Puma's Challenge to Maintain Leadership in India SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
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Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Puma's Challenge to Maintain Leadership in India
In 2015, Puma became the market leader in sportswear sales in India, leaving Adidas, Reebok, and Nike behind for the first time since Puma entered the market. Puma's success in India was primarily attributed to its marketing techniques, judicious expansion, and customer acquisition strategy. Indian consumers had been embracing lifestyle changes associated with increased health concerns and the popularity of fitness programs. As a result, the sportswear segment grew, presenting an opportunity for companies to maximize their return on investments. While Puma moved ahead of Adidas to become the leading sportswear brand in India, the market evolved and became competitive. Puma needed to continue innovating its marketing strategies to hold onto its leadership position. Meanwhile, domestic footwear brands were expanding their retail footprints and distribution networks beyond their regional presence in order to gain a substantial market share. Could Puma strengthen its branding and hold its market position despite continuing competition from established brands and new competition from domestic companies? Sandeep Puri is affiliated with Institute of Management Technology, Ghaziabad. Sanchita Krishna is affiliated with Institute of Management, Ghaziabad.
Swot Analysis of "Puma's Challenge to Maintain Leadership in India" written by Sandeep Puri, Sanchita Krishna includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Puma Sportswear facing as an external strategic factors. Some of the topics covered in Puma's Challenge to Maintain Leadership in India case study are - Strategic Management Strategies, Emerging markets and Global Business.
Some of the macro environment factors that can be used to understand the Puma's Challenge to Maintain Leadership in India casestudy better are - – technology disruption, talent flight as more people leaving formal jobs, increasing transportation and logistics costs, increasing energy prices, geopolitical disruptions, increasing inequality as vast percentage of new income is going to the top 1%, increasing government debt because of Covid-19 spendings,
central banks are concerned over increasing inflation, banking and financial system is disrupted by Bitcoin and other crypto currencies, etc
Introduction to SWOT Analysis of Puma's Challenge to Maintain Leadership in India
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Puma's Challenge to Maintain Leadership in India case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Puma Sportswear, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Puma Sportswear operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Puma's Challenge to Maintain Leadership in India can be done for the following purposes –
1. Strategic planning using facts provided in Puma's Challenge to Maintain Leadership in India case study
2. Improving business portfolio management of Puma Sportswear
3. Assessing feasibility of the new initiative in Global Business field.
4. Making a Global Business topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Puma Sportswear
Strengths Puma's Challenge to Maintain Leadership in India | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Puma Sportswear in Puma's Challenge to Maintain Leadership in India Harvard Business Review case study are -
Ability to lead change in Global Business field
– Puma Sportswear is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Puma Sportswear in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Cross disciplinary teams
– Horizontal connected teams at the Puma Sportswear are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Superior customer experience
– The customer experience strategy of Puma Sportswear in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Sustainable margins compare to other players in Global Business industry
– Puma's Challenge to Maintain Leadership in India firm has clearly differentiated products in the market place. This has enabled Puma Sportswear to fetch slight price premium compare to the competitors in the Global Business industry. The sustainable margins have also helped Puma Sportswear to invest into research and development (R&D) and innovation.
Diverse revenue streams
– Puma Sportswear is present in almost all the verticals within the industry. This has provided firm in Puma's Challenge to Maintain Leadership in India case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Digital Transformation in Global Business segment
- digital transformation varies from industry to industry. For Puma Sportswear digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Puma Sportswear has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Effective Research and Development (R&D)
– Puma Sportswear has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Puma's Challenge to Maintain Leadership in India - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Learning organization
- Puma Sportswear is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Puma Sportswear is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Puma's Challenge to Maintain Leadership in India Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
High switching costs
– The high switching costs that Puma Sportswear has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Innovation driven organization
– Puma Sportswear is one of the most innovative firm in sector. Manager in Puma's Challenge to Maintain Leadership in India Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Low bargaining power of suppliers
– Suppliers of Puma Sportswear in the sector have low bargaining power. Puma's Challenge to Maintain Leadership in India has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Puma Sportswear to manage not only supply disruptions but also source products at highly competitive prices.
