SAN BEDA UNIVERSITY

A Strategic Management paper on Crocs company

A Strategic Management Paper

Submitted to the Faculty of the

College of Arts and Sciences,

San Beda University, Manila

In Partial Fulfillment of the Requirements in

Strategic Management for the degree in

Bachelor of Science in Business Administration

Major in Marketing Management

Submitted by:

Submitted to:

TABLE OF CONTENT

Executive summary 4

Introduction 5

1
Scope and Limitations 6

Vision and Mission Statements. 7

Current Vision and Mission Statement. 7

Evaluation of Vision and Mission Statement. 7

Revised Vision and Mission Statement. 7

Recommendation on how to address Vision and Mission statement 8

Macro Environment Analysis 9

A. General environment Social, cultural, and demographic. 10

Economic Legal, political, & government 11

Technological. 11

Global/International

Industry Analysis. 15

Michael Porter’s Framework. 15

Summary of Porter’s Framework. 15

Competitive Profile Matrix 16

CPM Analysis and Interpretation 16

External Factor Evaluation (EFE) Matrix. 17

Micro Environment analysis 27

Internal Functional Audit 27

Marketing Management 31

Finance/Accounting. 31

Research & Development. 32

Internal Factor Evaluation (IFE) Matrix 33

Internal Strategic Issue/s. 36

Strategy Formulation

SWOT Matrix 40

IE Matrix 43

Summary of Matrix and Analysis 45

2
Quantitative Strategic Planning Matrix (QSPM) 46

Objectives, Strategy Recommendation and Action Plans 52

Strategic and Financial Objectives -52

Strategy recommendation 52

Strategy Map

55

Strategy Positioning 55

Financial Projections for years 2022 to 2025. 56

Assumptions

57

Departmental Programs and Action Plans 58

EXECUTIVE SUMMARY

3
 The performance of Crocs inc as a business will be discussed in this paper, a strategic

plan will be developed to identify the most effective strategies for expanding the company's

market presence. The importance of internal and external factors, such as political, economic,

socio-cultural, and technological issues, will also be considered. Additionally, the market share

of Crocs competitors is analyzed.

Following the identification of the company's respective strengths, weaknesses,

opportunities, and threats, several different matrices, including the SWOT Matrix, the

Internal-External Matrix, the Summary of Matrices and grand matrix, Porter's Generic Strategy,

and the Quantitative Strategic Planning Matrix, were utilized to arrive at recommended

strategies for the company to implement for its further improvement.

The analysis will also focus on the company's goals, such as developing strategies to

increase its market share, giving an analysis of the company's vision, mission, strategies, and

competitive advantage based on the industry's threats and opportunities as well as the

company's strengths and weaknesses, and making sure that new product development will be

introduced to the market and meet consumers’ demand.

In addition, Financial projection and statement was utilized to achieve better strategic planning

as well as improved strategy implementation for the purposes of evaluation, monitoring, and

control. Furthermore, a step by step plan map was established with the objective of In light of

all the research that has been conducted, several recommendations and strategies have been

presented in this study.

4
 I. INTRODUCTION

The Crocs brand of foam clogs is produced and sold by Crocs, Inc., an American footwear

manufacturer with headquarters in Broomfield, Colorado. Lyndon "Duke" Hanson and George

Boedecker Jr. developed Crocs to manufacture and market a foam clog whose design they

licensed from Quebec City's Foam Creations, Inc For those looking for footwear that

complements both their personalities and lifestyles while also being comfortable for their feet,

the CrocsTM brand stands for innovation, fun, and comfort. CrocsTM is progressing

significantly in its mission to offer intuitive comfort to feet everywhere by offering more

designs and in more locations for more situations than ever before. CrocsTM debuted a

cutting-edge shoe in 2002, the year of the company's creation, manufactured of the

ground-breaking material CrosliteTM. The footwear industry had never seen anything like the

unusual properties that CrosliteTM technology possessed, allowing it to function on both land

and in water. Because crocodiles can live in a variety of environments and are amphibious, the

firm was given the name CrocsTM.

5
 II. SCOPE AND LIMITATIONS

The strategic management paper mainly focuses on the case study for the brand of Crocs

which is limited to obtaining data from the 2011-2013 case reading that was given to the

proponents. The paper will provide strategic suggestions for Crocs at the end of the paper

bases primarily from the information provided by the source of the case study. This paper

aims to develop future strategic vision, objectives, strategy formulation, strategy

implementation, evaluation and initiating corrective action upon the situation and

circumstances Crocs were in back in 2012.

Furthermore, the study does not cover and consider any recent events/milestones of Crocs

from 2013 up until the present day in the making of this paper. The study is retrospective,

readers will be asked to reflect and recall events and decisions that occurred in the Crocs

franchise

6
 III. VISION AND MISSION STATEMENTS

Mission Statement

- Croc's mission is "to bring profound comfort, fun and innovation to the world's

feet"

Evaluation of Vision and Mission Statement:

Parameter Yes/No If yes, which part of the statement

1. Customer No

2. Products & Services No

3. Markets No

4. Technology Yes Innovation to the world's feet.

5. Concern for survival, No

growth, profitability

6. Philosophy Yes "to bring profound comfort, fun and innovation to

the world's feet"

7. Self-concept No

to bring profound comfort, fun and innovation to the

8. Public image Yes
world's feet

9. Concern for employees No

Revised Vision and Mission Statement

Crocs is dedicated to bring high quality fashionable shoes delivered with originality,

imagination and creativity. We want to be globally known as the brand that cares for their

customers as we strive to provide comfort, fun and innovation to the world's feet by

continuously developing lighter, softer, and flexible shoes.

