New Balance Athletic Shoe, Inc., Chinese Version SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Technology & Operations
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of New Balance Athletic Shoe, Inc., Chinese Version
Considers whether New Balance, one of the world's five largest manufacturers of athletic footwear, should respond to Adidas' planned acquisition of Reebok--a transaction that would join the second- and third-largest companies in the industry. Highlights the unique aspects of New Balance's strategy--focusing on fit and performance by offering long-lived shoes in a wide variety of widths and eschewing celebrity endorsement of its products--and discusses New Balance's operations decisions to support that strategy. These include significant use of domestic manufacturing at a time when nearly all other competitors sourced finished shoes from Asian suppliers and an emphasis on improving inventory management for its network of small and large retailers. Set just after the announcement of the Adidas-Reebok transaction in 2005, with New Balance having recently initiated a companywide effort to improve operational performance through the application of concepts from lean manufacturing and the Toyota Production System. Asks students to consider whether New Balance should change aspects of its operations strategy in light of the consolidation among its competitors or whether the Adidas-Reebok transaction represents an opportunity for New Balance to emphasize the importance of moving forward with its current approach.
Authors :: H. Kent Bowen, Robert S. Huckman, Carin-Isabel Knoop
Swot Analysis of "New Balance Athletic Shoe, Inc., Chinese Version" written by H. Kent Bowen, Robert S. Huckman, Carin-Isabel Knoop includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Reebok Adidas facing as an external strategic factors. Some of the topics covered in New Balance Athletic Shoe, Inc., Chinese Version case study are - Strategic Management Strategies, Competition, Manufacturing, Mergers & acquisitions, Supply chain and Technology & Operations.
Some of the macro environment factors that can be used to understand the New Balance Athletic Shoe, Inc., Chinese Version casestudy better are - – there is backlash against globalization, technology disruption, increasing energy prices, increasing inequality as vast percentage of new income is going to the top 1%, banking and financial system is disrupted by Bitcoin and other crypto currencies, cloud computing is disrupting traditional business models, supply chains are disrupted by pandemic ,
digital marketing is dominated by two big players Facebook and Google, geopolitical disruptions, etc
Introduction to SWOT Analysis of New Balance Athletic Shoe, Inc., Chinese Version
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in New Balance Athletic Shoe, Inc., Chinese Version case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Reebok Adidas, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Reebok Adidas operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of New Balance Athletic Shoe, Inc., Chinese Version can be done for the following purposes –
1. Strategic planning using facts provided in New Balance Athletic Shoe, Inc., Chinese Version case study
2. Improving business portfolio management of Reebok Adidas
3. Assessing feasibility of the new initiative in Technology & Operations field.
4. Making a Technology & Operations topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Reebok Adidas
Strengths New Balance Athletic Shoe, Inc., Chinese Version | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Reebok Adidas in New Balance Athletic Shoe, Inc., Chinese Version Harvard Business Review case study are -
Training and development
– Reebok Adidas has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in New Balance Athletic Shoe, Inc., Chinese Version Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Successful track record of launching new products
– Reebok Adidas has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Reebok Adidas has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Learning organization
- Reebok Adidas is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Reebok Adidas is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in New Balance Athletic Shoe, Inc., Chinese Version Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Highly skilled collaborators
– Reebok Adidas has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in New Balance Athletic Shoe, Inc., Chinese Version HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Operational resilience
– The operational resilience strategy in the New Balance Athletic Shoe, Inc., Chinese Version Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Effective Research and Development (R&D)
– Reebok Adidas has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study New Balance Athletic Shoe, Inc., Chinese Version - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Superior customer experience
– The customer experience strategy of Reebok Adidas in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Innovation driven organization
– Reebok Adidas is one of the most innovative firm in sector. Manager in New Balance Athletic Shoe, Inc., Chinese Version Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Sustainable margins compare to other players in Technology & Operations industry
– New Balance Athletic Shoe, Inc., Chinese Version firm has clearly differentiated products in the market place. This has enabled Reebok Adidas to fetch slight price premium compare to the competitors in the Technology & Operations industry. The sustainable margins have also helped Reebok Adidas to invest into research and development (R&D) and innovation.
