand in a timely manner. This flexibility in supply chain has revolutionized the whole industry and the way things are done. In addition, this flexibility in supply chain has also given Crocs a major competitive advantage over its competitors.