New Balance Corporation Strategy for Sustenance Essay Example
New Balance Corporation Strategy for Sustenance Essay Example

New Balance Corporation Strategy for Sustenance Essay Example

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  • Pages: 16 (4158 words)
  • Published: August 30, 2017
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The shoe manufacturing company New Balance Corporation is a leader in the United States, making important advancements in the industry. This study discusses various aspects of their manufacturing process, including work methods, advantages and disadvantages of global travel, quality planning, production procedures, reducing low-quality products, profit and break-even analysis. Instead of using celebrities to promote their products like many companies do, New Balance follows the philosophy of "Endorsed By No One" and relies on their own research, quality, and design.

Selling Position

There is evidence that changes in employer approach significantly affect employee efforts and have significant implications for job satisfaction.

The rise in literature focuses on the concept of the 'greedy' character, also known as post-Fordist, post-industrial, post-modern, or highly effective performance work. These concepts suggest a shift from hierarchical work st


ructures to more flexible production technologies. The theory typically involves team-based work, advancements in training structure and business development, and performance-based compensation. These measures require management to relinquish many restrictions imposed on employees and implement a variety of techniques aimed at increasing employee satisfaction and responsibility. The proposed benefit for workers is described with terms like 'employability' and 'empowerment'. By allowing employees to contribute and utilize their skills more fully, a higher output is achieved. Seen in a positive light, this means liberating employees from years of oppressive work and replacing it with challenging tasks, autonomy, and achievement.

Experimental studies on time squeezing indicate that these job characteristics result in "time-greedy workplaces," meaning that individuals in this sector spend more hours at work compared to traditional workplaces. It is also suggested that increased competition among workers may

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contribute to this phenomenon. According to Thurow's (1975) well-known theory of job competition, which suggests that competition leads to superior performance when wages are rigid or higher than the market-clearing level, it can also be interpreted as competition taking the form of willingness to dedicate extra time to work.

This text discusses the competition among employees to work long hours, even though there are often others who are willing to do the work. This phenomenon is becoming increasingly common in many organizations, according to Leslie Perlow's research. Previously, demanding schedules were only expected of top corporate executives and freelancers, but now they are prevalent in various industries. Despite the economic model of labor supply being widely accepted, it remains a mystery in practice. Traditional labor theories assume that employers pay for workers' time and services, but a significant portion of overtime remains unpaid.

The standard theoretical account of labour supply assumes that employees work their preferred number of hours, based on the optimal arrangement of their payment and preferred time. In theory, human resources may work more than desired if employers do not offer alternative options (referred to as the 'lumpiness' of labour demand). However, in practice, employees may also work more than desired (known as being over-employed) even without imposed limitations from the employer. According to the ordinary model, individuals are expected to make consistent choices by selecting the combination of income and leisure time that maximizes their well-being (or 'utility').

However, working overtime is frequently linked with feelings of time pressure and stress, an inability to maintain work-life balance, and occasionally even with long-term psychological issues. Individuals willingly expose themselves to a prolonged deterioration in their

overall well-being, which is atypical when considering the maximization of utility. Strategic management presents a means for the company; it provides a framework to guarantee that decisions concerning the future are executed in an organized and intentional way. Additionally, strategic management acts as protection against uncertainty and unforeseen developments in business prospects. It establishes a structure for making informed decisions.

It aids in taking control of critical countries with the best upcoming opportunities. It provides a strategic approach for the administration to anticipate and shape the future, while also being prepared internally to handle operations. It helps enhance procedures, systems, mechanisms, and decision-making processes that are essential for this purpose.

Strategic Business Area (SBA)

The SBA is a distinct division where the company intends to conduct business. Instead of attempting to enter every sector, it focuses on areas where it has a competitive advantage and maximizes its profits through strategic management techniques.

This helps the company focus its strategies in a specific country and reduce unnecessary expenses in unprofitable areas. Functional Strategy: Strategy related to each functional area of business such as production, marketing, and personnel is referred to as functional strategy. It is designed and managed in a coordinated manner so that they interact with each other and collectively facilitate the proper implementation of the competitive strategy. Strategy formulation involves creating long-term plans to effectively manage environmental opportunities and threats in light of the company's strengths and weaknesses.

