Business Exam

Mr. Belyea (BBB4M)

SWOT stand for?

Strengths

Weaknesses

Opportunities

Threats

ECCO Stregnths

- Ownership over majority of their production chain

- Direct-injection technology

- Stable family ownership -streamlines decision making

- Strong product diversification

- Internal recruitment

ECCO weaknesses

- Maintaining many tanneries costs money

- Weak marketing

- Sourcing raw mats. to asian markets reduces supply chain agility

- (low operating margins)

ECCO Opportunities

- Expansion to Asian market

- Constructing a regional hub in China

- Partnerships with local retailers

- hyper-individualised footwear

ECCO Threats

- Chinese manufacturers counterfeiting their designs

- footwear giants entering ECCO’s markets

- exposure to local labor cost spikes

Clark’s SWOT

S: biggest player in the global casual lifestyle market

W: Out-source virtually all production

O: Movement of all volume production lowers long-term overhead costs

T: Completely dependant on third-party producers, susceptible to intellectual leakages

Timberland SWOT

S: chokehold in heavy-duty boot market

W: Out-source virtually all production

O: Diversification away from only being a boot company

T: Overlap with ECCO footwear division, putting pressure on innovation

PESTLE stand for?

Political

Economic

Social

Technological

Legislative

Environmental

ECCO Political (PESTLE)

- Political stability in China, aid form Xiamen

- WTO compliance allows ECCO to own 100% of their operations in Xiamen

ECCO Economic (PESTLE)

- Low labor cost

- large domestic market

- large economic risk with building so many factories

ECCO Social (PESTLE)

- Emergence of the Chinese middle class increased demand for quality western products

- Connected with chinese consumers through Aibu

ECCO Technological (PESTLE)

- Replication of their direct-ink technology

- 5 planned factories and one tannery on one site allowing for tight technical integration

ECCO Legislative (PESTLE)

- Counterfeiting threat in China, copying certain designs and technologies

-

ECCO Environmental (PESTLE)

- They have to manage their environmental output in the tanneries responsibly

Where to locate distribution center?

- Xiamen, China

- Making everything so near to each other it allows for streamlining, raw mats come into the complex and shoes in boxes ready for stores leave

- using the Tondor blueprint they can allow Aibu stores to easily stay stocked

4 Ps of marketing

Product

Price

Place

Promotion

ECCO Marketing -Product

- emphasize the quality of the product

- talk about direct-injection and durability

- they must adapt their products in real time to chinese preferences

- leverage premium leather

ECCO Marketing -Price

- maintain premium price point (perceived quality and increase operating margins)

- since ECCO is avoiding tariffs, they should use that money to cover internal structural cost, DONT lower cost

ECCO Marketing -Place

- Maximize the partnership with Aibu

- Market in places where people are already spending money

ECCO marketing -Promotion

- Storytelling, tell the audience know who you are and what you stand for

- Anti-counterfeit marketing, could be a review looking at fakes versus the real one to discourage

Advice to incoming managers

• Power Distances

• Individualism vs. Collectivism

• Masculinity vs. Feminism

• Long-term orientation

Long-term orientation

-Emphasize stable long-term careers

Masculinity vs. Feminism

-ensure that the operational goals are clearly set out

Individualism vs. Collectivism

-Never criticise a chinese employee in front of others creates resentment

-Reward whole teams for success rather than individuals

-Establish trust with team leaders, making operations run smoothly in a collectivist society

Power distances

• Denmark has one of the lowest power distances, but China is very hierarchical, don’t ask subordinates for feedback in public forums it may be seen as a sign of weakness