Puma Case Study
Puma AG
The case centers mainly on the well-known sports brand Puma and its strategies to become one of the principal brands in the market. It also mentions its competitors, Adidas, Nike, Reebok, Diesel, Prada Sports and Fila, and their approaches to keep their status and high share in the market. One of their principal strategies is in marketing, each company targeting a different sport. In the 1980’s Puma was the world leader in tennis rackets and was ahead of Adidas in tennis footwear but a bad decision made Puma suffer. Armin thought that by making shoes affordable to everybody the sales in Puma would increase, however this strategy failed and made Puma had liquidity problems. The company needed a new organizational structure to be able to comeback stronger than ever. One of the first problems Zeitz solved was the company’s accounting. He presented Puma with a new way of monitoring the products by profit centers and distribution-oriented controlling to identify products and adjust profit margins. Another problem was the efficiency, in order to increase it half of the employees were laid off and they began outsourcing to Asia and Turkey. After making organizational changes Puma began concentrating in their core competencies: brand and product management and marketing and decided to once again make Puma and appealing sports brand. Their strategy was to appear in Hollywood’s bestseller movies, which made Puma earn 85 million euros and have record sales. This proved their strategy worked and placed Puma in the market again. In just four years, from 1999 to 2002, Puma was able to more than double their net sales and was able to compete with the high and recognized brands. Other marketing strategies included producing exceptional events such as the Puma Street Soccer Cup and the 4SOME Competition. Puma had two main product lines: Pumafootball and Pumarunning and its most famous product were the Puma King Football shoes, which also were the best
The case centers mainly on the well-known sports brand Puma and its strategies to become one of the principal brands in the market. It also mentions its competitors, Adidas, Nike, Reebok, Diesel, Prada Sports and Fila, and their approaches to keep their status and high share in the market. One of their principal strategies is in marketing, each company targeting a different sport. In the 1980’s Puma was the world leader in tennis rackets and was ahead of Adidas in tennis footwear but a bad decision made Puma suffer. Armin thought that by making shoes affordable to everybody the sales in Puma would increase, however this strategy failed and made Puma had liquidity problems. The company needed a new organizational structure to be able to comeback stronger than ever. One of the first problems Zeitz solved was the company’s accounting. He presented Puma with a new way of monitoring the products by profit centers and distribution-oriented controlling to identify products and adjust profit margins. Another problem was the efficiency, in order to increase it half of the employees were laid off and they began outsourcing to Asia and Turkey. After making organizational changes Puma began concentrating in their core competencies: brand and product management and marketing and decided to once again make Puma and appealing sports brand. Their strategy was to appear in Hollywood’s bestseller movies, which made Puma earn 85 million euros and have record sales. This proved their strategy worked and placed Puma in the market again. In just four years, from 1999 to 2002, Puma was able to more than double their net sales and was able to compete with the high and recognized brands. Other marketing strategies included producing exceptional events such as the Puma Street Soccer Cup and the 4SOME Competition. Puma had two main product lines: Pumafootball and Pumarunning and its most famous product were the Puma King Football shoes, which also were the best
References: Kaufmann, L. (2005), “Puma AG”, Crafting and Executing Strategy, The Quest for Competitive Advantage: Concepts & Cases, A. Thompson, A.J. Strickland III and J. Gamble (eds), 14th edition, McGraw-Hill International Edition, p. C-411 to C-432.