7
Recommendation on how to address Mission statements to stakeholders.

Vision and Mission statements first inspire the members of the organization regardless of

any brand/company because this is the first step in ultimately fulfilling what is said in the

statements. Stakeholders should consider that using too much simplicity for a mission

statement undermines their chance to strike empathy and curiosity from a customer's

perspective. The original mission statement has a good message in it but it lacks more

message that Crocs can provide and that should be the main concern for the stakeholders.

8
 IV. MACRO ENVIRONMENT ANALYSIS

General environment Social, cultural, and demographic Economic Legal, political, &

government Technological Global/International

A.1 Opportunities

A.1.1. Socio-Cultural-Demographic Forces

One-sentence summary of the factor: There are many countries were Crocs shoes could

potentially be popular due to the presence of a rapidly growing middle class, including China,

Vietnam, Brazil, Nigeria, Namibia, and Chile. These consumers are often seeking out new and

innovative products. (Pg 603,para3)

Relevance to the Crocs Explanation:cThis is an opportunity for crocs in 2013 because as they

become more popular, demand for crocs will climb in those countries mentioned as they seek

new innovations. This will help the crocs company.

A.1.2. Technological Forces

One-sentence summary of the factor: Asian and Eastern European markets are less established

and provide more opportunities for companies to explore various product development and

market penetration strategies. (Pg 601, para2)

Relevance to the Crocs Explanation: As crocs are less established at the time, the market is

progressively rising as an opportunity for crocs to penetrate and introduce crocs to this new

market.

A.1.3. Economic Forces

One-sentence summary of the factor: The overall improvement of the global economy is a

positive factor for companies like Crocs. (Pg 603, para3)

9
Relevance to the Crocs Explanation: As the worldwide economy improves, the croc market

rises, indicating that people can afford and the globe has money to spend on the company and

the global immersion of new items.

2 One-sentence summary of the factor: Crocs products are sold in Asia, Australia, New

Zealand, the Middle East, and South Africa in a similar way as they are in the Americas.

(Pg598, para6)

Relevance to the Crocs Explanation: Because America is a successful country, Crocs adapted

similar techniques from the American market to introduce to other countries that strive for

success in the same way that America does. This is a wonderful strategy for Crocs to boost

awareness and quality.

A.1.4. Environmental Forces

One-sentence summary of the factor: As consumers around the world become more focused on

health and prioritize both style and convenience, Crocs could capitalize on these demographic

trends (Pg 603, para3)

Relevance to the Crocs Explanation: Crocs is motivated to generate unique designs as this

factor is an advantage for the corporation for increased market demand for the product of crocs

as the world prioritizes health and innovation on style.

A.1.5. Politico-Legal Forces

One-sentence summary of the factor: China and the Philippines currently do not have

regulations in place for acceptable levels of certain contaminants. (Pg 603, para2)

Relevance to the Crocs Explanation: Deregulation on the market means that the company has

control over what happens on the market. For example, in 2013, Crocs in China and the

10
Philippines can fully capitalize on the opportunity to build a brand and market in these two

countries because they have not yet published any proper regulations about the company.

A.2. Threats

A.2.1. Socio-Cultural-Demographic Forces

One-sentence summary of the factor: Crocs products are sold in a similar way in Asia,

Australia, New Zealand, the Middle East, and South Africa as they are in the Americas. (Pg

598, para6)

Relevance to the Crocs Explanation: This will constitute a threat to the crocs market due to

differences in market approach and perspective in western countries versus east, particularly

Asian countries.

A.2.2. Technological Forces

Not mentioned

A.2.3. Economic Forces

One-sentence summary of the factor: The on-going negative press coincided with a weakening

global economy. (Pg 597, para1)

Relevance to the Crocs Explanation:This is a big worry for the crocs industry because they have

entered the international market. However, if the global economy gets worse, the market will go

down.

11
 One-sentence summary of the factor: Firms competing in the industry are increasingly

expanding them

Relevance to the Crocs Explanation:This will be a big problem for Crocs because there will

be more places to buy the same product. Crocs' market share will go down as competition in

the market gets stronger.

One-sentence summary of the factor: It is difficult to identify the companies who make the

imitation crocs that sell for less than $10, yet legitimate crocs cost more than $20 per pair. (Pg

603, para4)

Relevance to the Crocs Explanation:The significance of this to the crocs corporation is that

the quality of fake items will damage their reputation, and as the market for fake goods

grows and it becomes harder to tell if an item is fake, customers will be misled as to

whether or not their purchase is authentic or of low quality.

