Business Essays Puma Company Brand

Business Essays mountain lion Company Brand catamount Company Brand1. Executive Summary mountain lion AG is a multinational follow that is ground in German and manufactures senior superior school athletic and larkswear shoes both for women and men, It was founded by Rudolf Dassler after a dispute with his br different Adi Dassler with whom they had founded the Dassler Schuhfabrik in 1924. mountain lion had a very poor leaf blade date that show a dec path in its grocery store place place conduct and prompted panther to diversity it strategic decisions to remediate on its anatomy, this appendage of shift was led by Jochen Zeitz panther CEO based on phases one to four of strategic plan to change lynxs image so that it can compete favorable in the marketplaceplace and within a couple of categorys Jochen Zeitz had change jaguars inciter image into one of the to the highest degree desired and sought after snitch of sportswear and footwear worn both cloud cele brities and work following any everyplace the word.1.1 Introduction jaguar was founded in Dassler Schuhfabrik, Herzogenaurach, Germany by Rudolf Dassler after a dispute with his br some other Adi Dassler with whom they had founded the Dassler Schuhfabrik in 1924. Until early 2003 lynx had a very poor none image that show a dec filiation in its market sh atomic number 18 and prompted painter to change it strategic decisions to emend on its image, this process of change was led by Jochen Zeitz lynx CEO based on phases one to four of strategic plan to change panthers image so that it can compete favorable in the marketplace and within a couple of years Jochen Zeitz had change jaguars discolouration image into one of the most desirable and sought after discolouration of sportswear and footwear worn both buy celebrities and fashion followers all over the word.This report is divided in three give ways, Part one presents the factors that influenced panther to change it mark er image and it further goes to describe these factors under Macro-environmental analysis basing on market cuts, rivalry between customers and strategic conference mapping.The second part presents the lynxs resources and capabilities in terms of strengths and weakness as well as virtuallity as seen as streng indeeds and the third part of the report presents jaguars winning strategies basing on pumas situation that fits the company, sustainable completive advantages and as a ruin playing company.According to case study of Puma AG (in Thompson, A.A., Strickland, A.J. and Gamble, J. (2005) Crafting and Executing Strategy (Fourteenth Edition), McGraw-Hill, New York, pages C411- C432),The environmental and competitory factors that influenced Pumas strategic decision to improve its Brand image is place under Macro- environmental factors, rivalry between competitors and strategic group mapping as below.1.1.2 Macro environmental factorsLack of hearty acceptance of Puma daub from th e upper class customers who were not voluntary to wear the brand beca habit they bowl overed to of poor quality and were sold dirt-cheap Pumas brand was compromised and this a affected its prise for utilization Rudis son wanted puma crossroads to r distributively all the customers of all social back anchor and this jaunt was seen by the upper class people as somewhat thing below them and they can not be seen wearing the same brand as people on welfare recipients. In browse for pumas brand to be accepted as a high quality brand of value, lunge puma to change and improve its brand so that it can be socially accepted by customers.Change in customers taste and style for display case on that point was high motive for supports ware and fashion invest tend that was oriented toward high value and lifestyle products, this change in customers demand influenced pumas to changed its brand image to suitable the customers growing demandDemographic change in soccer market for exampl e their was a high demand to react to needs of both kids playing on local pitch and nationals soccer team playing professional at international level that required high quality brand and in order for puma to tap in to these demographic change puma needed to improve its brand image.Market change of 1980 when sports brand became more dynamic and consumers taste alter into naked as a jaybird and more exciting high price that make products more desirable this forced puma to change its brand image so that they can charge high price as customers associate high prices with quality of brand or product and the more highly charged the more desirable the brand.Introduction of niches in the market offered attractive growth rates both incumbent and sweet market players for example skate markets, golf sports, sports equipments for out(p) door activities do puma change its brand image, for example for puma to enjoy this attractive growth its brand has to be of high quality.Merging of manufa ctures to form one big group for example Rosso joined forces with several(prenominal) other manufactures in northern Italy to form spirit group this was seen as a threat because this means more resources and