Ecco Case Essay

Words: 5434
Pages: 22

ECCO CASE – PROJECT 1
Table of contents
Table of contents
Question
Theory used in this report
Data collection
Company description
Financial situation
SW - Internal
Value Chain
R&D
Production
Sales and Marketing
Service
Core competences
Benchmark
Ansoff’s matrix of growth
GAP-analysis
OT - External
Porter’s 5 forces
Force 1: The degree of rivalry
Force 2: The threat of new entrants
Force 3: The threat of substitutes
Force 4: Buyer power
Force 5: Supplier power
Porter’s Diamond
PEST
Political factors
Economic factors
Social factors
Technological factor
SWOT
Generic Strategy
Conclusion
Sources
Appendixes

Question
For this assignment we have chosen question one: “The company’s strategic situation -
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Income tax amounted to DKK 114 million in 2009. The effective tax rate was therefore 24.9% compared to 23.1% in 2008. The profit for the year after tax and minority interests totaled DKK 299.2 million compared to DKK 527.4 million in 2008. At the end of 2009, consolidated total assets totalled DKK 4,182 million, representing a fall of 4.9% or DKK 215 million. Fixed assets totalled DKK 1,441 million, of which DKK 1,329 million were tangible fixed assets. In 2009, the Group reduced its inventories of finished products by 21% or DKK 322 million which is in line with the Group’s overall goal of reducing inventories and increasing turnover rate. Equity as of 31 December 2009 was DKK 2,431.8 million, equivalent to a solvency ratio of 58.1%. The solvency ratio at the end of 2008 was 56.3%. The cash flow from operating activities amounted to DKK 985 million, an increase of DKK 196 million despite a fall in total income. This was mainly due to the reduction in the Group’s inventories. Net cash outflow for capital investments amounted to DKK 207 million in 2009 compared to DKK 477 million in 2008.
In 2009, ECCO achieved a free cash flow of DKK 762 million compared to DKK 306 million in 2008. This increase can be primarily attributed to the reduction in the Group’s inventories and a reduction in the consolidated total investments which were unusually high in 2008 due to the expansion of production capacity.

SW - Internal
Value Chain