abhishreshthaa
Abhijeet S
Auto-Owners Insurance is a Fortune 500 Company, and has been every year since 2002. The company was founded in 1916 by Vernon Moulton in Mount Pleasant, Michigan. Today, it is headquartered in Delta Township, Michigan and has over 65 full service and claims branches nationwide. Although the name suggests only auto insurance is provided, it actually provides many lines of insurance including property, liability, auto, garage, workers compensation, farm, and life. It has been rated by J.D. Power and Associates for having the "highest claims satisfaction" in auto insurance for 2009 and 2010.[2] Subsidiary Companies include: Auto-Owners Life Insurance Company, Home-Owners Insurance Company, Owners-Insurance Company, Property-Owners Insurance Company, and Southern-Owners Insurance Company. It's infrastructure is primarily mainframe-based.
Auto-Owners Insurance is the "16th largest Michigan-based company on the FORTUNE 500 list," according to PR Newswire. "With $5.017 billion in revenue for 2009, [the company remains] the second largest property-casualty mutual insurance company in the nation."[3]
Auto-Owners history can be traced back from its present management to the early leadership of Vern V. Moulton who, in 1916, organized Auto-Owners Insurance Company in Mt. Pleasant, Michigan The infant Company had no capital and was housed in one room of a bank building.[4]
Auto-Owners operated in Mt. Pleasant for a little less than a year. In 1917, V.V. Moulton literally picked up the Company, placed it under his arm and in his pocket ("The Auto-Owners Insurance Co. financial statement at the end of 1916 revealed assets of $174, a networth of $0, annual premium income of $2,060, and 10 losses paid totalling $186."[5]), and moved Auto-Owners to Lansing, Michigan.
It wasn't long before the Depression began when Auto-Owners weathered the lowest point of that era - the bank holidays of February 1933. The Company demonstrated its corporate strength and financial stability by paying all claims promptly, daily, and in cash. The firm was then writing more than $2.5 million in insurance premiums.
Auto-Owners entered the general casualty insurance field in 1940, having previously written only automobile insurance. During the next five years, the Company found it necessary to acquire three more buildings in the vicinity of its main office to accommodate its continued growth. In 1951, it consolidated all of its offices into one home office, which was constructed in downtown Lansing.
The Company wrote business in Michigan exclusively from 1916 until 1935, when it began writing insurance in Indiana and Ohio. In the '40s, Auto-Owners extended operations to include Illinois and Minnesota and, during the '50s, Iowa, North and South Dakota, Florida, Missouri, Alabama, Tennessee, and North and South Carolina. The Company began operations in Wisconsin in 1969, Georgia in 1973, Nebraska in 1978, Arizona in 1982, Virginia in 1989, Kentucky in 1994, Kansas in 1996, Utah in 1997, Colorado in 1999, Arkansas in 2005 and Idaho in 2006.
The company is spending about 2.5% to 3.5% of its revenue in supply chain in order to improve the quality as well as the development of its products. The company focuses their R&D from different renowned designers from different part of the globe with different cultural backgrounds in order to improve the product line of the company as well as to maintain their good relationship with their customers.
The company is focusing their innovation process in different part of the production, and they are working with different engineering teams in order to learn more things about the materials that can be helpful for a new product.
Above all, the company focuses their innovation and development process by focusing on famous and influential figures in terms of entertainment, music, lifestyle and business, and sports.
A winning strategy that fits the situation of a company well can help to achieve a continuous competitive advantage. This statement can be applied in the situation of Puma AG. There are different strategies that have been implemented by the company in order to improve the position and overall performance of the company in the global industry.
In 2007, the company had been able to boost its heritage business by French 77, it is a product concept that was inspired by 70’s tennis superstar Guillermo Villa. The focus of the product concept focuses on the sport-fashion crossover, timelessness, sophistication as well as irreverence (Puma 2005 p. 3). In addition to that, the company also focuses on the side of women by showing the sophisticated side of the women’s category of the company’s products. It had been showed in the I’m Going campaign (Puma 2005, p. 4).
One of the primary evidence to the success of the strategy of the company showed during 2006, when Puma had joined the top echelon in the world of team sports suppliers. The said event happens due to the efforts as well as continuous visibility of the company’s product in the Women’s football World Cup. Puma is considered as the third most worn by having 25% share. The products are also visible in the Rugby World Cup, where in the company sponsored greater than 70% of the athletes.
On the other hand, there is also some situation which shows that the strategies of the company are not enough in order to maintain its position in the market. One of this is the decrease in its net income.
