New Balance Athletic Shoe Company: Situational Analysis

Topics: Athletic shoe, Marketing, Brand management Pages: 6 (1830 words) Published: October 26, 2010
Situation analysis
New Balance Athletic Shoe Company has been ranked the third in the US Athletic shoe industry. During the financial year 2007, it recorded revenues of $1,630 million, an increase of 5.2% over 2006 ( Since the athletic shoe market is highly competitive, New Balance is trying to figure out how to compete in this highly competitive market against such industry giant like Nike, Adidas/Reebok. Below is a SWOT analysis of New Balance.

SWOT analysis
Strengths| Weaknesses|
* Brand name, quality product, and global recognition. * Strong distribution system * Brand loyal customer * Offer special product * Good reputation and relationship with distributors and retailers| * Too many types of product and performance. * Lack of celebrity endorsement. * High manufacturing cost| Opportunities| Threats|

* Sales and profit growth * Line and brand extensions * Market penetration * Product development| * Competition * Condition of economy|

New Balance’s strengths include its brand name, quality product, and global recognition. New Balance not only carries a name that has been world-renowned, it has prided itself on providing quality athletic shoes for the serious athlete. Also, it can be said that New Balance has strong global recognition as the company has marketed its products in more than 120 countries across the globe. Besides, strong distribution system which has allowed New Balance to gain efficiency in sales and distribution is its strength. Currently, New Balance has not only strong retailer network but also a good distribution system on the web. Customers can buy New Balance’s products through New Balance retailer stores or through some websites such as,,, etc…Brand loyal customer and offering a special product are also strength of New Balance. It is the only athletic shoe company that offers its footwear in a broad range of width sizes. Moreover, having good reputation and relationship with distributors and retailers can be considered one of strengths of New Balance. Currently, New Balance prefers talking to the retailers, understanding their requirements and supplying them with the required merchandize to enhance their point of sale advertising. That really helps New Balance to heighten the efficiency of selling. A true weakness New Balance is facing is that it currently has too many types of product and performance. It offers footwear, apparel, and accessories for various sports categories, such as running, walking, training, basketball, tennis, and cleated for women, men, and children. This may affect the company’s revenue and profit because not all products or all performances share the same profitability. If the company doesn’t emphasize on the most profitable performance, it may miss the chance of achieving the highest profit from that performance. Also, lack of celebrity endorsement is a weakness of New Balance since it puts New Balance at a disadvantage when it comes to brand building. This also causes the company to lose out somewhat on gaining awareness on a global scale as it lacks endorsements in major sporting events. Most global brand names generate strong brand recognition through celebrity endorsements in sporting events that would give them the needed momentum to carry their brand name further into the global market. Another weakness that New Balance has been facing is manufacturing costs. Its competitors such as Nike, Adidas and Reebok have been outsourcing most of their manufacturing to other countries such as China, and they have been able to cut their manufacturing costs significantly. New Balance on the other hand only outsources 75% of its U.S. volume while retaining the remaining 25% for final assembly in one of its five factories. New Balance’s opportunities are sales and profit growth, line and brand extensions, market penetration, and...
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