Hanna Cohen, Megan Findakly, Steven Zeigler, and Ayomide

Oluleye

Financial AnalysisRevenue Net Income

Financial performance is STRONGNet revenue has increased 172.43% from 2009 through 2013Net income has increased 246.93% from 2009 through 2013Earnings per share (EPS) has increased 226% from 2009 through 2013

3C’s Business ModelCustomer – Young urban professional affluent consumerCompany- Kevin Plank, 43, is Founder and CEO of performance apparel makerCompetitors – Nike, Adidas, Reebok, and Puma

Why India?Election of Prime Minister Narendra Modi in 2014Recent Changes to Foreign Direct Investment (FDI)Competitors

Method of EntryEntry into India will be accomplished by establishing:

Under Armour IndiaUnder Armour IndiaA wholly-owned subsidiary of Under Armour:

Strategic control and independenceDoes not want to repeat competitors’ mistakesChanging political/regulatory climateBranding

Under Armour India – Supply Chain

• Immediate/Short-term – Exporting– Goal: Enter India as quickly as possible

while keeping initial investment low– Solution: Exporting from Asia and

Mexico• Exporting• Free Trade Warehousing Zones (FTWZ)• FTWZ Stores Customers

– Costs:• Container: $1,800 to $2,500 per TEU from

Mexico to Mumbai, India– Capacity: 15,000 packaged shirts or 8,500

footwear– Cost: $0.12-0.17/shirt or $0.21-.029/footwear

• Import duty – 18%/CIF and Warehousing – Rs. 92/cf

Distribution - Retail Stores• Establish retail stores in shopping malls

– Mumbai – High Street Phoenix– New Delhi – Select CityWalk– Bangalore – Mantri Square

• 5,000-8,000 sq. ft. (North America average is 6,000 sq. ft.)

• Labor sourced locally with training provided by U.S. team

Distribution - Retail Stores• Retailing Costs:

– Retail rent: R150-R180/sq. ft. per month. For 6,000 sq. ft. – 9 Lakh or $13,200 per month, per store.

– Salaries: R110-450/hour, depending on position, 24 FTE person workforce. Total: 2.69 Lakh/week or $4,000 per week, per store.

– Inventory Cost: $21,050 per store (as of Dec. 31, 2014)• Marketing Costs:

– $3,808,000 per year, 52 commercials, 1 team, 6 celebrities and 12 sports players sponsorships

Financial Analysis – India Expansion

Year 1 Year 2 Year 3 Year 4 Year 5Stores & Inventory $1,815,321 $1,815,321 $1,815,321 $1,815,321 $1,815,321Marketing $3,808,000 $3,808,000 $3,808,000 $3,808,000 $3,808,000Build out/Training/Misc.

$618,800 $339,600 $339,600 $339,600 $339,600

Total Costs: $6,242,121 $5,962,921 $5,962,921 $5,962,921 $5,962,921

# of Customers – B/E 64,219 61,347 61,347 61,347 61,347Market Share – B/E 3.61% 3.45% 3.45% 3.45% 3.45%# of Customers – 5.8%

67,950 64,911 64,911 64,911 64,911

Market Share – 5.8% 3.82% 3.65% 3.65% 3.65% 3.65%Avg. Revenue per Customer: $97.20Under Armour Profit Margin (avg.): 5.8%Active Apparel Profit Margin (avg.): 8%Total Market in India: 1,780,000 people

Notes:

• Assuming a modest 3.6% market share in Year 1 and 0.1% gains for Years 2 through 5:

Financial Analysis – India Expansion

 Market Share Customers Revenue/

CustomerTotal

RevenueProfit

Margin

Year 1 3.6% 64,219 $97.20 $6,242,086 0.00%Year 2 3.7% 65,860 $97.20 $6,401,592 7.36%Year 3 3.8% 67,640 $97.20 $6,574,608 10.26%Year 4 3.9% 69,420 $97.20 $6,747,624 13.16%Year 5 4.0% 71,200 $97.20 $6,920,640 16.06%

Breakeven

SWOT AnalysisCEO Kevin PlankR&D and product innovationExcellent marketing abilities

SLimited wholesale distributorsUnfamiliar to the Indian sportswear marketWHeighted competitionNike and cricket strong relationshipT

Global market expansionExpansion into other sports accessoriesGrowing urbanizationSponsorship opportunitiesLack of Brand Loyalty

O

Risk AnalysisHigh Risk:

DemandGovernment Regulation

Medium RiskSupplyIntellectual Property

Low RiskPolitical InstabilityTheftCounterfeiting

Pot

entia

l Im

pact

Probability

Severe

HighMinimal

DemandSupply

Political Instability

Theft/ Shrinkage

Intellectual Property

Counter-feiting

Government Regulation

Strategic Plan: Differentiation

4 Ps of Marketing

Promo

Product Price

Place

Mumbai, Maharashtra

New Delhi, Delhi

Bangalore, Karnataka

Place

4 Ps of Marketing

Place

4 Ps of MarketingTECHNOLOGY

HeatGearColdGearStorm

Product

4 Ps of Marketing

Price

Mercurial Superfly FG CR7

$300

$400

4 Ps of Marketing

4 Ps of Marketing

Promo

GovernmentCricket Players/ Clubs

Bollywood ActorsFootball Player/ ClubsHockey India League

Sohail Khan

Shah Rukh Khan Juhi Chawla

Thank you

Appendices

Company BackgroundFounded in 1996 by Kevin PlankHeadquarters – Baltimore, MarylandPublic offering – November 18, 2005, now: NYSE as UAWorldwide, $2.32 billion revenue, 7,800 employeesCompetitors – Nike, Adidas, Columbia Sportswear

