Under Armour

UNDER ARMOUR’S HISTORY

Started in 1996 my former Univ. of Maryland football player Kevin Plank

Idea was to create a shirt that worked as well as compression apparel

First collegiate teams signed were Georgia Tech and Arizona State University

In 1997 added two new product line ColdGear and AllseasonGear

In 1998 Under Armour was featured in “Any Given Sunday” and “The Replacements”; caused an increase in sales

Went public in 2005 and has increased in value since then

In 2010 CEO Kevin Plank announced they reached the $1billion target in sales for the first time

VISION & MISSION

Vision: “To be the world’s #1 performance athletic brand.”

Mission: “To make all athletes better through passion, science and the relentless pursuit of innovation.”

INDUSTRY

The popularity of sports has created an industry that will continue to prosper and will give consumers many reasons to purchase from preventive health care to ego

The Companies in the Performance apparel manufacturing industry have a great commitment to social responsibility. The companies have several different efforts to give back to the community they operate in. E-commerce is on the rise.

INDUSTRY

Performance Enhancing Technology

The United’s States Sports Culture has caught attention around the globe

In 2010, US consumers spent about $337 billion on clothing and footwear

Elimination of Tariffs and Increase in Free Trade Agreements

CORPORATE STRATEGY

Vertical Integration

To combine additional stages of production

By gaining control of inputs and outputs By controlling resources

NIKE

Revenues of $19,014,000

34,400 Employees

Occupies a large portion of the athletic shoe market

Will replace Reebok as the official brand for the National Football League

COLUMBIA SPORTSWEAR

Revenues 1,483,500

3,200 Employees

One of the United State’s biggest skiwear sellers and focuses on active outdoor wear

There are several opportunities for Columbia to expand in the global market. Columbia is also expected to continue product diversification through acquisitions.

ADIDAS

Revenues of 15,889,100

41,287 Employees

Whole sale athletic goods manufacturer, producing goods such as footwear, apparel and equipment for professional sports team and retail

Purchased Reebok in April of 2006

Global Presence

HOW DOES UNDER ARMOUR COMPETE?

Under Armour has a differentiation strategy

“moisture-wicking synthetic fabrications engineered in many designs and styles for wear in nearly every climate to provide a performance alternative to traditional natural fiber products.

Brand Loyalty

BACKWARD AND FORWARD VERTICAL INTEGRATION

Under Armour Inc. looks to Backward Vertical Integration To increase control of its supply systems Will allow UA to directly affect customers’

satisfaction

Under Armour Inc. looks to Forward Vertical Integration To include control of the direct distribution of its

products Direct-to-customer relationship

Porters Five Forces

Current Rivalry: High, Nike, Adidas, Columbia Sportswear; others

Potential Entrants: Moderate, R&D costs discourage other organizations from entering.

Bargaining Power of Buyers: Low, due to market share.

Bargaining Power of Suppliers: High, due to fabric used.

Substitute Product and Services: High, competitors have mimic products.

COMPANY SCOREBOARD

CURRENT REVENUE GROWTH

FINANCIAL RATIOS ANALYSIS

Current Ratio: 4.1

ROA: 11.22

ROE: 15.15

Net Profit Margin: 6.44

Increase in Profitability and Company is in Good Financial Standing.

SWOT- STRENGTHS

Brand Equity Recognizable and appealing

Innovation & Growth PolyArmour HEATGEAR, COLDGEAR, ALLSEASONGEAR Charged Cotton

Professional & College Athlete Sponsorship Universities Athletes in Different Sports

SWOT- WEAKNESSES

Pricing Expensive

Dependence on 2 Distributors Dick’s Sporting Goods and The Sports

Authority

High Reliance on Domestic Market 88% of net sales from within U.S.

SWOT- OPPORTUNITIES

Market targets of women and youth

Introduction of footwear

Continuation of producing high quality products

Going internationally

Big name athlete endorsements

Using cotton in their shirts

SWOT- THREATS

Intensity of competition within the industry

Not placing patent on original design

Competitors having higher cash flows that can be put toward capital expenditures

Abandoning original demographic of intense athletes

Crude oil prices

DIVERSIFICATION

The new launch of their mouth guard “the Under Armour Performance Mouth wear by ArmourBite Technology. ArmourBite powered as fifteen years of research and development as well as approval of satisfied Professional, Collegiate, Amateur and Novice athletes.” (Dr. Frank W. Montoya, 2008)

DIVERSIFICATION FROM COMPETITORS

For example, the organization is settings its footwear apart by running shoes, and they'll tick off a list of advances in the composition of the foam in the sole or the moisture-resistant fabric used in the shoe's upper.

Other technology the company is adding to set its footwear apart is cartilage and rotational traction football cleats are uncomfortable to stand on. So Under Armour added disks of gel beneath each stud. On the other hand, baseball players make a lot of left-hand turns. Circular grooves under one of the upper studs of its baseball cleats help players get traction when they round the bases.

In addition, suit research suggests compressing muscles after exercise helps stabilize them and rebuild tissue. Under Armour plans to launch togs that athletes can wear post-workout to recharge muscles (Mehta, 2009)

RECOMMENDATIONS

Continue current strategy Expand sports equipment line

Look across other industries and break into new market space Use new material that reflects heat and

UV rays to create car seat covers

OPTIONS

Athlete Care Line Prevent/care for injuries Use moisture-wicking material in casts,

athletic tapes, wraps

Expand into sports drinks industry Team up with Gatorade for marketing

REVIEW

Under Armour founded in 1996

Mission: “To make all athletes better through passion, science and the relentless pursuit of innovation.”

Top Competitors: Nike, Columbia Sportswear, Adidas

Diversification: Innovation and Technology of new markets Options: Prevent/care for injuries Use moisture-wicking material in casts, athletic tapes,

wraps Team up with Gatorade

http://www.youtube.com/watch?v=5x0IVSKbkCk

ANY QUESTIONS???