High brand equity
– Puma Sportswear has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Puma Sportswear to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Weaknesses Puma's Challenge to Maintain Leadership in India | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Puma's Challenge to Maintain Leadership in India are -
Need for greater diversity
– Puma Sportswear has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Interest costs
– Compare to the competition, Puma Sportswear has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Workers concerns about automation
– As automation is fast increasing in the segment, Puma Sportswear needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Puma Sportswear supply chain. Even after few cautionary changes mentioned in the HBR case study - Puma's Challenge to Maintain Leadership in India, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Puma Sportswear vulnerable to further global disruptions in South East Asia.
Products dominated business model
– Even though Puma Sportswear has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Puma's Challenge to Maintain Leadership in India should strive to include more intangible value offerings along with its core products and services.
Low market penetration in new markets
– Outside its home market of Puma Sportswear, firm in the HBR case study Puma's Challenge to Maintain Leadership in India needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Capital Spending Reduction
– Even during the low interest decade, Puma Sportswear has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Puma's Challenge to Maintain Leadership in India HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Puma Sportswear has relatively successful track record of launching new products.
Slow to strategic competitive environment developments
– As Puma's Challenge to Maintain Leadership in India HBR case study mentions - Puma Sportswear takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Puma's Challenge to Maintain Leadership in India, it seems that the employees of Puma Sportswear don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
High bargaining power of channel partners
– Because of the regulatory requirements, Sandeep Puri, Sanchita Krishna suggests that, Puma Sportswear is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Opportunities Puma's Challenge to Maintain Leadership in India | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Puma's Challenge to Maintain Leadership in India are -
Low interest rates
– Even though inflation is raising its head in most developed economies, Puma Sportswear can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Puma Sportswear to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Puma Sportswear to hire the very best people irrespective of their geographical location.
Creating value in data economy
– The success of analytics program of Puma Sportswear has opened avenues for new revenue streams for the organization in the industry. This can help Puma Sportswear to build a more holistic ecosystem as suggested in the Puma's Challenge to Maintain Leadership in India case study. Puma Sportswear can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Using analytics as competitive advantage
– Puma Sportswear has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Puma's Challenge to Maintain Leadership in India - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Puma Sportswear to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Puma Sportswear can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Puma Sportswear can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Global Business industry, but it has also influenced the consumer preferences. Puma Sportswear can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Manufacturing automation
– Puma Sportswear can use the latest technology developments to improve its manufacturing and designing process in Global Business segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Developing new processes and practices
– Puma Sportswear can develop new processes and procedures in Global Business industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Global Business industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Puma Sportswear can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Puma Sportswear can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Leveraging digital technologies
– Puma Sportswear can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Learning at scale
– Online learning technologies has now opened space for Puma Sportswear to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Puma Sportswear to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Threats Puma's Challenge to Maintain Leadership in India External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Puma's Challenge to Maintain Leadership in India are -
Increasing wage structure of Puma Sportswear
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Puma Sportswear.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Puma's Challenge to Maintain Leadership in India, Puma Sportswear may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Global Business .
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Puma Sportswear in the Global Business industry. The Global Business industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
High dependence on third party suppliers
– Puma Sportswear high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Easy access to finance
– Easy access to finance in Global Business field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Puma Sportswear can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Puma Sportswear needs to understand the core reasons impacting the Global Business industry. This will help it in building a better workplace.
Shortening product life cycle
– it is one of the major threat that Puma Sportswear is facing in Global Business sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Environmental challenges
– Puma Sportswear needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Puma Sportswear can take advantage of this fund but it will also bring new competitors in the Global Business industry.
Technology acceleration in Forth Industrial Revolution
– Puma Sportswear has witnessed rapid integration of technology during Covid-19 in the Global Business industry. As one of the leading players in the industry, Puma Sportswear needs to keep up with the evolution of technology in the Global Business sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Puma Sportswear business can come under increasing regulations regarding data privacy, data security, etc.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Puma Sportswear.
Weighted SWOT Analysis of Puma's Challenge to Maintain Leadership in India Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Puma's Challenge to Maintain Leadership in India needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Puma's Challenge to Maintain Leadership in India is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Puma's Challenge to Maintain Leadership in India is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Puma's Challenge to Maintain Leadership in India is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Puma Sportswear needs to make to build a sustainable competitive advantage.
