1. What are the key changes for Puma?
Puma had suffered of a rise and fall problem in the end of the century. The positioning was a general sport brand for everyone; they wanted toaddress customers from every social class, from the welfare recipient to the millionaire! Therefore individuals from the upper class were no longer willing to wear a “dirt-cheap” brand. And every newcollection failed.
Jochen Zeitz came like the new leader that investors searched for. He was quickly promoted to the Head of Marketing. He changed two main things, in two phases; on one hand headdressed the ‘unhealthy sales”, products which sale at a very low margins. On the other hand, he restructured the organization to be more cost efficient, and the production was outsourced to Asia andTurkey.
The second phase is to attack the bad image of Puma. Zeitz had convinced a lot of companies to do partnership (to show Puma with other brands or in movies). The brand has now a better value forcustomers.
2. What is the analysis of the value chain?
Research & Development: Have an important role in the corporate strategy (2.5% to 3% of the Puma’s revenues). They try to innovate withevery new collection and to attract customer by both design and functionality. There are some materials which are built into Puma soles.
Sourcing, Procurement & Logistics: Puma completelyoutsourced the production in Asia and the raw material procurement is superior especially in these countries. Puma has done a highly vertical integration.
The production selected some criteria likequality, price and environmental factors.
70% of the logistics were outsourced.
Brand Management: Puma had completely changed its image. Now the brand has a highly brand image. The sponsorship played amajor role, but unfortunately competitors do the same. Because Puma doesn’t have the same financial resources of competitors (Nike and Reebok), the brand has to be very creative and maximize the...