Crocs Case Introduction
Module One: Crocs Case Introduction
Since its inception in 2002, Crocs (NASDAQ: CROX) has sold more than 300 million pairs of shoes in more than 90 countries around the world. The company considers itself a world leader in innovative casual. By 2012, the trendy shoe brand was at the height of popularity (Max, 2013). The company was pursuing an aggressive retailing strategy, offering over 300 different designs at nearly 600 retail stores worldwide, with 315 normal stores, 157 outlet stores, and 122 kiosks. From this perspective, things looked bright for this quirky, proprietary footwear manufacturer.
Then in 2013, the company’s performance began to publicly unravel. Although the company saw a rise of 11.2% in sales revenue, it had also grown its store count by almost 20%. A closer look at the company’s financials revealed that annual comparable store sales actually fell in the Americas by 8.3% and in Japan by 16.3%. Internet sales were also lackluster, falling 4.8% year-over-year (Green, 2013). By the summer of 2018, Crocs had just 398 locations. Moreover, fans were stunned to hear Crocs announce that the company was closing its last manufacturing facility. According to Footwearnews.com (2017), “Crocs challenges undoubtedly come at a time when retail, in general, is under tremendous pressures and store closures, layoffs and even bankruptcy have become par for the course.”
It hasn’t been all bad news for Crocs management: Its efforts over the past several years to turn around consumer interest in its quirky lightweight clogs may finally be working. After three years of declining sales revenue and net losses to cash flows, the company saw its first profitable quarter in 2018 (Manarriz, 2018). It remains unclear if management can continue to improve Crocs’s performance given the challenging retailing environment the footwear industry faces. Your case analysis will look to suggest important considerations of Crocs’s situation and recommend at least one course of action to improve the company’s global competitiveness.
As you approach this first strategic case analysis of this course, keep these basic questions in mind as you research Crocs’s situation:
· Why has Crocs’s performance always been inconsistent?
· How important are global markets to the firm?
· How well has Crocs managed its product line?
· What is changing about the global footwear industry?
· What is the sustainability of Crocs’s capabilities in the industry?