Ecco Case Analysis

ECCO Case Analysis

Background

ECCO is a Danish shoe manufacturer founded by Karl Toosbuy in 1963, as a company with a passion for pleasant walking, and aimed at producing the most comfortable and modern footwear for work and leisure in the world. In 2004, it manufactured 12 million pair of shoes in five factories located in Denmark, Portugal, Slovakia, Indonesia, and Thailand, and was planning to open five more in China over the next five years. ECCO’s vision is to be the "most wanted brand within innovation and comfort footwear a position that only can be attained by constantly and courageously researching new paths, investing in employees, in our core competencies of product development and production technology." Its philosophy was that quality is the only thing that endures, and that it was the reason why they work to create the perfect shoe, “so good that you forget you are wearing it”.

ECCO products include casual and outdoor shoes for men, ladies, and children, as well as semi-sport shoes, for two different seasons, spring/summer and autumn/winter. It produced 80% of its shoes in-house, and outsourced the remaining 20%, and exported more than 90% of its production mainly to the United States, Germany and Japan. By 2004, ECCO had 26 sales subsidiaries covering the entire world and two main distribution centers; one in the United States and one in Denmark. ECCO's total sales reached about DKK 3.37 billion of which 26% (DKK 875 million) came from USA sales. The company considered GEOX, Clarks, and Timberland as its main competitive threats. The company's goal was to increase revenue to approximately DKK 8 billion to DKK 9 billion by 2013, selling 24 million pairs of shoes per year.

Since its foundation, ECCO production technology has been a key asset to the company. Globalization entails employees with international mindsets and good adaptability skills, thus ECCO had given high priority and invested aggressively in vocational training, career...