A. Describe the competitive environment of ECCO and determine how well ECCO is positioned (vis a vis competitors) to take advantage of the changes in the industry?
“A perfect fit – a simple Idea”, ECCO mainly produces casual shoes for comfort and is totally focused on producing high quality shoes. ECCO owned several tanneries in the Netherland, Thailand and Indonesia, which supplied leather all over the world. ECCO had a well functioning value chain situated in various countries using skilled local workers. Due to their stronghold in various countries, their competitors found it difficult to maintain an equivalent level of quality as ECCO’s. ECCO’s main competition was from Geox, Clarks and Timberland. ECCO also faced competition from shoe …show more content…
If ECCO outsources its manufacturing, they will cease control over their quality and drop their market share.
B. ECCO has a fully integrated vertical value chain. What are the pros and cons of this strategy?
Having your own value chain has its own advantages. ECCO has its facilities in various different countries of the world. Those facilities employ local workers who feel empowered knowing that they are working for a huge company. ECCO’s acquisition of the largest tannery in the Netherlands followed by a tannery and research center has helped them get access to leading expert knowledge about tanning. When a company owns a value chain, they can make any changes to their product line as and when they want to. When you outsource, you are basically contracting your order.
ECCO also has 80% of its leaders promoted from within as they understand the culture of the company better than an outsider.
The cons of this strategy is the increased cost involved in putting management teams in place in different countries, operational cost, factory maintenance cost and payroll cost. All of ECCO’s competition outsourced their business to save cost and drop
“A perfect fit – a simple Idea”, ECCO mainly produces casual shoes for comfort and is totally focused on producing high quality shoes. ECCO owned several tanneries in the Netherland, Thailand and Indonesia, which supplied leather all over the world. ECCO had a well functioning value chain situated in various countries using skilled local workers. Due to their stronghold in various countries, their competitors found it difficult to maintain an equivalent level of quality as ECCO’s. ECCO’s main competition was from Geox, Clarks and Timberland. ECCO also faced competition from shoe …show more content…
If ECCO outsources its manufacturing, they will cease control over their quality and drop their market share.
B. ECCO has a fully integrated vertical value chain. What are the pros and cons of this strategy?
Having your own value chain has its own advantages. ECCO has its facilities in various different countries of the world. Those facilities employ local workers who feel empowered knowing that they are working for a huge company. ECCO’s acquisition of the largest tannery in the Netherlands followed by a tannery and research center has helped them get access to leading expert knowledge about tanning. When a company owns a value chain, they can make any changes to their product line as and when they want to. When you outsource, you are basically contracting your order.
ECCO also has 80% of its leaders promoted from within as they understand the culture of the company better than an outsider.
The cons of this strategy is the increased cost involved in putting management teams in place in different countries, operational cost, factory maintenance cost and payroll cost. All of ECCO’s competition outsourced their business to save cost and drop