One-sentence summary of the factor: Columbia Sportswear Company (COLM) expanded its

footprint in India in late 2013 by signing a distribution partnership with New Delhi-based

Chogori India Retail Ltd.Chogori has 32 locations in 14 Indian cities and is the exclusive

reseller of Hi-Tec, a British footwear brand, and Crocs, an American footwear brand. (Pg 596,

para4)

Relevance to the Crocs Explanation:Due to the primary competitor of Crocs entering into a new

arrangement to be the exclusive distributor of Hi-Tec, the distribution relationship has an impact

on the market for Crocs in India. As a result, the market for footwear will be split between

Hi-Tec and Crocs.

12
A.2.4. Environmental Forces

One-sentence summary of the factor: The increased understanding of harmful chemicals in

shoe manufacturing poses a risk to all shoe producers, including Crocs. (Pg 601 para3)

Relevance to the Crocs Explanation:Crocs does not manufacture products from the

countries mentioned, but many fake crocs are made illegally from those countries,

especially the Philippines. This will be a threat to the company because the product of crocs

can be tagged as hazardous products because many popular plastic brands have tested high

levels of phthaletes in the countries of the philippines, india, indonesia, south africa, and

other nations.

One-sentence summary of the factor: Panic over polluting products: public opinion may drive

customers away, particularly parents with young children, who are Crocs' core focus. (Pg

603, para2)

Relevance to the Crocs Explanation:This poses a threat to the Crocs Company since people

are concerned about counterfeit Crocs, but the truth is that they do not contain a high level

of phthalates. As a result, the original Crocs have been negatively impacted for producing

large levels of toxins under their name.

One-sentence summary of the factor: In 2009, the Swedish Society for Nature Conservation

discovered worrisome levels of harmful chemicals in a variety of popular plastic-based shoes,

including flip flops, sandals, clogs, and other similar style shoes. (Pg 601, para3)

Relevance to the Crocs Explanation: This is pertinent to Crocs because they manufacture

flip-flops, sandals, and other products. The public will be alarmed by the information

provided by The Swedish Society for Nature Conservation, which will affect consumer

behavior by leading them to believe that Crocs products are harmed and contaminated.
13
 One-sentence summary of the factor: The Swedish Society for Nature Conservation has

recommended consumers to demand full product disclosure and to avoid products containing

PVC and phthalates. (Pg 603,para2)

Relevance to the Crocs Explanation: The topic of crocs can be a threat or a competitive

advantage. On the threat side, customers will want to know everything about the chemicals,

which means the crocs company will have to hire more people and give them more work.

On the other hand, if this idea is put into action, people will know that crocs products are

safe and don't contain any of the toxins found in other brands.

A.2.5. Politico-Legal Forces

One-sentence summary of the factor: Toys containing phthalates are prohibited in the United

States and the European Union. (Pg 603, para2)

Relevance to the Crocs Explanation: This will affect the way crocs are made because most

toys are made of plastic and rubber. The toys that were contaminated and harmful were

made of plastic and rubber, so crocs will be affected because crocs use plastic to make

sandals and flip-flops. Customers in the United States and the European Union will be

worried and think that crocs rubber is harmful, too.

One-sentence summary of the factor: China and the Philippines still lack rules governing

allowable amounts of these containment.. (Pg 603, para2)

Relevance to the Crocs Explanation: Due to the lack of rules governing the containment of

toxins from illegal items, especially phthalates, China and the Philippines are among the

14
 nations where fake crocs are most prevalent. As a result, the people of these two nations are

a major source of these products.

INDUSTRY ANALYSIS

Michael Porter’s Framework

Summary of Porter’s Framework

The footwear industry in which the Crocs competes with several footwear companies have

shown that Crocs can take advantage of the industry because of their distinct advantage of

having their suppliers give them non-toxic materials such as the Croslite material. The figure

showed that foot customers worldwide are alarmed and are concerned about the long-term life

threatening effect of using footwears that contains toxic chemicals to the health of an

individual. 48% of overall footwear consumers have fashion as their motive for buying a shoe
15
while 27% of the market prefers durability and performance while the remaining market are for

sposrts enthusiasts The rapid growth of the industry suggests that the market is wide-open to be

dominated by a footwear company that carefully strategizes a plan in penetrating more markets

in more locations have more chances of expanding their brand globally. Moreover, countries

such as China, Vietnam, Nigeria and Nambia are good locations to penetrate with because of

the rise of population amongst the middle class consumers. It is safe to sat as welll that the

expansion of range products by a footwear company offer to their market helped in achieving

the $50.5 billion revenue of the industry.

Competitive Profile Matrix CPM Analysis and Interpretation

Key competitors

Competitors Reason for choosing competition

Competitor 1 Deckers Outdoor Corp It is a competitor in terms of markets in

footwear and its design products for cold

weather applications as well as hiking,

amphibious footwear just like how Crocs can

be used

Competitor 2 Skechers It is a competitor for Skechers market is for

lifestyle and athletic footwear

Competitor 3 NIKE It is a competitor because Nike specializing

in designing and developing footwear

products. Their company also market their

products through sponsorship of college and

professional sports teams

Critical Success Factors

16
CSF Importance Weight Reason for choosing CSF

and for the importance

weight

1. PROMOTION 15% Promotion of the company is

crucial.

