What shoes do you wear? It may be New Balance, Nike, or maybe PUMA!
It is likely that you know the brand of Puma and what it does. PUMA is a well-known German multinational corporation specializing in designing, manufacturing, and marketing athletic and casual footwear, apparel, and accessories.
Today, Puma is known to be leading the market space with influence across different market segments which is not easy! Everyone would have grown their brands into the next Puma if it had been easy.
So, what does a brand like Puma face while running the business?
Puma has its own set of strengths, weaknesses, opportunities, and threats.
To understand this, I’d present a detailed SWOT analysis for Puma!
Before we begin, here is a quick overview of the company!
Rudolf Dassler | |
Herzogenaurach, Germany | |
Textile and Footwear | |
€8.465 Billion | |
18,000+ | |
Puma |
SWOT Analysis For Puma, Sprinting Ahead!
Let’s dive into a detailed Puma SWOT analysis!
Strengths Of Puma
Strong Finances
One of the biggest strengths of Puma is its amazing financial performance. The company has been able to churn good profit margins and increase overall revenue in the last few years.
Here is the overall revenue in the last 5 years of Puma
2022 | 8.47 | +24% |
2021 | 6.81 | +30% |
2020 | 5.23 | -5% |
2019 | 5.5 | +18% |
2018 | 4.65 | NA |
The above stats are good considering the company had to undergo the challenges during the pandemic across the globe. Not many companies were able to sustain themselves like Puma.
Sustainable Operations And Manufacturing
PUMA has sustainable development initiatives in place. The company has made efforts to reduce its environmental footprint through various programs. PUMA introduced its first Environmental Profit and Loss (EP&L) statement in 2011, which quantifies the environmental impacts of its operations and supply chain. They have committed to reducing their carbon emissions and have launched several eco-friendly product lines, such as the PUMA x First Mile collection, which uses recycled plastics.
- By 2021 over 99% of Puma’s cotton originated from sustainable sources as well as nearly all of our polyester in apparel and our leather in footwear.
- Until 2025, 100% of Puma’s cotton, polyester, leather, and down feathers as well as paper and cardboard should come from more sustainable sources.
Global Presence
PUMA has a global network and is recognized as a global brand. PUMA’s products are sold in over 120+ countries, and the company has a presence on every continent. They operate numerous retail stores and have a significant online presence to reach customers worldwide. PUMA’s global network includes manufacturing facilities, distribution centers, and partnerships with retailers and distributors in various regions. This extensive global network allows PUMA to reach a wide and diverse customer base around the world.
Successful Partnerships With Brands, Athletes, And Influencers
PUMA has a history of collaborating with various brands, celebrities, and organizations to create unique and limited-edition products.
Some of the notable partnerships and collaborations that PUMA has engaged in include:
- Rihanna
PUMA’s collaboration with singer and fashion icon Rihanna, known as “FENTY PUMA by Rihanna,” has been highly successful. - BMW
PUMA has partnered with the German automobile manufacturer BMW to create a line of motorsport-inspired athletic wear and footwear. - Selena Gomez
PUMA signed a partnership deal with singer and actress Selena Gomez. She has been involved in designing and promoting PUMA’s activewear collections, including the “SG x PUMA” line. - Virat Kohli
PUMA has a long-standing association with Indian cricketer Virat Kohli. He represents PUMA in India and has launched his athleisure brand, “One8,” in collaboration with the company. - The Weeknd
Canadian singer-songwriter The Weeknd has been a brand ambassador for PUMA and has collaborated on his own line of sneakers and apparel called “PUMA x XO.” - Kylie Jenner
Reality TV star and entrepreneur Kylie Jenner had a partnership with PUMA, which helped the brand appeal to a younger and fashion-forward audience.
Offering Innovative Designs And Products
Puma has been investing a lot to innovate and offer products that are out of the standard league. It has a history of innovating and producing something that engages the customer at a glance!
Here are some notable innovations and technologies introduced by PUMA:
- PUMA Disc Closure System
PUMA introduced the Disc Closure System in the early 1990s, allowing wearers to tighten and secure their shoes with a simple twist of a dial. - evoKNIT
PUMA’s evoKNIT technology is designed to create seamless, lightweight, and breathable knit uppers for shoes. - NetFit
The PUMA NetFit system features an innovative net-like structure on the upper of the shoe, allowing wearers to customize the lacing to their liking. - LQDCELL
PUMA’s LQDCELL cushioning technology is engineered to provide stable cushioning and support for athletes. It features hexagonal cells that compress and rebound for responsive comfort. - HYBRID Foam
PUMA’s HYBRID Foam combines two of its most responsive foams: NRGY beads and IGNITE foam. This hybrid cushioning technology offers superior energy return and cushioning for running shoes. - PUMAGRIP
PUMA’s rubber outsole technology, known as PUMAGRIP, is engineered for optimal traction and grip on various surfaces. It enhances the performance of athletic and outdoor footwear.
Diversified Product Offerings
Puma does not rely on one product segment to drive revenues. This helps Puma to engage with customers and safeguard profit margins for themselves.
Here are the top 3 product categories in which Puma is offering its products.
- Footwear
Puma’s footwear division encompasses athletic and casual shoes tailored for various sports such as soccer, running, training, basketball, and golf, alongside lifestyle-oriented shoe options. - Apparel
Puma boasts an extensive array of sportswear, including jerseys, jackets, hoodies, trousers, shorts, and a diverse selection of activewear designed for men, women, and children. Additionally, the company offers lifestyle-oriented apparel, featuring streetwear and casual clothing. - Accessories
The accessories category includes an assortment of items ranging from bags, caps, socks, and sports-related gear that complement Puma’s comprehensive footwear and apparel collections. Puma further extends its portfolio to sports equipment, encompassing soccer balls, golf clubs, and protective gear for athletes.
