Puma's assignement
? 1. What is your opinion of the job that Puma's management has done since CEO J. Zeitz took over? Is the company in good shape and in a good market position? Would Puma management agree with you assessment? How does your Characterization of where Puma is and how well is it doing compare with the message and image that Puma management is trying to get across?
The management quickly understood that Zeitz was a winner. Being at the head of Colgate-Palmolive's marketing which was well known as a pure market player during the 90's was a good bet. Within a year at Puma at the age of 30 he has been promoted to CEO. His aims were to make Puma profitable, in order to do so; Zeitz reduced cost, which had increases margin. Then he worked on the working capital to reduce inventory and account receivable. His main goal was in fact to save cash. And then six years later he made a record earning of $37 millions euro with strong cash flows.
As a matter of fact Puma was in a great situation not because it was the leader in terms of market share but because their operating margins were the best in the sector.
? 2. What is the competition like in the international sport apparel industry? What does five forces analysis tells you about competition in this industry?
In terms of Supplier power, Costs are rising for many goods and services, competition in finding the cheaper supplier who remains the best quality and keeping high capacity production. As far as Barriers to entry are concerned, as a well-established Leisure shoe company, Puma benefits from large image in prospective areas which have contractual protection. Customer power is having an effect when Labor prices are set in global markets. Quality ...