NEW BALANCE

Gene (LARRY) Engholm Alyssa Stevens Jess Cutler Sean Noble

WITCAM I. Key Facts A. Players 1. Main characters or companies New Balance shoe company Jim / Anne Davis- sole owners of new balance William Riley- founder of new balance Arthur Hall- partner of Riley Eleanor/ Paul Kidd- daughter/son in law of hall Herb Spivak- executive VP of operations Paul Heffernan- executive VP Fran Allen Executive VP for sales and services John Willson VP manufacturing 2. Competitors Nike Reebok Adidas 3. Partners B. Financial Performance About 8-12% of market share in the shoes market 17.5 million in advertising first 10 months in 2005 1982 company reached sales of 60 million 1991- 84 million in footwear sales C. Timeline of the Case 1906- founded 1972 Davis bought New Balance 1978- first manufacturing plant and office in Europe Early 1980s new England manufacturing facilities II. Issues A. Conflicts 1. Management 2. Legal 3. Ethical B. Central Problem 1. List main problems. Quality issues Late deliveries Late samples to reps Competing against Reebok/Adidas

Competing against Nike Should they acquire a new company themselves Should they start outsourcing and ship manufacturing overseas to create less costs saving money and allowing them the gain profit Should they have better advertisement like the bigger competitors do? Spend more on advertisements? Small company not publicly traded so do not have the same funds to move around as the larger competitors Current ordering system is lacking

III. Analysis (narrative)

New balance started is trying to initiate the NB2E system. New balance executional excellence the goal of which is to increase the quality and efficiency of the companys operational processes through the application of lean manufacturing. This process already had provided evidence of improvement. They are also implementing a new sale for automation system enabling representatives to place direct orders remotely, access NB inventory information, and check on delivery statuses. Also there was another application that promised to enable retailers particularly small retailers to do the same without intervention by the sales representatives. As Withee explained that the application helps manage the flow of product through the supply chain and is about as vital as you can get in determining our performance. This would also help free up sales representatives so they could focus more on making recommendations on new items to carry, dramatically reducing inventory levels. Even though NB already outsources 75% of its final product assembly they still have 25% of their final shoe assembly in the northeastern United States. Before the NB2E process was put into effect NB had to resort to a rut force way of working. This way greatly increased finished goods inventory to improve product availability. V. Conclusion and Recommendation (the what) Overall NB is doing a good job given their current status. What they have that separates them from their competitors is personalization. They are smaller than the other companies and relate to their buyers/ retailers on a more personal level. They offer large incentives for their sales reps in order to boost sales. Their new manufacturing employees go through a lengthy process when being hired. Then they are paired with a buddy for the 6 to 8 week training period until they feel comfortable working on their own. This is a pretty good process for training to help initiate the workers. This way they will have ample work experience to make them a better worker improving the quality and delivery times of the products. The NB2E way of doing business at NB is going to greatly increase the profitability. It will reduce inventory allowing the company to have less overstock and keep in only what is needed. The NB2E process is creating a continuous flow of manufacturing and reduces the day to day 24 hour way of manufacturing and only focus on the daily orders. NB is a smaller company and can move faster than the large 800 lbs gorillas as referring to Nike and Reebok/ADIDAS. The retailer said that they were going to continue to do business with NB because they knew that they had a strong reliable workforce.