Promotion is a move that for any business to be a

should make a business's successful within its sector.

name, products, or services Public awareness is raised by

more noticeable. a majority advertising,

efficient marketing strategies which results in an

varying according to the improvement in

industry, the company's size, customer flow. Whenever

as well as a wide range of there is a

additional factors. Use of competitive industry, market

social media, publications, Promotion will be important

relationships and in

word-of-mouth demonstrating the service

are a few illustrations of and how it works

promotions distinctive on the market

2. Product Quality 15% Product quality is important

because

Product excellence Customers seek out

represents all of a product's businesses that

characteristics and traits that would meet their unique

contributing to its capacity to requirements for

satisfy the requirements and a venture

anticipations of customers.

17
Product excellence helps

businesses that are acquiring

customers loyalty and

building a brand

consciousness and restraint

expenses.

3. Price 20% Customers typically search

Competitiveness for better

as they negotiate contracts

Competitive pricing refers to with

the pricing procedure for construction businesses So,

products or for services to be they

market-driven and how to would resolve with the

utilize a thing to its fullest business that

in comparison to those they believe is worth their

provided by competitive money.

companies. Here is

frequently used by businesses

other businesses providing

similar items.

4. Variety of products 15% Customers favor businesses

offered that can

offer a variety of items

This is the number of

18
 products offered to customers

5. Target market 20% It helps to have the correct

target market.

The range on the group of A business decides where to

customers wherein the find

product is offered. The scope potential customers that are

of its market curious about what a

business has to offer. It looks

likely that the intended

audience will

How a corporation decides to

operate is

It will have a lot of

customers, and the more

more customers they have

A corporation will then have

revenue.

Rating of 1-4 (4 being the highest)

19
 CPM Analysis and Interpretation

In accordance with their total the highest on their rankings would be Nike with 3.25, the

second one would be Deckers Outdoors, the third one would be Crocs and the last one would

be Skechers. Nike has outnumbered everyone in the ranking for the main reason that Nike

specializes in the design and development of foot wear, apparel, sports equipment and

accessories for men, women and children. Their target market is all ages wherein they design

everything according to their lifestyle. Nike also sponsors products to College and

Professional Sports teams. Deckers outdoors being the lowest for all in these ranking it is not

the most popular one thus having its rating is reasonable. In all conclusion NIKE is the

strongest among them.

External Factor Evaluation (EFE) Matrix

Opportunities

● Worldwide Economic Growth

● Similar products that are being sold worldwide

● Product development for younger market

● consumers worldwide value health, style, and ease.

● China and the Philippines lack pollutant limits.

Threats

● found dangerous chemicals in flip flops, sandals, clogs, and other plastic-based

shoes

● Main Competitors enters indias market

● unlawful and counterfeit goods

20
● Industry rivalry is excessive and growing.

● Panic over contaminating products

Key External Weight Rating Total Explanation

Factor Weighted

Score

Opportunities

0.21 4 0.84 The global

Worldwide
economic
Economic
expansion
Growth
has paved the

path for

Crocs to

improve in

terms of sales

and as a

company.

0.15 2 0.3 similar

Similar
market
products that
strategy are
are being sold
being utilized
worldwide
This globally

demonstrates

the success of

the

21
 crocodiles'

approach.

0.05 2 0.1 As a result of

Product
the
development
development
for younger
of products
market
for a new

generation, a

new market

will emerge

for

exploration.

0.04 1 0.04 In the

consumers
industry and
worldwide
for crocs,
value health,
valuing a
style, and
healthy
ease.
lifestyle is of

little

importance.

0.03 1 0.03 China and

China and the
the
Philippines
Philippines
lack pollutant
are the only
limits.
countries

without a

crocs

22
 production

facility.

Threats

found 0.06 2 0.12 The product's

dangerous average grade

chemicals in is despite the

flip flops, presence of a

sandals, hazardous

clogs, and chemical that

other poses a

plastic-based concern to

shoes the industry

and to crocs.

Main 0.11 3 0.33 This is a

Competitors serious threat

enters indian to the croc

market market,

which is why

I rated it

above

average,

because its

main

competitor in

the industry

has entered

the Indian

23
 market.

unlawful and 0.19 2 0.38 The primary

counterfeit influential

goods variables are

counterfeit

goods, which

affect the

industry and

the crocs

market in

terms of

quality and

pricing.

0.13 1 0.13 Croc industry

Industry
rivalry is
rivalry is
increasing
excessive and
and can be a
growing.
concern since

with many

rivals, the

market for

crocs will

become

smaller.

Panic over 0.03 1 0.03 People's

contaminatin worry over

g products the issue of

24
 contaminatio

n may have

an impact on

the marketing

strategy of

crocs and the

business; a

reform is

required to

regain

people's faith.

Total 1 19 2.27

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 V. MICRO ENVIRONMENT ANALYSIS

Internal Functional Audit

Audit question Yes/No Discussion Supporting

Document

1Does the N/A No data avialable

organization utilize

strategic management

concepts?

2. Are the company's Yes View the mission The vision mission

aims and goals and vision statement statement of the

measurable and of crocs company

conveyed effectively?

