Puma Company Case Study

Puma Company Case Study

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Course: International Business Management

Activity: Case Study

Company: PUMA

|1924: |Rudolf and Adolf Dassler incorporate their first shoe company. |
|1948: |Rudolf Dassler sets up his own company Puma Schuhfabrik Rudolf Dassler. |
|1950: |Puma had established export ties to the United States, |
|1959: |Rudolf Dassler's wife and two sons become part owners of the Puma Sportschuhfabriken Rudolf Dassler KG. |
|1962: |Puma shoes are shipped to almost 100 countries. |
|1974: |Armin A. Dassler takes over as CEO. |

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|1986: |Puma goes public and company stock is offered on the Munich and Frankfurt stock exchanges. |
|1989: |Armin and Gerd sold Puma to Cosa Liebermann for an unknown amount |
|1991: |Swedish conglomerate Proventus AB becomes majority shareholder. |
|1993: |30-year-old Jochen Zeitz takes over as CEO. |
|1998: |Puma acquires 25 percent of Logo Athletic Inc. |
|1999: |Monarchy/Regency becomes Puma's biggest single shareholder. A film and television production company, who |
| |purchased a 12% share in |
| |Puma. |
|2003 |Puma re-launches Rudolf Dassler branded footwear collection in the collaboration with Alexander van Slobbe, |
| |featuring iconic shoes such as the Sprint Logo |
|2007 |Puma launches 360 degree Rudolf Dassler branded collection including footwear, apparel and accessories |

Pumas Service:

Puma has long-term mission of becoming the most desirable Sport lifestyle company. With that, Puma has expanded its boundaries by not only offering shoes but a variety of outer products such as: cologne, work bags, School-bags, shades/glasses, glasses holder, winter and sports gloves, casual wear, sports wear, winter wear sports equipment, caps, watches, bicycles, belts and under-wears. Lastly, Among its ‘white mountain’ competitors, puma describes them selves as the ‘blue mountains’ thus bringing more edge, creativity and uniqueness to their designs.

The following are Pumas principal subsidiaries:

Puma’s S.W.O.T Analysis:
|STRENGTH |WEAKNESS |
|Represents the company’s strong hold and usually is why the company is |represents the areas, in which the company can develop to increase its |
|successful. |efficiency and profits, |
|Brand-Puma is a brand which is known worldwide as makers of top quality |Price – the price is too high for poor class consumers; however it can be|
|product |one of their marketing strategy. |
|Design- Puma designs are often unique, different and always edgy. |Young consumers- a majority of Puma merchandise are geared towards young |
|Experience- Puma has done extensive research for efficiency and to gain |people thus decreasing their market share. |
|their competitive advantage |Few stores outlet- increase in Puma Outlets means more merchandise |
|Management – Puma is now increasing their levels of HRD to make their |available for purchase. |
|staff intelligent and creative. |Missing sport segments – Puma has extensive soccer and tennis gear but |
|International strategy- Puma has increased their global support of |neglects basketball, swimming and other sports to manufacture products |
|football and tennis. Both are played world wide and simply increases the |for. |
|popularity of their product. |Comparable low finance- as compared to Nike and Adidas, Puma is |
| |relatively small and has a lot more to go before it can fully compete |
| |with the others. |
|OPPORTUNITY |THREATS |
|Represents the areas which are promising for Puma in the future. |Represents where Puma is most vulnerable. |
|Cooperate with young designers- Puma is a company which is always open for|Intratype competition: Nike, Adidas, Reebok- these huge companies have |
|new ideas and hence tends to cooperate with new designers or celebrities |large resources and have been in existence a long time. |
|as in the case of Serena Williams who creates her own puma footwear as |Intertype competition- this is competition from other companies which |
|well as markets it. |provides the same products, like Seiko in the watch sector or Guess in |
|Licensing – Puma are open to sell the license to smaller companies to |the eye wear sector. |
|create Puma products while they monitor the progress and provide |High competition- due to the high potential, there are many smaller |
|background support. |competitive companies trying to steal or imitate puma designs, |
|Consignment goods- as in the case of Alexander McQueen, puma sells the |Limitation of products –Puma needs to increase their markets by providing|
|license to another to designer but is not owned by the consignee until the|more merchandise in different areas, for example, making a name for them |
|goods are paid for. Alexander McQueen can then put his name on the puma |in the formal wear sector of the clothing market. |
|product as in the case of Alexander McQueen Puma® . | |
|Sponsorship- Puma provides support to soccer and tennis events in South | |
|America and in parts of the United States, following a popular trend by | |
|sport merchandise companies. | |
|Acquisitions- Puma has made significant acquisitions of small shoe | |
|manufacturing international company such as Athletic Logo brand. | |
|Technology- Puma Tennis shoes are now light weight and colognes long | |
|lasting which are some example of Puma increasing their technological | |
|advantage. | |

