UNDER ARMOUR FINAL ANALYSISPRESENTED BY: REBECCA BROUGHER, LYDIA ERTEL, CORY PIERCE, TAYLOR RUDEN, AND JILLIAN SPECK

History Becoming A Company

CEO Kevin Plank “A product will sell itself”

History Competitors

• Company Culture• Innovation leads to success

• Celebrity Endorsements• Increased U.S. presence

External Analysis

P.E.E.S.T AnalysisPolitical

Increase in online

shopping: Less

customers in physical

retail locations

Less public liability

cases arise since less customers in stores

Positive: Lower

litigation costs in terms of financial resources and less harm to brand image

P.E.E.S.T AnalysisEconomic

2014 GDP Growth Rate:

2.2%

2015 GDP Growth Rate:

3.1%

Increasing Public and

Private Consumption

P.E.E.S.T AnalysisEcological

83% of consumers want companies to support causes

P.E.E.S.T AnalysisSociocultural

P.E.E.S.T AnalysisTechnological1. Reactive Material/Fabric

2. Wearable Device Technology3. Smart Clothing

Porter’s Five Forces AnalysisThreat of Substitutes

Porter’s Five Forces Analysis Threat of New Entrants

2004 2005 2006 2007 2008 2009 2010 2011 2012 20130102030405060708090

100

Under Armour: Capital Expenditures Increase To Finance Growth

Capi

tal E

xpen

ditu

res (

USD

Milli

ons)

Porter’s Five Forces Analysis

Threat of New Entrants

http://marketrealist.com/2014/12/armour-versus-nike-can-david-beat-footwear-goliath/

http://marketrealist.com/2014/12/key-revenue-earners-drive-pricing-power-nike/

Porter’s Five Forces Analysis Power of BuyersWholesale Buyers Customers

Low- Medium

Bargaining Power

Supplier Base is very Diverse

27 Manufacturers

across 14 countries

Top 10 account for only 49% of

products

Porter’s Five Forces Analysis Power of Suppliers

Porter’s Five Forces AnalysisIntensity of Rivalry Among Competitors• Adidas• $1.6 billion in

sales• Under Armour• $2.6 billion in

sales• Nike• $11.8 billion in

sales

Internal Analysis

Internal AnalysisSWOT Analysis

Strengths

• Good Leadership• Innovative New Products• R&D and Marketing

Weaknesses• No Proprietary Product Rights• 26% of Sales from Dick’s Sporting Goods• Sales Mostly Domestic (Compared to Competition)• High Prices

Internal AnalysisSWOT Analysis

Opportunities• Expanding Internationally (Financially Stable)• Female Market • Consumers Focusing on Quality (Not Price)• Corporate Social Responsibility Threats

• Easily Replicated Products • Not Diversified in Retailers • Too Dependent on a Few Third-Party Suppliers

Internal AnalysisResources: Financial

Under Armour Industry Gross Profit Margin

50.10% 37.50%

Return on Equity 18.18% 10.3%Return on Assets 13.47% 3.8%Total Debt/Eqiuty 0.03 0.41

Internal AnalysisCore Competencies

Marketing

Technology

Internal AnalysisValue Chain Analysis

Primary ActivitiesOperations

Jim Calo, Supply Chain Officer

MarketingIncreased marketing budgetPopular brand ambassadors

Support ActivitiesHuman Resource

Management 87th on America’s Best

Employers listTechnology Development

Armour39Concept Suit

Internal AnalysisVRIO Framework

Valuable Rare Imitable Organization

Implication

Financial Resources

YES YES YES NO Potential Sustainable Competitive Advantage

Production SOMEWHAT NO NO NO Competitive Disadvantage

Innovation and Marketing

YES YES YES YES Realized Temporary

Competitive Advantage

Products YES NO YES NO Temporary Competitive Advantage

Internal AnalysisOrganizational Structure

Board of Director

s

North America

Latin America Europe Asia

Pacific

Kerry Chandler:

CHRO

Brad Dickerson: COO, CFO

Kip J. Fulks: President, Footwear

Innovation

James Hardy: Executive VP,

Global Operations

Karl-Heinz Maurath: President,

International

Matthew Mirchin:

President, North America

Adam Peake: Executive VP,

Global Marketing

Henry Stafford:

Chief Merchandising

Officer

Kevin Plank, CEO

Strategic Analysis

Began making shirts and have since expanded into the entire athletic apparel industry

Operate under a related diversification strategy as each product line is interdependent

For example, clothing, footwear, and athletic gear

Strategic AnalysisDiversification

Strategic AnalysisBCG Growth Share Matrix

Strategic AnalysisMarketing

Strategic AnalysisDifferentiation Strategy

High Price

High Quality

Highly Differentiated Product

Strategic AnalysisStrategic ProblemsLack of Proprietary Rights

Small International Presence

Dependence on Outsourcing

Corporate Social Responsibility

Corporate Social Responsibility Core Valuesand Business Partners

Innovation

Inspiration

Reliability

Integrity

Protect This House

Empowering Athletes of the Next Generation

She’s a Fighter

Corporate Social ResponsibilityHow They Give Back

Recommendations

Consider protecting proprietary technology, especially with the release of smart clothing

Develop deeper market penetration in key global markets in order to keep up with competitors

Diversify retailing outlets in order to grow customer base

Questions?