Case | HBS Case Collection | November 2012

New Balance Athletic Shoe, Inc. (Abridged)

by H. Kent Bowen, Robert S. Huckman, Carin-Isabel Knoop and Matthew Preble

Abstract

Considers whether New Balance, one of the world's five largest manufacturers of athletic footwear, should respond to Adidas' planned acquisition of Reebok—a transaction that would join the second- and third-largest companies in the industry. Highlights the unique aspects of New Balance's strategy—focusing on fit and performance by offering long-lived shoes in a wide variety of widths and eschewing celebrity endorsement of its products—and discusses New Balance's operations decisions to support that strategy. These include significant use of domestic manufacturing at a time when nearly all other competitors sourced finished shoes from Asian suppliers and an emphasis on improving inventory management for its network of small and large retailers. Set just after the announcement of the Adidas-Reebok transaction in 2005, with New Balance having recently initiated a companywide effort to improve operational performance through the application of concepts from lean manufacturing and the Toyota Production System. Asks students to consider whether New Balance should change aspects of its operations strategy in light of the consolidation among its competitors or whether the Adidas-Reebok transaction represents an opportunity for New Balance to emphasize the importance of moving forward with its current approach.

Keywords: Production; Competitive Strategy; Supply Chain; Brands and Branding; Apparel and Accessories Industry; Sports Industry; Retail Industry; Asia; United States;

Citation:

Bowen, H. Kent, Robert S. Huckman, Carin-Isabel Knoop, and Matthew Preble. "New Balance Athletic Shoe, Inc. (Abridged)." Harvard Business School Case 613-006, November 2012.