'PUMA case study Essay\r'

'In order to arrive at the correct judgment of what impart be cougar’s opportunities and threats, let analyze the external environments occurrenceors modify the comp whatsoever basing on the PESTEL and industrial rivalrous constituents break awayment five whatsoever forces framework. And later when determining the companionship’s strengths and weakness I pull up stakes look at the comp all’s internal capabilities by expression at its quantify set up, value network and any other private-enterprise(a) component parts which gives the ships political party to a greater extent competitive advantage than rivals.\r\nBy definition external environmental factors be those factors which amaze chance oning on company although the company has any really poor or no apply at all all over those factors. Usually these factors atomic number 18 classified as PESTEL (Political, Economic, Social, technical, environmental and Legal).\r\nExternal Political Factors\r\nThese refer to the fol imprinting sub-factors:(I)Government st mogulThis has process to any blood. When the presidential term in which jaguar ope sets go far down unst adapted politically art leave in spades be affected. For exemplar civil contends affect most(prenominal) operations, leisure’s and sports events which atomic number 18 cougar’s personal line of credit. In our case study we saw that after terrorist attacks of September, 11, 2001 and wars in Afghanstan, geopolitical uncertainty led catamount to shift its merchandiseion from Pakistan to China ( lynx case study, 2003).\r\n(ii)Foreign interchange Regulations\r\nThese includes treaties and agreements which must be respected by the sh be countries and Companies (Czinkota, Rivoli and Ronkainen, 1992).For ex antiophthalmic factorle General Agreement on Tariffs and Trade(GATT),regulations in respect of monopoly and contestation standards, Trade fair Act(1997), genus Paris convention al for the protection of industrial property, to name nevertheless a hardly a(prenominal). These relieve oneself impact on mountain lion since wherever it operates it must adhere to.\r\n(iii) Taxation insurance policy\r\nThese come impact on panther’s business because ar an expenses which reduce revenue solely it lav in giveition be used as the barrier to entry to the targeted potential commercialises. Some government use to fix graduate(prenominal)er tax to incoming foreign company.\r\nEconomic Factors\r\nThese factors use up a huge impact on painter’s business. These be factors like terms of energy, oil, inflation, recession and reco rattling. For example busy rates(interest on loans and borrowings), inflation and unemployment has got veto impact on business since an development of oneness or both(prenominal)(prenominal) of these factors is equivalent to the raise of business running be at the kindred clock time exit guess reducing the purchasing causation(inflation and unemployment) of the sight.\r\nGNP Trends groundwork get down impact on mountain lion’s business since a fair GNP shows that the per capita income of the people is good. confirming growth trends means increases on people purchasing power which has a positive influence to lynx. peck with big disposable income drop spend to a greater extent(prenominal)(prenominal) on the leisure like sports and exchangeablely buys to a greater extent than of the overlaps as oppose to the people with less government income.\r\nSociocultural factors(i)Population demographic; on that point atomic number 18 arguments that the creation is getting older and on that pointfore lynx should adopts to emphasis on the senior people segment in order to remain profitable and for business growth.\r\n(ii) remaining income distri exception means there are few people with disposable income (the rich) and the majority hold very less purchasing power. It is not therefore a market panther should target.\r\n(iii) Lifestyle Changes\r\nThese consent the impact in business and it gets the company to be strategically innovative in order to recognize with peoples’ taste/fashion changes to retain and persuade the nodes. This is one of the factors making customers switch from one mathematical reaping to the others of the same use.\r\n(iv) Attitudes to work and leisureSince lynx operates globally it is possible to meet different societies with different perspectives to work and leisure. Negative attitude to work and leisure will lay down negative impact to business and positive one will call for positive impact to catamount business.\r\nTechnological FactorsProbably these are the most dramatic forces shaping our dowery which pull ins whole new markets and destroy others. These are much(prenominal) as;New discoveries/development and speed of applied science transferThese makes the products life cycles get short and creates a rough competition among industries and hence forcing the company to invest more on R&D so as to remain strategically innovative ( court conditional relation to business). Technological factors crumb lead to both advanced rate of obsolescence and Increase Company’s budget (through R&D).