The process of strategic planning involves several key steps such as defining the company's mission, setting achievable goals, devising appropriate strategies, and establishing policy guidelines. The first step is to conduct a situational analysis, which can be done using a SWOT

analysis. This analysis helps identify the company's strengths and weaknesses in order to effectively capitalize on opportunities and overcome potential threats.

The concept of SWOT (Strength, Weakness, Opportunities, and Threats) involves the analysis of external factors that affect a specific company and how they align with its internal strengths and weaknesses, resulting in the identification of four potential strategic options.


An organization's mission represents its purpose or reason for existence. A well-defined mission statement highlights the unique objectives that differentiate the company from similar organizations and outlines the scope of its operations in terms of offered products and target markets.

A mission statement can be defined narrowly or broadly. A loosely defined mission statement allows the company to have flexibility in its focus and offerings, but it fails to clearly identify its purpose or target market. On the other hand, a specific mission statement clearly expresses the organization's main concern, but it may limit the company's performance in terms of products or services offered, expertise utilized, and market served.


Goals are the desired outcomes of an intended action.

The objectives are the tasks to be completed and should be calculated if possible. Achieving corporate objectives should result in fulfilling a corporate mission. In a different situation, an objective, a goal is an open-ended statement of what is to be accomplished with no calculation or deadline. The areas that the company may aim for in order to establish its goals and objectives are prosperity, expansion, shareholder's wealth, and efficient use of resources.


The standard norms and strategies of an organization form a comprehensive master plan that explains how the company will achieve its stated objectives and targets. It fully utilizes competitive advantages

and minimizes competitive disadvantages.

Types of scheme: There are three standard types of schemes which are generally considered by many of the concern houses:
Corporate scheme: It tells about a company's overall way in terms of its general attitude towards development and supervision of its assorted fiction and merchandise lines. Corporate strategy mainly corresponds to three key issues in front of the house as a whole.
Directional scheme: The house's overall orientation towards development, stability and reduction of cost. The two basic growth strategies are speculation and diversified nature. The growth of a concern can be made possible through combination, acquiring hold of the ongoing business, joint concern endeavor and premeditated association. Turnaround, divestment, and insolvency are the assorted types of cost reduction approach.

Portfolio analysis: Portfolio analysis is when the administration evaluates its merchandise lines and concern units as a chain of portfolio savings. The goal is to monitor operations for a profitable return. Two popular strategies for portfolio analysis are the Boston Consulting Group (BCG) Growth Share Matrix and General Electric's (GE) business screen.

Rearing strategy: Rearing strategy is when administration coordinates behaviors and transfers ownership and develops competences among merchandise lines and concern units.

Business strategy: Business strategy is usually present at the commercial unit or alongside merchandise. It focuses on enhancing the competition structure in terms of the products and services offered by the corporation in a specific industry or market sector. It can be categorized as either competitive or corporate strategy.

Competitive schemes involve conflicts and resistance against rivals in order to achieve improvement. Michael Porter introduced three generic competitive schemes: cost leadership, differentiation, and focus. On the other hand, cooperative schemes involve working with

one or more rivals to gain an advantage over other competitors.

Corporate development stages

Successful corporations tend to follow a structural expansion paradigm known as phases of advancement as they grow and expand.

Starting from the basic structure of the industrial company, they typically become superior and manage operations based on functional lines with advertising fiction and support departments. With continued success, the company expands into new product lines in various industries and reorganizes itself into structured divisions.

Manufacturing Perspective

When discussing manufacturing options, New Balance Corporation has made significant changes in the world of shoe manufacturing. They have introduced alterations that provide better options through changing technologies. They have also utilized top-quality tailoring equipment, which leads to higher profits and allows for end-to-end production within one hour, particularly in the Chinese shoe market. The following is a brief overview of the corporation, which has achieved maximum profitability in producing shoes at a higher level.

