Sneaker 2013 Report.docx - Embry-Riddle Aeronautical...

Embry-Riddle Aeronautical University
Daytona Beach Campus
CASE STUDY: SNEAKER 2013
BA 518: Managerial Finance

Table of Contents
I. Introduction ......................................................................................................................................... 2
I. Financial Analysis ................................................................................................................................. 3
II. Sensitivity Scenario Analysis ................................................................................................................ 9
III. Current updates on the case .......................................................................................................... 19
IV. Conclusion ..................................................................................................................................... 20
V. References ......................................................................................................................................... 21
1

I. Introduction
This case study is about a company named New Balance which is based in Brighton,
Massachusetts. It is a footwear company which was facing economic downturn prior to the
launch of Sneaker 2013. During the 2012 London Olympics, New Balance saw an
opportunity to target younger male audience (12-to-18-year old) for its market value to
raise. Jim Davis, CEO of the New Balance knew they would be able to do it only if they could
set up an effective marketing and advertising campaign around the right athlete. Hence,
they decided to take Kirani James as an endorser for their new footwear. He was a gold
medal holder who won in a 400-meter dash in 43.93 seconds and earned global fame that
year [3]. At that time a lot of footwear companies launched high-tech expensive running