\r\nEnvironmental factorsMost of the nations and international bodies withdraw been enacting laws to protect the environment (green issues).Companies tolerate been compulsorily compulsory to adhere to these laws; for example the law to internalise pollution, intemperance remittance and all legislations regarding safety and environment issues. These feature signifi send packingt impact to business like mountain lion because it reduces revenue.\r\nLegal factorsThe company which operates globally must stop different laws in different markets place inwardly its operations. For example employment laws, health and safety regulations and monetary regulations. It will als o need to know advertise and promotion regulations, pricing regulations and consumer protection legislations. (Brassgton and Pettiti, 2007).\r\nPorter’s five forces of competitive schemaWas developed as a way of assessing the attractiveness (profit potential) of different industries. It helps to identify the sources of competition in an industries or sectors (Johnson, scholes and Whittington, 2006).The focus is in the environmental factors influencing this competitiveness; which are as follows;(i) Threats of new entrantsThere are six major sources of barriers to entry which includes economies to scale, capital requirements, and control of distri furtherition channel, customer loyalty, experience and retaliation. (Porter, 1998).\r\nTo my opinions and with reference to sports constancy for more than three decades, threats of entry has a very microscopic influence to panther. This is because to enter into sports industry you need not lonesome(prenominal) heavy capital and technology dependable experience and knowledge together with attractive customer chemical group which is the strong barrier to entry.\r\nSuppliers Power\r\nSuppliers can have power if;(a)There are a slow-wittedness of suppliers and they can purchase in big quantities(b)Suppliers have a wide range of customers and can well switch from one supplier to the other(c)The exist of faulting from one Supply some other is very high and,(d)If they pose a credible threats of integrating out front into the industry business.\r\nTo my opinion these conditions does not apply to cougar and therefore can not be threats because Puma policy on suppliers is much(prenominal)(prenominal) that Puma have no long term relationships with supply and the fact that production, logistics, distribution have been outsourcing surely Puma will be having very few suppliers (mostly not link up to production and transport departments). In supplement to that it is not possible for those suppliers to merg e backward into industry’s business.\r\nBuyers negociate power\r\nAccording to Johnson, Scholes and Whittington (2006) buyers are credibly to have influence on industry’s business if the following condition prevails;(a)There are denseness of buyers and they purchase a big quite a little(b)The cost of switching a supplier is degrade or involves little risks(c)The buyer pose a credible threats to integrate backwards to make the industry’s product.\r\nTo my views this factor is not a threat to Puma because buyers are scattered all over the universe of discourse such that they can not have collective bargaining power and the cost of switching from Puma to another suppliers is very big and risks because Puma is among reliable and compensable company.\r\nThe threat of substitutes\r\nSubstitutes reduce demand for a fact â€Å"class” of product as customers switch to secondary even to the extend that this class of products receives obsolete (Johnson, S choles and Whittington, 2006).Looking at the trend of sports industry for more than 40 age you will find that there are everlastingly Puma and the big three which dominates the sport industry and each having a very attractive customer base and thus this is a howeverification that Substitutes is no a threats to Puma.\r\nCompetitive contenderRefers to organisations with similar products and services aimed at the same customer group; which for Puma can be Adidas, Nike and Reebok and Fila, Diesel and Prada for football racy, running, basketball and primp and accessories respectively. This is not a threat at all since for this factor to be threats the following conditions must prevail; there are must be numerous competitors and are roughly have equal size and power which is not the case for sports industry(Look at Adidas,Nike, Rebook and Prada,diesel and Fila) all have different power and sizes. The other factor is that for the rivalry to take place the markets must be maturate b ut this is not the case for Puma because although the traditional market segment were heading to mature there are several niches which fracture attractive growth, and except analysts expect growth in geographical regions for football especially Europe, Asia and Americans.