PUMA Company Analysis
PUMA Company manufacture products like casual and sports shoes and t-shirts. The company founders, prepare for a presentation for investors, about new occasional footwear brand. Founders seek for more funds to boost their production, in units, and also get new ideas on how to expand casual ware sales. The company avails financial record to help calculate product margin per unit and analyse expense and sales. The new occasional foot ware captures the heart of many people especially youths. Puma is has established stores in the international markets; customers trust their brands.
Every company needs money to buy raw material and manufacture products. Companies seek investors help through sales of securities or impressive product presentation. New companies lack trust from many people, might be difficult to get investors. Bank institution gives loans to start a business. Investors attach money to a business, with a higher probability of success in future, their interest key. Company founders or directors and shareholders interests at times conflict. Product presentation captures the audience attention and wins their money. Companies acquire fund for a new product, from investors through the sale of securities. An excellent and unique market gap gives a company success, but poor product selection makes a company for failing. It is vital to provide product details, identify product impact on environment, society and economy, and point out strength and weakness of the way a product is presented to the audience.
PUMA Company produces casual footwear which they sell from their main offices and online. The Raw materials to make footwear are natural, unique and true to life in comparison with our competitors. The founders have many employees, and at the end of each month, they pay salaries to themselves and employees. The cost of shipping material is $2 per unit out of 700 units. PUMA Company advertises foot ware through social media platform costing $1000 every month. On this month alone the company produced and sold 1000 units of casual footwear. One piece of casual foot ware retails at $120, and in this month a total sales are equal to $120000. The company uses the internet to connect with foot ware customers on social media (Facebook, Twitter, and WhatsApp) which costs, 90 dollars (Clor‐Proell, Proell & Warfield 2014, p. 45).
Finances made from selling footwear product are deposited on a daily basis, and on withdrawal, a cost of 100 dollars is incurred. Each month the company spends $150 on utilities. The manager’s use a total of 1000 dollars to travel thus establish a market for casual footwear. The contribution margin per unit of company sales is 82 dollars which gives a total contribution margin of $49200 work. The company founders plan to acquire a new machine costing a total of $50000, to aid in the production of casual footwear. New equipment purchased speeds up production process giving cash flow of $15000, $28000 and $49000 respectively for the next three years. The company pay on credit during the purchase of raw materials and has a retained earnings of $4500. The company looks forward to hiring a part-time employee to handle packing and shipping at a rate 9 dollars per hour for 38 hours in a month costing a total of 342 dollars. (Aspara & Chakravarti 2015, p. 948)
Product Social/ economic/Environment Impact
Casual foot ware product has an attractive look and comfortable to wear. The product has some effects on the environment, also has social and economic effects. Some people in the society love the product especially youths. Most youths abandon other footwear products to Puma casual footwear. The product protects a person’s legs and keeps them warm. Youths prefer a good looking shoe and comfortable. (Clor‐Proell, Proell & Warfield 2014, p.66)
The casual footwear is economical, as both low income and high income earning individual, can afford to purchase the product. Low product cost provides an opportunity to many people to enjoy the product benefit. Some youths attracted to the foot ware are unemployed due to either at school or seeking for a job. Low cost of the product contributes to its high sales despite being new in the market. Customers praise the company due offering a foot ware products with a fair price. If the company increases the cost of the product, some people will reject the product and embrace of his competitor.
Rubber doesn’t decompose but can be recycled. Disposed shoes trap water which becomes breeding ground for mosquitos which infect people with malaria. Rubber also produce a chemical when heated by the sun thus causing deaths of creatures like ants. Some people get rid of disposed shoes through burning, releasing smoke and harmful gas to the atmosphere. Smoke and gas result in global warming causing great seasons and weather changes. Foot ware manufacture uses a natural product of rubber-producing trees. Using trees as product raw material leads to destruction and cutting down trees. Destroying forests, cutting down trees reduces the amount of rainfall leading to draught. Forests are natural habitats for animals, destroying a forest cause wild animals to migrate to other parts of a continent. Tourism industry collapse as there are no animals for tourists to see.
Strength and Weakness of Product Presentation and Preparation
During footwear product presentation to a team of investors, we prepare handouts with short information about the company product. When planning for an exhibition, we keep tight on the scope of presentation. Financial statements are the first step to make it possible to calculate product margin and the total contribution of the product per unit. Excellent and detailed product report builds confidence. Preparation helps on understanding more about the product, competitors and financial records of the company (Latham & Tello 2016, p. 85). At times during preparation, a person may leave essential details out which may win the hearts of investors. Development at times makes people overconfident thus losing a chance with investors. Preparing a lengthy report sometimes waste time and bores investors thus losing interest in boosting the sales of casual footwear product. Preparation is through practice, standing in front of students in class thus gaining confidence and correcting mistakes.
Presentation of footwear product requires us to have confidence in himself and his product. The display gives the audience a clear picture of the product. Bringing forward a sample of casual footwear offers investors (audience) a chance to experience the product for assessment. The presentation gives more details about the product performance in the market and future estimates of sales. Every company aim is to make large purchases thus good profit returns. Investors try to negotiate a specific stake plus loyalty in the company, in exchange for his investment. The presentation gives an opportunity for clarification between investors and company owners. Confidence and faith of success of new casual footwear product make investors trust the product. During a performance the founders second guess themselves
Before the presentation of a product to the audience a person should practice and prepare well to avoid freezing in the middle. Some people get nervous in front of an audience thus forgetting crucial information making investor shy away. Investors value their money a lot as they have to invest in a profitable business opportunity. Investors pay attention to the market trend, there for easy to predict the future of a product in the market. PUMA Company, casual foot ware despite being new in the market, their business is already making progress. The company distinguishes itself from others through the use of unique and durable material to make casual footwear. Customers are always attracted to products that are individual and long lasting thus making companies like Puma estimate high sales proceeds. The manager’s know how to take care of company finance through minimising expenses that the company every month. If company managers make a sound decision, there is the success and company expansion. If the founders consider putting measures in place to reduce the cost of casual foot ware production, the monthly sales will increase further. Rudolf Dassler believes hiring professionals in the production field to help in company management. The company new product will be recording high transactions, internationally, as customers trust their brands. Puma casual footwear is especially useful during winter and rainy seasons.
PUMA should also establish more offices in the town where many people can access. For the company to make a good profit, they have to increase their sales and cut some of the fixed costs that are high for conference fee. The company has to improve the strategies of marketing to convince people about the importance of the new product. For customers to adopt a product, they have first to try it out and sees if it satisfies they need or not. The company should listen to customers complain which will help them to make changes in less satisfying factors. The company should offer a discount to promote customers thus boosting their sales. The company should treat their customer’s well, to recommend friends and family to new casual foot ware; the company sales will increase with time. Company share has performed well in the market, meaning its demand is high.
Aspara, J. and Chakravarti, A., 2015. Investors’ reactions to company advertisements: the powerful effect of product-featuring ads. European Journal of Marketing, 49(5/6), pp.943-967.
Clor‐Proell, S.M., Proell, C.A. and Warfield, T.D., 2014. The effects of presentation salience and measurement subjectivity on nonprofessional investors’ fair value judgments. Contemporary Accounting Research, 31(1), pp.45-66.
Latham, S. and Tello, S.F., 2016. Examining Entrepreneurs’ Presentation Effectiveness in Generating Stakeholder Interest: Observations from the Medical Device Industry. Journal of Small Business Management, 54(1), pp.85-101.