3. Do managers at all Yes Organizational Chart Organization Chart

levels of the hierarchy on the book

plan effectively?

4. Do managers Yes Organizational Chart Organization Chart

delegate authority on the book

effectively?

5. Is the structure of Yes Organizational Chart

the organization

appropriate?

26
6. Do job descriptions No Data Available

and job specifications

make sense?

7. How high is staff No data Available

morale?

7. Is employee morale No data Available

high

9. Are organizational No data Available

reward and control

Marketing Audit

1. Are markets Yes The market and Crocs Revenue by

segmented customer are highly channel

effectively? segmented

worldwide

2. Is the organization Yes The company IFE Matrix

positioned well among ensures that they are

competitors? well-positioned

among competitors.

3. Has the firm’s Yes Sales of the IFE Matrix

market share been company and the

increasing? growth of awareness

27
4. Are present N/A

channels of

distribution reliable

and cost-effective?

5. Does the firm have N/A

an effective sales

organization?

6. Does the firm N/A

conduct market

research

7. Are product quality Yes Income statement Income Statement

and customer service shows increase in

good? revenue

8. Are the firm’s N/A

products and services

priced appropriately?

9. Does the firm have N/A

an effective

promotion,

advertising, and

publicity strategy?

28
10. Are marketing N/A

planning and

budgeting effective?

11. Do the firm‘s N/A

marketing managers

have adequate

experience and

training on marketing?

12. Is the firm’s N/A

Internet presence

excellent as compared

to rivals?

Production/Operations Audit

1. Are supplies of raw Yes Crocs manufactures Pestle Analysis

materials, parts, and products without

subassemblies reliable containment

and reasonable?

2. Are facilities, N/A

equipment,

machinery, and offices

in good condition?

3. Are N/A

inventory[1]control

29
policies and

procedures effective?

4. Are quality control N/A

policies and

procedures effective?

5. Are facilities, N/A

resources, and

markets strategically

located?

6. Does the firm have N/A

technological

competencies?

Research and

Development The

Company does not

have a Research and

Development

No Data Available

Computer Information

Systems

No Data Available

30
 Objective Strategies Time Budget (USD)

Marketing To help launch 1. Promos 4 months 500,000

and sell their and

product as well discounts

as new product 2. Marketin

lines g

advertise

ments

3. Create a

new

product

Operations Create fresh 1. Addition 8 months 200,000

products/designs of fresh

products

for

design

and

trends

2. Enlarge

or

upgrade

their

product

designs

31
Finance To raise or get 1. Issuance of 1-2 months N/A since it will

funds to help the debt: be based on the

future projects 250,000,000 project proposal

2. Issuance of

Equity:

100,000,000

Total budget

will be:

400,000,000

the remaining

balance would

come to the

internal funds

for the company

Research and To create new 1. Research 4 months - 1 50,000 on

development trends in fashion the trend year fashion trends

on

To conduct consume 50,000for

researches into r research on new

new product behavior products

categories and

purchase

intention

Information To Improve their 2 years 200,000

Systems upscale/upgrade SAP technology

their SAP to indicate how

the trends can be

turned into

32
 products

Internal Factor Evaluation (IFE) Matrix

STRENGTHS

● Brand Awareness: Young adults have a high brand recognition with Crocs. One of

the most well-liked brands among college students

● Competitive Advantage: Due to its distinctive design, Crocs has a competitive

advantage over its rivals.

● Strong Product Line: Crocs come in a variety of designs and hues. This enables it to

appeal to a wide range of potential clients.

● High-Quality Products: Crocs produces high-quality goods. It can survive heavy

use because of its high durability;

● Unique Design: The distinctive design of Crocs makes them stand out from other

shoe companies.

STRENGTHS IMPORTANCE FIRM’S WEIGHT

WEIGHT RESPONSIVENES SCORE

(1-4)

S1 .16 3 .48

● Brand Awareness:

Young adults have

a high brand

recognition with

33
 Crocs. One of the

most well-liked

brands among

college students

S2 .10 3 .3

● Competitive

Advantage: Due

to its distinctive

design, Crocs has a

competitive

advantage over its

rivals.

S3 .11 4 .44

● Strong Product

Line: Crocs come

in a variety of

hues. This enables

it to appeal to a

wide range of

potential clients.

S4 .12 4 .48

34
 ● High-Quality

Products: Crocs

produces

high-quality goods.

It can survive

heavy use because

of its high

durability. They

produce their own

footwear in own

facility (Mexico,

Italy & China

S5 .08 3 .24

● Uniqueness: The

distinctive material of

Crocs which is the

croslite and the

absence of any type of

packaging makes

them stand out from

other shoe companies.

