...Q: What are the key elements of the New Balance’s operations strategy? Key elements of Operations strategy are * Customization/Personalization - A shoe with multiple width size option to support superior performance and comfort * Focus on manufacturing and operations and not on marketing * Marketing spend much lower than competitors * Product focused strategy with campaigns like “Endorsed by No One Campaign “ * Special focus on Product design * Incremental Design for existing product to suit evolving customer needs * New Design – Absorb EX and Zip oriented towards on younger customer base * Shoe Manufacturing(25%) in United States to provide customization and speed to market * Sales and Distribution * Distribution through small retailers. Building strong relationship with retailers * Leveraging independent sales force. Effective relationship management leading to long tenured Sales force. * More Sales and low inventory/inventory holding cost at retailers site * Shipment delivered to retailer day after the order placed. This way retailer has to hold less inventory and hence less inventory holding cost. Also improves speed to service the customer. * All the risk with New Balance company * Supply Chain and Manufacturing * Placing order weekly vs monthly and placing small orders to decrease lead time from 12 weeks to 9 weeks. * Building stronger relationship with suppliers...
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...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. ...
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...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. ...
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...William J. Riley, a 33 year old English immigrant, founded the New Balance Arch Support Company, which manufactured arch supports and other accessories designed to improve shoe fit, in Boston, Massachusetts. His first product, a flexible arch support, was designed with three points of support in the shape of a triangle. These points created greater balance and comfort in the shoe. It's believed that Riley came up with the name "New Balance" by observing chickens in his yard and demonstrated the way his arch supports worked by keeping a chicken foot on his office desk to demonstrate. He would explain to customers that the chicken's three clawed foot resulted in perfect balance. In 1927, Riley hired Arthur Hall to be a salesman and in 1934, Hall became a business partner and soon found his niche by marketing his products to people whose jobs required them to spend much time standing. In 1956, Hall sold the business to his daughter Eleanor and her husband Paul Kidd. Eleanor and Paul continued to sell mainly arch supports until 1960, when they designed and manufactured the "Trackster," the world's firstrunning shoe made with a ripple sole. It was also the first running shoe to come in varying widths. The "Trackster" was given a big boost through the YMCA programs where it became the unofficial shoe of the program. College track teams such as MIT, Tufts University andBoston University adopted the New Balance Trackster for their cross-country teams soon to be followed by other...
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...Pergunta 1 Pergunta 2 Pergunta 3 Pergunta 4 New Balance A empresa foi fundada em 1906, inicialmente como uma companhia que fazia calçado ortopédicos, e ao longo dos tempos foi evoluindo, nos anos 60, para uma empresa que fabricava sapatilhas inovadoras para certo tipo de desportos, nomeadamente para atletismo. A empresa foi evoluindo de estando centrada apenas nos Estados Unidos, como uma empresa global, numa operação comandada pelos então empregados Jim Davis e Anne, que mais tarde viria a casar com Jim, e ambos tornar-se-iam donos da New Balance Vários contratos de distribuição foram feitos nos anos 80, que catapultaram a empresa para o valor de 60 milhões de dolars em 1982. A criação do modelo 990, feito para corrida, elevou a fasquia de produtos de grande qualidade da empresa, com um preço record de 100 dolares por par, quando a maioria da concorrência vendia os seus produtos a 50 dolares. A empresa tinha como estratégia criar produtos com uma grande evolução tecnológica e que se adaptasse à reais necessidades dos consumidores, nomeadamente nos tamanhos, e em contraponto com os rivais que apostam em produtos da moda que davam mais valor à imagem e não tanto ao conforto dos pés. Além disso, a empresa apostou em manter em inventário grande parte dos seus produtos, de modo a que sempre que tivesse pedidos pudesse satisfazer entregas, ao invés dos rivais, que diziam aos retalhistas que tinha de fazer as suas encomendas seis meses antes. Os donos da empresa assumiam-se...
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...How important is the NB2E for New Balance To understand the importance of the implementation of the initiative to NB, one has to understand the concept of continuous improvement. Continuous improvement in this case is process-oriented, i.e. that the lean manufacturing process is an improvement of the processes linked to the manufacturing and distribution, which is necessary to achieve improvement of operative activities. Lean aims at reducing non-value creating activities, and to establish a system where every process adds value to the product. Why is continuous improvement so important for businesses? Only 6-10% of all innovations are radical, the rest are seen as incremental improvements. That means that the majority of innovations are continuous improvements to processes or products. For a company to stay competitive, this means that there has to be a focus to continuously improving their current operations. Just focusing on radical innovation will not be enough to change at the same pace as the environment. Further, cumulative gains of efficiency are often greater over time than occasional radical changes. This underlines the importance of incremental innovation and continuous improvement. How does this apply to NB? As stated above NB is seeking for process-oriented improvement. More precisely, they want to improve the lead-time between a retailer’s order and its delivery. Since NB is an operations-oriented company, continuous improvement of processes are the most reasonable...