\r\nOpportunities and threats\r\nLooking at the environmental factors and the five forces affecting Puma I have observe some of the opportunities and threats for the company;OpportunitiesTrends of accessories/equipments is attractiveIf accessories can be justly managed can be greater opportunity for panther to grow the business. Currently 60% of the total gross gross gross sales are generated from footwear member, but according to experts lop and accessories categories are showing attractive growth rate .why not Puma utilise this opportunity by providing its customer variety of such products by cogitate on both high-value and stylish product and disgrace scathed products so that can get shares from com panies like LVHM, Hugo gaffer and Prada. In my opinion Puma can start focusing on virgin markets such as Racing especially Horse racing, skateboarding, snowboarding to mention but a few.\r\nAlliances and joint move\r\nAlthough puma has acquired some of the largest companies such as Swedish Tretorn the European ternary largest manufacturer of Tennis balls, it is not enough. Alliances and joint venture is one of the major opportunities for Puma to both draw out geographical markets for its products and at the same time get access to valuable technology and competences.\r\nThreats\r\nPuma faces both intertype and intertypes competitorsPuma’s internal capabilitiesIf the companies are to achieve competitive advantage by delivering value to customers, they need to figure how that value is created or lost (Johnson, Scholes and Whittington, 2006).Puma’s value Chain has been divided into two; Primary and allow activities.\r\nIf you consider the primary activities side you must realise that puma is described as Virtualized Company. Its in- preindication resources and activities such as inbound outbound logistics, operations and Procurement have been outsourced. This gives the company to deal with its core competency more effectively. It does not mean however that the company doesn’t care for the outsourced activities but the way are very careful on the take aimion of suppliers, logistics submitrs and producers but also it has a strong in tieration technology base of operations which helps them to coordinate slowly and efficiently.\r\nHuman resources management\r\nPuma with no doubts it has a strong HR by looking at the CEO and his deputy. The CEO universe graduate in international business nerve and having an ample experience in international business and merchandising and worked for Colgate-Palmolive. Also the deputy CEO having an lengthened experience in supply chain management and scheme execution of instrument is one of the just ifications that the company have strong HR capability.\r\nTechnology development\r\nPuma has a proprietary technology which helps the company in hurt of innovation and designing and also in discipline technology. For example the company due to technological ability developed shudol shoe. One of the technological innovations can also be seen on â€Å"cell technology”. To manage its entire coordination and consolidation from all 80 countries is one of the justifications that Puma is strong technology wise.\r\n market and SalesPuma’s strengths come from the best implementation of its strategies in market and sales. Puma’s core competencies have been divided into marketing, nock and product management.\r\nBrand focusingOne of the major reasons for puma’s turnaround was the new prepareing of the marking itself (refer to case study).One of the strategies used is sponsorship of either individual player or police squads and associated the company with ch arismatic personalities who proliferate the desired sword perception, recogonition and awareness It has association with biggest name in history of sports such as Pele, Maradona and Cruyff.\r\nlately the CEO, use the technique of associating the company with entertainment passkey such as Arnon Milchan (the influential film maker),David Matalon and ray of luminance Chernim these stars making brand appears in several Hollywood production. Apart from sponsoring teams like Jamaica and Cameroon Puma has been organising several events such as Puma street soccer in 1994 and 4SOME competition in 2003 aiming at both displaying puma label and communicating Puma philosophy. By 2003 the brand was so high that super stars like bloody shame were proud to wear Puma harvest-home without any compensation.\r\nMarketing\r\nPuma’s marketing division is responsible for all Puma advertising, promotions, PR and interchangeing. pissed promotion and advertisement helps Puma be know company gl obally. Management are careful to select a media of advertisement and promotions.Footbal, Basketbal and running cups have change by reversal the mega events watched by viewers from across the global. Puma has been sponsoring either individual or teams. As a pull up stakes these events support excellent marketing opportunities for the company to create awareness of its brand. It has been fine turning its marketing strategies for football cups from 1960’s when Stars like Pele, Maradona and Cuyff to recent stars like Madonna.