Business, Management

Puma’s Generic Competitive Strategy & Growth Strategies

Updated on Updated on by Christine Rowland
Puma generic strategy, competitive advantage, Porter, intensive growth strategies, Ansoff Matrix, athletic shoes business case analysis
A Puma Pigeon shoe. Puma’s generic competitive strategy and intensive growth strategies support and utilize competitive advantages in the global athletic footwear, apparel, and equipment industry.

Puma’s generic strategy for competitive advantage aims to make the company’s products different from competitors, considering Michael E. Porter’s model for generic competitive strategies. Puma’s intensive growth strategies focus on gaining a larger market share for its shoes, apparel, and equipment, considering Igor Ansoff’s Matrix of growth strategies. Puma uses its generic strategy and growth strategies to compete with Nike, Adidas, ASICS, New Balance, Under Armour, and others. Puma’s generic competitive strategy supports the firm’s intensive growth strategies.

The combination of Puma’s generic strategy and intensive growth strategies translates to competitive advantages based on innovative sporting goods design for a larger market share. Puma’s operations management further strengthens these business competitive advantages, in support of the enterprise’s generic competitive strategy, intensive growth strategies, and strategic positioning.

Puma’s Generic Competitive Strategy (Porter’s Model)

Puma’s generic strategy is differentiation that is broadly applied to business operations in the global market. Based on Porter’s model, this generic strategy creates competitive advantages through the uniqueness of the business and its products, such as via innovation in athletic footwear design. This generic competitive strategy moves the business toward attaining Puma’s corporate mission and vision. Through differentiation, the resulting competitive advantage empowers the company to reach and satisfy its target customers, despite competitors that offer comparable sporting goods. This generic competitive strategy’s success rests on its alignment with Puma’s intensive growth strategies.

Puma also uses focus strategies for some of its product lines, such as athletic shoes for certain market segments involving specific types of sports activities. The cost leadership (best cost provider) generic strategy is insignificant because Puma’s emphasis is on product innovation, high quality, and technological advancement, entailing relatively high costs.

An implication of differentiation as Puma’s generic competitive strategy is the strategic objective of maintaining high investments in product design and innovation. This strategic objective supports the generic strategy’s requirement of making the business and its sporting goods unique in order to develop competitive advantage.

Additionally, differentiation leads to the corporate strategic objective of using radical marketing strategies in reaching customers in the global market for athletic shoes and accessories. Puma’s marketing mix or 4P helps strengthen competitive advantages through business strategies and tactics for marketing communications for this generic competitive strategy. In relation to the marketing strategies, Puma’s corporate social responsibility (CSR) and ESG strategy helps build the uniqueness of the company’s corporate image and product attractiveness.

Puma’s intensive growth strategies advance the strategic objectives based on the company’s generic competitive strategies for success in the global sportswear and equipment industry.

Puma’s Intensive Growth Strategies (Igor Ansoff Matrix)

Market Penetration (Primary). Puma’s main intensive growth strategy is market penetration. In the Ansoff Matrix, this intensive strategy for growth focuses on selling more of the company’s current sports shoes, apparel, and equipment to current markets. The SWOT analysis of Puma outlines the business strengths used to successfully implement market penetration. This intensive growth strategy depends on the use of competitive advantages based on the company’s generic strategy, which implies innovation in the design of sporting goods. A strategic objective based on market penetration is to grow the business by aggressively marketing Puma’s products.

Product Development (Secondary). Puma’s product development is a secondary intensive strategy for growing the business. For example, the company integrates computing technology in developing and manufacturing its athletic shoes, leading to better products that satisfy athletes and non-athletes alike. Product development as an intensive growth strategy pushes for products’ competitive advantages, thereby contributing to the effectiveness of Puma’s generic competitive strategy of differentiation.

The implementation of product development depends on the company’s organizational structure, especially with regard to resources used for innovating sporting goods. For example, Puma’s corporate structure (company structure) includes human resources that are dedicated to innovation in the design of products.

Also, the success of this intensive growth strategy of product development (and the corporation’s generic competitive strategy of differentiation) depends on how cultural factors enable competitive advantages. Puma’s corporate culture (organizational culture) provides support for human resource development necessary in product innovation.

A strategic objective based on Puma’s product development is to continue R&D investment for new and improved designs of athletic footwear and accessories. Other strategic objectives include the integration of new technologies into sporting goods design and production processes, and the integration of new technologies into the products themselves. A PESTEL/PESTLE analysis of Puma can provide information about the technological and social trends relevant to business design and product development.

Market Development. Puma’s business performance minimally depends on market development as an intensive growth strategy. In this case, the Igor Ansoff Matrix definition of market development entails selling the company’s current sporting goods in new markets or offering current sporting goods for new purposes or uses. However, Puma relies more on market penetration and product development as intensive growth strategies.

An example of implementing market development is offering athletic or sports accessories for a market segment’s casual (non-athletic) use. Puma’s generic strategy of differentiation provides the competitive advantage to ensure this intensive growth strategy’s success. In using market development, a strategic objective is to determine new uses of Puma’s existing products, in order to create new revenue streams for the business.

Diversification. The growth strategy of diversification is minimally significant in Puma’s business development. Diversification involves the development of new products in new industries or markets other than the company’s current ones, which in this case is the market for athletic footwear, apparel, accessories, and equipment. Puma maintains its operations within this current market. This focus means that diversification as an intensive growth strategy has insignificant contribution to the sportswear company’s growth.

Considering that Puma uses differentiation as its generic competitive strategy, diversification would likely involve the same generic strategy to create competitive advantage in new markets or industries. In implementing diversification as its intensive growth strategy, the company would need further market information to determine the best approach to developing competitive advantages.

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