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Source: Financial Times, February 5, 2005
Acquisitions might be Puma's next step
Puma hinted strongly yesterday that acquisitions would form an important part of a fresh four-year expansion plan to be unveiled this year.
Announcing a larger-than-expected 43.5 per cent jump in net profits to €257m ( $331m) last year, Jochen Zeitz, chief executive, said the group's earning power and strong cash flow 'made possible all options for the future'. His comments, coinciding with signs that Puma's exceptional rate of expansion is slowing, are likely to fuel speculation about the direction Mr Zeitz plans to take the group. Mr Zeitz said he was bringing forward Puma's 'phase four' development plan, covering 2006 to 2010, and would give more details in the second half.
Puma's 'phase one' plan rebuilt its financial strength; phases two and three developed the brand. With its trendy image, off-beat products and high profitability, Puma has become one of Germany's most successful companies. However, Mr Zeitz suggested sales growth might slow this year. Sales growth in Europe would soften in the face of a 'difficult market'.
That cautious outlook led to a steep initial fall in Puma's share price. The stock later recovered. Its shares rose strongly last year, peaking at about €220.
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Compare the strategies of Puma and Nike and also the type of organization they are.