Puma has been in operation since 1950 and has taken pride in being one of the most renowned sports brands in the world. The company is not only interested in making a profit but also on a mission to support an athletic society that is mentally and physically fit. Therefore, it uses sports to attract attention and customers to become a unique brand of athletic products in the market. Being a multinational company, Puma invests a lot in its employees, meaning that it hires the best in the market. Additionally, it understands the value of teamwork, thus providing a conducive work environment that supports productivity vital to remaining relevant in a competitive market. Puma being a German brand, intends to expand to the UK market, which has a promising consumer base. Either way, it will need to consider certain factors, including the target market, possible competition, and risks.
Target market
The British market is wide, but it depends on the products a company provides to make it successful. Therefore, understanding it is vital before investing to avoid unnecessary losses. British consumers love quality and classy products that match their statuses, meaning that Puma will have to step up its game with its sports products. Additionally, it will be essential to ascertain the kind of games and sports people love in the UK to make sure it releases the right products. According to Das (2022), people in the UK engage a lot in netball, football, athletics, and tennis, among others. Therefore, Puma will need to know the sports products that would penetrate the market fast, thus investing in them. The sporting products market has grown significantly in the UK, and according to Tighe (2021), the growth rate is at 1.7%, making it a promising market for Puma.
Possible competition
As much as Puma is a famous brand in sporting products, it is bound to face a lot of competition in the British market. The major sports and games products brands in the UK market include Nike, Adidas, and Reebok (Robert, 2018). Nike is the leading independent brand in the UK, followed by Adidas, meaning that Puma will have to develop a unique product to help penetrate the market and beat the competition (Robert, 2018). Nike accounts for 42% of the entire market, with the rest of the brands accounting for 41% of the market. Therefore, Puma will need to strategize on how to take over the market or at least acquire a reasonable market share.
Risks
Some of the risks that Puma will need to consider before venturing into the British market include political risks, economic risks, and foreign exchange rate risks.
Political risks
The UK market depends on its political stability as it is important to have a conducive environment to run the business. Conflict is never favorable for business, meaning that it will be important for Puma to ascertain the political stability of the UK. According to Hilton (2017), it is dangerous for businesses to depend on politics and politicians for the outcome of the expected profits, which is the case in the UK. That is because the government controls the policies involved in running businesses in the country, which means instability if these policies are not favorable. One of the major political risks in the UK market is Brexit which has affected business with other countries, and Puma will need to establish if it will have any effect on its investment.
Economic risks
The UK market has an economic risk regarding the availability of affordable labor. That is because it has switched to using technology a lot, making manual labor expensive. Another risk concerns conscious buying among consumers meaning that they buy products they find worth buying (Gillham & Duong, 2021). That affects their buying habits which could favor or fail a product in the market. Therefore, Puma will need to ascertain the taste of the targeted consumers to help identify their purchasing behavior and power to help make the right choices. Even though the UK market is promising, the Brexit issue is causing an economic crisis in the market as it makes globalization unachievable to some extent.
Foreign exchange rate risks
Currency fluctuations can cause losses to a business making it vital to invest in a country with a stable currency. Puma is a German brand meaning that it transacts using the Euro while the UK transacts using the Pound Sterling. Therefore, Puma will need to know if the currency exchange rate will be favorable for its business.
Conclusion
Puma would easily thrive in the UK market as it has an extensive market and brings products that have demand. Even though competition may seem high, Puma can find a way to deal with it by introducing new products. Understanding the target market will also be crucial to its success in the UK market as it will offer unique products that match their taste. In that case, Puma stands a chance in the British market as long as it identifies its niche and how to approach the consumers.
References
Das, S. (2022, January 11). Top 10 Most Popular Sports In The United Kingdom. Retrieved from Sports Browser: https://sportsbrowser.net/most-popular-sports-in-the-united-kingdom/
Gillham, J., & Duong, H. (2021, October 1). Reset on risk: four trends shaping the UK economy and how we need to respond. Retrieved from PWC: https://www.pwc.co.uk/services/risk/rethink-risk/insights/four-trends-shaping-uk-economy-how-to-respond.html
Robert, K. (2018, October 10). 10 Biggest Sports Brands in the world. Retrieved from Pledges sport: https://www.pledgesports.org/2018/01/10-biggest-sports-brands-in-the-world/
Tighe, D. (2021, October 8). Sporting goods in the United Kingdom (UK). Retrieved from Statista: https://www.statista.com/topics/5863/sporting-goods-in-the-uk/#dossierKeyfigures
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