New Balance Athletic Shoes

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New Balance Athletic Shoes |

Case Study |

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1. How important is continued product innovation to New Balance’s ability to compete in the marketplace? What timing and seasonal factors come into play? Who are the New Balance’s key suppliers and partners in the innovation ecosystem? What role do competitors play? Discuss the interdependencies and risks inherent in this marketplace in the context of Adner’s article?

1. Continued product innovation is a key to competitive success due to the following factors - Growth in subscriptions to specialized magazines like “Runner’s World” leading to more educated customers, significant increase in number of leisure runners and serious runners, projected increase in the number of women runners and innovation from competition. Besides, based on Fisher’s framework, New Balance manufactures innovative products.

2. The timing and seasonal factors are:

i. Shelf life of a successful shoe model is a maximum of 2 years

ii. Release of shoe ratings by Runner’s week – Highly rated shoes saw an increase in demand almost immediately. Shoes for which ratings reduced started seeing a slow decrease in demand, although not immediately.

iii. Regional sales depend on weather conditions in the specific regions (ex. winter = low sales)

3. Key suppliers include material suppliers (soles, wedges, leather, stitching, cement, laminates etc.) and equipment suppliers (power stamp cutters, lasts, laying machines etc.). Partners included specialty magazines, experienced runners and track coaches (ex: Tom Flemming) and to some extent the competition, because they help support the ecosystem.

4. Competition played a significant role in product innovation. The total number of models available to the customer increased significantly so product distinction was a key. Competition helped design innovation and support the supplier market with requirement for new materials. If New Balance were the only company...