Puma AG is a German company established on October 1st 1948. The company designs, develops and markets premium sportswear, quality footwear, and sporting equipment accessories for men, women and children under the brands Puma, Cobra Golf and Tretorn. Puma’s products are sold through retail accounts through wholesale channels, owned retail stores, internet sites and a mixture of independent distributors, factory outlets, franchisees and licensees worldwide.With Puma’sstrategic objective of being "The Most Desirable and Sustainable Sport lifestyle Company” puma strives to become the authentic outdoor choice globally by offering consumers a selection of products which would allow them to enjoy the experience of being outdoors. Additionally Puma is positioned as a sport lifestyle brand that takes pleasure in skillfully combining sports and lifestyle influences and which strives to contribute to a better world. Notwithstanding these goals however, Puma faces a variety of competitive challenges from other domestic and foreign footwear and apparel producers, some of which may be significantly larger, more diversified and have superior financial and marketing resources. Figure 1: SWOT Analysis of Puma
STRENGTHS * Branding * Management and international strategy| WEAKNESSES * Missing sporting events * Low financial resources compared to competitors| OPPORTUNITIES * Fitness hype * Technology * Acquisitions and sponsorships| THREATS * Economic situations * High competition | (SOURCE: http://www.slideshare.net)
One such major competitor is Adidas. The company was founded in 1920 and has its headquarters in Herzogenaurach, Germany. It was formerly known as Adidas-Salomon AG and changed its name to Adidas AG in June 2006. Adidas AG, designs, develops, produces, and markets a range of athletic footwear for men and women primarily in the football, running, training, basketball, and golf sectors worldwide as well as apparel and accessories. The company offers its products under the Adidas, Reebok, Reebok Hockey, CCM Hockey, Rockport, Taylor Made, Adidas Golf, and Ashworth brand names. The company currently has over 1000 stores worldwide. They also distribute their products via the internet and through wholesale and retail channels. Its drive to be the leader in the footwear market is reflected in the current marketing slogan, “Impossible Is Nothing”. Apart from this market competitor there also exist current market conditions which may impact heavily on Puma’s financial performance which would be analyzed in the proceeding discussion.
Puma’s financial performance may be ominously affected by political conditions in countries where Puma operates. For example civil wars affect operations, leisure and sporting events which are Puma’s business. After terrorist attacks of September 11th 2001 and wars in Afghanistan, geopolitical improbability led puma to reallocate its production from Pakistan to China. Puma, being a company that utilizes outsourcing from other countries there are various international and local laws, trade restrictions and tariffs that must be taken under consideration and adhered to by Puma to maintain incessant development. Similarly to Adidas and Nike, Puma outsources production from Asia because most of Asian countries offer lower labor cost and taxes compare to Europe and America. In this regard due to the fact that the Puma is an international organization that manufactures in addition to selling their products in different parts of the world, there different political issues and events that can affect the overall performance of the company in the sale of products in foreign markets.
While Puma’s staff and intermediary auditors periodically visits and monitor the operations of their vendor, independent manufactures and licensees, they do not control the practices of these individuals. For example; in 2010 and in 2009 there were concern about the discovery of...