SWOT Analysis of Puma

Introduction 

Swot analysis of Puma. Puma SE is a German sportswear accessory, apparel, casual footwear, and athletic products manufacturing multinational company. Rudolf Dassler was the founder of Puma, and he laid the foundation of the sportswear brand in 1948. The headquarter of the company is in Herzogenaurach, Germany.

Puma and Adidas have an interesting history, their founders were the Dassler brothers. They jointly launched the sportswear company “Dassler Brothers Shoe Factory.” However, they started to have a conflict of interest on different types of decisions later. Finally, they decided to go separate ways and split the company. One entity became Adidas, and the other became Puma.

According to an estimate, the annual revenue of Puma in 2019 was 5.50 billion Euros. Out of which, the net income of the sportswear company was 262 million Euros.

Puma’s main competitors are Converse, Brooks Sports Inc, ASIC S Corporation, Fila, Reebok, Adidas AGNike, Li Ning, Under Armor, and New Balance.

Today, we’ll discuss the swot analysis of Puma. It would focus on the internal and external factors impacting the world’s leading sportswear brand. Here’s the swot analysis of Puma as follows;

Strengths of Puma

Sponsorships

Puma has sponsored international events like FIFA Football World Cup. Millions of people watch such events. When a company sponsors such an event, it builds up a strong customer base overnight and increases its sales.

The company also hires sports celebrities from different ethnicities in various countries as brand ambassadors. When those celebrities endorse the products of a certain brand, their fans follow them.

Strong Marketing

Puma uses advanced levels of marketing techniques for the promotion of its products. Like TV, social media platforms, and target marketing. The company makes sure that its advertisements are catchy and attract the attention of customers. They increase the sale of the company’s products across the world.

Recognized Brand

Puma has been in the sportswear industry for the past 70 years. The company has always stood toe to toe with the competitive world’s leading brands. Most importantly, people recognize the big cat logo of Puma all over the globe.

Research & Development

According to an estimate, Puma spent approximately more than 61 million Euros on research and development in 2019. The goal is to come up with a better quality product, material, and comfortable to wear and exercise. The company has employed more than 980 employees in the research and development department.

Partnerships

Puma has made partnerships with sport vehicle brands like BMW and Ferrari. Now, the company manufactures racing suits and boots for them and other brands as well. However, such alliances have increased the market share of the company’s products.

Skilled Workforce

According to an estimate, Puma has employed more than 14332 employees in more than 120 countries worldwide. The skilled and highly professional workforce is one of the main reasons behind the success and growth of the sportswear brand.

Weaknesses of Puma

Low Customer Loyalty

Many brands are available in the market, and customers keep on switching brands. It has decreased brand loyalty among customers. The reason is that the company hasn’t differentiated its products/services from the competitive brands. They’re offering the same products at a lower price.

Lower Market Share

Puma is indeed the world’s leading brand. But the company’s market share is lower if you compare it with other competitors like Adidas, Nike, and others. Their increasing marketing share and influence are jeopardizing the company’s market position.

Cheap Labor

Puma is a German brand and the company gets its products manufactured from developing Asian countries. It helps the brand to take advantage of the cheap labor. However, many critics and competitors claim that the brand pays lower wages and exploits the cheap labor.

Opportunities available to Puma

Lifestyle Products

Not everyone is a sports lover and wears sports shirts, boots, and tracksuits. If Puma starts offering casual lifestyle apparel, it would attract the attention of many people.

Expanding Product Portfolio

Puma should consider expanding the product portfolio of the company by adding more products/services. The product range should items other than sports accessories.

Developing Market

Trends like a healthy diet, exercising, and sporting activities are increasing across the world. Different types of sports are popular in various countries. When people play games, they need sporting equipment and accessories. It brings up the role of Puma, the company should be active in developing countries.

Women Fitness Attire

Many women have also been showing interest in the fitness activities like running, walking, yoga, etc. Puma should launch attire and sportswear for women. It’s a new market for the company, and it would increase the market share.

Threats Puma has to face

Counterfeit

Counterfeit products are very common in the 3rd world countries. They use the Puma logo and sell lower quality products at a high price range. As result, many customers can’t see the difference and lose faith in the company after the bad experience.

Competition

The sportswear industry has become very competitive in recent years. Now, customers have many choices to buy a product of a different brand. The market share of Puma’s competitors is increasing, it poses a severe threat to the company.

Economic Recession

The pandemic of covid-19 has pushed the global economy into an economic recession. The buying power of ordinary people has decreased, and they have become reluctant to spend their money on luxury activities. Their focus is on satisfying the basic necessities.

Conclusion: Puma Swot Analysis 

After a careful study of the swot analysis of Puma, we’ve concluded that Puma is indeed the world’s leading sportswear manufacturing company. Economic crisis, increasing competition, and lower brand differences are some of the main threats to the company. Puma should differentiate its products in terms of designs and price to avoid threats and weaknesses.