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  1. 1. Organizations and their dilemmas Profesor: Claudio Saavedra Alumnos: Helmut Fischer, Cristian, Stefan Schindler, Nicola Westermeir 22.09.2008 1
  2. 2. The company - basic facts <ul><li>founded in 1948 by Rudolph Dassler </li></ul><ul><li>producing Sport/Lifestyle articles: footwear, apparel, accessories </li></ul><ul><li>ca. 9000 employees </li></ul><ul><li>distribution through 130 countries </li></ul><ul><li>Chairman of the board & CEO: </li></ul><ul><li> Jochen Zeitz </li></ul><ul><li>total revenue(2007): 2373 million € </li></ul>2
  3. 3. Historical facts that led to the crisis <ul><li>1932: Dassler Brothers founded “Dassler- shoe company” </li></ul><ul><li>1948: Due to a conflict: Rudolph Dassler founded PUMA </li></ul><ul><li>Reason: PUMA wanted to manufacture a broad range of Sport articles and compete with Nike, Adidas & Reebok, but: failed </li></ul><ul><li>1992: crisis of PUMA: almost insolvency and liquidation of the company </li></ul><ul><li>1993: Last option: Change of PUMAs market orientation & organizational structure </li></ul><ul><li> New CEO: Jochen Zeitz (30 years old) </li></ul><ul><li>2007: stock exchange value: >4000% (1993) </li></ul>3 Steady growth PUMA competitors Adidas Steady decline Steady growth
  4. 4. Management <ul><li>Task 1: “ Create a sense of urgency” </li></ul><ul><li>(was obvious due to possible liquidation of the company) </li></ul><ul><li>Task 2: “ Put together a strong enough team to </li></ul><ul><li>direct the process” : </li></ul><ul><ul><li>Jochen Zeitz (CEO) </li></ul></ul><ul><ul><li>Young, charismatic, dynamic </li></ul></ul><ul><ul><li>Dieter Bock (Head of Finance Department) </li></ul></ul><ul><ul><li>Has been employee of PUMA since 1979 -> knows the companie’s structures </li></ul></ul><ul><ul><li>Antonio Bertone (Chief Marketing Officer) </li></ul></ul><ul><ul><li>Creative , visionary </li></ul></ul><ul><li>Furthermore: employment of known Haute Couture designers as: Alexander McQueen, Phillip Starck, Mihara </li></ul>4
  5. 5. Management <ul><li>Task 3: “ Creating a Vision” </li></ul><ul><li>Managed by the Phase Model of PUMA (=long term oriented business plan) launched in 1993 </li></ul><ul><li>Long term goal/vision: </li></ul><ul><ul><li>...”becoming the most desirable Sport lifestyle company on the planet” </li></ul></ul><ul><li>Phase I: </li></ul><ul><li>Reconstructing PUMA’s worldwide organization in order to build up a profitable business and a solid financial basis for the future </li></ul><ul><li>--> implementing modern organization structures, getting rid of old, stiff systems that are unable to </li></ul><ul><li> grow & expand </li></ul><ul><li>Phase II: </li></ul><ul><li>Improving brand equity </li></ul>5
  6. 6. Management <ul><li>Task 3: “ Creating a Vision” (continued) </li></ul><ul><li>Phase III: </li></ul><ul><li>2002 marked the beginning of PUMAs growth plan: further exploring the potential of the brand by generating a desirable and profitable growth </li></ul><ul><li>Phase IV: </li></ul><ul><li>reinforcing PUMAs position as one of the leading multi-category Sport lifestyle brands </li></ul><ul><li>The Phase Model became part of PUMAs constitution (was written down & could be seen by every employee) </li></ul>6
  7. 7. The Phase Model of PUMA <ul><li>Task 4: “Communicate that vision broadly” </li></ul><ul><li>Positive aspects: </li></ul><ul><li>employees have both: a long term goal and little steps to achieve </li></ul><ul><li>employees become enthusiastic by reaching one step (phase) after another </li></ul><ul><li>Task 5: “ produce sufficient short-term results to give their efforts credibility and to disempower the cynics” </li></ul><ul><li>After succesfull completion 1. step : employees want reach next step; they get the feeling of being an important part of the process of change </li></ul><ul><li>In contrary, if a step fails  employees =desperate  possible breakdown of phase strategy.  Implementing a new strategy = very hard (lack of belief) </li></ul>7
  8. 8. Quote “ In my view, management is about ensuring a process is delivered efficiently but a leadership is about influencing change” (S. Chapple, Senior Sales Director ICON) 8
  9. 9. Leadership style of Jochen Zeitz <ul><li>1993: had to become a leader not only a manager </li></ul><ul><li>Obligation to work on the system and not only in the system </li></ul><ul><li>At the beginning of the process: </li></ul><ul><li>Mixture between autocratic/ creative/transformational/change Leadership styles </li></ul><ul><ul><ul><li>At that time it was a necessity; employees needed a leader who told them where to go. Due to the crisis: people, customers, employees = disorientated </li></ul></ul></ul><ul><ul><ul><li>He had to think beyond individuals, single problems, single solutions </li></ul></ul></ul><ul><ul><ul><li> Rethinking the system to introduce change </li></ul></ul></ul>9
  10. 10. Development of the leadership style of Jochen Zeitz <ul><li>Basis : Main crisis  solved </li></ul><ul><li>Change into a more democratic leadership : </li></ul><ul><li>participation of employees in decision-making process (work shops, creating competition about new ideas) </li></ul><ul><li>Basic Vision can develop </li></ul><ul><li>Employees become part of the vision </li></ul><ul><li>Employees of PUMA became a TEAM that has a vision, everyone is part of </li></ul><ul><li>Task 6: “ Empower employees to act on the vision” </li></ul>10
  11. 11. PUMA’s Strategy <ul><li>Positioning as a lifestyle and a fashion focused but still sportive brand (articles sold in Puma Stores not in shopping malls as mass products) </li></ul><ul><li>Being different by sponsoring extraordinary Sport teams, e.g. Camaron, South African, Jamaican Soccer team </li></ul><ul><li>Being different by advertising their products differently </li></ul><ul><li>Creating a differentiation to Nike, Adidas </li></ul><ul><li>Creating a modern lifestyle, retro style brand at an affordable price </li></ul><ul><li>PUMA achieves to be relatively cheap (compared to e.g Dolce & Gabbana) but different & stylish </li></ul>11
  12. 12. PUMA’s Strategy Impressions 12
  13. 13. Increase of shares Impressions 13
  14. 14. Puma Store 14
  15. 15. Puma´s way of thinking 15 Being different by advertising differently - It is not about the product It is about the brand
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  23. 23. The End 23 Thank you for your attention!!