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New Balance

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Abigail Kim

on 10 March 2014

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Transcript of New Balance

New Balance
What is New Balance?
New Balance Athletic Shoe Inc, best known as New Balance, is an American footwear manufacturer and is one of the world's major sports footwear manufacturers.
The company was founded in 1906 as the "New Balance Arch Support Company" and it maintains a manufacturing presence in the US as well as the United Kingdom.
The founder of the company is William J Riley and he created a new type of athletic shoe with blended gel inserts, and heel counters.
New Balance consists of mostly athletic shoes along with apparel.
It is also one of several shoe companies that makes some of their products in the United States.
New Balance is the apparel partner for the Melbourne Football Club in the Australian Football League.
They also have an endorsement deal with Matt Bonner of the NBA's San Antonio Spurs.

Strategic Planning
Demonstrate responsible leadership, we will build global brands that athletes are proud to wear associates are proud to create and communities are proud to host.
SWOT Analysis
Technology and innovation
A variety of products
Worldwide presence
Strong leadership
Diverse workforce and job benefits
Social corporate responsibility
SWOT Analysis Weakness
Smaller size in terms of revenue
Smaller market share
Use more celebrity endorsement or famous athletes
SWOT Analysis Opportunity
Growing athletic footwear market
Growing preference of online shipping
Changing lifestyle
SWOT Analysis Threats
Threat from competitors
Threat from counterfeits
Sluggish economic recovery
Increasing minimum wages
Strong leadership
Innovation and technology
Lean Manufacturing
Differentiated products
Fighting counterfeit
Corporate social responsibility
Managerial Approach
Environmental Analysis
Human Resources Management
They have industry leading benefits, professional development programs, and rewards for those who give back to the community.
Some of the professional development programs include monitoring, on and off-site seminars, customized team sessions, and tuition reimbursement.
As a human resource manager, it is important to make sure that each and every worker is actually being given access to these development programs.
Human Resource Management
Ethical Considerations
New Balance's operations embody all four aspects of the pyramid of global corporate social responsibility.
Economic, Legal, Ethical and Philanthropic
They steer clear of any kind of deception in the marketing of their products.
They take every measure they can to benefit their customers, employees, and the environment.
They try to minimize their environmental impact by enacting things such as Life Cycle Analysis, waste reduction techniques, and hazardous substance control.
They look for the best of the best when hiring, actively searching for hard workers who have a lot of energy.
Although selective, their design team allows job opportunities for college students in their junior and senior year.
One thing that could be enhanced is the organization's benefits.
When compared to Nike, there are a lot of parallels, but New Balance does not participate in transportation services like Nike.
Ethical Considerations
The organization encourages employees to give back to their community.
They also have their own charitable foundation, the New Balance Foundation.
Abigail Kim
Sherry Larios
Xiao Lu

