Final Quiz - Case - New Balance

New Balance Quiz - Case Study Analysis

• Global Sales Ranking (2004): New Balance was ranked third globally in terms of sales in 2004.
• US Market Share: New Balance held third place in terms of market share in the US.
• Product Differentiation: Key aspects differentiating New Balance's products are limited edition designs and sponsorships with athletes. They also focus on performance and fit.
• Product Characteristic: A significant characteristic of New Balance products is frequent seasonal releases.
• Retailer Preference: New Balance prioritized small, independent retailers due to cost-saving on advertising
• Manufacturing vs Marketing: New Balance's focus on manufacturing rather than marketing is summed up as "We are manufacturers, not marketers".
• Private Ownership Advantage: Private ownership allows New Balance flexibility for long-term investments.
• Domestic Manufacturing Percentage: 25% of New Balance's manufacturing is conducted domestically.
• Offshore Production: High-volume, predictable styles were manufactured offshore.
• Domestic Manufacturing Costs: Additional costs incurred by domestic manufacturing include higher wages for executives and increased import tariffs.
• Domestic Manufacturing Benefit: Faster response to retailer requests and reduced lead times from Asian suppliers were listed as benefits of domestic manufacturing.
• "Made in the USA" Branding Reasoning: New Balance maintains "Made in the USA" branding to gain public goodwill and to build their reputation within the US market.
• NB2E Initiative Focus: The NB2E initiative is aimed at cutting manufacturing lead times and costs.
• Asia Supplier Strategy: New Balance chose to develop, rather than outsource, close supplier relationships with Asian providers in order to cut lead times.
• Sales Representatives Replacement: New Balance's sales force automation system aimed at enabling remote order placement.
• Teamwork Emphasis: New Balance emphasizes teamwork through encouraging cross-functional training and experience.
• Competitive Challenges: New Balance's competitive position was affected by Adidas/Reebok merging.
• Market Position Impact: The Adidas/Reebok merger did not significantly impact New Balance's market position.
• Higher Market Share Benefits: Increased bargaining power with suppliers and reinforced and enhanced product design options are advantages of higher market share.
• Transaction Response: New Balance cut costs by eliminating domestic production in response to the Adidas/Reebok merger.
• Delivery Time Goal: NB2E's primary goal for order delivery is 24 hours.
• NB2E Implementation Obstacle: Difficulty in reducing inventory reliance contributed to challenges in implementing NB2E.
• Domestic Factory Lead Times: New Balance's domestic factories aimed to reduce lead times to 12 hours.
• BTO/BTS Model Effectiveness: The BTO model is optimal when product varieties are extensive and the demand is predictable. The BTS model works better for long-life-cycle products with large inventory spans.
• Private Ownership Drawbacks: The limited ability to access public capital and increased operational costs are possible downsides to New Balance's private ownership structure.
• New Hire Training: New Balance hires include a dedicated six to eight-week team-based training period for new employees.
• Made in USA Advantages: A "Made in USA" label helps establish stronger domestic brand loyalty. and increase sales in the American market.
• NB2E Goal: NB2E's ultimate target is improved operational responsiveness and increased international expansion.
• Competitor Factor Prioritization: New Balance prioritizes lead time reduction slightly less than its competitors.
• Inventory Cost Impact: NB2E aims to reduce finished goods inventory.
• Lean Manufacturing Approach Benefits: Significant benefits of lean manufacturing are reduced product lead times during domestic production.
• Independent Sales Agents Reasoning: Independent sales agents are chosen with the goal of increasing sales commissions and accelerating international growth.
• Domestic Manufacturing Cost: Domestic manufacturing can incur $50 million in added costs.
• Asia Factor Explanation: New Balance's decision to use foreign suppliers in Asia relates to lower manufacturing costs in comparison to remaining domestic.
• Long-Term NB2E Advantage: Reliable and consistent lead times is a long-term advantage of NB2E.
• Key Competitive Factors: Product fit and width options are prominent competitive advantages for New Balance.