By purchasing raw material providers, Crocs will ensure exclusive excess to the raw materials.
HBR, 2, pp Crocs has the highest margins This is because the acquisition of another organization may require Crocs to invest huge amount of money on the transaction. This reduction in the number of suppliers would reduce the competition that exists between them and would have a deteriorating impact on the bargaining, negotiating and pricing power of the organization.
The company has a high gross profit margin compared to competitors and even the industry average Moreover, Crocs doesn't have to mark down its shoes at the end of the season because of its efficiency in closely matching production to sales.
In general, Crocs should actively look out for acquisitions that allows them to reduce cost and increase flexibility in their supply chain, prevents future competition and diversifies its business risk away. This, as a result, enabled the organization to achieve high levels of growth.
They own their own manufacturing plants which make for fewer lost orders and allows them to respond faster to the market demand.