Six owned New Balance footwear factories: 5 in New England and 1 in Flimby, England
Manufactures Contractor in the U.S, Mexico, China, Vietnam, and Indonesia.
New Balance has suppliers from various countries.
The New Balance Code of Conduct is translated into 24 languages.
Growth and develop six owned factories
All New Balance apparel is made in contract facilities, primarily in America and Asia. Some are made in Europe and the Middle East.
Additional Production
Some of the other brands occur throughout North and South America, East, Southeast and South Africa, Europe, the Middle East and Africa.
Market-specific licensees-typically manufactured within the region for which they hold a license.
Auditing and monitoring program in contract facilities.
More than 120 countries throughout the world through specialty retailers, department stores, New Balance licensed and paned retail, factory stores, and online shops.
Wholly-owned operating subsidiaries in the United Kingdom, Hong Kong, Singapore, Australia, New Zealand, Mexico, Canada and South Africa.
Began to address social compliance with contract footwear suppliers in the late 1990s.
In 2004, New Balance hire full time staff to develop and implement a program that, in 2006, expanded to include apparel, accessories, and licensee products.
"The Organization's competitive environment exerts influence in a close, more direct and immediate manner."
Five Components:
1. Rivalry with competitors
2. Rivalry with new entrants
3. Influence of substitutes
4. Bargaining power of suppliers
5. Bargaining power of customers
New Balance and their Environment
New Balance competes within two industries which include the Shoe Manufacturing Industry and the Athletic Shoe Stores.
The major players in the Athletic Shoe Store Industry are Nike Inc., Foodlocker, and Adidas but
New Balance is the major player in the United States Shoe Manufacturing Industry!
The shoe and footwear manufacturing industry in the United States has a love level concentration. Most large footwear companies, such as Nike and Adidas, manufacture nearly all of their products outside of the country. This practice has increased over the past few years as large manufacturers discontinue production in the United States, instead focusing domestic activities on design and wholesale of footwear.
Important Success Factors
Establishment of brand names
: brand strength can create consumer demand for a specific company's footwear products.
Economies of scope
: footwear manufacturing firms that produce a wide range of footwear products can satisfy various segments of consumer demand.
Ability to alter goods and services produced in favor of market conditions
: the quality of footwear manufactured and the ability to adapt to changing fashion trends provide major competitive advantages.
Understanding government policies and their implications
: understanding the implications of changing tariff rates and import duties is required to formulate a competitive strategy in this industry.
Economies of scale
: producing footwear items at the lowest marginal cost is an important competitive factor.
Willingness to outsource when appropriate
: In order to keep input costs down, manufacturers must be willing to source their products from low-priced foreign providers, either by establishing supply contracts with third parties or moving their own facilities overseas.
Important Success Factors Cont.
Product innovation is increasingly becoming a large competitive consideration for manufacturers; design teams are constantly creating various ranges of new styles of footwear, which include added features such as air pocket soles for outdoor activities. This product differentiation is perceived as one of the prominent factors consumers use at the point of purchase, aside from price.
Product branding is a crucial determinant. Established brand names such as Nike and Adidas have created huge brand image and recognition through varying marketing activities. This has created a loyal consumer base, which can be influenced by companies' market share and recognition. While Nike and Adidas do not produce in the United States, they are examples of external competitive forces, with strong branding, placing on local industry operators.
Most important success factors are related to understanding and complying with the environment.
New Balance is a privately held company and the owners, Jim and Anne Davis, lead with their core belief:
Let's challenge the conventions of the industry
They have created a community of dedicated supporters and work to create an environment where their associates value giving back to the communities in which they operate and manufacture.
Recently, they have embraced environmental sustainability, understanding the need to integrate social and economic dimensions with environmental performance.
New Balance is currently the only footwear manufacturer still making athletic shoes in the U.S.
Managerial Approach
New Balance remains dedicated to the ongoing enhancement of their multiple production locations by establishing continuous improvement initiatives.
They believe that being closer to the consumer in the areas that they manufacture in allows us to provide better service to their customers.
Gain from Global Market Financially
Recorded global revenue of $2.0 billion, up from $1.7 billion in 2007
Estimated $129.1 million can be attributed to the company's domestic shoe manufacturing operations in 2013.
Over the five years, US industry-specific revenue has grown at an estimated average annual rate of 3.3%.
25% of New Balance shoes are sold in the U.S.
Move to the World
"movement for movement
"Let's move the World"- Physically, emotionally, and intellectually
Training courses including:
Global team-building in China: How are we different: How are we alike? How should I interact with my global counterparts?
In 2010, New Balance signed the International Buyers Principles of the International Labor Organization (ILO) Better Work program. They actively participate in the ILO Better Factories Cambodia (BFC) and Better Work programs in Vietnam, Jordan, Indonesia, and Haiti.

New Balance is working towards a more global approach that integrates compliance programs under an overall, broadly conceived management system that uses the best elements from U.S., European and global labor and environmental, health and safety standards.
The general population is about 88 percent white and 12 percent nonwhite. Hispanics and Latinos are over-represented in sales and operatives.
Promoting Diversity
2009: 71 positions internally (154 total position filled)
2010: 61 position filled internally (157 total position filled)
Working closely with:
Fair Labor Association (FLA)
Joined long standing, multi-stakeholder organization of colleges and universities, NGOs and brand owners.
Promoting Diversity cont.
Development and learning program are designed to help associates at each level of employment attain a distinct group of abilities that correspond to New Balance's leadership competencies:
Values-driven Role Model
Global Strategist
Result-driven leader
Inspirational Talent Developer
Innovative Risk Taker
Professional Expert
Organization Structure
(Charts on the board)
All teams within New Balance share accountability for responsible leadership activities.
Responsible Leadership Steering Committee (RLSC) is composed of many individuals such as Jim and Anne Davis (Chair and Vice Chair) and Rob Demartini (President and Chief Executive Officer.
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