ategy, from a vertical operation in Germany in the 60's and 70's, to an outsourcing focus today throughout Asia. Unlike the big two, they do not have a code of conduct, and their factories are considered to be the worst in the industry. It is just a matter of time before they are exposed, with an underground swelling of negativity already occurring today. In order to avoid the negative effects and lost revenues that Nike and Reebok have received, they need to immediately begin to take a pro active stance in regards to the working conditions of their factories. Converse With a market share of 3% and revenues of $280 million, Converse manufactures their products both domestically and internationally. It is important to note that the only product they continue to manufacture in the U.S. today, is the Chuck Taylor All Star, with plants in Lumberton, NC and Mission, TX. This is a product where the "Made in the USA" label is crucial to its success, and internalization is a source of competitive advantage. These two factors serving as the sole reason why the production remains within the U.S. All other shoe models are out sourced in Asia, with the explanation of reduced wages driving this strategy. Converse, like Adidas, must also generate a higher degree of internal monitoring of their subcontractors, or they will soon face increased scrutiny. New Balance New Balance is the one company that has kept a substantial amount of manufacturing in the United States, and has a 3% market share with sales of $260 million. They currently operate five plants in New England, employing over 1400 workers, that produces 50% of their output. With this mixed strategy, of vertical integration and outsourcing, they are very unique, with their strategic reasoning based on the advantages gained through higher levels of quality domestically, and the "Made in the USA" label. They are in a highly specialized, niche business, running shoes, and closeness of factories i...
