Ecco A/s - Producing the Dragon's Footwear

Introduction of ECCO A/S

• Founded as a family owned enterprise in 1963 by Karl Toosbuy.

• Global footwear manufacture.

• As of 2008 16,300 employees in 33 countries worldwide.

• Sold 17.5 million with a net revenue of 5.4 billion in Danish crones (DKK)

• ECCO’s organization consists of 11 business units

• Production sites (Thailand, 1993, Indonesia 1991, China 2005)

1. Analytical Summary

ECCO utilizes a differentiated business strategy in producing the highest quality footwear. They employ their operations as a competitive advantage by following a strategic philosophy termed “from cow to customer”, which indicates an overall in house coordination of their value chain. ECCO’s operation strategy is a top down resource based strategy with a high focus on internal resources and capabilities.

Figur 1: ECCO'S Global Value Chain

They prioritize quality, design and comfort in their products, which is evident within their value chain as it is configured to produce in accordance with their “from cow to customer” philosophy and without error.

In contrast to their competitors such as, Timberland and Geox, ECCO produces their own material and manufacture 70 % of their own products in their subsidiary. This is done to assure that ECCO can control the entire value chain, which gives them the ability to maintain the highest quality of production.

However sales within Western Europe and the Americas declined rapidly and as a measure to maintain their market share, ECCO established a production site in China, with the aim of further supplementing and optimizing their global value chain