Business 7th Edition Czinkota Terrorism

In order to arrive at the correct judgment of what will be puma’s opportunities and threats, let analyze the external environments factors affecting the company basing on the PESTEL and industrial competitive factors using five forces framework. And later when determining the company’s strengths and weakness I will look at the company’s internal capabilities by looking at its value chain, value network and any other competitive factors which gives the company more competitive advantage than rivals. By definition external environmental factors are those factors which have impact on company although the company has either very little or no control at all over those factors.

Usually these factors are classified as PESTEL (Political, Economic, Social, Technological, Environmental and Legal). External Political Factors These refer to the following sub-factors:(I)Government stabilityThis has influence to any business. When the government in which Puma operates become unstable politically business will definitely be affected. For example civil wars affect both operations, leisure’s and sports events which are Puma’s business. In our case study we saw that after terrorist attacks of September, 11, 2001 and wars in Afghanstan, geopolitical uncertainty led puma to shift its production from Pakistan to China (Puma case study, 2003). (ii)Foreign Trade Regulations These includes treaties and agreements which must be respected by the member countries and Companies (Czinkota, Rivoli and Ronkainen, 1992).For example General Agreement on Tariffs and Trade(GATT),regulations in respect of monopoly and competition standards, Trade fair Act(1997), Paris conventional for the protection of industrial property, to name but a few.

These have impact on Puma since wherever it operates it must adhere to. (iii) Taxation Policy These have impact on Puma’s business because are an expenses which reduce revenue but it can also be used as the barrier to entry to the targeted potential markets. Some government use to fix higher tax to incoming foreign company. Economic Factors These factors have a huge impact on Puma’s business. These are factors like cost of energy, oil, inflation, recession and recovery. For example interest rates(interest on loans and borrowings), inflation and unemployment has got negative impact on business since an increase of one or both of these factors is equivalent to the raise of business running costs at the same time will mean reducing the purchasing power(inflation and unemployment) of the people. GNP Trends can have impact on Puma’s business since a good GNP shows that the per capita income of the people is good.

Michael Czinkota teaches international business and trade in the Graduate School of Business at Georgetown University, where he also served as the chairman of the National Center for Export-Import Studies. Fluent in Spanish and German, he has held professorial appointments in Asia, Australia, Europe, and the. Only, if you need complete ebook International Business 7th Edition please fill out registration form. Project food animals and gender in the age of terror,the metamorphosis by kafka 10 critical. International business michael czinkota iikka a ronkainen michael h moffett on amazoncom free shipping on qualifying offers the.

Positive growth trends means increases on people purchasing power which has a positive influence to Puma. People with big disposable income can spend more on the leisure like sports and also buys more of the products as oppose to the people with less disposal income. Sociocultural factors(i)Population demographic; there are arguments that the population is getting older and therefore Puma should starts to focus on the senior people segment in order to remain profitable and for business growth.

(ii) Uneven income distribution means there are few people with disposable income (the rich) and the majority have very less purchasing power. It is not therefore a market puma should target. (iii) Lifestyle Changes These have the impact in business and it needs the company to be strategically innovative in order to cope with peoples’ taste/fashion changes to retain and persuade the customers. This is one of the factors making customers switch from one product to the others of the same use. (iv) Attitudes to work and leisureSince Puma operates globally it is possible to meet different societies with different attitudes to work and leisure.

Negative attitude to work and leisure will have negative impact to business and positive one will have positive impact to Puma business. Technological FactorsProbably these are the most dramatic forces shaping our destiny which creates whole new markets and destroy others.

These are such as;New discoveries/development and speed of technology transferThese makes the products life cycles get short and creates a fierce competition among industries and hence forcing the company to invest more on R&D so as to remain strategically innovative (cost implication to business). Technological factors can lead to both high rate of obsolescence and Increase Company’s budget (through R&D). Environmental factorsMost of the nations and international bodies have been enacting laws to protect the environment (green issues).Companies have been compulsorily required to adhere to these laws; for example the law to internalise pollution, waste remittance and all legislations regarding safety and environment issues. These have significant impact to business like Puma because it reduces revenue. Legal factorsThe company which operates globally must expect different laws in different markets place within its operations. For example employment laws, health and safety regulations and financial regulations.

