New Balance: Footwear and Apparel Business Essay

Submitted By micfrat
Words: 641
Pages: 3

New Balance was founded in Boston in 1906, it was founded by a man named William J. Riley when he had begun making arch support to alleviate pain for people who spent all day on their feet (). In 1925, Riley created his first running shoe for the Boston Brown Bag Harriers. Than in the 1940s, because of the success of his shoe New Balance began making custom shoes for running which lead mass production of his shoes in the 1960s. Then in 1972 New Balance was purchased by James Davis for $ 100,000, James stayed owner with his wife and in 2009 James became chairmen of the company. In 2006, New Balance implemented a lean production system in all domestic operations, which led to significant productivity improvements and reduce waste, worker exposer and cost. A year later , a new CEO named Rob DeMartini who came from the consumer product industry was brought on board to lead the company to becoming a true global brand(). In 2009 New Balance was became global with 4,100 employees worldwide and sales of 1.61 billion in 2008 (). New Balance was the second-largest manufacturer of athletic footwear in the United States after Nike, and the fourth largest in the world ().
The start of New Balance problems started when domestic manufacturing of shoes had been rapidly declining and it was estimated at less than 3 billion annually which lead footwear manufacturing companies to move overseas to countries such as China, because of how much money they would save in labor cost (). With the result of moving operations to developing countries with known human and labor rights violations footwear and apparel company’s like New Balance faced significant social and environmental challenges, which made having an integrated CSR strategy very essential. With the lack of a CRS department in the New Balance company creates four major issues that have high potential to affect New Balance. The first major issues is human and labor rights issues in the supply chain. Ever since the boycott of Nike product in the 90s this area still remains top focus in 2009. The nongovernment organization also known as, “NGO”, campaigns work on developing codes of conduct and implementing supplier monitoring. In 2009, issues like maximum work hours, health and safety in overseas factories, use of temporary workers, transparency, responsible purchasing practices and exit strategies. The second issues is the increasing demands for transparency, although privately held companies like New Balance did not face the same disclosure pressures as public company did like Nike, but a greater transparency could build trust and mitigate unexpected reputation risks from recalls or problems in supply chain. Having a greater transparency could build an emotional bond with ethical…