Case Study 1 - Crocs, Inc - Tobias Liedel.docx - Case Study – Crocs Synopsis/Executive Summary In this case Crocs started off with great sales numbers

Case Study 1 - Crocs, Inc - Tobias Liedel.docx - Case Study...

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Case Study – Crocs Synopsis/Executive Summary: In this case Crocs started off with great sales numbers as they were the new name on the market and many times companies in this sector rely heavily on name brand association. In this case study we are going to dig deeper into what caused the decline of Crocs, Inc. How could a company with record sales in the early 2000s get pushed to close its last manufacturing facility in 2018? Croc is a company in the Textiles, Apparel, and Luxury Goods and produce water resistant shoes with multiple styles, maybe too many. They offered over 300 different types of “casual” shoe designs in approximately 600 retail stores across the globe. The company runs its business across three geographic regions: the Americas, the Asia Pacific, and EMEA. The company prioritizes five core markets, including the U.S., Japan, China, South Korea and Germany. Some issues identified within the case study and through additional research really come down to the nature of the product, where and how it is sold, and The seasonal nature of their product leads to an uneven revenue stream with less coming in during the fourth quarter. Additionally, Crocs are what you would consider a luxury item and their success is highly dependent on consumer’s disposable income. The last problem identified is the supply chains of Crocs, in particular the distributors of their goods and the speed at which they expanded. Situation and Findings: Since Crocs, Inc. is in the retail business, it makes sense to see their sales fluctuate on a regular basis. In 2013, when the drastic fall in revenue occurred it just so happened that it was also the lowest mark for consumer disposable income. According to Net Advantage consumer disposable income fell from about 3.3 percent in 2014 to -1.3 percent in 2013 which would
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explain the drop in sales. When you add in the fact that Croc produced so many different styles of shoe, it seems that the inventory carrying cost alone would put them at odds with success during this time. One assumption that could be made based on the case study is that Croc might have gotten a little too aggressive with the number of styles of shoe they sold. Mass producing hundreds of different styles doesn’t always go well if the market research done is inaccurate or trends switch quickly. Compounding the issue with consumer spending habits, Crocs expanded their locations and product line to over 90 worldwide between retail stores, kiosks, and outlets at a time where the stand alone retail stores were starting to struggle. This is evident in the case study where it mentions that while its revenue was up slightly (11.2%), much of that was false when you
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  • Summer '18
  • Crocs Inc.

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