\r\nProduct management\r\nProduct management at Puma concerned with designing, operating and maintaining good products. This ensures that the company doesn’t sole(prenominal) produce but creates a product that people will want to buy. Fistly; the company has a wide range of product which help the company to easily respond to different customers with different levels and interests. For example Puma football, running and basketball and others in acc essories and equipments.\r\nIn terms of technology and also to ensure that it offers customers’ product of high bore Puma has association with engineers and renowned designers\r\nsuch as Jil Sander Mihara.For instance Puma innovation was â€Å"Cell technology” which change overd far-famed athletes to be Puma products such Cameroon National soccer team and Jamaica running professionals. Puma is innovative in each stage of the production for example to develop the new â€Å"Shudol shoes” worked with the team of Jordan Grand prix engineers.\r\nFrom Puma’s internal capabilities the following strengths and weakness have been observed;StrengthsStrong brand-name hear/company storyPuma has a reputation for being a pioneer in sports and the brand has very strong heritage in world football, featuring a glittering list of past brand ambassadors which includes some of the biggest names in the history of the game such as Maradona, Pele and Cruffy.It boasts most of the exiting teams and individuals and as a result of having such sports people as customers creates good atmosphere for Puma to enjoy not only the survival but also the company growth.\r\n lovable customer base\r\nHaving the association with quality players it gives an image to most of the people that the company have quality as well. As the results puma has loyal customers worldwide. This coast deal laid a foundation for sports marketing and PR drive which saves and strengthens Puma’s position as one of the best performers on footwear, apparel and accessories for years now.\r\nLower cost base and marketing Focused CompanyPuma is a practical(prenominal)ized company because it has outsourced all production, procurance of materials, distribution and logistics making its working capital just small. This make the company not only have a humiliate cost base but more importantly focuses in its core competencies.\r\nWeakness(i)The virtualized company can have serious strateg ic weaknesses in the long runPuma mainly depends on partnerships, collaboration and networking. Although virtual can meet and satisfy its customers adequately just like other, there arguments that such an extreme form of outsourcing are likely to result in serous weakness in the longrun, as the company become devoid to core competences and cut off from the breeding which can exists through understanding these activities in house (Johnson,Scholes and Whittington,2006).\r\n(ii) PricePuma products’ prices are relatively freeze off than rivals. This is a weakness because price may bring implication that you product has lower quality because most of customers associates high price with high quality. Therefore if the product is priced lower to some customer it will mean that its quality is lower as well. Secondly it reduces the revenue especially if it is not accompanied by high volume of sales.\r\nTo take in and propose the optimal strategies for Puma in light of the above SWOT and analysing possible change issues and challenges in implanting the strategies.\r\nHaving looked at Puma’s strengths and weakness and victorious into consideration opportunities and threats the company can encounter. The following are my proposal of what would be the optimal strategies for the company:-A crossing schemeUnder this system the company seeks to not only provide product or services benefits which are determine by the customers that are different from those of competitors but also provide those products at a lower price than that of competitors. It has both lower price strategy and differentiation strategy.\r\nLower price strategyThis can be a best strategy for Puma given its financial position and market shares as compared to rivals. Also Puma has already some element of this strategy which can be a foundation for the implementation of mark strategy. For example Puma’s products have lower price than those of competitors, defenitely is because th e company have a low cost base after outsourcing all logistics, production, procurement of materials and distribution.Without lower cost base you can not sustain this because lower price reduce security deposit which unless you have some where within other portfolio to subsidise your business will be very clog to sustain.\r\nHowever lower price strategy only when can not be effective and sometimes is dangerous because is can led to â€Å"price war” as your rivals imitate what you have done. Thus to be strategically safe it should be accompanied by differentiation.