Nb.Ochoa Llamas


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Nb.Ochoa Llamas

  1. 1. Ochoa-Llamas, Vanessa Bus 491 New Balance New Balance Needs to maintain its focus on the New Balance Executional Excellence, the goal of which is to increase the quality and efficiency of the company’s operation processes through the application of lean manufacturing—in order to make market share gains.  Lean Manufacturing  Differentiation  Media Expenditure New Balance’s core purpose is to manufacture innovative performance footwear available in multiple widths. Its product offering is a strength because customers are attracted to shoes that fit. However, this can be a weakness for NB because it has too many styles and SKU’s. It makes efficiency more complicated because customers have many options, which results in “too many balls to juggle” for New Balance. Nevertheless, this is an area it has been working on through their NB2E goal of lean manufacturing. It has already set a strategic goal of 100% delivery within 24 hours. Although the goal may seem impossible, Tompkins has said it is working on something very close to that. It has also already began to reduce the lead time from a retailer’s order to its delivery. New Balance prides itself in differentiation, which is making its fit shoes for all width sizes. It targets its shoes to an older market segment that more concerned with fit rather than looks. Its strength is that some people would rather purchases shoes on fit, instead of looks. However, there is an opportunity to keep loyal customers and expand the product line to attract younger consumers that are into stylish shoes. Davis has admitted emphasizing more attention on design. As the younger kids who are interested in stylish shoes mature into potential consumers, those consumers might be interested in fit shoes. However the maturing
  2. 2. Ochoa-Llamas, Vanessa Bus 491 New Balance consumers are used to making purchases on style, that consumers might opt for continuing purchases with the stylish shoe companies. This is a great opportunity for NB to promote shoes that fit well and are stylish at the same time. New Balance’s media expenditure is less than it rivals. Its strength is that it spends less than its competitors and is able to spend more money elsewhere, such as its B2B sales team. However, a weakness is it doesn’t spend much on media or endorsements compared to rivals, which don’t give it enough brand awareness. This has resulted in 58% Brand familiarity with the $10.9 million spent on media. Although its popularity began by word of mouth, being in a runner up position, it will have to invest more money in advertising. I have to admit; I have never seen or at least remember seeing any NB commercials on television. However, I do remember seeing commercials with endorsements for basketball players for Nike and soccer players for Adidas, which are still vivid in my mind. Since it does not have a high media expenditure compared to competitors, an opportunity could be promoting at high school, college, Olympics and marathons, where a lot of core consumers might be. New Balance is a runner up competing alongside Adidas and Reebok. It has a very strong balance sheet, a seven-to-one ratio of assets to liabilities. It has Superior Product Strategy approach and it has already found a way to differentiate itself based on premium quality. It has great relationships with its salespeople and distributors after it set up a B2B application. For now the main focus should be the lean manufacturing, continuing to differentiate itself, and considering its media expenditures so that it can capture more brand awareness, and in turn gain market share.