Risk Management  Moreover, strategic planning and special projects such as margin control and process optimization are used as cross-departmental tools. Process- or risk-specific systems, particularly with respect to supplier reviews, hedging of currency risks, and a group-wide controlling and reporting system are additional tools used in PUMA’s risk management process. The risk areas to be reported on, as well as any new findings  in the risk portfolio, are defined by RMC and evaluated in  accordance with a guideline. Any changes are promptly  communicated to the Board of Management.  PUMA’s worldwide activities are exposed to extensive global and local risks, arising from internal and external factors which are carefully monitored within the framework of a risk management system. To this end, the risk volume is identified and quantified, the probability of occurrence is assessed, and countermeasures are formulated to achieve the envisaged corporate targets. The guidelines and organization of the risk management  system ensure a methodological and systematic approach within the Group. The direct responsibility for risk is transferred to  operational employees who report on any detected risks in a  “bottom-up” procedure. This ensures that risks can be detected early and reported to the ”Risk Management Committee“ (RMC). The risk management reports on significant changes in the risk portfolio both through periodic and ad-hoc reporting.  Risk Areas  General Economic Risks Brand Image Dynamic Market Environment sporting goods industry and the business development of PUMA. PUMA counters this risk through geographic diversification and a well-balanced portfolio.  The overall economic development may have a direct influence on consumer behavior. A significant slowdown can lead to a decline in consumer spending with adverse effects on the  which conducts audits of all manufacturers of PUMA products worldwide in accordance with guidelines that are even more  stringent than legally required.  The success of a global company is largely dependent on its brand strength and its ability to respond to the desires and  expectations of consumers. In addition, public expectations regarding environmental and sociopolitical standards are  increasingly gaining in importance and any arising problems can impact the brand. PUMA approaches these risks with a carefully designed long-term marketing strategy that includes market research activities as well as trend studies on design, image  and price setting. To ensure compliance with environmental  and sociopolitical standards, PUMA’s S.A.F.E team (Social, Accountability, Fundamental, Environmental) has established a corporate process and internal control management system,  The PUMA logo and the related form stripe are protected  trademarks of the PUMA brand. Along with increasing brand awareness and desirability, the number of product imitations and pirated products has grown. This has potentially negative effects on the brand image. Therefore, PUMA is increasingly mobilizing internal resources for intense surveillance and legal prosecution of such cases. All detected imitations are taken off the market and are destroyed.  competition, characteristic design and the high recognition  value of the PUMA brand are significant factors in creating a  competitive advantage. A dynamic market and competitive environment requires that new and innovative concepts are continuously developed and market trends quickly grasped and flexibly implemented. Furthermore, if market shifts are not recognized and  implemented early, the consumer demand for PUMA products may change significantly. In order to transform the company’s own creative ideas into new products in line with market  requirements, the company invests heavily in design and  product development. Deliberate differentiation from  With its successful global positioning and accompanying  strengthening of the brand through internationally oriented  marketing concepts, PUMA aims to be an industry leader. Moreover, the existing risk is reduced through effective product lifecycle management, targeted merchandising of PUMA products and PUMA’s own retail activities. 34 Foreword | Mission |  Management Report  | Share | Marketing | Consolidated Financial Statements - IFRS - | Report of Supervisory Board | Board of Management