Swot analysis is a very important tool to measure the organization performance. This paper attempts to do a swot analysis for new balance company. The paper carry s the found strengths whereby in every strength there is an argument on how each strength may be fully utilized to maximize the company’s productivity.
Subsequently the paper takes into account each weakness and how it affects the organization, threats has also been examined and how to reduce their effects. The paper also contains the company external opportunities and how the benefit the company.
Finally the paper puts forward the strategies used by the company, to perform the way it performs. The company has been found to use innovation and creativity as its competitive strategy in its operation.
New Balance Athletic Shoe Company is a privately owned company. Its headquarters are in Boston and Massachusetts. The company manufactures athletic shoes in various sizes. New balance is the fourth largest manufacturer of athletics shoes in the United States and fifth in the world.
The historical Background
The history of new balance can be traced back in 1906, which was known as new balance Arch Company. The company was founded by an English immigrant named William Riley. By then the company manufactured arch supports and also manufactured orthopedic shoes. In 1934, Riley entered into partnership with leading salesman Arthur hall who had found a ready market. By selling the shoes to policemen and other people whose jobs called for standing for long hours.
However, during these times the marketing was done through the world of mouth. There was no established system for marketing. During the 1930s, there were major developments in this company. New balance manufactured the first running spike. Partner Arthur hall sold the new balance company to his daughter and son in law Eleanor Paul and Paul Kidds in 1954. The continued to sell arch supports until 1961, when the manufactured the worlds first performance running shoes that were available in various widths to fit any client.
The shoes were called trackster, which became the mostly used choice of shoes for running by coaches and fitness director. This saw New Balance Company experience a substantial growth due to the growing reputation.
New Balance Company continued to experience rapid growth in 1975, Fleming won the New York City marathon in a pair of the new balance 320, and this played a major role in promoting the company’s public image. New Balance Company became a tough competitor in the athletic manufacturing shoes.
In 1978, Anne Davis wife joined the company and served as the vice president of administration she was very diligent on the operations of the company. She worked towards a superior work environment and organizational culture. This was a very important stage in the history of the company, due to her efforts the company was able to achieve a strong organizational culture and stable working conditions.
Despite the fact that new balance had always proudly manufactured their shoes in the US, In the 1980s the company expanded its operations to other markets in the Vietnam, Indonesia, Bangladesh, among other international destinations.
According to Murray (1998), each organization has its own Strengths, Weaknesses, Threats and Opportunities. However every organization should strive to use its Strengths and Opportunities to overcome the effects of threats and weaknesses. The following are the Strengths of the new balance Athletic shoe.
Sufficient Cash Flow: The Company has enjoyed a steady and a stable cash inflow which is mostly attributed to its established and well founded operations which has stood the test of time. This strength offers the company a competitive edge due to fact that most company’s collapse due to inadequacy in their cash flow.
As a result of having the adequate flow of money the company has been able to expand its scope of operations and also targeting more markets in the international arena.
Wide customer base: The Company has over the years enjoyed a great deal of customer loyalty all over the world. This is due to its consistence in production and its quality products. In addition, the company has been able to attract new customer in many countries across the world. This gives the company a competitive advantage in the sense that it is only through sales that an organization is able to reach the planned profitability.
Quality products: New balance Athletic Shoe Company produces high quality shoes that are comfortable and unique waved laces which are sold allover the world. The Quality products give the company a competitive advantage in that the company is in a position to attract and maintain the current customers due to the reliability of their product. The company is also able to fetch more profits from wide spread products as opposed to a single product.
Positive public image: The Company over the years has been able to build good reputation especially among its customers. A positive image has the ability to attract and maintain new customers. Which is desirable for every company as it offers grounds for improved relationships with the outside world. The public was fascinated by how the world sportsmen were able to win various competitions in the company trackster and 320s. For instance the case of Fleming really promoted the company’s name.
Among the market leaders in the world: New balance company is the fourth largest athletic manufacturing industry in the US and number five in the whole world. This gives the company a competitive advantage because it gives the notion to customers and potential customers that it has the quality products as compared to the competitors.
The company’s weaknesses
Discrimination: New Balance Company has shown a considerable amount of discrimination. This is especially to African countries by releasing few of its products to the African Countries. This is a weakness because this market may decide to back off and turn to the company’s competitors or local producers. However the company may still stop the discrimination to maintain African customers.
Old period of operations: The new balance company is more than a century old in the manufacture of athletics shoes. This has negative effects; young generation likes to associate themselves with the latest fashions in the market, which has made many youth turn away to new fashions in the market. The company should engage in serious re branding to give its product a new look.
Positive public image: The Company enjoys positive public image from the publics, which comes from sociological dimensions which gives the organization the chance to maximize its operations and exploit its resources as there is a ready market.
Technology: With improved global technology the company can take advantage of the technology to maximize its production and enhance the employee performance.
More unexploited markets: There are more Markets that are yet to be exploited which requires the company to exploit the market, the company should extend its operations to increase its productivity.
Some of the threats facing the company include, Competition: The Company is facing a lot of competition from other international company for instance Nike and also local producers. In various places in the world, some little known brands have overtaken the new balance Company. This might affect the sales turnover of the company.
Poverty from target Customers: New balance Company targets all the nations of the world whereby some especially from African country and Asia. These countries are languishing in poverty this affects their purchasing power which in effect leads to minimized sales turn over.
Strengths are the internal aspects of the company that gives it a competitive edge in the industry, while weaknesses are the internal factors that will make a company falls out in the industry. On the other hand, opportunities are the external factors that favor the company to become more productive. Threats are those external factors that will endanger the profitability of the company.
The company’s mission
To exhibit leadership that is responsible and also building international brands that will make those who wear proud.
To comply to well defined philosophies
To focus on function over fashion
To nurture strong retail partnerships
Support grassroots initiatives
The competitive strategy that the company uses is Innovation and Creativity. The company has been very innovative in its creation of new brands and also in their innovative performance. The company aims to have brand that is competitive in the international market.
To be highly innovative and creative a company should be ready to invest heavily to achieve flexibility and to become adoptable to the market. So the company is faced with the challenge of finances.
Encourage more innovation; this is because even if it is expensive it has return on investments
Remain static: Due to the following variables the company can decide to remain static and not to be adoptive.
Resources available are also a problem because the raw materials are not readily available.
Production capacity: This calls for constant change of the production facilities; which is not difficult.
HR limitations: This is because the human power is needed if there is gong to be effective Innovation and creativity.
Competition also poses a major challenge in their capability to overtake the company in its innovation.
Suppliers: There are supplier problems since are not supplying adequate materials.
However I still recommend for constant innovation, this is due to changes in the environment which dictates constant changes in the company’s. Despite the fact that innovation is expensive, the company has to continue with it.
This recommendation will properly work especially if it is introduced by a competent management team. Innovation as a major factor into an organization success.
H Kent Bowen Et al (2006), New Balance Athletic shoe Massachusetts.
Michael Murray (1998), Strategic management, New York, University press.
John wakiwns (1980), New Balance Foundation, Chicago.