Mike Brennan, Zack Davis, Nicole Herman, Fei Zhejun

What is Under Armour

Sporting goods company

Created by Kevin Plank in 1996

Sells sports apparel as well as sports equipment

Their products are sold worldwide and are worn by athletes at all levels, from youth to professional

Have an online store as well as multiple Under Armour Outlet Stores

Opened its first store in China at the end 2012

Mission Statement “to make all athletes better through passion, design, and the relentless pursuit of innovation”

Drivers

Kevin Plank

Tossed out of Georgetown Prep for academic performance

Ended up at Military School

Walk on at Maryland, special teams captain

Vision to sell innovative, technically advanced apparel products engineered with a special fabric construction that provided supreme moisture management

Long term growth, brand name-opportunities to expand-globalization

The demand for sporting equipment and apparel

The different technology they have separates them from Nike and Adidas

How Under Armour Makes Money

Partnerships/sponsors

Globalization

Making their stocks public

Wholesale distribution

Brand

Under Armour factory stores

Strengthening by Acquisition

MapMyFitness was a $150 million acquisition

MapMyFitness is a fitness technology company powering one of the world’s largest digital fitness communities

Has over 20 million registered users

Utilizes GPS and other advanced technologies, providing users with the ability to map, record and share their workouts

The deal closed in November of 2013

Global ExpansionUnder Armour introduced Brazilian Athletes to innovative footwear, apparel and equipment

Chose to expand to Brazil due to the country’s rich athletic history, how important sports are to Brazilians in their everyday lives and due to the booming Brazilian economy

Offers a broad array of training and running apparel and footwear in the initial launch phase

Launch occurred on March 12, 2014 in Sao Paulo, Brazil

Horizontal Strengthening

Notre Dame Athletics Sponsorship Deal

Tottenham Hotspur Sponsorship Deal

US Speed Skating Sponsorship Deal

Customer/ Value Proposition

Under Armour is for athletes who seek great athletic performance

Their mission is to make all athletes better through passion, science and relentless pursuit of innovation

Under Armour's technology is complex but the value is simple

Consumers can wear "heat gear" when it’s hot out, "cold gear" when it’s cold and and "all season gear" between the extremes

Key Strategic Issues

• Under Armour's sales are not as strong in countries outside of the United States, they need to find their niche in these other countries to increase sales

• There is a lot of strong competition, they need to continue with their high-quality attire and continue to differentiate themselves 

Forces

Some of the Forces of Under Armour are Rival firms such as Nike and AdidasSuppliers of Under Armour goods are third parties located in Asia, Central and South America and Mexico, that are pre approved by Under Armour Consumers are athletes, as well as active people

UA Innovation

http://www.youtube.com/watch?v=oYCvIr0fWnM

Innovation in Sports Apparel

Under Armour Stock Analysis

Net Revenue and Income 2006-2010

$0

$200,000

$400,000

$600,000

$800,000

$1,000,000

$1,200,000

$1,400,000

$1,600,000 Net Revenue

Net Rev-enue

$0

$20,000

$40,000

$60,000

$80,000

$100,000

$120,000 Net Income

Net In-come

Value ChainDesign- Main Focus of UA conducted in-house in Baltimore, Maryland. They have a strict code of conduct for suppliers and have suppliers in Asia, Central and South America and Mexico.

Sourcing and Manufacturing-Outsourced to 3rd parties in Asia (60%) and Latin America (35%)

Marketing- Conducted in-house in Baltimore Maryland. Also UA has many sponsorships and endorsements but no synergy in marketing plan. Also all different kinds of athletes used for example Tom Brady, Bryce Harper, Hunter Mahan and Lindsey Vonn.

Distributing- Hybrid of in-house and outsourcing. Distributer used as well.

Service-Hybrid of outsourcing and in-house depending on retail route. Has great reputation for customer service and after-sale service.

Recommendations

Cut the footwear segment of the company

Under Armour only holds 2.1% of the market share for running shoes

Nike dominates this share with 57.5% of the market

Under Armour Basketball shoe sales grew to .57% of the market

Nike also dominates this with 92% of the market

Under Armour apparel sales grew 25% last year and now control 17.6% of the market

Nike controls 25.8% of the market share

Under Armour should reinvest the money spent on footwear into apparel or accessories segments

Net Revenue by Product Category

2011 2010 2009

Dollars Percent Dollars Percent Dollars Percent

Apparel $1,122,031 76.2% $853,493 80.2% $651,779 76.1%

Footwear $181,684 12.3% $127,175 12% $136,224 15.9%

Accessories $132,400 9% $43,882 4.1% $35,077 4.1%

SWOT Analysis

Strengths • Product Technology

Innovation• Brand Loyalty• High Quality Apparel

Weaknesses • International Market Share• Lack of Female Customers• Limited Number of

Distributors• No Individual Customization

Opportunities• Need for Innovation• Enter into Foreign Markets• Growth in Sportswear

Industry

Threats• Highly Competitive Industry• Substitute Products

Epilogue

Year over year (from December 2010-2013), Under Armour, Inc. has been able to grow revenues from $1.8B USD to $2.3B USD

The company has been able to reduce the percentage of sales devoted to cost of goods sold from 52.08% to 51.26%. This was a driver that led to a bottom line growth from $128.8M USD to $162.3M USD

Epilogue (cont.)Net Revenue (in

thousands)

1/1/11 1/1/12 1/1/130

500,000

1,000,000

1,500,000

2,000,000

2,500,000

Net Revenue

Net Income (in thousands)

1/1/11 1/1/12 1/1/130

20,00040,00060,00080,000

100,000120,000140,000160,000180,000

Net In-come