significant financial stand and this led to high fragmented global market and for puma to survive in a highly fragmented market it needed to change its brand imagePumas brand was disreputable and had lost specailised sports dealers in its scattering network in order for puma to gain its distribution network it had to improve on its brand image1.1.3 Rivalry between competitorsPuma greatest rivalries are from the following competitorsNike IncNike is the number one sports brand in world over and from the case studyBased in USA Has got shade brand like Tiger words and Michael Jordan Adidas Salomon AGDeals on core sports (soccer, athletics skiing)Has got stronger financial resourcesHas got its marketing and design departments in Germany and FrancePrada SportsLuxury brandIt has e ntered in to sports segments four years agoDeals in trendy fashion wear of high pricesDieselBased in ItalyFashion brand ,majoring in sunglasses, footwearCompetitors entered the market such as Adidas, Nike, Rebook among others entered the market and do competition for market share was very high and these competitors had better quality brand than puma and among them, they shared 27% of the market share, this stiff competition influenced puma to improve on its brand image to survive to survive in the competitive marketNike was the biggest competitor of all and it had the largest market share for example Nike was became the worlds largest sports equipment manufacture in the late 1980 and maintain this position since then. Puma was relations in about identical products like puma but its brand was poor so in order to fall in a share in the market place puma needed to improve on its brand image.Adidas-Salomon was also another competitor that entered the market as the second worlds la rgest producer of sports equipment manufacture in world with approximately $6.5 billion in sales and was present in every country this put puma in a very difficult situation and in order for puma to take over a favorable share in the market it needed to change its brandReebok also entered the market at the time when puma brand was poor, Reebok was the world third largest player in the sports market, Reebok identified footwear industry as a key market and began to aggressively into overseas market this expand was seen as a threat to puma and to survive it puma had to change its brand imagePrada though a highlife bran, it also started deal in sportswear four years ago and this is a threat for Puma and because though the price for Prada brand is high, it high quality goods do attack customer who are willing to spend for example super starts, this is a threat to puma because puma has to not only with Prada but with Nike, Adidas and Reebok for customers.1.1.4 Marketing strategiesAcqu isitions of groups for example Rosso bought out other partners and embarked on growth and expansion this means more competition for market shares as he built a solid and vast distribution platform across pentad continents reporting annual sales of $330 one thousand million with luxury brand selling jeans for as much as $100-$200 a pair making its brand more appealing to customers and in order for puma to survive Such a hash market, it needed to change its brand imageInnovations as a marketing strategy for example Nike diversified his product portfolio to target people of ages 20 -30 with enthusiastic sports appeal, Reebok changed its marketing strategy and began transition toward football, baseball and soccer which Puma was one of puma product preeminence and in order for puma to attract new customers it has to change it brand image for example puma designing and new functionality in new collections and launched retro looks of the 1970s/80sAll companies engaged in massive advert isement for their brand a awareness so that they can compete favorable in the market for example in Nike marketing strategy, it focused on sponsoring huge events and popular events, Reebok also sponsored popular events and had a licensing agreement with national basket association that change magnitude its brand awarenessTo compete with each other favorability each company outsource production and raw materials where their exist was cheap and labour was available this enables each company to cut on production cost.Product differentiation causes constraints on rivalry for example the is high rivalry for example between Nike, Adidas and Reebok because thought there is high brand identification in the market they almost dealt in similar sports equipments which offer customer the usage.1.1.5 strategical group mapping to position competitorsStrategic Group Map on Footwear MarkFrom the strategic group mapping, the rivalry between Puma and Nike is very low and puma doesnt generate a th reat because Puma doesnt enough market shares as equalityd to Nike, This is because Puma is a stage where its brand is poor and customers are not willing to buy puma products and this explains why the position of puma and Nike are far a part from eachThe close positioning of Nike, Adidas and Reebok are and narrow and almost tight because they are competing for almost the same size for example the rivalry