ECCO A/S — GLOBAL VALUE CHAIN MANAGEMENT Harvard Case Solution & Analysis



ECCO was a big player in the shoe industry and was established in 1963 by Bredebro. The company was focusing on the quality of the product by maintaining integrated global value chain. It was committed to providing high quality shoes to the end-consumers so as to achieve its objective of the becoming most wanted innovative and comfort footwear brand.

The company constantly focused on exploring the new markets of the world, particularly in Asia and Europe. Furthermore, the company also expanded its operations in Portugal, Slovakia, Indonesia, Thailand, and planned to invest in China in order to establish a world class manufacturing unit. Moreover, in order to compete globally, the company developed its employees with the international mindset and requisite skills. The company realized that the employee should be considered as the main asset of the company. The company had followed a strategy in which the management position was to be filled by recruiting internally in order to develop the leaders of the company within.

ECCO's produces various varieties of shoes, and its product range from casual to outdoor shoes for men, ladies, and children. In addition, it also produces semi-sports shoes for the different season. ECOO was using advance technological production techniques to ensure the quality and innovation. The full-scale production process involved both capital intensive and manual labor machinery.  The company emphasized on its production technology and considered it as akey asset. ECCO was highly concerned about its value chain and thus, focused on maintaining the entire value chain from cowhide to shoe. Moreover, the company owned many tanneries in different countries such as Netherland, Thailand, and Indonesia.

Problem Statement

The management of the company was highly concerned about moving towards a market-oriented path in order to focus on the long-term sustainability. Moreover, the dispersed and highly complex global value chain became a challenge for the company to manage and coordinate. ECCO’s dispersed supply chain configuration posed organizational and managerial challenges. In addition, the company was required to optimize its value chain and at the same time, it was also requisite for the company to increase its focus and invest heavily to increase the marketing efforts. Therefore, it is difficult for the company to maintain its sustainability in the highly competitive landscape. In addition to this, the management of the company was also concerned about entering into the new markets.

Value Chain Analysis

ECCO followed a unique strategy through which it was able to control its value chain from cowhide to shoe,as mentioned earlier via its tanneries and production &distribution center.

ECCO brought raw hides and then through tanneries, it processed them and transformed them in to usable leather. The company owned many tanneries in different parts of the world, but the largest tannery it had was in the Netherlands. In addition, it also owned leather research center due to which, it became capable of accessing leading expert knowledge about tanning. Furthermore, the production processes of the company took place in Portugal, Thailand, Indonesia, Slovakia, and China where the processes were streamlined in order to produce the required volume of shoes. Whereas the research and development work for the new products was carried out at ECCO’s production site, which was based in Denmark. Moreover, the company’s distribution system was also important to its business and had two main distribution centers, which were based in the US and the other one was based in Denmark......................

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