35
Total .57 1.94

WEAKNESSES

● Crocs keeps the CrosLite chemistry as proprietary information

● Diverse in the shoe market: Crocs products are very different from other

competitors

● All white males comprise Crocs top management: all of the same culture thus

having only one idea in a box

● No Longer Exclusive: Other regions are creating fakes of the products especially in

the Philippines wherein there are hazardous materials in the plastic product itself

● Unbalanced/uneven sales per brands: 95% of all revenues are derived from Crocs

footwear

WEAKNESSES IMPORTA FIRM’S WEIG Explanatio

NCE RESPONSIVE HT n

WEIGHT NESS SCOR

(1-4) E

W1 .15 2 .3
Crocs

● Crocs keeps the CrosLite keeps the

chemistry as proprietary CrosLite

information chemistry

36
 as

proprietar

informatio

W2 .05 1 .05 They have

● Diverse in the shoe market: different

Crocs products are very brands

different from other with

competitors different

designs

thus

having

clogs are

unique but

very

different

from other

competitor

W3 .10 2 .2 Lesser

● All white males comprise ideas since

Crocs top management: all all are

of the same culture thus coming

having only one idea in a box from one

culture

37
W4 .08 1 .08 Many are

● No Longer Exclusive: Other copying

regions are creating fakes of their

the products especially in the designs

Philippines wherein there are and they

hazardous materials in the are letting

plastic product itself it happen

W5 .05 1 .05 They have

● Unbalanced/uneven sales per different

brands: 95% of all revenues brands and

are derived from Crocs all does

footwear not make

revenue

not like

the Crocs

brand

Total .43 .68

38
 VI. STRATEGY FORMULATION

SWOT Matrix

STRENGTHS WEAKNESSES

1. Crocs keeps the

1. Brand Awareness:
CrosLite chemistry as
Young adults have a high
proprietary information
brand recognition with

Crocs. One of the most

well-liked brands among

college students

. 2. Competitive Advantage: Due 2.Diverse in the shoe

to its distinctive design, Crocs market: Crocs products

has a competitive advantage over are very different from

its rivals other competitors

39
3. Strong Product Line: Crocs 3. All white males

come in a variety of hues. This comprise Crocs top

enables it to appeal to a wide management: all of the

range of potential clients. same culture thus having

only one idea in a box

4.No Longer
4. High-Quality
Exclusive: Other regions
Products: Crocs produces
are creating fakes of the
high-quality goods. It can survive
products especially in the
heavy use because of its high
Philippines wherein there
durability. Produces own
are hazardous materials in
footwear in own facility
the plastic product itself
(Mexico, Italy & China)

5. Uniqueness: The distinctive 5. Unbalanced/uneven

material of Crocs which is the sales per brands: 95% of

croslite and the absence of any all revenues are derived

type of packaging makes them from Crocs footwear

stand out from other shoe

companies

SO STRATEGIES WO STRATEGIES

40
 SO1. Use the Croslite Material WO1: Emphasize the

in making new line of products sense of fashion to the

that crocs' competitors make. design for making new

OPPORTUNITIES (S5, O1) diverse items since almost

half of the market loves

fashionable items. (W5,

O1)

1. Opportunity to make new SO2. Crocs management can WO2. In connection with

designed shoes for fashion consider putting up factories in the SO2 strategy, crocs

since majority of footwear these less developed countries can try to build more

consumers prefer to buy shoes that will get them to pay low cost factories in any area that

for fashion for finding employees that needs they would like so that

job (S4,02) employees can be

distributed in those new

factories (W2,02)

2..less developed countries SO3..Given that the company WO3: rovide a system that

in eastern asia and europe values their clients and has allows the customers to rate

that can be penetrated. built meaningful relationships shopping experience and give

with them, their behavior and rewards for customers who

. responsiveness to the will give high reviews.(W1,

company's services/products 03)

(S1, 03)

3. Customer behavior and SO4. WO4. To add an additional

responsiveness to services department which would cater

and/or products.

41
 the needs of the customers

(W1, O3)

ST STRATEGIES WT STRATEGIES

ST1. Make an advertisement WT1. Invest in putting

campaign that shows that trademark design in footwears

THREATS Croslite material is not health that are hard to copy from by

risky to use for footwear. (S5, imitators (W5, O2)

T1)

1. Attitude built by customers ST2. Use the brand awareness WT2. Add a little bit of

who think that not fully power of crocs on informing workload for those employees

disclosing the materials of the public on the difference and if crocs could huild a

crocs may turn off customers between a knock-off and on factory in the philippines,

original crocs. (S1, T2) then there are less chances of

having croc-offs because a

pportion of the footwear

workers would have to work

for crocs. (W2, T2)

2. Knock off crocs ST3: . Maximize the capital WT3.

manufacturers specifically in through innovation of a new To craft a research in regards

countries like Philippines product, such as collaborating to effective usage of fuel and

with a supplier that provides energy. (W5, T3)

limited edition materials that

promote long-term usage for

the consumers to use. (S4,

O2)

42
3. The rising cost of fuel,

electricity, as well as other

commodities will undoubtedly

have an impact on project

costs

IE Matrix

TOTAL IFE RATING

2.62

TOTAL EFE Strong Average Weak

RATING 3.0 to 4. 2.0 to 2.99 1.0 to 1.99

High I II III

3.0 to 4.0
2.3
Medium IV V VI

2.0 to 2.99

Low VII VIII IX

1.0 to 1.99

Grand Matrix

QUADRANT II QUADRANT I

1. Market penetration 1. Market development

2. Market development 2. Product development

43
 3. Horizontal integration 3. Market penetration

4. Liquidation 4. Forward integration

5. Divestiture 5. Backward integration

1. Retrenchment 1. Concentric diversification

2. Concentric diversification 2. Conglomerate diversification

3. Horizontal diversification 3. Horizontal diversification

4. Conglomerate diversification 4. Joint venture

5. Divestiture

6. Liquidation

QUADRANT III QUADRANT IV

Explanation:

The Grand Strategy Matrix analysis of the firm's competitive position and market growth

revealed that the relevant strategies that must be pursued by the company fell under Quadrant I.

