Organizations and their dilemmasProfesor: Claudio Saavedra

Alumnos: Helmut Fischer, Cristian, Stefan Schindler, Nicola Westermeir

22.09.20081

The company - basic facts

• founded in 1948 by Rudolph Dassler• producing Sport/Lifestyle articles: footwear, apparel, accessories• ca. 9000 employees• distribution through 130 countries• Chairman of the board & CEO: Jochen Zeitz• total revenue(2007): 2373 million €

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Historical facts that led to the crisis

1932: Dassler Brothers founded “Dassler- shoe company”

1948: Due to a conflict: Rudolph Dassler founded PUMA

Reason: PUMA wanted to manufacture a broad range of Sport articles and compete with Nike, Adidas & Reebok, but: failed

1992: crisis of PUMA: almost insolvency and liquidation of the company1993: Last option: Change of PUMAs market orientation & organizational structure

New CEO: Jochen Zeitz (30 years old) 2007: stock exchange value: >4000% (1993)

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Steady growth

PUMA competitors Adidas

Steady decline Steady growth

Management

Task 1: “Create a sense of urgency” (was obvious due to possible liquidation of the company)

Task 2: “Put together a strong enough team to direct the process”:

Jochen Zeitz (CEO)Young, charismatic, dynamicDieter Bock (Head of Finance Department)Has been employee of PUMA since 1979 -> knows the companie’s structuresAntonio Bertone (Chief Marketing Officer)Creative , visionary

Furthermore: employment of known Haute Couture designers as: Alexander McQueen, Phillip Starck, Mihara

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Management

Task 3: “Creating a Vision”

Managed by the Phase Model of PUMA (=long term oriented business plan) launched in 1993Long term goal/vision:

...”becoming the most desirable Sport lifestyle company on the planet”

Phase I: Reconstructing PUMA’s worldwide organization in order to build up

a profitable business and a solid financial basis for the future--> implementing modern organization structures,

getting rid of old, stiff systems that are unable to grow & expand

Phase II:Improving brand equity

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Management

Task 3: “Creating a Vision”(continued)

Phase III:2002 marked the beginning of PUMAs growth plan: further exploring

the potential of the brand by generating a desirable and profitable growthPhase IV:reinforcing PUMAs position as one of the leading multi-category

Sport lifestyle brandsThe Phase Model became part of PUMAs constitution (was written down & could be seen by every employee)

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The Phase Model of PUMA

Task 4: “Communicate that vision broadly”

Positive aspects: • employees have both: a long term goal and little steps to achieve• employees become enthusiastic by reaching one step (phase) after another Task 5: “produce sufficient short-term results to give their efforts credibility and to disempower the cynics”

• After succesfull completion 1. step : employees want reach next step; they get the feeling of being an important part of the process of change• In contrary, if a step fails employees =desperate possible breakdown of phase strategy. Implementing a new strategy = very hard (lack of belief) 7

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)

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Leadership style of Jochen Zeitz

1993: had to become a leader not only a managerObligation to work on the system and not only in the systemAt the beginning of the process:Mixture between autocratic/ creative/transformational/change Leadership styles

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 He had to think beyond individuals, single problems, single solutions

Rethinking the system to introduce change

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Development of the leadership style of Jochen Zeitz

Basis: Main crisis solved

Change into a more democratic leadership:participation of employees in decision-making

process (work shops, creating competition about new ideas)Basic Vision can developEmployees become part of the vision Employees of PUMA became a TEAM that has a vision, everyone is part of

Task 6: “Empower employees to act on the vision”

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PUMA’s Strategy

• Positioning as a lifestyle and a fashion focused but still sportive brand (articles sold in Puma Stores not in shopping malls

as mass products)

• Being different by sponsoring extraordinary Sport teams, e.g. Camaron, South African, Jamaican Soccer team

• Being different by advertising their products differently • Creating a differentiation to Nike, Adidas

• Creating a modern lifestyle, retro style brand at an affordable price

• PUMA achieves to be relatively cheap (compared to e.g Dolce & Gabbana) but different & stylish11

PUMA’s Strategy

Impressions

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Increase of shares

Impressions

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Puma Store

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Puma´s way of thinking

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Being different by advertising differently

-It is not about the product

It is about the brand

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The End

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Thank you for

your attention!!