New Balance Australia offers a various range of shoes for Men, Women, Kids of all ages for various purposes; could be running, walking, cross-training, tennis, basketball, adventure sports, etc. , New Balance also asks the consumers a question of what they would prefer. Athletic shoes built around the belief that the marketing prowess of an NAB superstar can sell anything? Or athletic shoes built around the belief that better fit and technology mean better performance? They prefer the latter; that’s why they adhere to a unique “Endorsed By No One@” philosophy.
Instead of paying celebrities to tell you how great our products are, they invest in research, design, and domestic manufacturing and let their products speak for themselves. By adhering to this philosophy, they are able to celebrate the true stars: every day athletes who choose New Balance footwear and apparel because they fit and because they perform. Technological Factors New Balance may not be the first brand name that comes to mind when thinking of athletic shoes. Indeed, New Balance has less than a 7% share of the US market, which is dominated by Nikkei and Rebook.
However, this is a highly cultivated market share: New Balance pursues the serious athlete with its no-nonsense design and carefully created American-made shoes tort running, walking, telnets, cross-training, tennis, basketball, hiking and Jogging. New Balance does not simply automate the back end of the process: IT has been thoroughly integrated into the entire product life cycle. Over the past three years, IT techniques and solutions have also reduced the time it takes to make a pair of shoes from 45 minutes to 25 minutes or less. In addition to cutting and stitching, computerized machines perform injection molding.
Looking to the future, New Balance is working with computer engineers and designers at the Massachusetts Institute of Technology. The shoemaker is using Mitt’s knowledge of IT, computers, robotics and other advanced technologies to develop systems that are new to the shoe industry, as well as others that don’t yet exist. 2. 2. 2 Porter’s Five Force Model Using the Porter’s Five Force Industry Model we will analyses the market for our new product of the Training shoes. The five forces look at five key areas namely the threat of entry, the power of buyers, the power of suppliers, the threat of substitutes and he competitive rivalry.
Threat of New Entrants/Barriers for Entry and Exit New Balance in Australia is already an established company in the sports footwear segment. With a plan to enter the training shoes as a new segment within the footwear industry there would be no major barrier to entry. The cost of entry for New Balance is estimated to be relatively low, as it will be using its existing infrastructure of the company and manufacturing plants from overseas to import this new range of training shoes into Australia. The company already has many distribution channels and its main sales team works from Victoria.
It will utilities its existing network to distribute and sell this new range through these outlets. Hence competitors do not pose a major threat of entry. Bargaining Power of Customers (Mediators= retail shops view) New Balance Australia has an established network of its own dealers. The company has a good reputation of offering the best of its service and good margins to its dealers as compared to its other competitors. There has even been an increase in the retail sales as there has been a good increase in the consumer demand for New Balance products.
Orders from the dealers have therefore increased. Thus the lealer show more interest in purchasing as they expect even more sales in the future. Hence the company enjoys a good level of control over its dealers. Bargaining Power of Customers (Consumer view) The bargaining power to Customers is relatively high as the end-user NAS a large amount of choice if looking for a certain kind of training shoes or a model. The consumer has much choice in the market as he can choose from other major brands like Nikkei, Aids, and Rebook etc.
Due to this factor the New Balance could lack in its market attractiveness. Hence these large groups of customers possess a greater eying power which could lead New Balance to negotiate through lowering its price or adding some extra features to its product to get back its share of consumers. Bargaining Power of Suppliers The footwear supplied to New Balance Australia is from the manufacturing units located overseas. They are predominantly from the United States of America. Highly efficient re-stocking systems have improved relations with retailers.
The company – supplier relationship is favorable. There are a large number of manufacturing plants spread in this area and therefore the supplier power is less as the company has maintained a certain amount of control over them through the years. Threat of Substitutes The threat of substitutes can be said as neutral because there are very limited substitutes in the market as the customers can opt for any other sports shoes they regularly use instead of this training shoes offered by its competitors like Nikkei and Aids.
Since New Balance-training shoes uses a high quality and a unique material like its other products. No other competitor will be able to easily duplicate this product. Therefore the threat from the substitutes could be minimized. Competitive Rivalry New Balance has a very high risk of competitors in its training shoes segment the major competitors are Nikkei, Aids, Rebook, Fill, Acacias and Puma. As it plans to launch a new line of shoes in the sports segment it will face intense competition from companies like Nikkei, Aids, Fill, Rebook.