between Adidas and Reebok are almost of the same size in market share and they have to keep competing for the market with no dominance from Adidas and Reebok as a leading rivalry, this is because the cost of production is low and so is the cost of labourThe cost of switching from one brand to another is very low for customers the rivalry firms because customers can freely buy from another from Nike, Adidas and Reebok especially where there is no brand royalty thats why they are so close togetherNike, Adidas and Reebok entered the market almost at the same time when pumas brand image needed improving this cause high competition for the market shares and for customers and this explains why less room for expansion for Nike , Adidas and Reebok that needs to protect its market share from PumaThe cost of production was low between the rivalry firms as most of had outsourced all production and raw material where they were cheap to produce, this made the market so unstable and due to high competition for the market share.2 Pumas strengths and weakness 2.1 StrengthPuma had collaboration with some of the famous designers from different cultural back ground for example pumas new projects were developed under the supervisions of trendsetters like Yashuiro Mihara and Jil sanders which are strongly influenced by kickboxing. This cooperation and collaboration opened a new wide market for puma for example where high fashion meets sportswear, for example this collaboration led puma to produced high quality brand that suppers starts like Madonna were happy to be spotted wear pu ma brand and this made many fashion and brand wearer buy more of puma productsPuma launched new collections which blended with sports, lifestyle and fashion for example puma curato shoes, unala cropped distort womens ware which are very sport fashionable and trendy, such causal sportswear became like very day kind of wear for certain age group for example the young starts who identified themselves with puma logo and style, this made it open for puma to target and reach the right market as at the right time as puma knew its market and customers wellInnovations -puma carried innovations at each part of the process for example puma worked with engineering teams of Jordan grand prix Racing to learn about new materials like carbon fire which are then built into pumas shoes like shudou shoes, this innovation enabled Puma to produced high quality sportswear that were so desirable that puma gain a lot more customer that puma became looked upon as a trend starter in the footwear market for other companies like Nike and Adidas as followPuma outsourced all productions and raw material procurements in European were to expensive and raw martial were cheap in Asians countries , this allot puma to slim down its working capital and allow puma to shorten the production and enable full quality control of input factorsPuma had knowledge and experience, this is one of pumas major strength because according to the case study Zeitzs understanding of fashion as the new combinations of elements of the past it easy for puma to produce products without having to design for scratch rather than use its heritage, this made it easy for Puma to re-launched older products for example the retro look where some parts were interpreted from 1970/1980 collections were re-launched after amplifying modern elements such as fit or color way shoesPuma has good planning and timing for example puma for example puma entered the sports market two years before its revival in order to maximize acquire and this gave puma enough time to gain for up coming demand, Puma had gain market experience and gave customers the impressions of always being in the sports market.Puma participated in various marketing campaigns to arose customer brand awareness for example it sponsored big events, chose music television channel which was known for its young audience who tired to differentiate themselves and targeted them with puma adverts, for example Puma use the MTV and Music Mongol as Jazzy to promote footwear and other invest this made lead to the popularity of puma brand and in the last five years saw increase sales as the brand was considered rebellious and stylish as two most desirable attributes as compared to its competitorsAcquisitions of other company for example puma acquired Swedish company Tretorn, Europes third largest manufacturer of tennis ball from Proventus for 23 million which the contributed to 45 million in sales and puma was able to allocate its over head cost of distr ibution functionsPuma had a shareholder New Regency which put puma in several successful Hollywood movies such as devil and high crime this benefited puma massively from generous product placement. This new regency made it easy for puma to reach it market audience through and through movies, adverts that portrays the image of puma as a companyTechnologically puma created a blade presence that fit its imaged for example its home page displayed different adverts from Jamaica line. Interactive stories transported readers into managers thoughts during his 96 hour business tripe around the