New Balance seek - Sample Essay
As illustrated above, New Balance seek to address the challenge of competition regardless of the Adidas-Reebok tandem, in which could be just circumstantial to the ongoing competition of footwear companies within the top ten roster. The 2005 creation of the NB2E product brand can be perceived as “new market entrants” of New Balance to withstand the competition in terms of product innovation, wherein it consolidates the aspect of “supply (supplier) and buying (buyer) power”, pertaining to creating a new product brand that can uniquely capture the market lines.
At this instance, New Balance strategizes in “product and technology development” that will earmark its position in the market competition. Moreover, we may summarize the external analysis that New Balance tried to redefine the “driving forces” of the industry and market by maintaining its product lines within the reach of targeted consumers together with “value-adding” technologies in athletic footwear manufacturing.
Therefore, New Balance reinvents the external capability of its organization according to the perceived environmental changes within the industry and trends of the market competition. From which James Davis has quoted that “remaining aware of the industry setting and New Balance’ place in the market enables financial flexibilities not only in the domestic market competition” (12), referring to consolidating the stakeholders as partly a “key success factor” of New Balance to compete not only in the domestic but international markets as well. Internal Analysis
In order to analyze the internal capabilities of New Balance, we may again use the marketing model of Michael Porter (1980) as the fundamental guideline. As a brief background, Porter (1980) has introduced the “four P’s of marketing model” referring to product, price, place and promotion as the strategic components in determining the “internal capabilities” of an organization responding to “external factors”. In other words, the internal capabilities must be aligned to the “effects” of business environment that creates the “patterns and pulse” of the industry and market.
Thus, the table below illustrates the “sample marketing strategies” of New Balance: The “sample marketing strategies”, as illustrated above, indicates on how New Balance manages its marketing activities, relating the “four P’s marketing model”. It may be noted that the strategic components of New Balance are integral to the “key result areas and indicators”, in which the company focuses its business operation. It may be analyzed that New Balance was aware in the year 2005 business environment.
On the contrary, it may be observed that New Balance has its own promotional strategies, generally relying on word-mouth advertisements, such as consumer feedback and public endorsement. Correspondingly, the value-chain position and scope of New Balance in terms of product-market positioning was derived in establishing sales and distribution networks. To cite, New Balance sells it products through an estimated 3,500 retailers from more than 12,000 outlets (Bowen et al, 2006).
Through the abovementioned marketing approach, James Davis has quoted that “New Balance focuses on dealing and assisting the small-type service-oriented clienteles who believe in the success of retail business” (16). Accordingly, the retailing is partly a corporate responsibility that emphasizes the importance of value-chain position and scope of New Balance market, from which retailing contributes 25 percent to annual gross sales (Bowen et al, 2006). To thoroughly provide the internal analysis, it is also worth examining the financial viability of New Balance.
In this particular discussion, we may use the works of Bruce L. Jones (1996) in guiding the financial analysis of New Balance. According to Jones (1996), ratios and other financial measures is the “barometer” in determining how successful the capital budget of an enterprise. To cite, the financial viability and objective must relate the financial performance in three basic components, such as (1) maximization of profit, (2) minimization of risks, and (3) status of liquidity (Jones, 1996).