Deja Shoe, Case Study Example

Deja Shoe’s inception as an ecologically friendly footwear company showed much promise. With the strength of its founder’s vision, the sterling reputation of its managerial term and the broad private and public support it received from both venture capitalist firms and organizations such as the The National Recycling Coalition, as well as high profile newspapers like the Wall Street Journal, Deja Shoe seemed destined to succeed.

What seemed like a recipe for success was also the reason Deja Shoes failed to secure market viability. Founder Julie Lewis managed to attract the attention of Scott Taylor and Bruce Macgregor, two reputable former Avia executives  (Hardy, “Deja Shoe A,” 4). While the executive reputation of Deja Shoes was the main reason it was able to secure millions of dollars in venture capitalist funding, it also meant that the company pursued the development of its products within an established business paradigm that did not suit the unique needs of Deja products.

First, Deja sought to have its shoes manufactured in Asia to minimize production costs, but this became problematic when they realized manufacturers were unable to procure the necessary materials for a shoe made of recycled products (Hardy, “Deja Shoe A,” 6). Deja had no choice but to source its own materials, have them recycled, and then ship them to Asian manufacturers, effectively removing the competitive advantage gained from low-wage manufacturing by greatly increasing production costs.[i]

Not only was the existing business paradigm not compatible with Deja’s vision, the company was plagued by material problems from the beginning. An early miscommunication between Lewis and Macgregor led the latter to believe that the recycled high-strength polypropylene fabric central to the design of Deja’s shoes was perfected, when in fact it was consistently outperformed by virgin polypropylene in terms of durability and was much harder to use as a raw material (Hardy, “Deja Shoe A,” 6). As a result, Deja had to come up with a viable alternative halfway through production, and could only find a type of environmentally friendly canvas. Not only was this material much less effective in creating comfortable, durable shoes, it was less preferred by consumers[ii]

These two systemic failures led to an overpriced, lower quality shoe that did not meet the expectations of retailers and consumers alike. It’s clear that in hindsight, a few minor adjustments might have allowed Deja Shoes to flourish, given its huge potential. If I were part of Deja’s executive during its brief yet meteoric rise as a footwear company, I would have first made sure that my product was fully viable before entering into the manufacturing stage; Deja was able to produce a better product for its second line, but only after incurring hugely unnecessary costs (Hardy, “Deja Shoe B,” 2). Due to the unconventional nature of the product and that it was the first of its kind on the market, I would have aimed to produce shoes on smaller scale. This would have permitted affordable access to the North American manufacturing industry; Deja shoes could have been produced without the huge hassle of material sourcing an untested product. Once the consumer interest in Deja products was established and a reputation created, the company could then expand manufacturing to Asian markets to gain a competitive edge.

[i] Macgregor estimated that the environmental design and materials in Deja shoes resulted in at least a 20% premium over the cost of footwear produced by traditional footwear companies (Hardy, “Deja Shoe A,” 6).

[ii]  80-90% of the shoes sold annually in the U.S. at this time were made of leather or imitation materials (Hardy, “Deja Shoe A,” 7).

Works Cited

Hardy, P. “Deja Shoe A,” “Deja shoe B.” CEMP: Corporate Environmental Program, University of Michigan. 1996