MGT311 Introduction To Operation Management

Answer

Core competencies and advantages

Croc’s is a footwear brand aiming to provide comfort to feet everywhere. The company was founded in 2002. The company introduced innovative shoes which are made up of a revolutionary material known as Croslite. The Crocs are manufactured in Mexico and Italy.

Croc’s has established an innovative supply chain system which allows dealers to place smaller pre-books and order within the period. It is popular and a global strategy and provides the company with a competitive advantage. The company is flexible enough to meet the unpredicted demands and the low inventory level. The adjacent relationship with the traders enables to maintain proficient and flexible dissemination model. Croc’s has gained competency in the marketing as it works with the small retailers after successfully approaching the large retailers. It enables the company to negotiate favorable terms. The material used by the company is also one of its core competency. Croc uses a unique croslite material which is comfortable, light and odor resistant. The company has a wide range of product line and 96% of sales come from shoes only. It has also license agreement with the Disney, Universities and sports teams (Xiao and Gang, 2017).

Croc’s has gained an advantage as good shock absorption. These are available in the wide colors and are favored by the young and old for its lightweight, comfortable and waterproof. The cushioned shoes protect the feet, ankles and back from impact at the time of walking on the hard floors. These shoes are perfect for the wide feet. These are easy to clean and are suitable for trips like beach and gardening, as crocs can be worn roughly. The company has launched its range offering support and comfort known as CrocsRX which is APMA supported and are recommendable to people who have certain foot problems like diabetic and post-surgery patients (Chander, Morris, Wilson, Garner and Wade, 2016).

Exploitation of the competencies in the future

Croc’s can acquire useful companies in order to increase the efficiency of the supply chain.

• The vertical integration in the supply chain allows the company to acquire delivery channels, injection machine, and the raw materials. It has a highly flexible supply chain.
• It matches the competencies of the company and has ownership of intellectual property which is Croslite resin.
• Croc’s can exploit the competencies in the future through information sharing with the material suppliers.
• The company has reduced ‘bullwhip’ effect and reduced raw inventories through just in time system (Ellitan, 2017).

Croc’s can grow with the help of the acquisition of the smaller competitors.

• It does not match the different culture of the companies may cause challenges.
• The acquisition can be completed in order to expand huge market share, upsurge profits, and approachability to greater resources and improved business growth.
• It matches the ability in a few senses as Croc’s is capable of acquiring a company which caters to the niche market.
• Croc’s can purchase all the contract manufacturers and can have full control over the manufacturing process.
• The acquisition can result in decreasing variability in the demand and lowering cost of the manufacturing.

Growth with the help of product expansion in the future. The company can enter new markets by announcing new products and directing research and development.

• Croc’s have the opportunity to enter the new markets by introducing a new range of shoes.
• It is helpful to the company when it decides to branch out and add more products. Entering the new markets is helpful in increasing profits and brand
• The new products are helpful in improving brand visibility. Croc’s can also add clothes, bags, accessories, and socks in its product range (Gokula, Gaspar, King, Moore and Li, 2015).
• Croc’s can also expand through licensing agreements like Disney.

The degree of the core competencies

The core competency of the vertical integration is helpful to the Croc’s in attaining higher control over the value chain. It assists economies of scale and lower production costs. The vertical integration provides better quality control. It enables the company with an effective barrier to the entry (Jena, Singh, Mishra, Gandhi and Singhal, 2016). The supply chain is capable enough to negotiate with the suppliers and buyers. The factors which defocus the away from its core competency is the lack of efficiency and capacity balancing issues.

The growth by acquisition has advantages in the form of a reduction in competition and resistance against the substitute products. It is helpful inaccessibility to the developed technologies. The acquisitions enable the ability to meet different customer expectations. The disadvantages of the acquisitions are a financial aspect and the integration concerns (Alshaali, Bodolica, and Spraggon, 2014).

The production expansion has advantages in the form of the economies of scale and ability to meet customer’s expectations. The product extension makes a product obsolete even before the competition tries to copy it. The weakness faced in the product expansion are increased production cost, less flexible supply chain and the use of other materials. Croc’s also faces drawbacks of having more or less inventory. The more inventory is obtainable for the sale and more petition in new place. The fewer inventories are less to manage (Marques, Guedes and Ferreira, 2016). It is more beneficial to test in a new market. The fewer inventories reflect that supply chain is malleable and is able to encounter demand. The high and low margins affect the inventory decisions of the company. Croc’s is a high margin company and faces rivalry from companies like Adidas, Reebok, Puma, and Nike. More inventories are available for more sales and more petitions in more places. Fewer inventories are comparatively less to accomplish. It is helpful only if trying a new market. The fewer inventories depict that the supply chain is capable enough to encounter the demand (Wang, 2016).

References

Alshaali, A., Bodolica, V. and Spraggon, M., 2014. Venturing in Entrepreneurial Undertakings. In Managing Organizations in the United Arab Emirates (pp. 75-110). Palgrave Macmillan, New York.

Chander, H., Morris, C.E., Wilson, S.J., Garner, J.C. and Wade, C., 2016. Impact of alternative footwear on human balance. Footwear Science, 8(3), pp.165-174.

Ellitan, L., 2017. The role of business enviromental and strategy alignment in the optimization of business performance of small scale manufacturing companies in indonesia. World Journal of Research and Review (WJRR), 5(2), pp.57-63.

Gokula, M., Gaspar, P., King, B., Moore, C. and Li, X., 2015. Effect of Implementation of the Tele-Health Visiting Nurse Association Project on Re-Hospitalization Rate and Cost. Journal of the American Medical Directors Association, 16(3), pp.B26-B27.

Jena, A., Singh, R.K., Mishra, R., Gandhi, P. and Singhal, H., 2016. Influence of Operations Management on Other Business Activities in an Organization. International Journal of Innovative Research and Development, 5(2).

Marques, A.M.D.R., Guedes, M.D.G. and Ferreira, F., 2016. Open innovation in the fashion industry: portuguese footwear industry. In CORTEP 2016-Romanian Textile and Leather Conference (pp. 349-354). Performantica, Iasi, Romania.

Wang, Y.S., 2016. Dynamic capabilities in fashion apparel industry: emergent conceptual framework. Baltic Journal of Management, 11(3), pp.286-309.

Xiao, C. and Gang, Z., 2017, July. How Do Innovation Capabilities of Industrial Cluster Evolve in the Context of E-Commerce?: A Case Study from China. In Management of Engineering and Technology (PICMET), 2017 Portland International Conference on (pp. 1-8). IEEE.