Case Study: New Balance Athletic Shoes Essay

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CASE STUDY #1: NEW BALANCE Introduction New Balance was founded by William J. Riley in 1906 in the city of Boston. Riley started by making arch supports for customers who had to spend all day on their feet. Over time the building of arch supports led to the creation of his first running shoe in 1925. As part of a local running club, Riley capitalized on an opportunity to improve running shoes of the time and his designs became widely popular. His new running shoes became so popular that by the 1940’s that production spread from running to many other sports. Then the expansion of the manufacturing significantly increased as he realized a need to running shoes with more selection for wider feet, and…show more content…
One could easily argue that Nike’s success is a direct reflection of their commitment to their celebrity sponsorships, and while New Balance has found a niche by staying clear of these expenses, it could also be a root cause for why they dominate less than eight percent of the market share (Veleva, 2010). Operations New Balance decided to improve their operations by implementing a “lean production system” in all of their domestic facilities. The lean production system was taken from Toyota’s manufacturing processes to, “deliver goods on demand, minimize inventory, maximize the use of multi-skilled employees, flatten management structure, and focus resources when and where they are needed” (Veleva, 2010). These improvements helped significantly improve vast processes across New Balance manufacturing, and in one example reduced the time to make a pair of shoes in the Lawrence facility from eight days down to three hours (Veleva, 2010). 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.
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