It will also need to know advertising and promotion regulations, pricing regulations and consumer protection legislations. (Brassgton and Pettiti, 2007).

Porter’s five forces of competitive strategyWas developed as a way of assessing the attractiveness (profit potential) of different industries. It helps to identify the sources of competition in an industries or sectors (Johnson, scholes and Whittington, 2006).The focus is in the environmental factors influencing this competitiveness; which are as follows;(i) Threats of new entrantsThere are six major sources of barriers to entry which includes economies to scale, capital requirements, and control of distributition channel, customer loyalty, experience and retaliation. (Porter, 1998). To my opinions and with reference to sports industry for more than three decades, threats of entry has a very little influence to Puma. This is because to enter into sports industry you need not only heavy capital and technology but experience and knowledge together with attractive customer base which is the strong barrier to entry. Suppliers Power Suppliers can have power if;(a)There are a concentration of suppliers and they can purchase in big quantities(b)Suppliers have a wide range of customers and can easily switch from one supplier to the other(c)The cost of switching from one Supply another is very high and,(d)If they pose a credible threats of integrating forwards into the industry business. To my opinion these conditions does not apply to Puma and therefore can not be threats because Puma policy on suppliers is such that Puma have no long term relationships with supply and the fact that production, logistics, distribution have been outsourcing surely Puma will be having very few suppliers (mostly not related to production and transport departments).

In addition to that it is not possible for those suppliers to integrate backward into industry’s business. Buyers bargaining power According to Johnson, Scholes and Whittington (2006) buyers are likely to have influence on industry’s business if the following condition prevails;(a)There are concentration of buyers and they purchase a big volume(b)The cost of switching a supplier is lower or involves little risks(c)The buyer pose a credible threats to integrate backwards to make the industry’s product. To my views this factor is not a threat to Puma because buyers are scattered all over the world such that they can not have collective bargaining power and the cost of switching from Puma to another suppliers is very big and risks because Puma is among reliable and paying company. The threat of substitutes Substitutes reduce demand for a particular “class” of product as customers switch to alternative even to the extend that this class of products becomes obsolete (Johnson, Scholes and Whittington, 2006).Looking at the trend of sports industry for more than 40 years you will find that there are always Puma and the big three which dominates the sport industry and each having a very attractive customer base and thus this is a justification that Substitutes is no a threats to Puma. Competitive rivalryRefers to organisations with similar products and services aimed at the same customer group; which for Puma can be Adidas, Nike and Reebok and Fila, Diesel and Prada for football, running, basketball and apparel and accessories respectively.

This is not a threat at all since for this factor to be threats the following conditions must prevail; there are must be numerous competitors and are roughly have equal size and power which is not the case for sports industry(Look at Adidas,Nike, Rebook and Prada,diesel and Fila) all have different power and sizes. The other factor is that for the rivalry to take place the markets must be matured but this is not the case for Puma because although the traditional market segment were heading to mature there are several niches which offer attractive growth, and yet analysts expect growth in geographical regions for football especially Europe, Asia and Americans. Opportunities and threats Looking at the environmental factors and the five forces affecting Puma I have noted some of the opportunities and threats for the company;OpportunitiesTrends of accessories/equipments is attractiveIf accessories can be properly managed can be greater opportunity for puma to grow the business. Currently 60% of the total sales are generated from footwear division, but according to experts apparel and accessories categories are showing attractive growth rate.why not Puma utilise this opportunity by providing its customer variety of such products by focusing on both high-value and stylish product and lower priced products so that can get shares from companies like LVHM, Hugo Boss and Prada. In my opinion Puma can start focusing on virgin markets such as Racing especially Horse racing, skateboarding, snowboarding to mention but a few. Alliances and joint venture Although puma has acquired some of the largest companies such as Swedish Tretorn the European third largest manufacturer of Tennis balls, it is not enough. Alliances and joint venture is one of the major opportunities for Puma to both expand geographical markets for its products and at the same time get access to valuable technology and competences.