Company Background

To empower athletes everywhere

To make all athletes better through passion, design, and relentless pursuit of innovation

To compete with the best

InnovationInternational expansionDirect-to-consumer sales

Vision

Mission

Aim

Strategy

Tactics

Expand women’s footwear, international and direct-to-consumer businessDiversify brand (golf, fishing, & hunting)

1999 2005 1996

Timeline and ManagementFounded by

Kevin Plank,

incorporated in

Maryland

Global expansion into Asia market

Global expansion

into Europe market

Went public on NASDAQ

Under Armour played a

supporting role in Any

Given Sunday

2007 20092006

Traded on NYSE as UA

Opened European

HQ in Amsterdam

2009 – Formed alliance

with Ripken Baseball

Opened first direct

to consumer store in

Annapolis, MD

2012 20142010

Under Armour

surpassed $1 bn in annual

revenue

Deal with Univ. of Notre

Dame to provide

uniforms and

athletic equipment

Michael Phelps won 7 medals

at the Olympics, cementing the Under Armour name

Comprehensive SWOT Analysis

CEO Kevin Plank/Management TeamR&D and product innovationProduct performanceBrand cacheContinues growth Excellent marketing abilities

SLimited wholesale distributorsLimited Global brand recognitionLimited patents – easily replicable apparel technologyLate player in the Indian sportswear market

WConsumer price sensitivityIncreased cost of raw materialsHeighted competitionGlobal expansionStrong relationship of competitors with local retailers

TIncreased desire for productExpansion of direct-to-consumeGlobal market expansionExpansion/creation into other sports accessoriesMiddle class emergeSponsorship opportunities in different sports teams)

O

State Income per capita (2013) (Rs.)

% change in Per Capita Income over previous year

Delhi 219,979 14.22%Karnataka 84,709 10.62%Maharashtra 114,392 10.00%

Population in the 15-24 (for Urban Areas) State Total Male FemaleDelhi 3,3 M 1,8 M 1,5 MKarnataka

4,6 M 2,3 M 2,3 MMaharashtra 9,9 M 5,32 M 4,6 M

Place

4 Ps of Marketing

Appendix - FinancialsYear 1 Year 2 Year 3 Year 4 Year 5

Cost Analysis:

Rentals $ 475,200.00 $ 475,200.00 $ 475,200.00 $ 475,200.00 $ 475,200.00

Labor Costs $ 624,000.00 $ 624,000.00 $ 624,000.00 $ 624,000.00 $ 624,000.00

Inventory $ 511,515.00 $ 511,515.00 $ 511,515.00 $ 511,515.00 $ 511,515.00

Shipping Fees (19%) $ 97,187.85 $ 97,187.85 $ 97,187.85 $ 97,187.85 $ 97,187.85

Import Fees (18%) $ 92,072.70 $ 92,072.70 $ 92,072.70 $ 92,072.70 $ 92,072.70

Warehousing Fees (3%) $ 15,345.45 $ 15,345.45 $ 15,345.45 $ 15,345.45 $ 15,345.45

Marketing $ 3,808,000.00 $ 3,808,000.00 $ 3,808,000.00 $ 3,808,000.00 $ 3,808,000.00

Total Variable Costs: $ 5,623,321.00 $ 5,623,321.00 $ 5,623,321.00 $ 5,623,321.00 $ 5,623,321.00

Store Buildout/Upkeep (3 stores) $ 118,800.00 $ 39,600.00 $ 39,600.00 $ 39,600.00 $ 39,600.00

Training $ 300,000.00 $ 100,000.00 $ 100,000.00 $ 100,000.00 $ 100,000.00

Miscellaneous $ 200,000.00 $ 200,000.00 $ 200,000.00 $ 200,000.00 $ 200,000.00

Total Fixed Costs $ 618,800.00 $ 339,600.00 $ 339,600.00 $ 339,600.00 $ 339,600.00

Total Costs: $ 6,242,121.00 $ 5,962,921.00 $ 5,962,921.00 $ 5,962,921.00 $ 5,962,921.00

Appendix - FinancialsRevenue Generation:

Average Revenue per Customer $

97.20 $

97.20 $

97.20 $

97.20 $

97.20

# Customers at: 0% profit

64,219

61,347

61,347

61,347

61,347

4% profit

66,788

63,801

63,801

63,801

63,801

Under Armour Avg. - 5.81% profit

67,950

64,911

64,911

64,911

64,911

8% profit

69,357

66,255

66,255

66,255

66,255

52 commercials @ $15,000 $

780,000.00

1 teams @ $1,000,000 $

1,000,000.00

6 celebrities @ $55,000 $

330,000.00

12 sports players @ $141,500 $

1,698,000.00

Base Inventory (3 stores) $

63,150.00 Inventory Turnover Ratio 2.7Average Profit 8.0%Under Armour Avg. Profit 5.81%

Current Indian Target Market 1,780,000 1,780,000 1,780,000 1,780,000 1,780,000Market Share at: 0% profit 3.61% 3.45% 3.45% 3.45% 3.45%

4% profit 3.75% 3.58% 3.58% 3.58% 3.58%Under Armour Avg. - 5.81% profit 3.82% 3.65% 3.65% 3.65% 3.65%

8% profit 3.90% 3.72% 3.72% 3.72% 3.72%

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