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The company project(new balance)

korea university

SeongHun Kang

on 13 June 2014

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Transcript of The company project(new balance)

IB Strategy
2014411150 Jae-Woo Im
2014311132 Woon-Jong Lee
2014411122 Dong-Kyu Lee
2014411165 Hea-Woon Jeong
2014411002 Seong-Hun Kang
1. Company Mission:
Demonstrating responsible leadership, we build global brands that athletes are proud to wear, associates are proud to create and communities are proud to host.

- An innovative approach to athleticfootwear
- Responsible Leadership
- Domestic Manufacturing
IB Strategy
In 2013, one out of every 4 pairs of shoes we sold in the USA was made or assembled in the USA. Where the domestic value is at least 70%, we label our shoes “Made in the USA”.

New Balance
The Company Project
IB Strategy Changes of New Balance
- New Balance are very proud of “Made in USA” as a core competency
with 100 years heritage – more focus on domestic market in the beginning based on home manufacturing system

- As overseas demand and business revenue increase, New Balance needed to change International Business Strategy in order to manage local responsiveness by selecting proper entry mode, (e.g. Licensing – E.Land in Korea, Owner ship - plant in UK for EU market)

- To compete with competitors(e.g. Adidas, Nike), New Balance would like to keep their own brand identity with strong ownership (Private Company) while optimizing price through outsourcing (e.g. China, Vietnam)
IR Grid and Global Configuration Coordination
Analysis for New Balance IB Strategy
SWOT analysis for current New Balance IB Strategy
manufacturing Mode
Made in USA
Family of Brands
Mr. James S. Davis

Mr.Robert T. DeMartini
/ President

Mr.John Withee

Mr.John E. Larsen
President Emeritus
Advisory Board Member

Mr.John Wilson
/ Manufacturing

Mr.Herb Spivak
/ Commercial Operations

-108 years of Innovation, accumulated technology & know-how
- Strong brand value Americans love
- Domestic Manufacturing
- Company-employees relationship
- Strong management team

- Narrow business portfolio compared to competitors
- Relatively low commercial advertisement & marketing compared to competitors
- Customers limit(10s~30s) especially in Asian market
- Expanding Business area
- High growth possibility
- Customer potential
- Made in USA dilemma
- Tariff reduction or removal of TPP(Trans-Pacific Partnership)
- Aggresive strategy of competitors
It allows the company to have a distinct image in the mind of its customers and the transportation period from manufacturing to warehouse is significantly shortened.

Therefore, it can achieve a Just-In-Time (JIT) supply chain for the domestic market. If they outsource with foreign suppliers, it can cause long lead times in the supply chain.
Recently, they have taken many actions to reduce the lead times from suppliers such as small orders on a weekly basis, allowing the suppliers to “pre-buy” raw materials on behalf of New Balance

It has reduced the total lead time from 12 weeks to 9 weeks.
It is high cost related with the manufacturing in the United States as compared to the cost if the shoes were completely produced in Asian countries.

New Balance has always maintained that it is a company focused on manufacturing and operations rather than on marketing.

This is a strategy that greatly differs from their competitors that they are focused on outwardly on publicity and celebrities to create reputation.
While most competitors in the athletic shoes industry have outsourced almost all of their production to manufacturers in Asia,New Balance continues to manufacturing 25% of its volume as final product assembly in one of five factories in the northeastern United States.
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