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...MKTG 3030 D Final Report Group 1 Content Executive Summary ................................................................................................................................................. i Part Ⅰ: Situational Analysis 1. 3C Analysis: Company, Competition & Consumers...................................................................................... 1 2. 4P analysis: Product, Price, Placement & Promotion .................................................................................... 2 Part Ⅱ: Campaign 1. Target Market: Profile & Refinemnet .......................................................................................................... 4 2. Communication Objectives .......................................................................................................................... 4 3. Message Strategy: CFR, POP & POD.......................................................................................................... 5 4. Creative Strategy: Discover our excellent & Definr your excellent ............................................................ 5 5. Media Strategy: Objective, Media choices & Measurement ........................................................................ 8 6. Campaign Budget: Overall Budget & Distribution .................................................................................... 10 7. Research Strategy ........................................
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...Executive Summary In analyzing the New Balance case we were asked to address four core topics: the current operations strategy of the company, the cost of maintaining 25% of manufacturing in the United States, the impact of the Adidas/Reebok merger on New Balance, and the future of the NB2E initiative. We organized our paper around the key areas of the business; beginning with an overview of the current operations strategy, followed by manufacturing and supply chain, and finally finishing up with marketing and sales. Within each of these sections we provide a summary of the current situation as well as our recommendations for New Balance moving forward in the wake of the Adidas/Reebok merger. The four core topics we were asked to analyze are addressed throughout the paper in the appropriate areas. In the overview of current operations we suggest that New Balance maintain its current strategy as a company focused on performance and operations rather than fashion and marketing, even in the face of the Adidas/Reebok merger. The manufacturing and supply chain section includes the calculations of the cost of maintaining 25% of production in the US and, based on these cost figures, suggests several strategies for reducing inventories, lead times, and costs. In the marketing section we recommend that New Balance utilize the Adidas/Reebok merger as a way to remind customers of who New Balance is and what the company stands for: quality and performance, not big business...
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...New Balance Athletic Shoe, Inc. is an American athletic footwear manufacturer based in Boston, Massachusetts. The company was founded in 1906 as the "New Balance Arch Support Company" by William J. Riley and is now one of the world's top athletic footwear manufacturers. William Riley started out developing arch supports designed to improve shoe fit. His first product, a flexible arch. The company now boasts of manufacturing various athletic shoes and apparel. New balance is the second largest manufacture of athletic shoes in the United States and it is currently the number four largest manufacture of athletic shoes in the world. The company has over 4000 employees worldwide. The company was the only global footwear manufacturer with production in the United States. Sales for its products were estimated to be over $2.0 billion. The company prides itself as the only footwear manufactures to with production factories on US soil. The current CEO is Robert De Martini. New-Balance athletic company still remains a privately owned company. The company owns five factories in the Unites states. Two in Massachusetts and three in Maine. What makes New-Balance company rise above other companies in terms of CSR, is the current owners James and Anne Davis; continued commitment being socially responsible and “giving back” to stakeholders. Under The stewardship of the Davies, New-Balance Company had always strongly braced corporate philanthropy, encouraged employee volunteering and ensured compliance...
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...NEW BALANCE CASE STUDY If you have a company and do business internationally, in today’s global world you have to compete with your rivals and be strong in the market. Reducing your cost is one of the effective ways to be competitive and strong. That’s why majority of companies seek low cost producer, labor etc. As we know China is the best example with its low cost labor, outsource etc. So China is very attractive for the companies doing international business. Most of them outsource more of their manufacturing to China to maintain a cost advantage. It looks very logical and easy to benefit from cost advantage by this way but it not as easy as we thought. As we can see our case, New Balance which is one of important shoe companies chose this way and faced really annoying problem for its brand: Counterfeit goods. 1) New Balance faced with these issues: • How to protect its intellectual properties when setting up manufacturing overseas. • How to stop the Chinese manufacturing unit from producing the “fashion” shoe which is sold at very low price and diluting the brand. 2) Important factors that are important in understanding this decision situation: • Since China is selling the low-price “fashion” shoes that are indistinguishable from the originals, brand value of New Balance can be damaged. • Selling low-price shoes can lead New Balance to gain reputation of selling low-quality shoes. 3) The alternatives are: • Getting into the overseas legal system...
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...Case Study #1: New Balance Introduction New Balance is a global athletic shoe and apparel company, founded in Boston in 1906 by a waiter named William J. Riley, who made arch supports for people who walked a lot (Veleva, 2010, p. 2). He began designing running shoes for local organizations and in the 1940s, New Balance was making custom shoes for many different sports, including running, basketball, baseball, tennis, and boxing and in the 1960s, started manufacturing shoes in varying widths in larger quantities (Veleva, 2010, p. 2). In 1972, the company was sold to James and Anne Davis for $100,000, who have owned New Balance ever since and in 2009, with James as chairman, and Anne as vice-chairman and executive vice-president, administration (Veleva, 2010, p. 2). James Davis saw great growth potential for the company after trying out the shoes himself (Veleva, 2010, p. 2). New Balance experienced enormous growth and its sales increased more than 600% between 1991 and 2008, achieving $1.61 billion in that year (Veleva, 2010, p. 3). The owners, James and Anne Davis had always operated New Balance in a socially responsible way, but did not have a formal CSR department or strategy for the business and did not advertise their CSR activities to the public (Veleva, 2010, p. 5). In 2006, James and Anne Davis formally integrated CSR into New Balance’s mission and values (Veleva, 2010, p. 5). Katherine Shepard, the company’s communications manager was promoted to the role of social...
