Identifying the Business Requirements New Balance had a problem. Nike owned the lion’s share of the athletic shoe market and no one could touch them. New Balance was also behind Adidas and Reebok, but something happened in the last two years that changed everything.
Nike also had a problem. They had gotten so big that customer relations became a low priority. Nike controlled the market and dictated supply and demand to even their biggest customers. Consumer input was ignored and requests for special orders of customer demand products were met with indifference. Nike gave and Nike took away, at their discretion, to reward or punish retailers for Nike’s benefit. Then along came New Balance, who six years ago was almost out
…show more content…
It 's Jim Tompkins, president of New Balance. "Is your forecast right?" he asks. "Where are the orders to back it up? Why did those orders slip another month? What are you going to do to get back on plan today?"
This isn 't how you expected your week to start. But the personal attention isn 't unique today—Tompkins is calling every salesman whose top account has fallen behind on purchases. The source of his omniscience: The "Top Accounts ' ' report, an update distributed at noon every Monday that gives New Balance managers a clear-eyed look at sales figures for the past, present, and forecasted future. "The salespeople have nowhere to hide," says sales planning manager Teresa Holland, who is responsible for making sure the company 's forecasts are accurate, both in the United States and in foreign markets. She smiles as she remembers that Monday in July, the day her software project changed the way New Balance executives run the company.
Sales and Sales Management Production Tools
Tompkins and other top managers at the company 's headquarters in Boston, Mass., can now view a finely detailed report for each style of shoe in New Balance 's lineup: the to-date sales for the year and month for each major retailer that New Balance serves; the sales of that shoe (or its predecessor) for the same period last year at that retailer; the orders for that retailer that have yet to be filled by New Balance 's factory or warehouse; and what
sale of Nike’s high-margin products to high-end customers. Regardless of the low cost of the World Shoes, they
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
While it is true that Ms. Forthright had always exceeded her budgeted sales, the extent to which she diverts away from the managers projections does not necessarily means that she is violating honesty and integrity. Her decision on what her budgeted sales for the year is highly relevant to the data available to her. Her projections tends to lie between the field manager and the marketing manager’s predictions, which can be reasonable because in the past years, the field manager’s projections tend to be over what the actual sales of the year will be.
Unfortunately, the same factor that contributed to Nike’s exponential growth (low-cost labor and production) also contributed to hurting Nike’s public image as a leader in “athleticism, health and fitness, and innovative marketing and design” (Locke, 2002). Nike was criticized for unethical practices by their subcontractors, which included underpaid workers, poor working conditions, child labor, and abuse (Locke, 2002).
* Forecasting is an impartial strategic ingredient that will ensure apt base for reputable planning. Our forecast is always the first step in developing plans in running the business along with our future plans of growth strategies. With this tool, we are able to anticipate our sales within reason that then can allow for us to control our costs in conjunction with inventory which will then help us to enhance our customer service. Sales forecasting is a vital strategic tactic in our company’s methodology.
The following memo aims to outline the results of the audit of Apollo Shoes, give recommendations to improve the company’s operations, and provide justification for our qualified opinion.
The factors that drive Nike’s decision to stick with its current organizational structure include its well-established brand name in the industry. The company positioned itself as a brand
Question 2: Would you consider New Balance a niche player in the athletic footwear industry
As the brand name of Nike continue to soar, other companies in the industry; learning from the success Nike has experienced, start focusing more on brand development to keep up with the increasing levels of competition. These companies resort to brand maintenance, which has become the main target in this industry due to product differentiation made by Nike. Nike, being market-advantaged, produces an extensive range of products, through which it gains a balanced level of profits. This has influenced rival companies to initiate a new range of products in their businesses too. Previously these companies had high risks of failing in business, if their single products did not appeal to the market. Due to the impact of Nike’s business strategy, the other companies are also enlarging their product range,
Understanding customer needs will help Nike to define new market opportunities and drive innovation and revenue growth in every aspect of its organisation. The most basic concept underlying marketing is that of human needs. Human needs are states of felt deprivation (Kotler and Armstrong, 2006). Customer logic is derived from evaluation of a company and its product based upon customer needs, customer benefits, and product features. For branded athletic shoes, Nike has to understand customer needs on a global level as the products are sold
Therefore it makes it hard for companies like Nike, Adidas and Under Amour etc. to be able to have power over the customers. If a buyer is dissatisfied with any company in the industry; that buyer can easily switch to another company to acquire the products that they need.
The athletic shoe industry is made up of companies that produce footwear for athletic use. This is a strong industry and has been around for over 100 years. The athletic shoe industry is one of the fastest growing footwear industries and have top growing sales compared to other footwear industries (NDP Group, 2016). The key players that currently dominate the market are Nike, Adidas, and Puma (Kates & Bolduc, 2013). This paper will use the porter five forces, industry life cycle, and the key players to understand the industry. Over these years the athletic shoe industry has grown into a competitive market.
But even this is not possible in case of a new product or innovation. A forecast of sales, demand, cash, requirements and several such business valuables are extremely essential for a business in order to be able to appropriately plan and conduct its operations in an effective and efficient manner. Yet, forecasts cannot be made accurately as there are several factors and changes in the current environment that leads to variations in forecasts and impacts or causes a manager to make changes in the forecasts.
After sluggish focus and growth in the 1980ies, Nike experienced strong growth in the 1990ies and cemented the position as global recognizable brand. The increased international focus created strains on the supply chain, which was consider inadequate to cater efficiently to the organization and the rapid changes consumer demands . As a consequence of the afore mentioned supply chain problem Nike faced inefficient inventory management, problems in flow of goods and poor demand
Seeking Behaviour Although Nike is the market leader in sports shoes, this doesn't guarantee consumers will switch to competitors alternatives. There are consumers who switch brands in an attempt to be different. This is often due to changes in fashion 4.6 Consumer Decision Making in the sports shoe market, for a running shoe: Total Set