Premium Essay

New Balance

In: Business and Management

Submitted By minjung12345
Words 1059
Pages 5
1. Present Situation
New Balance is an athletic footwear and apparel company that has revenues of $1.64 billion per year. It has long had a cadre of loyal customers; the company was made famous for its commitment to runners and innovations like separate widths offered for most of its shoe models. Its main competitors include Nike—which pulls in around $19 billion per year in revenues—and Adidas, which draws about $12 billion per year. In recent years, New Balance has branched out with more models and acquired casual and boot brands, but it still has trouble suing for space at department stores, even when it offers to guarantee stores the products will sell.
2. Problem Identification
New Balance’s most loyal customers tend to be middle aged and older individuals who buy shoes for functionality, not fashion, and as their feet don’t grow this demographic will often keep the same pair of shoes for years. Indeed, New Balance’s advertising slogan from the 1980s stated that “We don’t live by fashion. Then again, we don’t die by it either”. While they have since altered their approach in recent years to spur growth, the core of this philosophy remains essentially intact: New Balance values functionality over fashion. But while this certainly hasn’t killed the company, it has contributed partially to its stagnant position in the market with respect to more larger and more fashion-oriented competitors like Nike and Adidas. Unfortunately, many youths prize fashion over functionality.
At a department store (Macy’s), I didn’t see a single pair of New Balance shoes on display. At Dick’s Sporting Goods the space allotted to New Balance was far less than that afforded to Nike or even Adidas, and Sports Authority seemed to carry even less New Balance. If New Balance wants to expand sales, it must first generate or demonstrate the excess demand is there before retailers will start...

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