New Balance Athletic Shoes Case
New Balance Athletic Shoes
James Davis is the president and general manager of New Balance Athletic Shoes. The Boston, Massachusetts based company began producing corrective shoes and arch supports in 1906. New Balance garnered a reputation for quality specialty footwear when in the 1950's it began producing running shoes for men. It is the beginning of 1978 and Mr. Davis has a number of important decisions to make regarding the future of his growing company.
In recent years the demand for running shoes has experienced explosive growth. The increasing popularity of the sport of running requires James Davis to carefully evaluate the accuracy of the …show more content…
Finally, we are going to address New Balance's various options for capacity expansion. In addition to running a second shift, alternate sites for new facilities have been located in Lawrence, Massachusetts, the state of Texas, and the country of Ireland. The following table details the financial aspects associated with each expansion option. Beginning with the option of starting a second shift, you can see that Mr. Davis' belief that this option is not viable holds true. On the one hand, a second shift is not the best financial decision for New Balance because of both higher expenses (Labor Cost), and