Ecco’s global value chain management Essay

1. Describe the competitive environment of ECCO and determine how well ECCO is positioned (vis--vis the competitors) to behave advantage of changes in the application. http//wulibraries.typepad.com/files/footwear.pdf2. Analyze ECCOs global value cosmic string. How well does this configuration bear upon the drivers in the industry? Analyze ECCOs global value chain.High demand for feeling and reduced precede times led the company to a self-sufficiency approach on streamlining its entire value chain from raw hides to finished clothes unlike its major competitors who altogether designed and marketed their point of intersections without in house manufacturing. In having a global network of tanneries, take facilities, seek c ventures and distribution centers, ECCO is able to meet node demands in specific geographic localizations in terms of response times which lead to customer satisfaction. Additionally the flying accrues from benefits of lower labor and production costs an d different expertise levels in different locations which can be in turn transferred down to the customers. http//www.pwc.com/en_GX/gx/operations-consulting-services/pdf/pwc-supply-chain-and- put on the line-management.pdf According to Porters value chain framework, ECCO utilized respective(a) strategies to achieve a balance of responsiveness and efficiency in their efforts to improve its global value chain. http//www.strategicmanagementinsight.com/tools/value-chain-analysis.html Specifically, the tauten utilized1) Firm infrastructureIn having a factory based in Slovakia, uncertainty and risk of political instability in Thailand could be mitigated by helping to drive up rule book between plants and ensuring quicker delivery speeds to markets in Russia & Poland. 2) Human Resources ManagementECCO ensured knowledge remained in the company finished promoting workers from within and improving worker skills through trainings. 3) Technological DevelopmentR&D activities were relocated t o the production sites where they could adequately support production processes and optimization of materials. Thekey competencies of the potent were in product development and production engineering science to ensure customer comfort in the apparel designs. 4) ProcurementECCO giveed high up demands for quality and lead times for the vendors and worked only with experienced firms in building their factories. 5) Inbound Logistics and Outbound LogisticsStreamlining of logistics was performed through location of tanneries adjacent to enclothe production facilities in Indonesia & Thailand Distribution centers in United States and Denmark were strategically located to act the market demand in order to match market needs. Appropriate modes of transport such as by sea, vans, freight planes and lorries were utilized depending on the nature and urgency of deliveries. 6) OperationsThe firm also accrued benefits of sustainability by having control over the entire value chain as it coul d directly tailor its R & D efforts into production and closely monitoring operations. The distribution centers adapted to changing business environments by expansion to meet capacity demands and closure of some warehouses when sales to the Danish market reduced. 7) Marketing & Sales use of goods and services of specialty outlets and multi- note stores ensured ECCOs enclothe would be accessible to the target market of consumers foc employ on high quality rather than fashion and elegance. Establishment of sales subsidiaries and production units spread all over the innovation enable the firm to save in terms of labor costs and spread risk. ECCOs selling team screened samples and made forecast volumes and production styles before the set shoes were scheduled to be in demand. 8) ServiceThe firm concentrated on utilizing special expertise to its advantage in the case of the Thailand firm producing complicated shoes due to the ability of the Thais to deliver first class workmanship. I n addition to shoe manufacture, ECCO supplied leather to auto & furniture industries which offered an alternative market for the tanneries and generated more than r tear downue for the firm. How well does this configuration match the drivers in the industry? Ownership of tanneries, factories and leather research centersmaintained the firms brand of payload to quality and boosted the companys ambition and confidence in delivering products that met customer expectations In reducing the deem of vendors, the company was able to maintain high quality levels through close quality control measures and maintain its brand image of working to ready the perfect shoe. The firm also made compromises to its approach in some cases by outsourcing its production for shoes that could not benefit from its in-house technology. Most firms in the shoe industry outsourced production as a way to cut production and vendor logistic costs.3. ECCO has a to the full integrated upright value chain. What are the pros and cons of this strategy? What economic and strategic factors should be analyzed to act this question? Proshigher(prenominal) demands of quality can be achieved (e.g. through better quality control) supports the companys vision of high quality productsCore Technology stays within the companyYou have more price control (= slight exposed to price fluctuation) Eliminate the intermediaries (and obtain the margin of supplier / intermediaries) Higher economies of scaleAbility to access leading expert knowledge about tanningImplement shoe and company specific Research & Development (for example less pollution = can be used for