Puma’s Development

Puma is a company which literally started off from nothing. Presently, Puma has shown its strength and its ability to compete with larger and more resourceful brands such a Nike and Adidas.
The Corporate Development Plan is devised into four phases: 
• Phase I: 1993
o Establish a solid financial statement
• Phase II: 1997
o Reposition the brand
• Phase III: 2002
o Growth plan
• Phase IV: 2006
o Multi-category Sport lifestyle brands
Furthermore, in the development of Puma came a new Mission statement that is to   become the most desirable Sport lifestyle company.
Their Brand Strategy 
• Bringing distinctive designs and a global outlook by blending influences of sport, lifestyle and fashion
• Maintaining vigilant watch over distribution channels and also, solid guidance and strict alertness for licensee.
Furthermore, Puma did not become successful through the failure of its competitors. Instead it worked on some key aspects to win its customers, hence increase it market share and overall profits.
Puma started by increasing Global brand sales which means investment and development in outlets in other countries or even selling licenses to other companies to manufacture puma products. This initiative gave puma a great advantage and made their product even more popular on the international markets.
Secondly, Puma strategize their goals and decrease the overall cost of Product development and design expenses without affecting the quality of its products; This lead to an annual increase in earnings per share for the company.
Thirdly, in terms of Regional Development, Puma faced a tough consumer environment due to each consumer demands, competition from larger and smaller companies which provided the same product and manufacture cost due to oil prices etc.
However, it still invested millions of dollars into product development in terms of quality and uniqueness in the American and Asian markets.
In addition, the outlook for 2009 and beyond are very optimistic, since Footwear orders are up currency adjusted by 6.8% to € 703.5 million, Apparel by 0.6% to € 393.1 million and Accessories by 8.4% to € 66.7 million.   Given the results achieved so far this year the Puma management has raised its sales guidance for the full-year outlook from a single-digit to a mid to high single-digit currency adjusted growth.  Also, as already announced, Puma will continue with its brand investments as planned in order to explore the long-term growth potential.
Lastly, we live today in a world that is growing together, that changes ever faster, and that offers information in abundance. Puma is convinced that in such a world a brand's success depends on more than the quality of its products. Behind the products there must be a brand with its own unique personality. Only then will it distinguish itself from the competitor's.
Puma’s Final Analysis
After a legendary feud between Adolf Dassler and Rudolf Dassler, Rudolf decided to stem off and started his own company--Puma. Puma first started as a national organization offering its services only to the German population. Its products were often seen worn by the West German Foot Ball team and other popular German sports icons of that time. By 1950 Puma decided to go offshore and became a Small and medium sized enterprise (SME) establishing export ties to the United States. This began a rival between Puma and Adidas (Adolf’s company) which spanned for a few years iced with copyright and infringement lawsuits.
Albeit the ups and downs of Puma, the 1960’s was the spawning of Pumas Multinational appearance as it began to appear not only in the United States but in other countries as well. However, because Puma’s margin of profit began to decrease, they decided to go public offering stocks on the Munich and Frankfurt stock exchanges. Despite their efforts in offering stocks, Puma continued to struggle in increasing its margin of profits. The company was eventually procured by Cosa Liebermann for an unknown amount, but this procurement still did not solve their crisis. Puma suffered a drastic drop in its profits in 1993 and decided to recruit a young 30-year-old Jochen Zeitz to take over as CEO.
Being the new CEO, Zeitz implemented a 3 phase plan which included a partnership with Monarchy/Regency, a film and television production company, who purchased a 12% share in Puma (a share that grew to 40% before it was sold in June 2004). Through this partnership, Puma obtained free advertising through product placement in films like Pretty Woman and JFK as well as in television shows like Will and Grace and Friends. The connection with Hollywood deepened when celebrities like Gwyneth Paltrow and Madonna were seen wearing Puma.
In essence, Puma had a rough beginning in its inception stage but continued to climb its way up until it became the success it is today. This company has literally been through great trials which even threatened their actual existence. However, in the end, Puma re-strategized, shed some old skin, and became fit to live and tell their tale.

References:
Lenker, L., et.al. (n.d.). PUMA. Rrteieved October 12, 2008 from
((http://209.85.175.104/search?q=cache:3ZzMpyACwPwJ:classes.bus.oregonstate.edu/spring-06/ba495/Retailers/puma.ppt+PUMA+S.W.O.T.+analysis&hl=en&ct=clnk&cd=13&gl=bz

MacLeod, A. (2006). Puma AG: market buster. Retrieved October 12, 2008 form
http://ritamcgrath.com/ee/images/uploads/Puma.pdf

Puma (2008). Our history. Retrieved October 12, 2008 from
http://www.rudolfdassler.com/

Sneaker head(2008). Puma. Retrieved October 24, 2008
http://www.sneakerhead.com/manufacture-puma.html

-----------------------
Puma Italia S. r. l. (Italy)
Puma Polska sp.zo.o (Poland)
Puma Hungary Kft.
Puma Australia Pty. Ltd.
Puma New Zealand Limited
Puma Chile S. A.
World Cat Ltd. (Hong Kong)
Puma Far East Ltd (Hong Kong).

Puma United Kingdom Ltd.
Puma France S.A.
Puma (Schweiz) AG (Switzerland)
Austria Puma Dassler GmbH
Puma North America, Inc. (United States)
Logo Athletic Inc. (United States; 25%)
Puma Benelux B.V. (Netherlands)
Puma Canada, Inc.
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