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Case Presentation y• Dinesh Jain• V Phonekar

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Overview : Mission, Objectives, Core Values & CompetitivePriorities.History of New BalanceQ (a) : Current Operations StrategyQ (b) : What Do The Numbers Look Like?

Assignment Question (c)Assignment Question (d)The New Balance BusinessSuccess of New BalanceThe Six Manufacturing StrategiesDomestic Manufacturing DetailsChallenges Facing New BalanceWorld Class PerformanceQuestions & Answer Session

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To Be Recognizedas the WorldsLeadingManufacturer ofHigh PerformanceFootwear andApparel.

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IntegrityTotal Customer SatisfactionTeamwork

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TechnicalSuperiorityWidth-Sizing

Manufactured in theUSAGrassrootsPromotionsRetailerPartnerships

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Equip the seriousathlete withfootwear andapparel thatprovides the bestperformance, fit,quality andcomfort

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1906 – Foundation by William J. Riley

1934 – Riley partnered with Arthur Hall1954 – Hall sold the business to Eleanor and PaulKidd1961 – Trackster Launched

During 60’s –Popularity of New Balance’s reputationfor manufacturing innovative performance footweargrew1972 – Jim committed himself to uphold thecompany’s founding values 1978 – Anne joined New Balance1980 - New Balance’s First international sales office and first European manufacturing facility opened

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1982 –Company reached $60million in salesand debuted the well-received 990 runningshoe1984 – Jim and Anne got married

1990 –Company unveiled is New balanceSuspension System2004 –New Balance declared that it wouldmatch whatever possible its associates

donatedNew Balance adopted New BalanceExecutional Excellence NB2E)

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$9 Billion in shoe sales in 2004

New Balance has an 11.36% market share inthe US

Total Sales for New Balance in 2004 equaledapprox. $1 billion.

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US Market in 2005 - 400,000,000

New Balance US Market Share – 11.36%

NB Shoe sold – 1x2 = 45,424,000

% of Manufactured in US = 25%

NB’s shoes made in US – 3x4 = 11,356,000

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Cut through Assembly made – 5x33%=3,747,480

Sourced Upper made in US – 5x67% = 7,608,520

Extra Cost of Cut through Assembly – 6x$13 =48,717,240

Extra Cost of Sourced Upper – 7x$0.5 = 3,804,260

Total Extra Cost to Manf in US – 8+9 = 52,521,500

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Spend less on marketing, spend more onproductionReduce time and cost for deliveryQuickly move products into the marketstreamStay true to company's American roots

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Continued

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Products

Services Processand

Technology

Capacity

HumanResources Quality

Facilities Sourcing OperatingSystems

Continued

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Increase In

• US

manufacturingcosts

• 24 hour

domesticshipping costs

Decreases In

• Inventory

Costs• Overseas

shipping costs

• Lead Time

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