THE RISE OF THE DAVID: a PUMA vs the GIANTS.PRESENTED BY: Rajdyuti Dasgupta
A BRIEF HISTORY: After World War II, brothers Adolf & Rudolf Dassler, co-founders of GebruderDasslerSchuhfabrik,had a falling out & went their separate ways.Adolf using a combination of his nickname “ADI” & the first 3 letters of their last name,foundedADIDAS.Rudolf started his own company &,after deciding that Ruda dint sound great, called it PUMA.
THE STRATEGIES: ADIDAS CORE COMPETENCY: ADIDAS has been known for its technically advanced shoes & has grown by consistently being a major player at world sporting events such as the Olympic games & the Football World Cup. ADIDAS shoes was the most popular brand worn in the entire Football Worldcup,1952. It was the only shoe brand worn by the entire Football World Cup in 1962. .
In 1984 Los Angeles Olympics,124 out of 140 nations wore Adidas IN 1984,124 OUT OF 140 COMPETING NATIONS IN LOS ANGELES OLYMICS WORE ADIDAS. WINNING 259 GOLD MEDALS! IN 1985 ADIDAS WAS THE SHOE OF CHOICE FOR 11 OUT OF 17 EUROPEAN BASKETBALL TEAMS.
STRATEGIES ADOPTED TO TURN ADIDAS AROUND FROM BANKRUPTCY REASON: Failure to keep up with fashion trends. It was positioned to be for the more serious athlete but failed to attract the fashion conscious youth. MEASURES: 1). Made English the official language. 2). Put Americans & other foreigners in top posts 3). RELATED DIVERSIFICATION BY ACQUISITION: Acquired the winter sports equipment company Salomon which was also the owner of the Golf company TaylorMade.
REPOSITIONING: TO WORK ON ITS IMAGE.
THE 2008 BEIJING OLYMPICS: OFFICIAL SPORTSWEAR PARTNER.
REPOSITIONING STRATEGY: DIVESTITURE (A Defensive Strategy) : In 2005 Adidas sold the Salomon group for less than half the 1997 purchase price, while keeping the profitable golf equipment company Taylormade. PARTNERSHIP with Porsche design created to launch a premium line for luxury sports products as sports shoes and apparel. Contd…
…contd. ACQUISITION OF REEBOK: Announced in 2005 & completed in 2006 This acquisition gave Adidas the necessary foothold in the US market. ENHANCED PROMOTION: Reebok had endorsement deals with American NBA & NFL. As of 2006-07 season all NBA (men’s & women’s) all leagues would carry the logo for 11 years!
ADIDAS ORIGINALS STORES OPENED IN 2001….
FOUNDED BY RUDOLF DASSLER IN 1948. WORN BY: DIEGO MARADONA. BRUNO CONTI. MARTINA NAVRATILOVA. BORIS BECKER. THOUGH ALWAYS A BIT SLOW IN GETTING ENDORSEMENTS (THAN ADIDAS) FROM ENTIRE TEAMS,IT DID WELL TILL 1980S…
WOES OF PUMA: Just lile ADIDAS , PUMA did not keep up with the trends of the changing markets & quickly lost its position as a top sports footwear company. There after puma shoes could only be found at discount prices & Puma began writing losses in 1986. By 1989 the Dassler family sold its inherited shares to the trade group Cosa Liebermann By early 1990 it was in a debt of $100 million & close to bankruptcy.
Joining of Jochen Zeitz-1990youngest CEO in 1993. VISION : “To turn Puma into the world’s most desirable sports lifestyle brand”
PHASE 1 (1993-1997) Restructuring. Retrenchment. Moving production to Asia. Several warehouses were replaced by central distribution center.
Phase 2 (1998-2001) & 3 (2002-2005) Phase 2 concentrated on creating a new image for Puma,via marketing and product development,which would be the main driving force behind further growth. Phase 3 focused on exploring the potential of the brand. New styles and designs were constantly being released.
PROMOTION: ads were placed in magazines such as Vogue. New lines were created for running biking skateboarding and tennis. ASSOCIATION: MANY African teams chose Puma as sponsor. Cameroon went on to win the African Nations Cup 2000. 2002- Italian National Team, Jamaican Olympics team. 2005- Swedish Team. ACQUISITION: Acuired 25% stake in LogoAthletic in 1999 which had contracts with NFL. REPOSITIONING: to keep their stylish image, shoes and fashion should not be found everywhere and only in limited quantities.
PHASE 4 (2006-2010) Expanding Puma into further new products & segments as well as new brands and new markets. Sports partnership with Ducati. Moved deeper into the luxury segment by including a golf collection
PPR ORGANIZATIONAL CHART AS OF DEC 31ST 2006.
PPR BUYS PUMA IN A $7 BILLION DEAL… Paris based PPR acquired a controlling stake in Puma via its subsidiary Sapardis which bought a 21% stake in Puma. PPR is the 3rd largest liuxury brand in the world and the takeover was a friendly one.