Case Study: New Balance Athletic Shoes
CASE STUDY #1: NEW BALANCE
Introduction New Balance was founded by William J. Riley in 1906 in the city of Boston. Riley started by making arch supports for customers who had to spend all day on their feet. Over time the building of arch supports led to the creation of his first running shoe in 1925. As part of a local running club, Riley capitalized on an opportunity to improve running shoes of the time and his designs became widely popular. His new running shoes became so popular that by the 1940’s that production spread from running to many other sports. Then the expansion of the manufacturing significantly increased as he realized a need to running shoes with more selection for wider feet, and the company grew significantly through the 1960’s (Veleva, 2010). James Davis purchased New Balance in 1972, from Paul Kidd, after looking into several business opportunities and trying out the New Balance sneakers for himself. Davis currently owns New Balance along with his wife, Anne Davis, who holds the position of vice-chairman and executive vice-president (Veleva, 2010). By the 1990s, rising labor costs and fluctuations in customer demand pushed much of the manufacturing processes overseas. Although the expansion into foreign manufacturing opened up unlimited opportunities, it also exposed the industry to intense scrutiny for various human rights issues in the supply chain (Veleva, 2010). New Balance, among other companies, realized an increasing need to focus on sustainable business plans that incorporated internal Corporate Social Responsibility programs.
Strengths and Weaknesses
Overall Governance
New Balance has focused on a sustainable business model and responsible corporate leadership for many years before CSR became a hot topic. Before CSR was had formed roots at New Balance, they already had a program they referred to as “Responsible Leadership Steering Committee (RLSC). The RLSC was tasked with
Introduction New Balance was founded by William J. Riley in 1906 in the city of Boston. Riley started by making arch supports for customers who had to spend all day on their feet. Over time the building of arch supports led to the creation of his first running shoe in 1925. As part of a local running club, Riley capitalized on an opportunity to improve running shoes of the time and his designs became widely popular. His new running shoes became so popular that by the 1940’s that production spread from running to many other sports. Then the expansion of the manufacturing significantly increased as he realized a need to running shoes with more selection for wider feet, and the company grew significantly through the 1960’s (Veleva, 2010). James Davis purchased New Balance in 1972, from Paul Kidd, after looking into several business opportunities and trying out the New Balance sneakers for himself. Davis currently owns New Balance along with his wife, Anne Davis, who holds the position of vice-chairman and executive vice-president (Veleva, 2010). By the 1990s, rising labor costs and fluctuations in customer demand pushed much of the manufacturing processes overseas. Although the expansion into foreign manufacturing opened up unlimited opportunities, it also exposed the industry to intense scrutiny for various human rights issues in the supply chain (Veleva, 2010). New Balance, among other companies, realized an increasing need to focus on sustainable business plans that incorporated internal Corporate Social Responsibility programs.
Strengths and Weaknesses
Overall Governance
New Balance has focused on a sustainable business model and responsible corporate leadership for many years before CSR became a hot topic. Before CSR was had formed roots at New Balance, they already had a program they referred to as “Responsible Leadership Steering Committee (RLSC). The RLSC was tasked with
References: Chang, C. (2012). New Balance Athletic Shoes Case. StudyMode.com. Retrieved 11, 2012, from http://www.studymode.com/essays/New-Balance-Athletic-Shoes-Case-1241026.html NewBalance.com. (2012). New Balance Responsible Leadership Report. Retrieved October 13, 2013, from assets.newbalance.com/nb-us/rl_flipbook/files/inc/171206508.pdf NewBalance.com. (2013). Responsible Leadership. Philanthropy and Community Investment Foundation Veleva, V. (2010). New Balance: Developing an Integrated CSR Strategy. In R. Ramadan (Ed.), Organizational Leadership 690: Responsible Corporate Leadership