New Balance holds only 3-5% of the market share of the shoe industry. Nike leads the pack with 30.4%. Issues New Balance Need to Address
1. Outsourcing issues. With their major competitors outsourcing to other countries for production, New Balance needs to look into this issue and examine how it can incorporate this in their business strategy. Outsourcing need not be the way to go but they could, for instance, put up New Balance manufacturing plants in Asia which are intended mainly to cater exclusively to Asian customers.
2. "Endorsed By No One" philosophy is another issue which they could look into. Having no identifiable single representative of the product could be a disadvantage because Nike's popularity hinges on its being identified with the best athletes in the world.
3. Their share of the market. A mere 3-5% market share compared to Nike's 30.4% does not appear so impressive. They need to look into ways to increase the number of their customers.
How New Balance Could Increase Market Share
* Multinational customers could potentially increase their market share. In 1995, Nike's international operations accounted for 36.06 of its total sales. New Balance should recognize the fact that the demands from international markets will increase in future.
* The changing US demographics could also be a factor as there is a rising number of Hispanics, Asians, and African Americans. These groups have different shoe preferences that New Balance should be able to satisfy. New Balance should determine the next generation of loyal customers and provide for their needs.
* New Balance marketing efforts seemed focused on sports footwear or athletic lines. There are other venues that can be tapped for increased sales such as casual footwear, women's shoes and children's footwear.
* New Balance should improve their ways of conducting business online. The online market is huge. New Balance could tap into this huge source of customers. They must make their more user-friendly to attract more visitors. More visitors often translate to more sales. Their website should also be more interactive and allow customers to have their say with regards to the shoes, designs and other matters.
* New Balance should also conduct surveys on their customers to know what they really want. Trends and styles change often.
* New Balance could introduce a Loyal Customer Program just like their Nike counterpart. In this program, points are added to an account after a purchase. The points would vary depending on the amount of the purchase. New Balance allows customers to buy products through the points the customers are able to accumulate.
New Balance may not hold the lion share of the shoe industry but it certainly has a lot of potentials. Being one of the more established companies in the footwear industry, New Balance certainly offers a lot of value to the customers.
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