The company can generate revenues by their business of selling different sports related products. Puma is selling their products to different kinds of retailers as well as specialty shops. The company produces its athletic footwear having €1.4 billion or 58% of the revenue during 2007; apparel having €827.3million or 38%; and accessories having €158.3 million or 6.7% (see Appendix D). All of the said line of products is under four brands which are Puma, Tretorn, Mihara and the Rudolf Faddler Schuhfabrik (cited in PPR 2007). From 1999 up to 2000, we can see that that the sales of the company had grown so as the expences (see Appendix C). That is the reason why the net sales of the company are also low.
It is also important to show that the total revenue of the company from 2006 to 2007 had decrease by 0.6%. The said event was the effect of the weakening of different currencies against the euro. But other than that relationship, we can see a significant change of sales every year from 1993. The total revenue had increased to €541.3 million.
As the sales of the company grows, so as its expenses. These expenses main focuses in the different activities from marketing to the retailing that summed up to €272 million during 2005, and increased to €420 million during the year of 2006 and 2007. In general, the operating expenses had increased by 50% between the year of 2005 and 2006 that caused the net income of the company to fall (Puma 2007, p. 2) (see Appendix E).
Another important weakness of the company is its inability to have a huge exposure in the US market. This is due to the fact that Puma focuses more on the European countries. It is important for the company to focus their strategies in raising brand awareness in the United States because it is considered as one of those most powerful countries in terms of sports in the world.
Puma AG doesn’t have a strong exposure in the US market, only 25.3% of its sales during 2007 came from the region of America. The said rate had fall from 28.3% during 2006 (Puma 2007, p. 9) (See Appendix F). On the other hand, the company is focusing its strategies in different emerging markets by pursuing expansion in countries like South Korea, Croatia as well as the Romania.
In addition to that the backlogs are considered as the different orders that have been set to ship within the next 6 months had painted the similar picture. For 12 years, straight, the backlog during the end of the fiscal years is increasing. During the end of 2007, the company had a total of had €1.2 billion in backlog, having a total of 6.1% increase compare to the backlog of the prior year. However, the company had managed the said increase in spite of the 3.2% decrease in the sales in the region of the America that was caused by the market of the US. The said decrease was compensated by the backlog growth, having a total of 26% in the Asia/Pacific Region. Furthermore, that is the result of the increasing brand awareness campaign of the company in Asia (Puma 2007).
The following data and information that have been showed and explained demonstrates that the techniques and the strategies of the company is not yet that superior in order to regain the past position of the company in the market. However, it can be considered as a big development from it’s almost bankruptcy position before Seitz enter the picture.
Auto-Owners Insurance is the "16th largest Michigan-based company on the FORTUNE 500 list," according to PR Newswire. "With $5.017 billion in revenue for 2009, [the company remains] the second largest property-casualty mutual insurance company in the nation."[3]
Auto-Owners history can be traced back from its present management to the early leadership of Vern V. Moulton who, in 1916, organized Auto-Owners Insurance Company in Mt. Pleasant, Michigan The infant Company had no capital and was housed in one room of a bank building.[4]
Auto-Owners operated in Mt. Pleasant for a little less than a year. In 1917, V.V. Moulton literally picked up the Company, placed it under his arm and in his pocket ("The Auto-Owners Insurance Co. financial statement at the end of 1916 revealed assets of $174, a networth of $0, annual premium income of $2,060, and 10 losses paid totalling $186."[5]), and moved Auto-Owners to Lansing, Michigan.
It wasn't long before the Depression began when Auto-Owners weathered the lowest point of that era - the bank holidays of February 1933. The Company demonstrated its corporate strength and financial stability by paying all claims promptly, daily, and in cash. The firm was then writing more than $2.5 million in insurance premiums.
Auto-Owners entered the general casualty insurance field in 1940, having previously written only automobile insurance. During the next five years, the Company found it necessary to acquire three more buildings in the vicinity of its main office to accommodate its continued growth. In 1951, it consolidated all of its offices into one home office, which was constructed in downtown Lansing.
The Company wrote business in Michigan exclusively from 1916 until 1935, when it began writing insurance in Indiana and Ohio. In the '40s, Auto-Owners extended operations to include Illinois and Minnesota and, during the '50s, Iowa, North and South Dakota, Florida, Missouri, Alabama, Tennessee, and North and South Carolina. The Company began operations in Wisconsin in 1969, Georgia in 1973, Nebraska in 1978, Arizona in 1982, Virginia in 1989, Kentucky in 1994, Kansas in 1996, Utah in 1997, Colorado in 1999, Arkansas in 2005 and Idaho in 2006.
