New Balance: Outrunning the Competition
Introduction
After reading the case study for New Balance I see a brand with great potential. A brand that has staunch traditional values and customer satisfaction as its primary priority.
Question 1: What are New Balance’s strengths, weaknesses, threats and opportunities?
SWOT ANALYSIS
STRENGTHS
Good Management structure e.g. Van Rooyen the general manager
Wide range of products across every sporting category
Functional technological design in terms of fit. Foot widths have been incorporated in the design of the shoe. This distinguishes/ differentiates New Balance product from its competitors.
Brand has been kept affordable in terms of price
Inspired well-taken care of employees who
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The company can be both bigger and better.
THREATS
The sportswear industry is growing and becoming more competitive so the will be new producers and entries in the market with new ‘’aces up their sleeves’’. More competition in the market
Sales on the technical running market have been on the decline according to (exhibit 1) in the New Balance Case Study, and this is New Balances’ stronghold.
Becoming myopic and not scanning the periphery. Not seeing that there are gaps in the market and focussing mainly on running.
Not considering fashion focussed brands such as Puma as competition. This is a myopic trait of assuming indispensability
Summary
Much of the strengths of New Balance lie in the quality of their product and the good relationships they have with their retailers/ distributers. Their weaknesses are in that they are too focussed on the functionality of product, whereas the market is constantly changing and they need to be evolving with the market. Opportunities lie in the diversification of the product and making it more contemporary. They also need to employ stronger marketing techniques.
Question 2: Would you consider New Balance a niche player in the athletic footwear industry
New balance is a niche player with regards to their marketing technique. They utilised niche marketing strategies that the bigger firms overlooked.
1. Van Rooyen
Competitive analysis is an essential part of strategic marketing where companies continuously monitor the business activities of its competitors gathering and analyzing industry information keeping up with the current trends and developments providing a perspective on the probabilities and possibilities of the future (Brannon and Divita, 2015). Athletics Supreme faces competition from its top three competitors. Dick’s Sporting Goods has made adjustments and shifted sales to meet changing trends in the area of sports now catering to serious athletes and children, and young adults at all levels of play. Foot Locker, Inc. is a leading retailer in athletic shoes and apparel mostly operating specialty stores malls across the United States. Walmart
Based on The Running Room’s current situation, Cisco considers a number of alternatives to her present marketing strategy. On one hand, she could continue to maintain a broad target market to appeal to both casual athletes--with more fashion-conscious products that aren’t necessarily running shoes--and serious runners, while attempting to tap into the growing market for women’s athletic shoes with expanded product lines for female athletes. This strategy would help her maintain her aging loyal customers, as she could offer athletic shoes that reflect the new exercise programs that they are becoming involved in instead of running. Conversely, she could narrow her target market to just serious runners, by investing in the high-end molded running shoes and the additional training and promotion that would be required to sell them. An analysis of The Running Room’s strengths and weaknesses can help her determine that the second strategy is the most worthwhile to pursue moving forward. As a former nationally-ranked runner herself, and with both a proven track record for catering to serious runners (who make up a majority of her sales) as well as the flexibility to switch product lines fairly easily, Cisco’s business strengths would support a shift to a more serious runner target market with relative
sale of Nike’s high-margin products to high-end customers. Regardless of the low cost of the World Shoes, they
New Balance has a significant opportunity to expand its operations in the western region. While the commitment to northeastern operations may have provided an early advantage, there is certainly an opportunity to capitalize on the explosive growth within the western market (Chang, 2012). It is important to balance growth across various markets, to ensure market share is captured, in order to get ahead of the expanding market culture before brand dominance is established by the competition.
Sportsman Shoes has been a leader in the shoe industry for more than thirty years. Sportsman manufactures and sells athletic shoes for all types of sports. The company has pursued a low-cost strategy in order to sustain their success. They sell a limited number of shoe designs and have held costs low through manufacturing efficiency and standardized operations. However, the past five years have been a struggle at Sportsman. The shoe market has seen a rise in the availability of low-cost imported shoes that has threatened Sportsman’s competitive position. As a result, company executives have decided it is time for a strategy shift.
Companies like Under Armour, Nike and Adidas/Reebok have high threats of substitute´s products. These companies share the sport apparel industry and are vulnerable to competitive pressure from the actions of buyers whenever they view that their products can be substituted for others. The availability of substitutes invites the costumer to compare performance, features, and ease of use as well as price. Under Armour’s major competitors are Nike and Adidas/Reebok because they have a similar or competing product offerings. The top sport apparel brands offer similar products and that is why each one of them needs to keep a high standard and produce good quality products in order for customers to keep buying their product.
Currently, Nike stand as a leading figure in producing high quality sports and fitness equipment and apparels. Bearing just a simple start of selling Japanese imported shoes from a station wagon has transformed
Its ability to have created a global brand these products is a valuable asset and a sustained competitive advantage
The threat of new entrants in the athletic shoe industry is very weak. Currently the market is dominated by three major competitors, and
The strength of the company is the loyalty of its brand and its talented management team and workforce. Another strength is the organizational vision which gives employees a view of the future and something to believe in and something that can be realistically achieved. The weakness of the company is that of the expansion into new markets. They need to make sure they stay focused on the creativity and innovation of products and not over focus on expansion. If they over
One key trend driving growth for the industry is innovation including new high-tech fabrics. Demand for advanced and comfortable athletic wear is driving companies to launch new product lines of sports apparel made of cutting edge high-quality materials A few other drivers contributing to the industry growth is global expansion and increasing popularity amongst the female demographic.
Competition is very fierce due to the number of companies competing for sales. Lots of money goes to marketing and promotions using various channels to reach the young demographic group of consumers who spend the most money on Nike’s products. Growth is slowing down in the athletic footwear industry. But new markets are emerging with high growth rates. These markets include extreme sports market and the corporate merchandise market.
• Established brand position (40-years experience) • Baby products / clothing : speciality retailer • Ability to adapt itself to the needs of its customers in international markets • Wide variety of products and services
Nike, Inc. has been the world’s leading innovator and provider in athletic footwear, apparel, equipment and accessories for 50 years. Their mission has been to bring inspiration and innovation to every athlete in the world; if you have a body, you are an athlete. Arguably one of the most innovative companies in the world, Nike has built its brand into an iconic world-class powerhouse that continues to dominate the market with no signs of slowing up. Nike’s marketing and advertising have been breakthrough, aspirational, and legendary over the years, featuring high-profile athletes and heroes.
That gives Kao plenty of chances to interact with consumers in terms of using and recognition, and then sharpens its brand and positioning in the market-place.