Assign 1: Alternative Approaches to Global Supply Chains and R&D

Prof notes – Ecco case study

ECCO is different in several ways from many or most other major shoe companies. As you develop your recommendations for the company, it is important to consider ECCO competitive strengths and overall corporate mission and develop a strategy that builds on both. Here are a few points to consider:

ECCO is a privately or closely held company, with little if no interest in becoming a publicly held company. How does this position affect the company’s ability to raise capital and expand?

Unlike Nike and similar companies, ECCO's comparative advantages and strengths are in shoe leather and manufacturing rather than in marketing and sales. Should it outsource parts of its operations where it is less competitive, which may well include marketing and sales?

ECCO uses proprietary technologies and techniques. It is not clear that outsourcing is necessarily more efficient than internal production. The more unique the production process and equipment used in the manufacturing process, the greater the benefits of vertical integration versus outsourcing.

ECCO has long lead times as a result of in house production and closely held information regarding its technology. This likely makes it harder for ECCO to compete in the fashion segment of the footwear industry, where styles change frequently. Are there sufficient growth opportunities in classic shoe styles to support ECCO’s expansion?

ECCO customers expect their shoes to last for long periods of time and still remain fashionable. How do the preferences of ECCO's core market influence the type of innovation taking place within the company? Is it more in terms of shoe quality and comfort versus style than for other shoe manufactures? Or are both style and quality/comfort equally important? Is there much localization in terms of style?