marketing) Potential for growthAccess new marketsattaining market power = eventually monopolize the market procure into new markets (auto and furniture industries) = diversification = risk spreading Shorter lead times achievableShows a high level of ambition and confidenceLess transaction costEasier coordination of all stages to reach the objective of cu stomers satisfaction More control You can have more influence on how the product is presented to the people and you can block competitors from getting access to scarce preferences Reduce transportation costs if commonplace ownership results in closer geographic proximity ECCO example factory and tannery in China sum up entry barriers to potential competitors, for example, if the firmcan gain sole access to a scarce resource ConsDifficulty of integrating the different stages into one entity It requires different skillsIt may decrease the focus on affectionateness competenciesHigh presidencyal requirements = eventually costs too high It deepens the position in the same bowl = less flexibility for different variants = not responsive to changing wants of the customer e.g. ECCO is attached to leather shoesMaybe less quality because of lack of competitionStrategic and economic factors that should be analyzedHow technology intensive is the market? What skills are needed? Do we fulfill these needs? Can we compete with former(a) companies? Is there a market entry barrier? How much do we have to invest? How many a(prenominal) distributors / suppliers are available? How competitive is their market? How big is their margin and market power? Will an integration result in less price fluctuation? Do we have enough resources to realize the organization of the whole supply chain? Do we really want to reinforce our position as a leather shoe fabricant? Or do we want to achieve higher flexibility to open chances to enter new markets? Do we generate a higher supply chain surplus with a vertical strategy? Are there laws or political issues to be considered?Are current suppliers unreliable, expensive or cannot supply the required inputs?Referenceshttp//www.strategicmanagementinsight.com/topics/vertical-integration.html http//smallbusiness.chron.com/advantages-vertical-integration-strategy-20987.html http//www.quickmba.com/strategy/vertical-integration/4. Is ECCO following the inside-out or outside-in strategic office? What are the implications of this survival of the fittest and how can ECCO increase their sales/marketing efforts?ECCO is following the inside-out strategic perspective. turned strategic perspective definition You pick your own brand snap. You take a stand, confidently go out to the mankind and declare,This is what we stand for and the way we are going. A combination of gut instincts and sheer courage is enough to create the conviction that your brand strategy will resonate with your target audience. You believe with all your heart that by sticking to your guns, youll win a loyal following. http//thefinancialbrand.com/1162/inside-out-vs-outside-in/Evidence supporting this perspective in the paper well-nigh wanted brand within innovation and comfort footwear a position that can only be attained by constantly and courageously researching new paths Company Vision Statement Evidently, trends in the market it terms of fashion and elegance were valuable, but usability was ECCOs highest design antecedence. This indicates that ECCO has chosen their brand direction, and even though they do follow market trends, they are maintaining their current course. ECCO is not a fashion brand and it never will be. We do not sell shoes where the brand name is the most important and quality is a secondary consideration. Primarily, we sell high-quality shoes and that is where we seek recognition. Soren Steffensen (Executive Vice-President, ECCO) A fashion brand would be a good example of a company utilizing an outside-in strategic perspective.Steffensen also addresses ECCOs brand direction in this quote. Implications of following the inside-out strategic perspective Often not enough market research is done by companies following this strategic perspective because they are supremely (over) confident in their vision. Inside-out strategic perspective leads to undifferentiated brand strategies like excellent usability, high quality, or capacious value. An inside-out brand strategy really doesnt take into direct wants/needs of customers. Instead, ECCO attempts to put what these wants and needs should be. Ways to increase sales/marketing effortsECCO can increase sales by slip more from inside-out to outside-in in their strategic perspectives. This means instead of simply saying X is our priority and Y and Z are our goals, the company should take customer wants/needs and market trends more into account and tailor their brand direction around this target market. Even though Soren Steffensen states that ECCO is essentially a shoe company focused on utility, perhaps sales would increase with a greater focus on fashion. A company with a greateremphasis on fashion would probably be a company utilizing an outside-in strategy. Companies based on an inside-out strategic perspective usually require more panoptic marketing efforts than companies founded on an outside-in perspective. This is due to the fact that inside-out companies are creating products that the customer has less input in. With this less input, the customer needs to be convinced to purchase the product.5. How is family ownership affecting ECCO? Comment on the embodied ownership structure and its implications for strategy-making and implementation. What alternatives exist?