International Operations
Management
MGMT 6367
Case Study
Instructor: Yan Qin
Fall 2013
Outline

Case study
◦ Case: New Balance
◦ Case: Crocs
Case Study: New Balance
 Please read the case “New Balance Athletic Shoe, Inc.” and
think about the following questions:
 What are the competitive implications of the Adidas/Reebok
transaction for New Balance? You may want to refer to figures
in Exhibit 2.
 In what aspects did New Balance see itself differentiated from
Nike, Adidas, or Reebok?
New Balance – Cont.
 New Balance placed a disproportionately large emphasis
(relative to sales generated) on serving smaller retailers and
ensuring timely delivery of products to them. What are the
reasons for them to do that?
 New balance performed 25% of its manufacturing in the
United states at a time when nearly all of tis competitors
were manufacturing 100% of their products in Asia. What are
the primary reasons for them to maintain domestic
manufacturing?
New Balance – Cont.
 Suppose the total US volume of athletic shoes per year is 400
million pairs. How much is the cost penalty resulted from
New Balance’s domestic manufacturing?
 The ultimate goal for NB2E was 100% delivery of requested
product within 24 hours. The dramatic reduction in lead
times mandated under NB2E raises the question of whether
the initiative was a critical component of New Balance’s
strategy or simply an unrealistically ambitious attempt. What
is your opinion?
Case study: Crocs
 Read the case “Crocs (A): Revolutionizing an industry’s supply
chain model for competitive advantage” and think about the
following questions:
 What are Croc’s core competencies?
 How do they exploit these competencies in the future?
Consider the following alternatives:
 Further vertical integration into materials
 Growth by acquisition
 Growth by product extension
Crocs – Cont.
 To what degree do the three alternatives in Question 2 fit the
company’s core competencies, and to what degree to they
defocus the company away from its core competencies?
 How should Croc’s plan its production and inventory? How
do the company’s gross margins affect this decision? What can
go wrong?