Case Study #32: PUMA’S House of Brand Strategy Will Support Long-Term Business Vision

Puma is a well-respected and well-recognized global sports lifestyle brand. The company’s logo is a puma poised to pounce. According to Wikipedia, a puma is an “adaptable, generalist species” and a “capable stalk-and-ambush predator”. The word is shared by a range of companies besides the global sports lifestyle brand, ranging from automotive manufacturers to technology companies. The qualities of a puma can represent a company’s competitive spirit and ability to transcend short hardships with smart strategic actions. The puma is also a territorial and reclusive animal, characteristics that are shared with several high-end fashion brands. However, success cannot always be achieved through reclusive actions, nor can it be hunted down in the complex jungle of business opportunities. Puma’s integrated partnership and acquisition strategy enables it to sustainably grow without diminishing the brand’s equity and cannibalizing its core product line. Please click on the “Read More” hack to read a brief analysis of Puma’s partnership and acquisition strategies:

PUMA and the Alexander McQueen partnership: Alexander McQueen is a famous fashion designer who is known for the “juxtaposition between contrasting elements: fragility and strength, tradition and modernity and fluidity and severity”. His collections are distributed in over 39 countries through 194 wholesale accounts including specialty shops and department stores. The partnership with Puma is formed in 2005 and focuses on a footwear collection that conveys the physical and mental power of sports in an innovative way. This partnership can help PUMA expand its global market presence, distribution footprint and customer targets in a way that extends the brand into sports lifestyle without perplexing its core meaning. McQueen integrates unique his design capabilities with Puma’s brand equity to diversify his talents. The purpose of this partnership is to represent the PUMA brand through the powerful associations connected to athletic sports via the PUMA McQueen footwear product line.

PUMA and the Yashuhiro Mihara partnership: Yashuhiro Mihara strives to re-design sneakers. Mihara begins his shoe label, “Mihara Yasuhiro”, in 1997 and distributes the collection to 50 accounts a year later. The partnership with Puma is formed in 2000, five years before the PUMA McQueen partnership. Mihara’s core competencies in footwear design and development are aligned with PUMA’s core competencies in footwear design and development. They are also aligned on the vision of challenging the sneaker design. Specifically, Mihara’s collection with PUMA is inspired by animals and their environments in which they live. This is quite fitting for a brand represented by an animal. The purpose of this partnership is to represent the PUMA brand through the re-definition, re-vitalization and re-engineering of the sneaker via the PUMA Mihara footwear product line.

PUMA acquisition of Tretorn: Tretorn makes refined, yet simple rubber-made products. PUMA acquires Tretorn in 2001. This acquisition may not be as aligned with PUMA’s core brand, but it helps PUMA expand its global market presence, distribution footprint and customer targets. Tretorn’s brand strength in the rubber-made footwear category can help PUMA extend its brand into a recreational sports category, unlike the Mihara or McQueen partnerships which demonstrate the rawness and boldness that are generally associated with competitive sports. The purpose of this acquisition is to represent the PUMA brand as one that is functional for a recreational sports enthusiast, not one who is evoked by competitive sports footwear re-engineering and juxtaposed style elements.

PUMA acquisition of Hussein Chalayan: PUMA acquires a majority stake in Hussein Chalayan in 2008. Chalayan is highly regarded for his performance-based fashion productions. Chalayan is inspired by architectural theories, science and technology. According to PUMA, the relationship puts an emphasis on the company’s more fashion forward ranges, as it continues to post growth in its performance categories of football, motorsport, running and sailing. Growth in core categories can plateau over time, but can be maintained through retention activities at the distributor and customer level. However, innovation and diversification are essential for fashion companies in a market of transient tastes and fierce competition. The purpose PUMA’s acquisition of Chalayan is to adapt to the fashion forward market through an inorganic arrangement, rather than an organic arrangement, to penetrate a market that is on the periphery of the core brand.

PUMA is true to the associations that may stem from its logo: a puma poised to pounce. The company adapts itself to different capabilities for core and peripheral business opportunities. PUMA is a very formidable competitor in the global sports lifestyle category. However, unlike the puma animal, the company is not reclusive or territorial. Instead, PUMA strategically and sustainably “pounces“ on partnerships and acquisitions.