These findings can be linked to the market's rapid expansion and internal factor analysis.

Summary of Matrix and Analysis

External influences influence the crocs industry's possibilities and risks. For the opportunities,

the global economic expansion is a tremendous opportunity for the crocs business to sell more

items and to expand its presence in international markets. When COLM enters the Indian

market, this is a major problem for the company's market share, which will be split between

COLM and its principal competitor. The issue with containment is a grave threat to the behavior

of potential customers, but Crocs has assured that their toys and flip-flops are not contaminated,

stating that the countries with containment issues do not have a Crocs manufacturing plant. Last

major opportunity is that identical items are offered globally. This is an opportunity for Crocs to

adapt its marketing strategy for successful countries to other countries that need to strengthen

their marketing and sales methods. As the opposite of this opportunity is the threat of

44
counterfeit goods that are illegally produced and sold at a much lower price, and the quality of

this product is very low, so that the name of the company crocs is being tarnished with the

low-quality material because of counterfeit goods, crocs must address the counterfeit items, as

not only crocs are affected by this threat, but the entire industry is as well.

Crocs' major competitive advantage, according to the IFEmatrix, is their brand awareness and

strong product range; aside from that, they have a strong competitive advantage in designs; and

crocs have been in the industry for a long time, therefore crocs truly leads the market for rubber

sandals. Because counterfeit products are a big danger to crocs, crocs are no longer an exclusive

item, as evidenced by the IFE matrix.

Quantitative Strategic Planning Matrix (QSPM)

Market Product
Market Penetration
Development Development
Key Factors
WEIGH AS TAS AS TAS AS TAS

OPPORTUNITIES

1.Opportunity to

make new

designed shoes

for fashion since

majority of 0.14 2 0.28 4 0.56 3 0.42

footwear

consumers prefer

to buy shoes for

fashion

45
2..less

developed

countries in

eastern asia and

0.68 2 1.36 2 1.36 3 2.04
europe that can

be penetrated.

3. . Customer

behavior and

responsiveness to

services and/or 0.14 2 0.28 2 0.28 2 0.28

products.

THREATS

1. Attitude built

by customers who

think that not

fully disclosing
0.24 3 0.72 4 0.96 3 0.72
the materials of

crocs may turn

off customers

46
 2. Knock off

crocs

manufacturers

specifically in

countries like 0.07 3 0.21 4 0.28 3 0.21

Philippines

The rising cost of

fuel,

electricity, as well

as other

commodities will
0.16 3 0.48 3 0.48 3 0.48
undoubtedly have

an impact on

project costs

STRENGTHS

47
1. Brand

Awareness:

Young adults

have a high brand

recognition with
0.24 3 0.72 3 0.72 3 0.72
Crocs. One of the

most well-liked

brands among

college students

2. Competitive

Advantage: Due

to its distinctive

design, Crocs has

a competitive 0.24 4 0.96 3 0.72 3 0.72

advantage over its

rivals

3. Strong

Product

Line: Crocs come
0.24 4 0.96 4 0.96 4 0.96
in a variety of

hues. This enables

it to appeal to a

48
wide range of

potential clients.

4. 4.

High-Quality

Products: Crocs

produces

high-quality

goods. It can

survive heavy use

0.24 4 0.96 4 0.96 4 0.96
because of its

high durability.

Produces own

footwear in own

facility (Mexico,

Italy & China)

5.Uniqueness: Th

e distinctive

material of Crocs

which is the
0.3 3 0.9 3 0.9 4 1.2
croslite and the

absence of any

type of packaging

makes them stand

49
out from other

shoe companies

50
 VII. OBJECTIVES, STRATEGY RECOMMENDATION AND ACTION

PLANS

Strategic and Financial Objectives

OBJECTIVES

Strategic Objectives Financial Objective

- Produce and Distribute the new - To increase the sales revenue

made product lines in the second percentage to up to 30% in the1st

quarter of the year year of operations. 25% on the

2nd year and 15% for the 3rd

year.

- Make an ad campaign that - Increase the footwear sales by

critically explains why croslite is 40% from its past year

not health dangerous. performance

- Find new geographic sites that can - Build a structural budget for

be used to build new factory sites restructuring changes

Strategy recommendation

Reason to do so: Strategy recommended

new designed shoes for fashion since . Use the Croslite Material in making

majority of footwear consumers prefer to new line of products that crocs'

buy shoes for fashion competitors make.

