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+ER. Stephanie Light, Dana Cook, Austin Bastian, Philip Winfield, Tyler Bushman Jordan Jones, Ian Walraven , Bryson Bell. UNDER ARMOUR. History of Under Armour. Founded in 1996 by Kevin Plank Former Maryland football player Originated what we know as performance apparel

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Stephanie Light, Dana Cook, Austin Bastian, Philip Winfield, Tyler Bushman

Jordan Jones, Ian Walraven, Bryson Bell

Under armour


History of under armour

History of Under Armour

  • Founded in 1996 by Kevin Plank

    • Former Maryland football player

  • Originated what we know as performance apparel

    • The superior shirt was designed to keep perspiration off your skin

    • Works to regulate body temperature and enhance performance

  • Mission: to make all athletes better through passion, science, and the relentless pursuit of innovation

Industry environment

Industry Environment

  • Economic environment

    • Sporting apparel industry has suffered less than other industry’s through the most recent recession

    • Sales of equipment, apparel, and footwear is only down 4%

    • This is due to the growing popularity of exercise and fitness

Industry environment1

Industry Environment

  • Political characteristics

    • The industry has been under scrutiny for sweat shops and violation of labor laws

    • NIKE is the most well known case

  • Demographic characteristics

    • Aging population has realized the importance of staying fit

    • More and more women are working out

      • Due to American culture that is obsessed with fitness

Driving forces for change

Driving Forces for change

  • Going global

    • Under armour relies heavily on overseas manufacturing but only 5% of their sales are international

    • Adidas is wanting to use the 2010 World cup to help generate sales

    • Nike is stepping up their footwear market across China

    • All firms realize the importance of having a global presence

Driving forces for change1

Driving Forces For Change

  • Marketing Efforts

    • Becoming more popular within the industry to have interactive websites and get consumers involved in the decision making process

      • Ex. NIKE Plus, NikeID

      • Ex. Adidas Originals Website

      • Ex. Under Armour “boom boom tap” that leads to exclusive women’s website

Evaluating strength of competitive forces

Evaluating Strength of Competitive Forces

  • Top Competitors:

  • 1.) Nike

    • #1 shoemaker in the world

    • Sells athletic apparel and equipment along with Cole Haan dress and casual shoes

    • Owns a variety of stores

    • Nike acquired soccer star Umbro in 2008

Top competitors cont d

Top Competitors (cont’d)

  • 2.) Adidas

    • #2 maker of sporting goods worldwide

    • They have deals with a variety of sports

    • Had sponsorship rights to the Beijing Olympics in 2008

    • Purchased Reebok in 2006

    • Signed an 11 year agreement with the NBA and WNBA

    • They are currently trying to strength their brand in western European markets

Top competitors cont d1

Top Competitors (cont’d)

  • 3.) Columbia Sportswear

    • One of the world’s largest outerwear makers

    • Includes a variety of brand names

    • They licensed their name to RC pet products in 2007

    • About 40% of sales are outside of US, which is why they focus on worldwide expansion

    • They are looking to expand more on their footwear line

Strategic issues

Strategic Issues

  • Under Armour’s strategies are:

  • 1.) Expanding their product line

    • Footwear and innovation

  • 2.) To continue the growth of the company

    • Since 2006, UA has been signing distribution agreements to increase their international expansion

    • Since Dec. 31 2009, their products are sold in 20,000 retail stores worldwide

Porter s f ive forces

Porter’s five forces

  • Threat of substitute products or services

    • Compression t-shirt

    • UA claims 79% of market for compression sports apparel

      • Nike

      • Adidas

      • Columbia Sportswear

        • Omni-Tech

        • Omni-Dry

Porter s five forces

Porter’s five forces

  • Threat of entry of new competitors

    • Help of customers/supporters (Roger Clemens/Jerry Rice)

