In order to arrive at the correct judgment of what will be puma's opportunities and threats, let analyze the external environments factors affecting the company basing on the PESTEL and industrial competitive factors using five forces framework. And later when determining the company's strengths and weakness I will look at the company's internal capabilities by looking at its value chain, value network and any other competitive factors which gives the company more competitive advantage than rivals.
By definition external environmental factors are those factors which have impact on company although the company has either very little or no control at all over those factors. Usually these factors are classified as PESTEL (Political, Economic, Social, Technological, Environmental and Legal).
ExternalPolitical FactorsThese refer to the following sub-factors:(I)Government stabilityThis has influence to any business. When the government in which Puma operates become unstable politically business will definitely be affected. For example civil wars affect both operations, leisure's and sports events which are Puma's business.
In our case study we saw that after terrorist attacks of September, 11, 2001 and wars in Afghanstan, geopolitical uncertainty led puma to shift its production from Pakistan to China (Puma case study, 2003).
(ii)Foreign Trade RegulationsThese includes treaties and agreements which must be respected by the member countries and Companies (Czinkota, Rivoli and Ronkainen, 1992).For example General Agreement on Tariffs and Trade(GATT),regulations in respect of monopoly and competition standards, Trade fair Act(1997), Paris conventional for the protection of industrial property, to name but a few. These have impact on Puma since wherever it operates it must adhere to.
(iii) Taxation PolicyThese have impact on Puma's business because are an expenses which reduce revenue but it can also be used as the barrier to entry to the targeted potential markets. Some government use to fix...