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International Business Opportunities

UNDER ARMOUR in BRAZIL Specialty Stores in Rio de Janeiro and Sao Paulo Dominick Fuccillo Scott Glasthal Guive Savoji Ivan Velev.

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International Business Opportunities

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  1. UNDER ARMOUR in BRAZIL Specialty Stores in Rio de Janeiro and Sao Paulo Dominick FuccilloScott GlasthalGuiveSavojiIvan Velev

  2. "Under Armour's international expansion is a key component of our long-term growth strategy for the brand,“ Ryan Wood, President of Under Armour Europe - July 2006 International Business Opportunities • 2009 - 5.6% of sales outside of USA / Canada • Primarily in Europe / Japan • Third-Party Manufactured from Southeast Asia and South America • Source: Under Amour Press release 2006, 2009 Under Armour Annual Report

  3. Brazilian economy has rebounded from the global recession and projects 5.5% GDP growth in 2010 with currency stability and a strong, inflation targeting central bank. • World Cup in 2014 and the Summer Olympics in Rio de Janeiro in 2016, a high-upside international marketing opportunity for global brand exposure. Why Brazil? Source: The IMF

  4. Proposal –Projected Cost $25 million USD in 2011, $73 million USD in 2014, $88 million USD in 2016 • Establish two Under Armour retail stores in Sao Paulo and Rio de Janeiro. • Create a South American Headquarters in Rio de Janeiro and central distribution center for all South American product distribution and potential third-party retail sales. • Implement marketing strategy targeting current and up and coming Brazilian athletes, specifically focused on the soccer market and creating brand awareness and status among high end Brazilian consumers. • Targeted ramp-up of investment to coincide with World Cup and Olympic events. Brazil Entry Proposal • Source: Under Amour Press release 2006, 2009 Under Armour Annual Report

  5. Brazilian Apparel/Footwear Market

  6. Competitor Pricing Strategy • Source: esporte.netshoes.com, www.adidas.com, www.nike.com

  7. Common External tariff is 35% on clothing and athletic shoe • China anti dumping law will not be applicable to premium shoes • Foreign companies treated the same as Brazilian companies • Paperwork chains Tariff and Legal Source: The International Custom Journal: Brazil #6, 20th edition, 2008, Doing Business: Measuring Business Regulations. www.doingbusiness.org

  8. Socialism fears in 2002 of the first working class president were proven wrong by a balanced government actions that increased minimum wages, kept inflation low, and is working to facilitate more foreign direct investment • 2010 elections are expected to elect a leader that will continue this trend • President Obama called Lula “the most popular politician on earth” Political Economic Stability • Source: The Most Popular Politician on Earth. Margolis, Mac. Newsweek. September 22, 2009. http://www.newsweek.com/id/215941

  9. Capital account Crisis in 1999 Currency Instability

  10. Brazil’s Unholy Trilemma – Pre 1999 Brazil’s Unholy Trilemma – 1999 Free capital flow East Asian Financial Crisis Fixed exchange rate Sovereign Monetary Policy

  11. Brazil currently has a slight current account deficit that is dwarfed by the US’s. This would suggest further appreciation of the Brazilian Real. Currency Stability Source: www.oanda.com via Interbank exchange rates

  12. Exchange Rate Risk

  13. $187 Million just sitting on the balance sheet and its time to make a moveQuestions? We must protect this house!

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