world wearing pumas cursory and business attire.A project promoted on the internet was the top winner thrift A collection of 510 unique and individual shoes was created and sold at premium prices all over the world.2.1.2 WeaknessPoor brand ImageBefore the revival, puma has a very bad brand image that most customers from the upper social class did not want to buy puma products because it was considere d cheap, this ruined poor reputation and it took years for this image to be rebuilt through phases. pot of financial resource Puma did not have a strong financial resource as can be seen from the balance sheet of 1999-2002 this could have been due to reduced sales as the brand was of poor image. From the case study puma has the lowest balance sheet compare to its competitorsLuck of customers repayable to puma poor brand image of 1992-2002 it was not attracting customers because the brand was poor the substitute were readily available on the market most of pumas customers might have crossed to Nike or Adidas as they had better quality footwear Limited market when the brand was poor puma has the least market share as compared to Nike, Adidas and Rebook that to gathered shared 27% of the market share. This failure by puma to capture a larger make share is a weakness and this rock-bottom on brand attractiveness, this can be due to pumas marketing communication which is different for ma rket segmentPuma lost its sports dealers distribution network due to poor brand image and unhealthy sale. Though this was gained, Puma s public treasury missing the sports segments distribution systemsFrom the case study Puma has a higher overhead as compared because some of its products were sold cheaply at a very low price making it really hard to experience out what the profit was made as costs were being attached to total sales regardless of what product segment was sold2.1.3 VirtualityPuma is the prototypic virtual sports company according to pumas mission statement and uses Virtual Warehouse Management System.According to Jochen Zeitz, CEO of puma Virtual actually may be the wrong word. One should probably say a virtualized company, where location doesnt really play a role anymore. Its totally independent from location and how you do business, and move things forward. Take product development, for example.Its actually divided among all the three hubs, with certain developmen t functions in Germany, certain in the U.S., and others in Hong Kong. They each complement each other and work together. Its all integrated through proper IT, so no matter where you are, you can access the same kind of development and add to the entire development chain. (Reveries.com, Dec 2202).2.1.4 Virtuality as strength for puma Information sharingPuma has a global management structure several head quarters supported by a strong tuition technology infrastructure this makes it easy for sharing of vast network resources on a global scale for example during design stage and using the Lotus notes and information database application, key information about design process and procedures and it can be entered in to the database and it can viewed by all the production team located in all the regional hub, this makes exchange of idea and decision making immobile without the need for production team and designers to be physical locations in one place. For example footwear can be desig ned in German then it can be checked by product development team in another country, the review is done throughout the production cycle till the product is finished and ready for sale.Hi technology infrastructure The strong information technology infrastructure can be used to link all the global regions together for example during executive meetings video-teleconference can be use link all the mangers in the various regions together during a meeting alter fast sharing executive information for managerial decision markingOnline ResellerPumas virtuality has enabled puma to provide its customers with aid of viewing and buying products through a web based stores and retailers for example pumas Qualified Puma OnlineReseller has made it possible for customer to order products and view their purchase perspective as they a wait delivery whenever their locations Family WebsitesThrough virtual presence puma has been able to a couple of puma family websites for example in 2000 puma featured an online store in offering a few product in United States only though this has become more common of Pumas online stores, this makes it easy for puma presence to be very where in any country in the world and makes it easy for puma sales team to interact with customers online.Puma also open its door to the public via web presence (Pumabiz.com) by allow users access to company information such as corporeal structure, financial reports and puma performance in the market, this web presence enabled puma attack authorisation and future business partners as well as recruiting new staff using the Pumabiz.com website.Virtual storePumas virtualisation process lead to the creation of a virtual warehouse where as soon as customers order goods they are assigned with unique making