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ECCO A/S (ECCO) had been very successful in the footwear industry by focusing on production technology and assuring quality by maintaining full control of the
ECCO A/S (ECCO) had been very successful in the footwear industry by focusing on production technology and assuring quality by maintaining full control of the entire value chain from "cow to shoe." By measure of rawhides, ECCO had become among the five largest producers of leather worldwide. As ECCO grew and faced increased international competition, various value chain activities, primarily production and tanning, were offshored to low-cost countries. ECCO's approach to global value chain management was to offshore routine and standardized (mainly production and tanning) activities to low cost countries, whereas most creative and innovative activities were held captive in Denmark. The fully integrated value chain tied up significant capital and management attention in tanneries and production facilities, which could have been used to strengthen the branding and marketing of ECCO's shoes. Moreover, an increasingly complex and dispersed global value chain configuration posed organizational and managerial challenges regarding coordination, communication and logistics. Discussion Questions What sets ECCO's supply chain apart from their competitors? How do you think that they can improve it and what specific recommendations would you make? Do you think that their type of vertical integration is timely (versus their competitor's outsourced model)
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