Nevertheless, the company intends to fully utilise Liberty holdings after the full takeover,to position itself strategically in the China market. The Sports lifestyle Company an also strengthen its market share and maximise its profits by tapping into the broader Asian market. However, it will need to establishing its brand image and dominating the Chinese market first. Puma’s foreign direct investment in China has the potential of driving its growth strategy and capturing all opportunities on the broader Asian market as part of the firm’s strategic plan for the next five years. The planned five-year strategy forecasts that in the long-term, Puma will be able to attain a sales target of four billion Euros.
Puma 4To attain its ambitious strategic plan for the Asia Pacific market segment, the company will increase its current operations in China. First, the company will upgrade its existing stores tohave advanced modern designs. Second, the firm considers opening new Puma Stores to increasepresence as well as strengthen its cooperation with some of the local business partners.Background information on PumaFinancial positionPuma has been experiencing a steady financial growth over the years. In the 2017 fiscal period, the firm suffered a positive trend as the working capital mostly promoted the increment of cash flow from business activity operations. In the same period, the company experienced a 5.3 million dollars increment of cash outflow from investing transactions compared to the previous year. As a result, overall free cash flow increased to 84.3 million dollars in 2017 of the prior year’s 70.5 million dollars. Also, there was a 7 million dollars increment of cash flow from financing activity in 2017 compared to 2016. However, the increase is primarily due to a loan to finance capital expenditure (Wall Street Journal, 2018).
Puma 5Figure 1: Puma 2017 Cash flow statementOwnership and legal structurePuma became a public company in 1986, after being listed at the Frankfurt Stock Exchange. The largest shareholders include the former Pinault-Printemps-Redoute group now known as the French luxury group Kering that ha sixteen per cent shares and Artemis SA has twenty-nine per cent of the share capital. Bjørn Gulden, a former professional footballer, has been the CEO since July 2013. As of 2017, Puma SE employs more than 13,000 people worldwide and distributes its products in more than 120 countries. Regarding the Shareholders’ equity, the Subscribed Capital of PUMA SE. in 2017 totalled 38.6 million dollars. The subscribed capital is divided into roughly fifteen million bearer shares with each no-par value share match up to 2.56 dollars of the subscribed share capital (Wall Street Journal, 2018).Figure 2: Changes in the circulating sharesBackground Information on the Business Environment in ChinaPESTEL analysis of ChinaPolitical factors
Puma 6China is the fourth largest economy by land area and is one of the most powerful states inthe world. China also enjoys a relatively stable political setup. However, the ruling communist party has curtailed some political freedoms.
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