\r\nDifferentiation seeks to provide products that offer benefits different from that of competitors and that are valued by buyers.\r\nIn this case Puma can upgrades its product’s quality and add to them appealing attributes than that of competitors. This can be achieved by Puma because the company have been in this line of business for decades now such that it clean-livingly know its strategy customers ( what they want ) and it clearly know what are the competitors(what they offer and their strengths).After upgraded the products Puma can plow them at similar price of that competitors. In this occasion Puma will be increasing its market shares as more people will go for its products.\r\nIn addition to that Puma can use hybrid strategy to enter into the markets where their rivals are well instituteed. If you look at the big three i.e. Adidas, Nike and Reebok you will note that they are more well off in terms of both financial and present in all(prenominal) country than Puma making it difficulty for Puma to grow the business and grab from them the market shares. solely entering the market with a superior product and with lower price will help Puma to take market share, divert the attention of the competitors, and establish a foothold from which they could move further (Porter, M, 1998).\r\nIt should clear however that the best results from implementation of the hybrid strategy depen ds on the sustainability of the strategy itself. And to achieve this Puma need to work harder in order to achieve more sales volume so that to compensate the lessen margin due to selling products at the lower price. This can be achieved by strategically tearaway(a) down cost .For example Puma should advocate more e-business which will enable the company to sell more but maintain lower cost base. It will also enable the company to sell across the boundaries with very minimum resources but nonetheless be able to achieve high volume at least cost. Also incorporating the supply chain into the system with a quick delivery time which can be a critical achievement factor.\r\nChange issues and possible challengesDefinitely what is behind hybrid strategy is selling at the lower price than that of competitors and at the same time seeking to provide products that offer benefits different from those of your competitors. To achieve efficiencies and productivity from hybrid strategy Puma wil l need to make changes on the entire staff within and around the organisation. It will need to change employees ‘attitudes so that to direct efforts and lettering to achieving of the positive results from the operations with least costs. This can only be achieved if the management will inspire the people towards Maximising output subject to minimisation of cost (cost sensitive strategy) and build and maintain the marketing and sales focused team.\r\nTo achieve lower cost base require real time visibility to cost-critical information for many important decision that impact cost prior to products delivery. This visibility must be contiguous available and understood to all who impact costs in the process across the enterprise.\r\nSelling at a lower price reduce margin and to compensate the lost margin you need to increase sales volume. You can achieve this by having a skilled and competent sales force because such a sales force can;\r\n• efficaciously persuade customers t o buy and hence increase market shares.\r\n•Reduce time and efforts necessary to sell by increasing the relationships level with customers.\r\n•Increase competitive ability and strengths by reducing predictability and delivery concise and consistent.\r\nfinancially the good sale force can have the following positive results;•Good team can expand the size of each deal and destination more deals.\r\n•Can decrease selling expenses. When the team doesn’t perform well sales cycles are extended and multiple calls are required to convince customers.\r\n•Lower recruitment and training cost.\r\n•Also if you able to sell more with fewer costs associated with sales efforts your margin increase.\r\n•A good team easily adapt to changesAll these can positively contribute to threatening down the cost base for the best implementation and achievement of the hybrid strategyReferencesBrassington and Pettitt (2007) Principle of MarketingCzinkota, rivol i and Ronkainen (1992) International business (2nd edition) New York, London, sydnet, Tokyo-The Dryden pressJohnson, Scholes and Whittington (2006) Exploring corporate strategy (7th edition) London scholar Hall.\r\nhttp://en.wikipedia.org/wiki/SWOT_analysishttp://en.wikipedia.org/wiki/Competitive_strategyhttp://en.wikipedia.org/wiki/Porter_5_forces_analysishttp://en.wikipedia.org/wiki/PESTELArmstrong. M. (2006). A handbook of Human Resource Management Practice, (10th edn), Kogan Page, LondonGrant, R.M. (2005), â€Å"Contemporary Strategy Analysis”, Blackwell Publishing Ltd., Oxford (U.K.), 2005Hunger, J. David & Wheelen, Thomas L. (2003) â€Å"Essentials of Strategic Management”. New jersey: Pearson Education Inc.\r\n'