A CASE STUDY ON ECCO A/S GLOBAL VALUE CHAIN MANAGEMENT

(SWOT ANALYSIS, PORTER FIVE FORCES ANALYSIS & PESTLE ANALYSIS)

GROUP MEMBERS
Ankit Rajal Keta Shah Deepa Bora Adnan Dhilawala Jigar Vakharia Jay Tanna Hussain Lokhandwala

SWOT ANALYSIS

STRENGTHS
Innovative products due to heavy investment in R&D increasing quality of shoes manufactured. Leading player in Golf shoes market in United States. Risk appetite is high as the business is Family Owned. Focus on Global operations thereby mitigating risk and lowering labour costs Provide continuous training and education of its employees R&D on environment-friendly tanning methods Supply high quality leather to furniture and auto industries

WEAKNESS
Needs to focus more on marketing operations Growth rate in United States is lower when compared to Geox It takes 8 weeks time to procure raw materials from the placement of order until the materials were ready to be shipped and it took another 5 weeks for the sea shipment

OPPORTUNITIES
Vast potential in Chinese markets Vast potential in increasing the production capacity in the market Scope of improvement in new designs

THREATS
Multiple competitors Threat of substitutes in Chinese market Brand conscious people may not purchase these shoes as ECCO does not emphasize on the brand, it focuses more on the quality

PORTERS FIVE FORCES STRATEGIC ANALYSIS

POTENTIAL ENTRANTS
Medium threat of new entrants New entrant will take some time to manufacture and distribute products globally Many manufacturers imitated the ECCOs design of products Entry of new players easily available in China

SUBSTITUES
Competition and Rivalry is intense as many competitors provide the same set of products Industry is also subject to changing consumer preferences Many Chinese manufacturers were copying the ECCO design of products Company ventured into new segments of shoes giving rise to new competitors

BUYERS
High bargaining power of buyers Many players manufacture the same line of products Consumers have many options to select from the same line of products Consumers are price sensitive and are well informed about the products

SUPPLIERS
Low bargaining power of Suppliers 80% of the production is in-house only 20% is outsourced Many suppliers providing the raw hides or finished goods The company has alternatives to find other suppliers who charge lower Medium threat of substitutes The difference between athletic & lifestyle casual footwear diminished slowly. Consumers can switch to either line of products when required.

PESTLE ANALYSIS

ECONOMIC FACTORS

An integrated value chain include high labor costs

SOCIAL FACTORS

High priority to continuous education and training of its employees Recruitment was done internally for management positions Huge investment in vocational training, career development, developmental conversations and expatriation Good knowledge of inventing and fine-tuning cutting technology Capital intensive machinery Huge investments in Continuous up gradation of latest technology

TECHNOLOGICAL FATORS