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...Problem Statement Two of New Balance main competitors, size and product wise, Adidas and Reebok, recently announced their intention of merging. Together, they become a counterweight large enough to rival with Nike, the world’s dominant player in athletic footwear and apparel. The Davises, sole owners of New Balance, know that this transaction will have an impact on the industry and their business. They wonder how to react to ensure long-term business profitability and whether they should adjust the company’s priorities in light of the changing competitive landscape. New Balance wants to grow and needs to find the appropriate strategy to effectively support this endeavour. At the same time, the company’s leaders wish to remain committed to its core values, philosophy and heritage. The athletic footwear industry is very competitive and each player tries to differentiate itself from the rest of the pack. Although New Balance produces cutting-edge, high performance running shoes, their style, or lack of, plays against them. The market has evolved since the successful introduction of its iconic 990 running shoe, and more and more people are now wearing sneakers for casual purposes. The Adidas-Reebok merger will certainly have consequences on the industry. Many stakeholders, including New Balance’s own employees, will soon begin to ask questions about the company’s response. In order to secure its assets, the Davises must quickly determine how to tackle the situation and capture...
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...Historically, print news has focused on the importance of text and where images have been used, little attention is given to the function of these images in conveying news discourse. However, the relationship between the verbal and the visual deserves further attention. Images have a powerful impact on a viewer’s response towards news and this impact cannot be created by text alone. A critical examination of three recent news events (see appendix) and analysis of the images that they utilise, reveals the communicative functions and the connotative force that is carried in news photography (Bednarek and Caple 2012, pg. 57). By studying these photographs through analytical frameworks, we see that images embody much more than what is depicted within a frame and in fact they “have been worked on, chosen, composed, constructed and treated according to professional, aesthetic and ideological norms” for the purpose of engaging with their audiences (Bednarek and Caple 2012, pg. 57). Prior to our analysis of the three articles, an overview of the analytical frameworks that will be used and their contribution to our understanding of news reporting must be investigated. News articles embody two different semiotic systems, language and image, which share an intersemiotic relationship (Bednarek and Caple 2012, pg. 121). Research of this relationship focuses on the textual strategies deployed in the newsroom to elicit responses from the audience, the words help drive the pictures while the...
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...1. Tables 1 through 5 contain the financial information describing the effects of level production on inventory, cash flow, loan balances, and interest expense. Reproduce these tables if Tim's suggestion were implemented; that is, change the Production This Month column in Table 2 from 400 each month to 150, 75, 25, and so on, to match Sales in the next column. Then recompute the remainder of Table 2, and Tables 3, 4, and 5 based on the new production numbers. Beginning inventory is still 400 units. Beginning cash is still $125,000 and that remains the minimum required balance. This is done on the attached excel file. 2. Given that Gale Force is charged 12 percent annual interest (1 percent a month) on its cumulative loan balance each month (Table 5), how much would Tim's suggestion save in interest expense in a year? The original interest amount is $254,250. With the new production, based on sales, the interest amount comes to $50,750. Savings in interest is $203,500 3. Up until now, we have not considered any inefficiencies that have been introduced as a result of going from level to seasonal production. Assume that there is an added expense for each sales dollar of .5 percent (.005). Based on this fact and the information computed in question 2, is seasonal production justified? The additional expense comes to $72,000 and the total interest comes to $51,924 ( due to more borrowing due to additional expense). The total expense is $123,924. The original interest...
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...As Generations Evolve, So Does Our Media In today’s day in age we are constantly flooded with information and news that is being almost shoved at us from all different angles. From radio, newspapers, television, magazines and the Internet we are always engaged in some sort of media. As technology has progressed we have also been able to access news and information anywhere in the world. With our tablets, laptops, and smartphones media is at the tips of our fingers and always available for us, which is much different then how it used to be. From the censorship of the media to the constant use of new media, the differences from the media in America’s history and today’s are vast. Every generation has to adjust to the media type that is current for their time, however with the constant progression of technology we are affected by the content of the media as well and the delivery system. Conferring with someone from an older generation helps fully understand how the media has changed and the different perspectives about it. My mother, Ellen Ferretti, was born on July 15, 1956 and grew up in Fort Lee, New Jersey, right across river from New York City. Even though she was born in the 50’s she still has a reference of information about the media during her childhood and teen years. Growing up she recalled always having newspapers, magazines, and the radio as a source of media. Her parents read the newspaper as a source of information and current events, locally...
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