New Balance incorporates advanced shoemaking techniques to stay competitive in the US market while providing growth opportunities for its employees. Employees receive 22 hours of training in teamwork and production line procedures, emphasizing mutual assistance and shared objectives for smooth operations. Floor workers contribute to process improvement, enhancing the company's efficiency amidst global competition and emerging manufacturing opportunities in developing nations. The production process can be optimized by integrating into broader production systems like global value chains (GVC) and global production networks (GPN). Additionally, multinational corporations (TNCs) play a crucial role in shaping and maintaining infrastructure, marketing, logistics, and trade investment capabilities.

Moreover, there exists an alternative strategy that is more competitive and globally influential. This strategy offers a more advanced method

for studying, learning, and enhancing welfare services. It poses a substantial challenge and requires manufacturing companies to address concerns regarding Global Value Chains (GVCs) and other Global Production Networks (GPNs). By doing so, it alleviates the pressure to safeguard one's own trade and production growth. As mentioned earlier, New Balance made efforts to implement significant changes in relation to multiculturalism and foreign market opportunities. They achieved success by manufacturing a large quantity of footwear for the Beijing Olympic events, which were hailed as one of the greatest Olympic events ever organized.

They were dealing with issues related to bringing about technical and non-technical work ethics and methods, as well as bringing a higher level of ambition. There is always a need to reconfigure old technological approaches and strive for self-improvement. To achieve further growth in the shoe industry, it is crucial to follow a series of steps to ensure better service and products for customers. These processes involve a broader range of knowledge and related activities, aimed at improving service and addressing issues at different stages of the production life cycle. It is essential to have an effective operational mechanism to handle complexity and ensure better management and connections.

There is always a mechanism through which a stronger effort can be made to improve the local economy and therefore contribute to a greater regional economy. There is always a diverse work method and dynamism that brings about change in the functioning of the value chain, which is crucial for innovation at the enterprise level. There have always been two distinct processes that can be identified as the buyer-driven and manufacturer-driven value chain. These two different aspects play

an important role in facilitating better interactions and generations in each unique case.

There is an increasing opportunity for better diversity in agreements, which can lead to improved chances and capabilities. Many issues arise that require purchaser-driven chains and close coordination to meet diverse spectrum demands and achieve better market outcomes. In value chains based on the needs of purchasers, there are always larger options and core competences, which contribute to driving factors in that value chain. This helps in providing greater access to organizing and controlling the production and designing process. To gain a better market share in developed and developing countries, there is a need for improved marketing activities. Typically, the chain is more intensive in industries and follows a highly irrelevant development methodology.

There is always a significant presence of branded merchandise, which is crucial for creating added value and improving marketing opportunities. It is essential to maintain brand protection rights and prioritize product development. Adopting a market-based approach can lead to global recognition and success in specific markets. It is important to adhere to manufacturing values, implement effective production and supply chain management, and focus on creating standout products. Coordinating with suppliers and prioritizing customer satisfaction are integral to the value chain. Medium and high-tech industries should prioritize prosperity conditions at a higher level. Additionally, developing countries can take advantage of labor-intensive and consumer-driven opportunities, excluding the East Asian newly industrializing economies. This presents an opportunity for a buyer-to-manufacturer chain, particularly in shoe production.

When implementing a more effective methodology, it is also necessary to address quality management issues and various universal specification demands. It is important to consider certain aspects of the process

flow requirement. The following are the fundamental process techniques for quality analysis:

- Quality planning process for developing and designing products and services that can meet or exceed customer expectations.
- There is always room for improvement in quality control and process implementation to minimize variations.

To establish a clear process for producing superior outcomes using a qualitative approach, there seems to be a lack of addressing a 20% fluctuation in output. There is a need for a clear performance measurement aspect to understand the consistent nature of the underlying process and relatively constant variation over time. There is always an inherent level of performance within a clear process. In other words, there is always an original way to improve quality control by establishing recognized standards and a range of fluctuation for better performance measurement. However, these areas need to be addressed for better standard performance.

Quality Management System

There are various approaches to improve Total Quality Management in terms of details and directions. It is important to emphasize the continuous nature of the different definitions for Total Quality Management scenarios.