Footwear | 51% | 4.317 |
Apparel | 34.2% | 2.89 |
Accessories | 14.8% | 1.25 |
Weaknesses Of Puma
Major Manufacturing From Third-Party Vendors
Puma has the resources to run first-hand manufacturing. However, it is still not doing it to its full potential. It is dependent on many third-party manufacturers. This substantial dependence on third-party manufacturers, predominantly situated in Asia, for its product manufacturing leaves the company vulnerable to several risks. These risks encompass potential disruptions in the supply chain, challenges related to maintaining quality control standards, and the impact of fluctuations in production costs.
Lower Market And Revenue Share Compared To Competitors
Puma’s market presence in certain emerging economies, such as China and India, remains less formidable compared to some of its competitors. In these regions, Puma has yet to capture a significant market share, and it lags behind rivals like Nike and Adidas in terms of brand penetration and recognition.
Here are the revenue numbers for the last 3 years of Puma, Nike, and Adidas!
2022 | 8.47 | 22.51 | 42.65 |
2021 | 6.81 | 21.23 | 36.53 |
2020 | 5.23 | 19.84 | 33.67 |
Just see the massive difference and gap in the revenue of Puma with Adidas and Nike!
Pricing Issues. Hence, Low Customer Loyalty
Puma has delivered amazing innovative products. But, the price range in which it offers for the customers is not acceptable to many. Many brands offer similar products or services, often at lower prices, which has made it challenging for customers to remain loyal to one particular brand. This has impacted customer loyalty for Puma. Many customers switch to different brands for better deals.
Opportunities For Puma
Expand In the Asian Market
Puma manufactures its products from third-party vendors in the Asian market. However, as I discussed the market share of Puma is still low compared to Nike, Adidas, or other brands.
Emerging markets such as China, India, and Southeast Asia hold substantial growth opportunities due to the expanding middle-class population and the rising demand for sportswear. Puma has the potential to concentrate its efforts on extending its footprint and enhancing its market position in these areas.
Invest In Research And Development
Puma invests a good amount in research and development. However, the amount is still less compared to its competitors. This gives the competitors an extra edge over Puma.
Adidas spend 153 Million Euros in the year 2022
Whereas, Puma spent around 82 Million Euros.
Yes, the revenue difference is also huge. But, somehow, research and development directly impact the profit margins by allowing the company to penetrate the market.
Leverage E-Commerce Growth
The worldwide e-commerce sector is experiencing rapid growth, creating avenues for Puma to expand its online sales and engage with a broader customer base. By investing in a seamless online shopping experience, precision-targeted digital marketing, and streamlined logistics, the company can harness this trend to its advantage.
Tap Into Casual And Athleisure Wear
The athleisure and casual wear sectors have seen remarkable growth in recent times. Puma can delve deeper into this market by unveiling inventive and stylish products that align with the evolving tastes of consumers. Considering Puma already has a customer base and an established brand, it will help Puma enter this market with a little ease.
Threats To Puma
Strong Competition
Puma finds itself in a fiercely competitive industry, where established giants like Nike and Adidas hold sway over the market. Meanwhile, new contenders and smaller brands further intensify the competitive environment, adding pressure on Puma’s market share, pricing strategies, and overall profitability.
Remember the data I presented before in each table. Puma lags behind Adidas and Nike by a huge margin. We cannot conclude that Puma is a dead-end. However, the competition it faces is immense!
Issues Through Economic Fluctuations
Global economic fluctuations have the potential to impact consumer spending patterns, particularly in the realm of discretionary items like sportswear, which could lead to reduced demand for Puma’s products. Economic instability in crucial markets presents a significant risk, as it could negatively affect the company’s sales and overall revenue.
Issues Through Currency Fluctuations
Being a global company, Puma is inherently susceptible to currency fluctuations, which have the potential to affect its financial performance. A robust Euro can result in higher prices for Puma’s products in international markets, potentially impacting sales. Conversely, a weakened Euro can lead to increased costs for imported raw materials, further complicating the company’s financial landscape.
Threat Of Counterfeit Products
The worldwide sportswear market is vulnerable to counterfeit products, posing a threat to Puma’s brand image and potentially harming its sales. It is imperative for the company to safeguard its intellectual property and implement robust measures to combat the proliferation of counterfeit goods in the market.
Bottom Line
In conclusion, Puma stands as a formidable player in the sportswear industry, showcasing several strengths that have contributed to its consistent growth, including its strong financial performance, commitment to sustainable operations, and a global presence that spans over 120 countries. Puma has successfully forged partnerships with renowned brands, athletes, and influencers, and continues to offer innovative designs and products that capture consumer attention. With diversified product offerings, including footwear, apparel, and accessories, Puma has managed to engage a broad customer base.
However, the company faces some notable weaknesses, such as its heavy reliance on third-party manufacturers, particularly in Asia, and its lower market share in emerging economies compared to competitors like Nike and Adidas. Pricing challenges have led to lower customer loyalty, as consumers often switch to brands offering similar products at more competitive prices.
Opportunities for Puma include expanding its presence in Asian markets, increasing investments in research and development, and capitalizing on the growth of e-commerce. Additionally, tapping into the athleisure and casual wear segments presents a promising avenue for growth.
On the flip side, Puma contends with a highly competitive landscape, where established giants and new entrants challenge its market share and profitability. Economic fluctuations and currency risks can impact consumer spending and financial performance. Lastly, the threat of counterfeit products poses risks to the brand’s reputation and sales.
In navigating these opportunities and challenges, Puma must continue to innovate, adapt, and maintain a customer-centric approach to secure its position as a global leader in sportswear.