Ecco case presentation
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Transcript of Ecco case presentation
Think Global!ScholarFree Consulting
Zhangran(Vikki) Wang, Minwoo Choi, Jun Liu, Siyun Liu
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Agenda• Background & History• Issues • External Analysis• Internal Analysis• Alternatives• Recommendation• Implementation• Q&A
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Background
1980International
Expansion
2000Fully
Integrated supply chain1963
Karl Toosbuy in Denmark
1990launch of
major products
1998The first
flagship in London
2004Hanni
Toosbuy Kasprzak
1978International recognition
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Issues• How can ECCO optimize value chain? - Procurement; Distribution
• How should ECCO tailor its products to the Chinese market?
- Customization; Establish New Product Line
• How can ECCO thrive in the global competition? - Technology Innovation; Marketing Plan
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Internal EnvironmentStrength• International production units • Fully Integrated value chain / Know-How• Economies of scale (80%)• Internal Management• Well-rounded product line
Weakness• Budget Planning (2003)• Lack of market orientation• Little appeal to fashion-savvy• Narrow sales supply channel
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External EnvironmentOpportunity• High potential market• International driving force (China)• Low labor cost in Asia
Threats• Changing Consumer tastes• Competitive market• Labor cost in Europe• Liability of Foreignness
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Alternatives• Cross-Brand with leather goods companies
– Use their brand name
– Share leather supply chain
• Children shoes cut out– Build up cash reserve
– Lowest portion of revenue
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11%
47%30%
12%
Percentage of Sales Revenue
ChildrenLadiesMenSports
Alternatives
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Recommendations• Optimize value chain (1/2)
– Procurement: self supply raw materials• Open farms and raise cows in Inner Mongolia, China
• Raw hides for leather production, raw meat to meat
processors
• Partner with major meat producers, such as Shineway
International Co. and Yurun Group
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Recommendations• Optimize value chain (2/2)
– Distribution: establish a distribution center in Xiamen, China• Only two distribution centers in Denmark and the U.S.
• Proximity to factories and tanneries(Indonesia, Thailand,
China)
• Easier accessibility to other Asian countries
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Recommendations
Xiamen
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Recommendations• Tailor products to the Chinese market
– Customization• Softer soles, V-shape cutout Achilles notch
• Lower price
– Badminton shoes rollout• Contract with Asian badminton players
(Dan Lin, Chongwei Lee, Taufik Hidayat, etc.)
• Substantive TV advertising and Baidu ads
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Recommendations• Thrive in the global competition (1/2)
– Outcompete Rivalries• Product/Technology Innovation
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Recommendations• Thrive in the global competition (2/2)
– Institute comprehensive marketing plan• Satisfy the changing appetite of consumers
• Establish exceptional customer service
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Implementation
Year 2
- Price Negotiation- Employ Consultants
- Distribution Center construction onset
- Construct Farm- Purchase Land & Cows
Recommendation 1
Recommendation 2 - Specialist/ Translator - Training- Operation
- 15,000 cows- Decrease leather supply from Europe- Seek meat suppliers
Year 1 Year 3+
Questions?
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1999 2000 2001 2002 2003 20040
5001000150020002500300035004000
25522836
3216 3360 3169 3394
Net Revenue
Appendix
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Appendix
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AppendixCost Table(2004)
Cow cost $1500/cow
Land cost $80,000 for 15,000 square meters
Gap period 15 months
Farmer cost $1000-2000/farmer
15000 cows
30 farmers
2 consultants
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AppendixIncumbent badminton footwear producers
• Li Ning (Chinese national brand)
• YONEX (World best)
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Appendix• Technology
– Forefoot propulsion plate• Save energy with every step as the plate provides
additional torque. The "three-finger" propulsion plate enhances the natural stride by mimicking the foot's biomechanics while walking.
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Appendix• Technology
– Air-weight• Gain a lightweight but strong outsole. Air weight
technology use high-density rubber in midfoot provides superior cushioning, stability, and comfort; enjoy the watertight seal but maintain flexibility due to a sole that’s built without glue or stitching to be durable, cushioning, and long-lasting.
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Appendix• Technology
– Vibram® outsole• Expect high performance no matter the temp or terrain. Whether
you'll spend tomorrow bounding over ice, hot sand, gravel, rocks, or grass, Vibram is a versatile outsole material for a wide breadth of outdoor activities.
– Carbon fiber textile• Steady as you go. Extremely hardwearing carbon textile for
enhancing stability in all aspects of golf. The stance, the swing and of course the 4 mile walk.