Company: New Balance is one of the largest makers of sports footwear in the world. New Balance has continued to maintain a manufacturing presence in the United States as well as in the United Kingdom, in contrast to its competitors in the same market space who do not manufacture in the USA or UK. Firstly, New Balance has been producing its products in European and domestic factories, which makes the cost of production remaining in high level. Unlike many of its competitors, for example, Nike, having a lot of factories in Asia, benefits from the lower labor cost. As a result, the profit would grow if NB makes changes on its manufacturing system. New Balance has advantages on manufacturing because it has many factories among the globe producing different types of sports wears with specialization. For example, NB produces sourced-uppers and cut-through in Lawrence, MA as well as specialty production in Boston, MA. However, NB does not put enough emphasis on customer. For instance, quality, performance and service to retailers are factors significantly improve its customer satisfaction. What is more, differentiating its product is also an issue because it has lots of powerful competitors such as Adidas and Nike. Therefore, marketing strategy is important to differentiate its product and show its uniqueness.
In 2004, New Balance is seeking opportunity to merger with Warrior Sports. There is no doubt that the merger will increase concentration in the athletic shoe industry, however, it also raises concerns on how NB can stick to its current strategy- differentiating its products from competitors. The merger will increase concentration in the athletic shoe industry, raising concerns as to whether New Balance can stick with its current strategy of differentiating itself from competitors. Specifically, whether it can afford to continue playing as the only manufacturer with domestic plants, and whether it can continue to hold a particularly high inventory position.
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