New Balance Athletic Shoe Inc.
New Balance Athletic Shoe Inc. (NBAS) is one of the manufacturer of footwear which was based in Boston, Massachusetts. New Balance Athletic Shoe Inc. was founded in the 1906 by the name of New Balance Arch Supporting Company. They’ve been responsible for investing huge budgets for the advertising which has led them to be one the reliable and the largest manufacturers in the sports footwear in the world. It has been responsible for maintaining its image from the early 1900’s till now by keeping up the good work in competition to its competitors in Nike, Adidas and Reebok.
New Balance owns three factories in Maine and two factories in Massachusetts. As per the analysis, New Balance was responsible for manufacturing more than 70% of its shoes in the whole of the United States of America. Whereas in United Kingdom, still 28,000 pairs are produced every week which is really incredible for a company which has been into the international market now for more than 100 years. United States Athletic Shoe Industry United States Athletic Shoe Industry was one of the largest athletic shoe market in the world.
But its market got a bit bobbed-down because its competitors decided to launch innovative structures
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Same as, Nike always had a lead over its competitors by 43 percent in the Global Market around the Globe, whereas Reebok, Adidas and New Balance captured 36 percent of the market in the U. S at that time. In this Context New balance budget for advertising was $17. 3 million, to compete with the New Balance many of it’s competitors started manufacturing the footwear outside US as they were highly labor intensive and as a result later on China has become the largest with 85 percent of the share for the U.
S. Product Design For every good manufacturing companies they have the best product design, so was the case with New Balance as they had 60 people who were working just for the design of the product out of which 30 were working on the incremental development and the others were working on the new innovative ideas to fit in and produce a unique product. But, New Balance always had this desire of manufacturing a product which had a long and durable life.
Lately quoted by Jim Davis that they have not been taking care of the product design the way they used to when they were in the market but they’ll look for the design reviews and work on the mistakes they’ve made in the past. Distribution channels Foot locker, a brand which was highly recognized by everyone all over the world had around 4000 stores all over the world and its contribution was a bit less than 10 percent to Nike’s annual sales as Nike was representing 50 percent of its sale for the foot locker.
They were also very cheap in price and their pride of lessening the retail price to $5. New Balance has always focused on smaller retailers as their main goal was to target the service oriented customers. The largest retailer for New Balance was foot locker and it was responsible for more than 3000 doors in the whole of US. New Balance divided the retailers into two groups in which specialty retailers were again dropped into 3 major teams which were the elite running stores, independently owned and operated New Balance stores and family stores.
New Balance has always maintained a good relationship with the small and the big retailers which have resulted in making its name in the international market all over the world. Supply Chain and Manufacturing New Balance was responsible for outsourcing 75 percent of its final product assembly outside US to the Asian Countries and the remaining 25 percent were in their own five factories in the United States. New Balance imports raw materials from the Asian suppliers and the rest was done within their own factories in the US. New Balance also has foreign suppliers as it has done its major business with China. Conclusion
No doubt, New balance has been one of the best athletic show manufacturers around the globe and has served the US markets to some great extent but it should apply the principles of the Toyota Production System and use some important concepts in shoe manufacturing which will help in producing goods. We don’t always improve the weakness it’s the system that has to be improved or in other words processes. New Balance is widely accepted and has its own market plus is the one of the top manufacturers in the US, their productivity can only be increased if they catch the customer’s attention worldwide and produce what everyone wants.