New Balance company
New Balance is an American company that produces and sells sports footwear as well as apparel manufacture. Further, the company has maintained its presence in the united states and the United Kingdom for attracting significant parts of European markets. The company is considered to be more expensive comparing to its competitors who have made the difference in its features within the market. Therefore, it is essential to understand one of the porter’s five of the company as well as opportunities and threats which is experienced by the company in the business market.
The porter’s five strategies are a scheme that addresses the potential of the company to achieve its business in the market or have a competitive advantage. The strategy determines two dimensions, which consist of scope and strength to accomplish its marketing strength in the industry. Therefore, porter’s approach, which is being used by the company, is the application of market segmentation and differentiation strategies (Parnell, 2016). The form of market segmentation for New Balance is a suitable strategy since it provides the opportunity to adapt to a niche market. New Balance cannot compete on a global scale with significant competitors such as Adidas and Nike since it does not have the economies of scales. The differentiation strategy is also vital since it involves creating a product that is perceived unique. The benefit of such features can benefit the operations of the company to provide a superior value for the customers to become successful(Parnell, 2016). Therefore, New Balance has a better chance of employing a differentiation strategy than most of its competitors. Substantially, this is because they have succeeded in identifying the niche market where they are known for manufacturing the best running shoes.
The analysis of opportunity and threats of new balance is essential in understanding the SWOT strategic tool. The opportunity provides an avenue that the environment surrounds the business on which it can capitalize to increase its returns. As a result, there are some of the opportunities in which the company has experienced. Changing the preferences is one that addresses the preferences of the customers across the world by changing a growing propensity in spending and willingness to invest in designer shoes. Further, it is recognized that New Balance is one of the companies to make the first custom shoes to make it a forerunner in capturing the trend(Bull, Jobstvogt, Böhnke-Henrichs, Mascarenhas, Sitas, Baulcomb, & Carter-Silk, 2016). The threats, on the other hand, are defined as the risks in which the company is operating within. There are various threats that the business is exposed to and needs to be addressed. Competition is one of the threats due to multiple companies such as Nike, Adidas, and even Puma. These organizations have diversified their portfolios to match the existing ones in the New Balance company. The other threat that the company is also facing is an increase in losing to piracy (Bull, Jobstvogt, Böhnke-Henrichs, Mascarenhas, Sitas, Baulcomb, & Carter-Silk, 2016). Notably, there is a large number of local cheap fake imitation of the leading footwear brands which are sold at a meager price. Most of the customers have become victims since they only want the look and not the quality.
In general, the understanding of the New Balance operating system is critical within the market industry. It is one of the significant successful company to develop a market niche segment to compete with other organization which has economies of scales that its operations. It has implemented the use of market segmentation as well as differentiation strategies to become a competitive advantage within the industry.