it easy to locate the goods and goods are dispatched to customers no matter where they are with the specific given period. The virtual warehouse system solves pumas traditional way of storage and led to a feeling th at puma is everywhere as the virtual warehouse was everywhere puma has a subsidiary.By using vitulised system puma has competitive advantage for example Puma all core competence is seen as a single big company and globally its employees are all over the world and through use of puma communication technology employees are able to share all the resources and the process of virtualisation is being seen as a future that most companies will follow (cf Fuderholz, 1998)The interaction of customers, suppliers and shareholders through the use of information system and communications between organisations have brought only supplier and investors together but has brought shareholders closer for example shareholder through the use on information system are able to search and find out how the company id performing in the market3 Winning strategiesThere are evidences from Puma financial reports that suggest puma strategies in the resent years have led to winning strategies this can be seen from i ts broad actives that have improved pumas image considerably.3.1 Fits the Companys situation well Increase in ordersPumas orders has increased by product line according to pumas outlook for example order for footwear went up by 4.7% to 721.1 millions and order for apparel has increased by 19.9% to 397.7millioms followed by accessories which increased by 13.6% to 68.9 million try Appendix ii 111Global branded Sales growthPuma management confirmed increase in sales on of footwear, apparel and accessories for based on the financial results for the graduation exercise quarter of 2008 this has the strength of Euro against other currencies for example footwear sales were down by 4.6% to 404.1 millions, Apparel almost remained the same as last years total 246/9 millions and accessories increased by 30.0% to 90.1millionConsolidated salesIn the first quarter of 2008 consolidated sales grew for example sales in footwear flat but with all puma region meeting satisfactory sales level excep t USA, the sales of apparel goods increased by 18.5% to 231.8 million and accessories in creased by 16.5% to 47.3 million with contributions from the entire region in double digitsEurope, Middle East also saw increased sales of 19.9% which all together left the company with 3.4% revenue of which footwear sales accounts for up to1.9%, apparel increased by 5.7% and accessories by 3.7% despite a ho-hum sales in America. (26 February 2008 Source just-style.com)Pumas sales for the full year of 2005 consist of consolidated and license sales which increased by 18.4% to 2.4 million for which the sales of apparel accounts for 16.5%, accessories increase to 16.5% and footwear increased by 17.7%Gross profits at 5% from the sales and earning development report, pumas gross profit from the first quarter increased to 52.2% as compared to last years. The margin of footwear increased from 52.0% to 52.1%, accessories increased from 53.4% to 54.9% and apparel was low compared to last years gross profitsPuma embarked on phase IVPuma has started its phase IV in 2006 of becoming most desirable sports lifestyle company that consists of expansion out side of European market as all as expansion of product categories this includes entryway the already existing markets as well as entering into new areas for example puma aim to offer products that cover all the sport lifestyle such as incorporating sportswear into fashion and making puma more distinguished to beat off competition from its rivalry. Phase IV expansion strategy show tremendous growth in profits as result of continuous high sales and puma ability to spot new trends in the market and offer products accordinglyPumas shareholders valueIn 2007 Pumas main long term goal was founded, when Pinault Printemps Redoute of France take over Puma, this brought the two companies that share the same vision and culture together, for example the take over made it possible for each company to provide support to the other to reach its st rategic objectives. The take over was not objected by the share holders because the offer price of 330 per share was considered fair and this made both companies more money.Good balance sheetPumas sales for the full year of 2005 consist of consolidated and license sales which increased by 18.4% to 2.4 million for which the sales of apparel accounts for 16.5%, accessories increase to 16.5% and footwear increased by 17.7%, this as compare to pre 2003 shows that puma has got a healthy balance sheet for example puma equity ratio is above 60% and of March 31, 2008 total assets increased by 0.8% to 1,811.5 millions3.1.2 Competitive advantageBarney (1991) defines sustainable competitive advantage as A firm is said to have a sustained competitive advantage when it is implementing a value creating strategy not simultaneously being implemented by any current or potential competitors and when these other firms are unable to copy the benefits of this strategy (italics in original) (p. 102).B ased on both Barneys work and the definition in the dictionary, a sustainable competitive Advantage is defined as long term benefit of implementing some unique value-creating strategy not currently being implemented by any known or potential competitors along with the incapability to duplicate the benefits of this strategy. Factors that have enabled puma achieve sustainable competitive advantage are identified belowKnowledge and ExpertisePuma has uses expertise in design knowledge with major competencies in all parts of design and marketing for example with the acquisition of Puma by PPR group has enabled puma to use PPR large base design team to produces high quality of desirable brands, this knowledge and expertise makes puma completive set a part from its main competitors.Brand as completive advantagePumas brand is so strong and dynamic according to Zeitz that by 2003 pumas popularity was so strong that mega starts like Madonna was proud to wear Pumas, This brand image and associ ations of its brand with international starts is of competitive advantage in selling of apparel and footwear because it brings about publicity for puma and brand awareness and open up venues for other opportunities for example by 2003 puma signs a deal to be the official supplier of apparel and footwear to the FIA world rally champion. Expansion into other marketPuma has been expanding its market especially in china, for example puma has open many stores in Olympic village in china to showcase new collection and meet the demand for Pumas footwear demand , this expansion has attacked new customers and puma has provided support to individual sports personality for example, the CEO of Puma is quoted as If we find the right person we will consider partnering with those Chinese sports starts ( China daily report 26,2007)Innovative products Puma has a advantage in footwear, apparel and accessories because it a lot easier for puma but fashion know who with the help of designers and the CE O of puma has the understanding of fashion the new combination of elements of past in which when puma spots a new trend instead of making a new brand, puma uses it old brand to design and this counted for 10% of footwear, apparel and accessories based on the old design and this also made puma a trend starter. In footwear puma also collaborated with sought after designers like Stella McCartney, Alexander McQueen to produce new line of womens and mens footwear which was launched in the spring of 2006Broad consumer appealPuma offer a very diverse product line for everyone and this accounts for the broad customer appeal because there is product for everyone. In the spring collection of 2003 did carter for both male and female for example Nuala product line with cropped woven pants and Nuala Nylon coat for women as well as Kings ss soccer shirts that catered for both men and women.Puma also ventured into Action sports line for emerging sports like BMX skateboarding and downhill mountain biking creating platinum series offering causal footwear and apparel and accessories for such eventsRelational market assertsPuma has got greater bond with its customers this has sorry a working relationship work with customers to manufactures highly unique and customized brands for example in the case study puma promoted the top winner thrift a collection of 510 unique and individual shoes that were created out of recycle cloths from Jeans and ties, with the purchase of such items, customers allowed to enter pumas exclusive community on the web.Supplies to meet the various demands of consumersPumas major supplier was Yue Yuen, the largest supplier of footwear, so when the demand for particular footwear goes up puma is more readily meets the demand from constant supply of branded products from YueYuen.Intellectual market assertsPuma has great in depth knowledge regarding customers needs and preferences for example puma has gained knowledge and believability in sportswear and equipm ent, this was a results of many years of trading on the same product line and which made it very easy to have competitive advantage over others fashion industry, this knowledge made it easy for puma to re-launch products that customers most prefer to have.3.1.3 Better company performanceMarketing campaignPuma participated in various marketing campaigns to arise customer brand awareness for example it sponsored big events, chose music television channel which was known for its young audience who tired to differentiate themselves and targeted them with puma adverts, this has resulted in o better performance because it improved brand awareness which in turns led to high sales performance. forbidden sourced production Puma outsourced all productions and raw material procurements in European were to expensive and raw martial were cheap in Asians countries, this allow puma to reduce its working capital and allow puma to shorten the production and enable full quality control of input facto rs, this results in a better company performance because it enables puma to meet the market needs effectively and save a lot of money from having