Digital Transformation in Technology & Operations segment
- digital transformation varies from industry to industry. For Reebok Adidas digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Reebok Adidas has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Strong track record of project management
– Reebok Adidas is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Diverse revenue streams
– Reebok Adidas is present in almost all the verticals within the industry. This has provided firm in New Balance Athletic Shoe, Inc., Chinese Version case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Weaknesses New Balance Athletic Shoe, Inc., Chinese Version | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of New Balance Athletic Shoe, Inc., Chinese Version are -
Need for greater diversity
– Reebok Adidas has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Workers concerns about automation
– As automation is fast increasing in the segment, Reebok Adidas needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
High bargaining power of channel partners
– Because of the regulatory requirements, H. Kent Bowen, Robert S. Huckman, Carin-Isabel Knoop suggests that, Reebok Adidas is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Reebok Adidas is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study New Balance Athletic Shoe, Inc., Chinese Version can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Capital Spending Reduction
– Even during the low interest decade, Reebok Adidas has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
Aligning sales with marketing
– It come across in the case study New Balance Athletic Shoe, Inc., Chinese Version that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case New Balance Athletic Shoe, Inc., Chinese Version can leverage the sales team experience to cultivate customer relationships as Reebok Adidas is planning to shift buying processes online.
Slow decision making process
– As mentioned earlier in the report, Reebok Adidas has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Reebok Adidas even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Interest costs
– Compare to the competition, Reebok Adidas has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Slow to strategic competitive environment developments
– As New Balance Athletic Shoe, Inc., Chinese Version HBR case study mentions - Reebok Adidas takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Products dominated business model
– Even though Reebok Adidas has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - New Balance Athletic Shoe, Inc., Chinese Version should strive to include more intangible value offerings along with its core products and services.
Lack of clear differentiation of Reebok Adidas products
– To increase the profitability and margins on the products, Reebok Adidas needs to provide more differentiated products than what it is currently offering in the marketplace.
Opportunities New Balance Athletic Shoe, Inc., Chinese Version | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study New Balance Athletic Shoe, Inc., Chinese Version are -
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Technology & Operations industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Reebok Adidas can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Reebok Adidas can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Using analytics as competitive advantage
– Reebok Adidas has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study New Balance Athletic Shoe, Inc., Chinese Version - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Reebok Adidas to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Technology & Operations industry, but it has also influenced the consumer preferences. Reebok Adidas can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Loyalty marketing
– Reebok Adidas has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Building a culture of innovation
– managers at Reebok Adidas can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Technology & Operations segment.
Creating value in data economy
– The success of analytics program of Reebok Adidas has opened avenues for new revenue streams for the organization in the industry. This can help Reebok Adidas to build a more holistic ecosystem as suggested in the New Balance Athletic Shoe, Inc., Chinese Version case study. Reebok Adidas can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Buying journey improvements
– Reebok Adidas can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. New Balance Athletic Shoe, Inc., Chinese Version suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Developing new processes and practices
– Reebok Adidas can develop new processes and procedures in Technology & Operations industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Learning at scale
– Online learning technologies has now opened space for Reebok Adidas to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Reebok Adidas can use these opportunities to build new business models that can help the communities that Reebok Adidas operates in. Secondly it can use opportunities from government spending in Technology & Operations sector.
Manufacturing automation
– Reebok Adidas can use the latest technology developments to improve its manufacturing and designing process in Technology & Operations segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Reebok Adidas can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Reebok Adidas in the consumer business. Now Reebok Adidas can target international markets with far fewer capital restrictions requirements than the existing system.
Threats New Balance Athletic Shoe, Inc., Chinese Version External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study New Balance Athletic Shoe, Inc., Chinese Version are -
Technology acceleration in Forth Industrial Revolution
– Reebok Adidas has witnessed rapid integration of technology during Covid-19 in the Technology & Operations industry. As one of the leading players in the industry, Reebok Adidas needs to keep up with the evolution of technology in the Technology & Operations sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study New Balance Athletic Shoe, Inc., Chinese Version, Reebok Adidas may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Technology & Operations .
Stagnating economy with rate increase
– Reebok Adidas can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Reebok Adidas will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Reebok Adidas can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study New Balance Athletic Shoe, Inc., Chinese Version .
Consumer confidence and its impact on Reebok Adidas demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Easy access to finance
– Easy access to finance in Technology & Operations field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Reebok Adidas can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Reebok Adidas needs to understand the core reasons impacting the Technology & Operations industry. This will help it in building a better workplace.
Shortening product life cycle
– it is one of the major threat that Reebok Adidas is facing in Technology & Operations sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Reebok Adidas.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Regulatory challenges
– Reebok Adidas needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Technology & Operations industry regulations.
Increasing wage structure of Reebok Adidas
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Reebok Adidas.
Weighted SWOT Analysis of New Balance Athletic Shoe, Inc., Chinese Version Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study New Balance Athletic Shoe, Inc., Chinese Version needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study New Balance Athletic Shoe, Inc., Chinese Version is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study New Balance Athletic Shoe, Inc., Chinese Version is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of New Balance Athletic Shoe, Inc., Chinese Version is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Reebok Adidas needs to make to build a sustainable competitive advantage.