There is always a need for an institutional operations degree of quality improvement process architecture that represents a clear shift in different administrative circles and establishes a clear collegial direction. Various issues must be successfully implemented and provide clear knowledge, skills, and abilities in order for Total Quality Management principles to be effectively implemented. It also emphasizes the importance of improving quality control and adopting better process methodology and a solid foundation in the Total Quality Management process. There is always a level of improved quality management that has emerged overnight and it involves interconnected units for

quality management that work together.

There is also a degree of Total Quality Management process which takes up a greater degree of operating breweries and quality with good word management having a clear service set up. TQM is a management process based on key principles that focus an organization's energy on always meeting customers' expectations. But because it is a process-not just a plan, it requires long-term commitment to bring into play in every aspect of the development. For a company like New Balance Corporation needs to have all the basic level work consideration and its unity. It has several years of quality based approach for better professional activity and numerous companies acronym. It has more number of round base transition based configuration. There's always a better initiative starting off with electronic and automobile manufacturing in the late 70's and early 80's and have a greater degree of banking and other service oriented based architecture companies. To have a greater level of expenditure process in companies, there needs to be clear use of TQM and return on investment and originally expect a question based approach with a better Return on Investment vibrating about. There's always a change in achieving a clear breakthrough for better performance contribution discoveries. It also creates a better challenging standard performance quality control zone and representing things to be done in a better way.

The chronic level response and improved functionality attack have received a poor response. There is always a historical need to address cross-functional problem solving issues.

Quality impacts business performance.

There is always a relational aspect to consider for significant advancement in innovative and exploratory approaches to improve industry applications. Additionally, there

is a growing industry undergoing fast technological change in unpredictable environments that can be discussed. The main objective of quality can be connected to various strategic approaches and tactics, particularly in the field of quality management responsibilities.

The need for organizational reclamation and better organizational classified work on pulling and analyzing little wins has been emphasized by researchers like Weick and Frances. There are significant benefits that can improve the detailed improvement process. The following process can generate a clear procedure at a generic level: achieving continuous improvement by involving a large number of employees and implementing improvement initiatives, as opposed to large-scale innovation and involving only selected experts. Mobilizing a wide range of employees can have a significant impact. There is always a correlation between wide-based efforts, which should be undertaken in a systematic and parallel manner to yield brilliant results. Often, a series of small wins precedes and follows major changes. These small wins provide momentum and necessary learning, while also eliminating obstacles to optimizing new processes or products.

In this sense, small victories enable significant changes.

Financial Perspective

When New Balance Corporation decided to take on new challenges and improve its operational foundations, various technical and financial management issues were encountered. One constant issue is the process of financial management. In order to successfully fulfill the supply requirements for the Beijing Olympics, New Balance Corporation addressed several issues such as specifying the normal time order and reducing the risk of bankruptcy. These efforts also contributed to improving cost management.

They have purchased an automatic stitching machine that can help them increase their revenue opportunities and maintain confidentiality. The cost of the machine varies depending on its specifications,

potential cost generation, and the likelihood of customers purchasing the product. This can influence the financial impact and reason for companies to have less debt and choose different cost discrepancies. The potential cost has discrepancies in all aspects and can be a deciding factor when choosing a clear approach, especially when the actual quality of the product is uncertain. The significance of this product-based approach is not considered important, and a better modeling framework should be adopted to address unknown consequences.

Fiscal analysis

Fiscal analysis is part of the overall financial management process for businesses. It involves analyzing historical data on a company's current and future financial strength. The finance department in businesses estimates economic trends, establishes financial policies, and creates future plans for business activities.

The income statement and balance sheet are the two primary sources of information for fiscal analysis. These documents provide insight into a company's financial health, specifically its purchasing power, profitability, and liquidity. Leverage refers to the portion of a company's investments that have been funded by investors as compared to creditors. This indicates the extent to which a company relies on borrowing to finance its operations. Profitability measures how effectively management utilizes the company's capital, including calculating the financial profit derived from expenditures. Liquidity is a measure of a company's ability to meet current bills and expenses, indicating the availability of cash and other assets to cover short-term debts and liabilities.

