Puma Case Study

3605 words - 14 pages

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).ExternalPolitical FactorsThese 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 RegulationsThese 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 PolicyThese 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 FactorsThese 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. 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...

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