Company Analysis
In this activity, you will research the New Balance Company and write an essay (Links to an external site.) based on the concepts learned this week. Your essay should be double-spaced, at least 250 words, and adhere to APA guidelines. Ensure you have a cover page, introduction, body, and conclusion for your essay.
Visit the New Balance website: www.newbalance.com (Links to an external site.) and review the company’s information.
Answer the following questions in an essay format below.
From your assessment of New Balance, identify and describe in detail at least one of Porter’s generic competitive strategies New Balance has been using. From your evaluation, what are some of your recommendations for New Balance to be more competitive in a global market?
Assess New Balance’s opportunities and threats; provide a plan for implementing at least two opportunity strategies and addressing two current threats you’ve identified. Explain how those opportunities and threat strategies will positively affect New Balance’s business operations.
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Company Analysis
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The New Balance company is known for producing and selling running and training shoes. The company also manufacture and sells other products such as skateboarding shoes, lacrosse and cyclic shoes. Analysis showed that New Balance uses cost-leadership strategy as one of the porter’s generic competitive strategies(Schlesinger, 2015). When compared to other competing brands in the market such as the products from Nike and Adidas, New Balance products are cheaper. This strategy allows the company to target a wider market. Despite the fact that New Balance produces its products in United States and the cost of product is high, the company has managed to keep the prices of its products below those of the competing companies. The only products that retails with high prices are those that are customizable in nature. Further analysis indicated that marketing managers of the company are keen in utilizing cost-leadership strategy.
It is recommendable that New Balance should consider shifting its production line to China or any other Asian country in order to reduce production cost. Studies have showed that the cost of manufacturing a product in Asia is between 50 % to 80 % of what it cost to produce in U.S. due to cheap labor(Steward, 2015). Although the prices of New Balance product are competitive, moving its production to Asia will significantly reduce the cost of production thus fetching much lower prices. The threats New Balance is facing lack of rarity and imitation from other companies such as Nike and Adidas. Since the company targets wider market, its products are common and ordinary. The opportunity available for New Balance is…………………………………….
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