Dansko, Inc.

Topics: Shoe, Management, Footwear Pages: 5 (1837 words) Published: April 16, 2011
Beginning in 1990, the “Danish Clog” was brought to life in the United States. It began as a small company selling the shoes at horse shows but quickly grew larger than was imagined. Expansion of the product went from a single closed back clog to over 3000 products being sold in over 3,500 retail locations. During the past fifteen years there have been many offers to sell interest in the company. You are now becoming concerned that the company that was such as success all of these years may not be structured appropriately to promote further growth. You are now faced with a decision on how to can move forward. Should you consider a merger that will allow growth and a more conventional way of operations? Financial Analysis

As of 2006, Dansko had approximately $90 million in annual revenue. This seems quite impressive given only 110 employees and only one small manufacturers. The company has succeeded in not taking on any debt as they have grown. Dansko remains a privately owned company so finding financial information proves to be difficult. There is much room for growth in the footwear industry. It has been projected that by 2009 footwear consumption will reach $60 billion. This is a forecasted growth of approximately 14.72%. Dansko management believes that it can grow 10-15% a year without putting any stress on the company. You have successfully made a brand of the product setting price beginning at $100. This allows you to achieve margins of 50-60%. This company has continued to be profitable with high margins and no debt. Strategy

Dansko, Inc. trains employees by what they call a “Home Schooling” approach. You have typically hired younger motivated people with little to no business experience, let alone footwear industry experience. Time is taken to mentor and train the employees and give them many opportunities for growth within the business. This strategy would be just fine if there were no desire to grow. Because of the desire to expand business this is a major weakness of the company. There is not even anyone in senior management that has any prior footwear industry experience. It will be very tough for the company to move forward and also to expand if no one knows exactly what to do or what may be the best idea to implement. The 'learn as you go' strategy could potentially lead to great loss and with an expanding company could likely be detrimental. The company has never been driven by financial goals but rather a desire to exceed expectations. You have done a great job at satisfying employees in terms of your support and commitment to them. Both you and Peter have prided yourselves in knowing the employees personally and helping them in any way that you can. You also promote volunteerism. All full-time employees can participate in 16 hours of paid volunteer time per year. For every volunteer hour worked, Dansko donates the equivalent of their salary to the organization. You have fostered creativity and try to give everyone a voice. The jobs that are given are not focused on any particular task but are very broad with no specific duties. This is a weakness because it encourages slacking off and not making the most of the time worked. There is no official marketing program. Most of the marketing is done by word of mouth. This may be an area where the volunteerism could be beneficial. Dansko could use the time that is spent volunteering to do good for the community but to also market the product. One very large mistake is that there is no set budget set. Managers are given what they ask for and do not need to break down costs or show an expected return. Overall the company is very much unstructured but works for where you are now. Competitors

Dansko, Inc. falls into the footwear category of Euro-Comfort. It is categorized by durability and anatomical correctness. Dansko received an award in 2004 in the Women’s Comfort Shoe category at the World Shoe Association Trade Conference. They have also...
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