Case Discussion:

Ecco A/S- Global Value Chain

Management

CB4303: Lecture Week 4

Chya-Yi Liaw, Emily

Department of Management
City University of Hong Kong
 Case Quiz

• After each case discussions

• Conducted on Canvas, 10 minutes quiz
• 5 multiple-choice questions, with only one
best answer
• Open book

2
 Internal Analysis

• Firms need to manage internal resources and

capabilities to gain competitive advantage
• “Resource-based view” of the firm
• Value chain analysis

3
VRIO Decision

4
Value Chain

5
Case

6
 About Ecco

• Established in 1963, Denmark company

• Family-owned
• Operating in Footwear industry:
• Offering casual outdoor shoes, semi-sport shoes
(walking, running, golf shoes)
• For men, ladies, children
• Goal- “Produce the world’s most comfortable and
modern footwear for work and leisure”

7
Footwear Industry

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 Ecco’s Strength in Industry

• What are the critical resources?

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 Ecco’s Value Chain Approach

• Fully integrated value chain

• R&D→ sourcing & tanning→ manufacturing→
distribution→ sales
• Offshore routine, standardized activities to
low cost countries
• Especially manufacturing and tanning
• Keep most creative, innovative activities in
Denmark
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Competitors’ Approach- Outsource

• Geox: Outsourced manufacturing to China,

Vietnam, Indonesia
• Timberland: Outsource 90% shoes
• Clark: Outsource > 99% shoes
• The differences between outsourcing vs. fully
integrated value chain?

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 Outsourcing Model

Design (or technology)

Clark Subcontractor
Design + Manufacture
(final product)

Design + Manufacture
(final product)
With Brand
Consumers

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 Integration Model

Design Manufacture
department department

Design + Manufacture
(final product)
With Brand

Consumers

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 Comparing Outsource vs. Fully
Integrated Value Chain
• Outsourcing:
Benefits Problems

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 Comparing Outsource vs. Fully
Integrated Value Chain (cont’d)
• Fully integrated:
Benefits Problems

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