The company is spending about 2.5% to 3.5% of its revenue in supply chain in order to improve the quality as well as the development of its products. The company focuses their R&D from different renowned designers from different part of the globe with different cultural backgrounds in order to improve the product line of the company as well as to maintain their good relationship with their customers.
The company is focusing their innovation process in different part of the production, and they are working with different engineering teams in order to learn more things about the materials that can be helpful for a new product.
Above all, the company focuses their innovation and development process by focusing on famous and influential figures in terms of entertainment, music, lifestyle and business, and sports.
A winning strategy that fits the situation of a company well can help to achieve a continuous competitive advantage. This statement can be applied in the situation of Puma AG. There are different strategies that have been implemented by the company in order to improve the position and overall performance of the company in the global industry.
In 2007, the company had been able to boost its heritage business by French 77, it is a product concept that was inspired by 70’s tennis superstar Guillermo Villa. The focus of the product concept focuses on the sport-fashion crossover, timelessness, sophistication as well as irreverence (Puma 2005 p. 3). In addition to that, the company also focuses on the side of women by showing the sophisticated side of the women’s category of the company’s products. It had been showed in the I’m Going campaign (Puma 2005, p. 4).
One of the primary evidence to the success of the strategy of the company showed during 2006, when Puma had joined the top echelon in the world of team sports suppliers. The said event happens due to the efforts as well as continuous visibility of the company’s product in the Women’s football World Cup. Puma is considered as the third most worn by having 25% share. The products are also visible in the Rugby World Cup, where in the company sponsored greater than 70% of the athletes.
On the other hand, there is also some situation which shows that the strategies of the company are not enough in order to maintain its position in the market. One of this is the decrease in its net income.
The company can generate revenues by their business of selling different sports related products. Puma is selling their products to different kinds of retailers as well as specialty shops. The company produces its athletic footwear having €1.4 billion or 58% of the revenue during 2007; apparel having €827.3million or 38%; and accessories having €158.3 million or 6.7% (see Appendix D). All of the said line of products is under four brands which are Puma, Tretorn, Mihara and the Rudolf Faddler Schuhfabrik (cited in PPR 2007). From 1999 up to 2000, we can see that that the sales of the company had grown so as the expences (see Appendix C). That is the reason why the net sales of the company are also low.
It is also important to show that the total revenue of the company from 2006 to 2007 had decrease by 0.6%. The said event was the effect of the weakening of different currencies against the euro. But other than that relationship, we can see a significant change of sales every year from 1993. The total revenue had increased to €541.3 million.
As the sales of the company grows, so as its expenses. These expenses main focuses in the different activities from marketing to the retailing that summed up to €272 million during 2005, and increased to €420 million during the year of 2006 and 2007. In general, the operating expenses had increased by 50% between the year of 2005 and 2006 that caused the net income of the company to fall (Puma 2007, p. 2) (see Appendix E).
Another important weakness of the company is its inability to have a huge exposure in the US market. This is due to the fact that Puma focuses more on the European countries. It is important for the company to focus their strategies in raising brand awareness in the United States because it is considered as one of those most powerful countries in terms of sports in the world.
Puma AG doesn’t have a strong exposure in the US market, only 25.3% of its sales during 2007 came from the region of America. The said rate had fall from 28.3% during 2006 (Puma 2007, p. 9) (See Appendix F). On the other hand, the company is focusing its strategies in different emerging markets by pursuing expansion in countries like South Korea, Croatia as well as the Romania.
In addition to that the backlogs are considered as the different orders that have been set to ship within the next 6 months had painted the similar picture. For 12 years, straight, the backlog during the end of the fiscal years is increasing. During the end of 2007, the company had a total of had €1.2 billion in backlog, having a total of 6.1% increase compare to the backlog of the prior year. However, the company had managed the said increase in spite of the 3.2% decrease in the sales in the region of the America that was caused by the market of the US. The said decrease was compensated by the backlog growth, having a total of 26% in the Asia/Pacific Region. Furthermore, that is the result of the increasing brand awareness campaign of the company in Asia (Puma 2007).
The following data and information that have been showed and explained demonstrates that the techniques and the strategies of the company is not yet that superior in order to regain the past position of the company in the market. However, it can be considered as a big development from it’s almost bankruptcy position before Seitz enter the picture.