New Balance Athletic Shoe, Inc. (Abridged)

H. Kent  Bowen; Robert S. Huckman; Carin-Isabel  Knoop; Matthew  Preble

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;

Language: English

Format: Print

15 pages

Educators Purchase

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.

This case is set in mid-2019, when Qualcomm was struggling with unwanted takeover battles, fights with Apple and the Chinese government, and internal dissension on the board of directors. Ten years earlier Qualcomm was hailed as a monopoly on CDMA technologies and its derivatives—it appeared to be positioned to become the next dominant technology company in the tradition of Microsoft and Intel. But as the industry changed, Qualcomm’s competitive position seriously weakened. The purpose of the case is to explore central questions in strategy formulation: 1. how to build a long-term sustainable position based on technology, 2. how to design an IP strategy to lock in customers for the long run, 3. how to build a global standard and appropriate returns on that standard, and 4. how to respond when your historical business model starts to crumble.

Email mking@hbs.edu for a courtesy copy.

The case describes a program that CVS Health recently implemented to improve medication adherence, an important problem from a societal, public policy, and firm perspective. A test of the program, costing hundreds of thousands of dollars to implement, increased the proportion of adherent customers by 1.4 percentage points. Students are asked to quantify the system-wide economic benefit of this improvement and draw upon insights from behavioral science to examine approaches for boosting medication adherence.

New Balance Athletics, Inc., a major U.S.-based athletic footwear and apparel brand, sources most of its footwear products from independent suppliers whose factories are located in China, Indonesia, and Vietnam. Monica Gorman, vice president of responsible leadership and global compliance, is seeking to combine data sets collected by different parts of the organization to see whether she and her colleagues in the company’s order management function can make a clear connection between the corporate social responsibility (CSR) results that her function tracks at the supplier level, with New Balance’s order placement practices.

Faculty & Research

New Balance Athletic Shoe, Inc. (Abridged)

Abstract

Citation:

About the Authors

More from these Authors