Less developed countries in eastern asia Crocs management can consider putting

and europe that can be penetrated. up factories in these less developed

51
 countries that will get them to pay low

cost for finding employees that needs job

Attitude built by customers who think Make an advertisement campaign that

that not fully disclosing the materials of shows that Croslite material is not health

crocs may turn off customers risky to use for footwear. (S5, T1)

Knock off crocs manufacturers . Use the brand awareness power of crocs

specifically in countries like Philippines on informing the public on the difference

between a knock-off and on original

crocs.

-Maximize the capital through innovation

of a new product, such as collaborating

with a supplier that provides limited

edition materials that promote long-term

usage for the consumers to use.

Strategies Advantages Disadvantages

● Product ● help in the ● Research and

Development enhancement of development might

product design and increase

style

● Consumers choose

fashion over

52
 comfort, therefore

it would be

advantageous if

both were

available.

● Market Penetration ● enhances the ● If the expected

product's branding results are not

● assists in attracting obtained, sales

unexplored markets promotion costs

through of will be added to

promotions, which current expenses.

may enhance

revenue

Market Development ● Focusing on ● a lack of focus on

developing markets established markets

may enhance

revenue.

● gain market share

overall

Horizontal Integration ● May increase ● decrease in

goodwill of the adaptability

company

53
Strategy Map

Strategy Positioning

54
 Financial Projections for years 2013 to 2015.

Assumptions (based on the established Strategic and financial objectives)

Assumptions Strategic/Financial Objective basis

- Sales Revenue will go up due - To increase the sales revenue

to the release of new product percentage to up to 30% in

lines that are fashion-trendy. the1st year of operations.

25% on the 2nd year and 15%

for the 3rd year.

- The ad campaign for the - Increase in footwear sales by

safeness of croslite will pay 40% for the next 3 years.

55
 off

- Crocs will be able to find 1 - Find new geographic sites

new factory site to built in per that can be used to build new

year for the next.3 years. factory sites

- Structural reconstruction - Build a structural budget for

expense will rise because of restructuring changes

the new strategies

implemented.

- innovations in crocs' footwear - To increase the sales revenue

designs that help distinguish percentage to up to 30% in

fake ones from real ones will the1st year of operations.

be a contributing factor to 25% on the 2nd year and 15%

sales 30% sales growth in 1st for the 3rd year.

year.

- Have a constant 40% increase - Increase in footwear sales by

in the average footwear selling 40% for the next 3 years.

price

- Asset impairments have - To increase the sales revenue

constant increase of 37% per percentage to up to 30% in

year the1st year of operations.

25% on the 2nd year and 15%

for the 3rd year.

- 58% markup for other - To increase the sales revenue

incomes for the next percentage to up to 30% in

the1st year of operations.

25% on the 2nd year and 15%

56
 for the 3rd year.

- Some accounts in the projected income statements are unmeasurable

due to the limitaitons of the study

Departmental Programs and Action Plans

Strategy: Departmental Communication and Marketing

Activity to be Target/expected Unit/person

Timetable Budget, if any
undertaken output responsible

Brainstorm ideas Settling in how JANUARY

for new product many new 2014

(3year projection)
categories and product lines
1.30,000,000
production of it should be Administration
2. 20,000,000
incorporated and
3. 20,000,000
are feasible in a

span of one year.

Ramp up for The Company FEBRUARY

marketing activity will have better 2014

brainstorming engagement in

especially in their primary

making an ad and secondary President/Admini

campaign on why markets. Also, stration

croslites are not proving that

health risky. croslite is safe

can boost PR

and can

57
 translate to

sales.

To be able to list

Laying down a down new

concrete company goals

Framework from with concrete

Administration
the new mission plan on how to
FEBRUARY and Marketing
statement. achieve
2014 Operations
them based from
Department
the lessons that

the performance

of the previous

year taught Crocs.

Research Crocs can not

Development only expand more

team will scout factories around

and survey new the world that 1 year

potential factory will help mitigate 30,000,000 for

sites around the their over research

world and populated Research and for the fashion

FEBRUARY
anticipate new employee Development trends
2014
fashion trends resources, but Department

also gain market 50,000,000 for

shares for the searching for

consumers living potential factory

around their new site locations.

potential factory

site locations.

58
 Market the new Publicity and (Projected

product and advertisement marketing

new Product materials should MARCH - MAY Marketing expenses)

Lines to the be developed 2014 Department 1.55,000,000

market 2.50,000,000

3.45,000,000

Strategy: Service Production Enhancements

Activity to be Target/expected Unit/person

Timetable Budget, if any
undertaken output responsible
Budget Capital To have a new and
Planning for solid plan in
regards to capital
budgeting plan due
FEBRUARY 2014 Administration
to the
implementation of
new product
categories for Crocs.
High supply of The
workers = More Expansion of
workload the working
crew and to
address the
"too much
MARCH 2014 Administration
employees"
issue by
making them
do a little bit
more on their
job role.
Quarterly Training To further improve
the quality of work PHP10,000
by giving new and · Speaker/
challenging training APRIL 2014 Trainer
Administration
exercises to further (Quarterly) · Venue and
improve other
business-decision Commodities
making skills.
Safety Meetings and To provide safety
Trainings and health protocols MAY Administrafion
PHP10,000
in the workplace in 2014 · Speaker/
each department (Quarterly) Trainer

59
 · Venue and
other
Commodities

….

60