Quality and finance are interconnected, with a cause-and-effect relationship. A company's quality performance typically affects its financial performance. This relationship can be examined using a simplified economic equation: Profit = income - expense. For quality to impact profit, it must influence either

write-offs or income.The figure displayed below illustrates the impact of merchandise quality on income and company finances. Internal failure costs include:

  • SCRAP - the need to discard places due to poor quality
  • REWORK - the expenses for fixing the merchandise, including overtime payments to workers
  • DOWNTIME - the time required to reassign workers to the rework section
  • PRICE REDUCTIONS - the necessity to lower prices to sell off places already in the market

External failure costs encompass:

  • COMPLAINTS - customer grievances that negatively affect reputation
  • RETURNS - merchandise returns that result in monetary loss, as entire shoes must be sent back for scrap or repair
  • WARRANTY CLAIMS - additional expenses incurred if rejection or return rates are high [nota kilometer]

Fiscal deduction for shoe business operations

As mentioned earlier, one crucial requirement for a failing company's defense mechanism is to assess whether its relevant assets can continue operating in the market under the control of a less anticompetitive buyer.

If a financially struggling business operates a store and receives an order from another business, it is not guaranteed that the buyer will use the assets in their own market. Assets are often interchangeable and can be used for other purposes. It is even possible that a competing bidder intends to completely eliminate these assets. Considering this uncertainty, should the competition authority be concerned about the potential buyer not using the assets in their own market? Taking a different approach to analyzing the bidder, focusing on their financial issues, can lead to a more accurate assessment of their market power.

There have been significant changes in the aspect of asset building and other market purchases in near-based scenarios. New balance acquisition may be a safe option for companies

considering taking up a purchase as permitted. There is also a major scenario in taking up shop return goods and losses incurred in getting back the merchandise. Hence, the company has to make up a grade that is more relevant to past aspects and general work-based scenario apparatus.

Current Profit/loss

By 2003, the New Balance Corporation had an 11% market share and ranked third among the athletic shoe industry. By 2004, New Balance sales were estimated at $1.3 billion, compared to $100 million in 1991. The company's net profit for the year 2008 is $1.64 billion.

The President and Head Running Officer of New Balance, Mr. James David, emphasized that the company's focus on design and quality rather than style has led to its success and sales.

Return on Investment

Return on Investment (ROI) analysis is a commonly used method for evaluating the financial outcomes of business investments or decisions. ROI analysis connects the scale and timing of investment gains precisely with the scale and timing of investment costs. A high ROI indicates that investment gains compare favorably to investment costs. ROI has become a key financial measure for approving asset purchase decisions and supporting decisions for projects and programs of all kinds, such as marketing plans and recruitment and development plans. Return on investment is typically referred to as the "return" from an action divided by the cost of that action.

A straightforward calculation of ROI, commonly used in business case analysis and other forms of cash flow analysis. For example, what is the ROI for a new marketing plan that is expected to generate $20,000 over the next five years and yield an additional $55,000 in increased profits during

the same period? The simple ROI equals 55%.

The breakeven point

The breakeven point (in sales dollars) is equal to total fixed costs divided by 1 minus total variable costs divided by corresponding sales volume. As New Balance Corporation already holds significant market power, it is crucial to focus on improving price and quality care options. During periods of high-quality firms encounter numerous technical challenges that can result in lower quality. By lowering quality, firms can reduce the expensive provision of quality, subsequently decreasing the marginal cost of production.

Higher net incomes for houses can be attained as long as consumers remain unaware of the lower quality of the products being sold. However, once consumers become aware of the inferior quality, demand for houses will decrease. If the sellers do not fully absorb the cost of this decline in demand or offer significant discounts, they may opt to manipulate their profits by shifting them to different time periods. This scenario is commonly seen in the shoe industry. When revising a plan, it is important to consider the cost data obtained from analyzing annual expenses breakdown (operating ratios in the income statement). If any of the cost items are found to be excessively high or low, they should be adjusted accordingly.

The changes in information can be written above or below your original entries on the disbursals worksheet. When you finish doing

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