New Balance: Design, Manufacturing, and Retailing of Athletic Footwear
June 21st, 2013
MEGATOYS
(Final- Case Analysis)
Problem statement
New balance is 100 years old privately owned company specialized in the design, manufacturing and retailing of athletic footwear. The company is among the top five producers in the athletic shoe industry. It manufactures and sells its products internationally and operates factories in northern United States.
Recent announcement of an Adidas-Reebok transaction would bring together two (2) of the most important rivals, therefore changing the global shape of the athletic shoe industry. This new deal forces New Balance’s executives to review the company'S priorities and its actual business strategy.
New Balance’s actual business strategy is one of expansion and differentiation. The company distinguishes itself from competition by promoting the technical strength of its shoes and their quality. Conversely, in order to gain share of the market, competitors are using a differentiation strategy with marketing as the propulsive of their less technical but more fashion designed shoes.
New Balance has to decide whether the company should keep its actual strategic focus and continue to serve its niche of technical runners and athletes who seek advices and the perfect shoe fit, or if the company should compete against the big players by putting aside its business philosophy, strengthen its marketing skills and promote the design of less technical but more attractive shoes, not offered by New Balance at the moment, but highly valued by customers.
The situation needs to be addressed shortly since the long-term profitability of the company is at stake. Underestimating the situation may force executives to apply sudden drastic cuts in the near future in order to remain competitive and profitable.
External analysis
General environment
The manufacturing industry’s previous two (2) decades are characterized by a strong rise of interest for small and industrialized foreign countries.
MEGATOYS
(Final- Case Analysis)
Problem statement
New balance is 100 years old privately owned company specialized in the design, manufacturing and retailing of athletic footwear. The company is among the top five producers in the athletic shoe industry. It manufactures and sells its products internationally and operates factories in northern United States.
Recent announcement of an Adidas-Reebok transaction would bring together two (2) of the most important rivals, therefore changing the global shape of the athletic shoe industry. This new deal forces New Balance’s executives to review the company'S priorities and its actual business strategy.
New Balance’s actual business strategy is one of expansion and differentiation. The company distinguishes itself from competition by promoting the technical strength of its shoes and their quality. Conversely, in order to gain share of the market, competitors are using a differentiation strategy with marketing as the propulsive of their less technical but more fashion designed shoes.
New Balance has to decide whether the company should keep its actual strategic focus and continue to serve its niche of technical runners and athletes who seek advices and the perfect shoe fit, or if the company should compete against the big players by putting aside its business philosophy, strengthen its marketing skills and promote the design of less technical but more attractive shoes, not offered by New Balance at the moment, but highly valued by customers.
The situation needs to be addressed shortly since the long-term profitability of the company is at stake. Underestimating the situation may force executives to apply sudden drastic cuts in the near future in order to remain competitive and profitable.
External analysis
General environment
The manufacturing industry’s previous two (2) decades are characterized by a strong rise of interest for small and industrialized foreign countries.