Access the government has built new sports facilities

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access, the government has built new sports facilities which are within 10 minutes’ walk from mahomes of each neighbourhood (“Resourcesto benefit,” 2015).As more people engage themselves in sports, there will automatically be an increase in demand for sports apparels and hence, there is a need for Puma to position itself strategically so as to build a closer relationship to its customers and at the same time, understand their needs and wants. Simultaneously, Puma has to create its own uniqueness in order to have a sustainable competitive advantage over its competitors and to become the market leader in sporting brands.
13 2.3INTERNAL ANALYSIS2.3.1Financial Analysis Financial Assessment201520142013 Current Ratio1.171.351.47 Debtor Collection(Month)1.841.351.22 Creditor Payment Period (Month)3.143.403.52 Stock Turnover (Times)2.812.782.69 Gearing Ratio0.38%0.37%0.36% Return on Capital Employed7.9%11.5%14.2% Return on Sales2.5%4.1%5.1% Gross Profits to Sales45.5%46.2%46.8% Strengths Weaknesses Current Ratio has increased marginally, most likely due to a reduction in debtor collection period. This will help increase Puma’s cash flow. Despite a margin increase in current ratio, it is still way below the industry’s standard of about 2.7. There might be concerns and problems if Puma decides to expand and requires large amounts of cash expenditure. Gearing ratio has been decreasing marginally which means long-term debt is slowly being reduced. The creditor payment period is slowly increasing. This is disadvantageous to Puma as it might encounter cash flow problems if its creditors do not pay up on time. Return on Capital Employed (ROCE) has improved about 3% per year, likely due to the result of improved productivity and modernized theme. The stock turnover ratio is decreasing. This implies poorer sales and therefore excess stock and inventory. A solution can be selling and clearing old stocks by giving discounts to loyal members.
14 2.3.2Value Chain Analysis Barney's (1991) VRIN framework allows a firm to determine if a resource or capability is a source of sustainable competitive advantage. This creates a sustainable business model for the firm. Below are the criteria for competitive advantage: Valuable : The capabilities creates greater value, in terms of relative costs and benefits, than similar capabilities in rival firms Rare: The capabilities is scarce relative to demand for its use among competing firms or for what it produces Inimitable: The capability it is difficult to imitate by rivals Non-substitutable: Other different types of capabilities cannot be function as substitutes
15 Activities Strategy Value Created Evaluation Sustainable? V R I N Administrative Infrastructure Lean organizational structure Clear market positioning, which is to be the "Fastest Sports Brand in the world", focusing on quality and performance of its products. Increase focus towards women market Innovative company culture Efficient communication to create clear unifying goals for staff to create products along the value chain Y Y Y Y Yes Human Resource Management Member of the Fair Company

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