  • Five year growth rate is increasing 40% above the industry average

Porter s five forces1

Porter’s five forces

  • Intensity of competitive rivalry

    • UA


      • Protect this House

    • Columbia

      • Omni-core technologies

    • Adidas

      • Clima365 and TechFit

      • Impossible is Nothing

    • Nike

      • Dri-Fit and Pro Combat

      • Just Do It

Porter s five forces2

Porter’s five forces

  • Bargaining power of customers

    • Companies compete with each other using price ranges

  • Bargaining power of suppliers

    • UA has 22 manufacturers in 17 countries

      • No long term contracts

      • Distributors: 31% sales go to Dick’s and Sports Authority

    • Nike has independent manufacturers in 34 countries

      • 16% of sales occur in Sojitz America (Trading Company)

Key success factors

Key Success Factors

  • Innovation of material

  • Brand Equity

  • Quality Products

  • Marketing Strategies

    • Team/School sponsorships, commercials, Olympics, etc.

  • Brand Control and Expansion

    • Current and future markets



  • Strengths

    • Innovation

    • Brand name/logo

    • Brand equity

      • Growth

    • Marketing

      • Sponsorships/Promotions



  • Weaknesses

    • Pricing

      • Expensive

    • Narrow Focus

    • Advertising

      • Sometimes to intense



  • Opportunities

    • Emphasis on a variety of sports

      • Not just football

    • Marketing

      • More sponsorships - colleges, soccer, etc…

    • Lowered pricing



  • Threats

    • Economic recession

    • Competition

    • Highly dependent

    • Pricing on raw materials

Current strategy evaluation

Current Strategy Evaluation

  • People, Product, Drive

  • “Our people are smart, innovative, and frankly, not sure of what they cannot accomplish”

  • 5 key growth factors

    • Men’s Apparel

    • Women's Apparel

    • Footwear

    • International

    • Direct-to-Customer

Current strategy evaluation1

Current Strategy Evaluation

  • Some important accounting/financial data

    • Revenues=$856,411(thousands), increase of 18% from 2008.

    • Gross profit=$413,025(thousands), increase by a comparable rate of 16%.

    • EPS=$0.094

    • Diluted EPS=$0.92(Class B convertible stock)

    • Cash and cash equivalents make up nearly half of the company’s current assets.

    • Cash on hand at year end=$187,297(thousands)

Current strategy evaluation2

Current Strategy Evaluation

  • Financial Ratio Analysis

    • Quick ratio=2.49

    • ROA= 8.5% (not very good)

    • ROE=12%

    • PE ratio= 34.30

      • Suggests that investors can expect higher earnings growth in the future.

  • All of UA’s ratios show that there has been an increase in profitability and financial health for UA.

Ua s relative cost position

UA’s Relative Cost Position

  • UA has never had a low-cost market strategy.

  • Factors that influence UA’s cost position

    • Seasonality

    • Source of manufacturing

    • Competition

    • Distribution/inventory management

Relative competitive strengths

Relative Competitive Strengths

  • Brand recognition

  • Founder



  • Passion

  • Pay cut

Under armour s options

Under Armour’s Options

  • Broaden Their Brand

  • Debt Management

  • Costs

Broadening their brand

Broadening Their Brand

  • Women’s Apparel

  • Children’s Apparel

  • Footwear

  • International Sales

Debt management

Debt Management

  • Credit Agreement

  • Focus on Liquidity



  • Ability to lower prices

  • Cutting Costs to Produce



  • Heavily saturated industry, yet UA continues to expand rapidly

  • Top 3 Competitors:

    • Nike

    • Adidas

    • Reebok

Key success factors1

Key Success Factors

  • Innovation

  • Brand Equity and Image

  • Marketing Strategies

  • Industry Attractiveness

Building a sustainable competitive advantage

Building a Sustainable Competitive Advantage

  • Focus on their strengths and improve their weaknesses

  • Use opportunities in their industry to expand their brand

  • Create a strategy with both innovation and low prices

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