Threats Puma faces both intertype and intertypes competitorsPuma’s internal capabilitiesIf the companies are to achieve competitive advantage by delivering value to customers, they need to understand how that value is created or lost (Johnson, Scholes and Whittington, 2006).Puma’s value Chain has been divided into two; Primary and Support activities. If you consider the primary activities side you must understand that puma is described as Virtualized Company. Its in-house resources and activities such as inbound outbound logistics, operations and Procurement have been outsourced. This gives the company to deal with its core competency more effectively.

It does not mean however that the company doesn’t care for the outsourced activities but the management are very careful on the selection of suppliers, logistics providers and producers but also it has a strong information technology infrastructure which helps them to coordinate easily and efficiently. Human resources management Puma with no doubts it has a strong HR by looking at the CEO and his deputy. The CEO being graduate in international business administration and having an ample experience in international business and marketing and worked for Colgate-Palmolive. Also the deputy CEO having an extensive experience in supply chain management and strategy implementation is one of the justifications that the company have strong HR capability. Technology development Puma has a proprietary technology which helps the company in terms of innovation and designing and also in information technology. For example the company due to technological ability developed shudol shoe.

One of the technological innovations can also be seen on “cell technology”. To manage its entire coordination and consolidation from all 80 countries is one of the justifications that Puma is strong technology wise.

Marketing and SalesPuma’s strengths come from the best implementation of its strategies in marketing and sales. Puma’s core competencies have been divided into marketing, brand and product management. Brand ManagementOne of the major reasons for puma’s turnaround was the new positioning of the brand itself (refer to case study).One of the strategies used is sponsorship of either individual player or teams and associated the company with charismatic personalities who proliferate the desired brand perception, recogonition and awareness It has association with biggest names in history of sports such as Pele, Maradona and Cruyff. Recently the CEO, use the technique of associating the company with entertainment professional such as Arnon Milchan (the influential film maker),David Matalon and Peter Chernim these stars making brand appears in several Hollywood production. Apart from sponsoring teams like Jamaica and Cameroon Puma has been organising several events such as Puma street soccer in 1994 and 4SOME competition in 2003 aiming at both displaying puma label and communicating Puma philosophy. By 2003 the brand was so high that super stars like Madonna were proud to wear Puma Product without any compensation. Marketing Puma’s marketing division is responsible for all Puma advertising, promotions, PR and selling.

Strong promotion and advertisement helps Puma be known company globally. Management are careful to select a media of advertisement and promotions.Footbal, Basketbal and running cups have become the mega events watched by viewers from across the global. Puma has been sponsoring either individual or teams.

As a result these events offer excellent marketing opportunities for the company to create awareness of its brand. It has been fine turning its marketing strategies for football cups from 1960’s when Stars like Pele, Maradona and Cuyff to recent stars like Madonna. Product management Product management at Puma concerned with designing, operating and maintaining good products.

This ensures that the company doesn’t only produce but creates a product that people will want to buy. Fistly; the company has a wide range of product which help the company to easily respond to different customers with different levels and interests. For example Puma football, running and basketball and others in accessories and equipments. In terms of technology and also to ensure that it offers customers’ product of high quality Puma has association with engineers and famous designers such as Jil Sander Mihara.For instance Puma innovation was “Cell technology” which convinced famous athletes to be Puma products such Cameroon National soccer team and Jamaica running professionals. Puma is innovative in each stage of the production for example to develop the new “Shudol shoes” worked with the team of Jordan Grand prix engineers.

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