Under Armour Final.pptx

8/14/2019 Under Armour Final.pptx

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UNDER ARMOURStrategies for International Expansion andSocial Media

Clientlogo

April 12, 2013

Mitchell Shelby, Woody Sokolowski, Darron Su, Kathleen Yang, Sam Zhang

Deloitte Consulting LLP


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Agenda

Vision Darron Su

Why China?

Financials

Additional Cultural Points

Sam Zhang

Darron Su

Market EntryOverview

Strategy

Kathleen YangWoody Sokolowski

Operations Overview Mitchell Shelby

Conclusion Darron Su

Q & A


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Why Are We Here?


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China

Russia BrazilRevenue

$486

Costs

$315

Revenue

$1,017

Costs

$648

Revenue

$602

Costs

$299


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China Russia Brazil

$369 $171 $303

2013-2017: Cumulative Profit Projection (in millions)


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WHY CHINA?Financials


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Market Comparison

Comparison relatively to ChinaChina Brazil Russia

GDP per cap 100% 172% 209%% GDP spent on apparel 100% 169% 151%

Macroeconomic Risk 100% 96% 117%Market Risk 100% 48% 44%

Targeted Population 100% 13% 7%Profit 100% 42% N/A


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Target Market Population

0

100000000

200000000

300000000

400000000

500000000

600000000

700000000

2014 2015 2016 2017

Brazil

China

Russia


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Market Comparison

Comparison relative to ChinaChina Brazil Russia

GDP per cap 100% 172% 209%% GDP spent on apparel 100% 169% 151%

Macroeconomic Risk 100% 96% 117%Market Risk 100% 48% 44%

Targeted Population 100% 13% 7%Profit 100% 42% N/A


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Growth of Middle Class PopulationChina's new middle class is hungry forWestern gear and individualism

----Times


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Growth of Middle Class PopulationChina's new middle class is hungry forWestern gear and individualism

----Times


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Growth of Middle Class Income

1

1.2

1.4

1.6

1.8

2

2.2

2.4

2.6

2.8

2011 2012 2013 2014 2015 2016 2017

Brazil

China

Russia

Growth in Disposable Income


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Projected Profit from 2014-2017 inmillion $

$-

$20

$40

$60

$80

$100

$120

$140

$160

2014 2015 2016 2017

Brazil

China

Russia


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Projected Profit from 2014-2017 inmillion $

$-

$20

$40

$60

$80

$100

$120

$140

$160

2014 2015 2016 2017

Brazil

China

Russia

Return of Investment%

0%

10%

20%

30%

40%

50%

60%

2014 2015 2016 2017


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*Target Market Age 15-37

Country Risk Profile

Brazil China RussiaCountries Grade Score GradeScoreGrade Score

Security risk B 34.5B 32.1C 53.6Political stability risk B 25.0B 47.1C 55.9Government effectiveness risk C 65.4D 77.9D 81.7Legal & regulatory risk B 41.5C 60.1C 69.7Macroeconomic risk B 43.5A 22.8B 33.7Tax policy risk C 50.0B 38.3C 55.0Labor market risk B 44.0C 59.0B 47.0Infrastructure risk C 63.2B 44.7C 51.3Average risk B 45.9B 47.8C 56.0


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WHY CHINA?Additional Cultural Points for Consideration


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Rising Obesity Rates

Average Chinese Male Waistline Size

IncreasedObesity Rates(20% ->40%)

HeightenedAwareness ofHealth Issues

IncreasedPhysicalExercise2012

76.2 cm198563.5cm

Source: China.org.cn


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Obesity in America

Light Blue -


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US Physical Activity Participation Rates

Source: Center for Disease Control and Prevention

0

5

10

15

20

25

1998 2000 2009 2010

Percent

Year

% of 18+ Adults that Met Physical Activity Guidelines forAerobic Activity and Muscle Strengthening Physical

Activity

Percent


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Sports Universities

3,000 Elite Athletic Institutions

Sports > Academics

Performance Driven Mindset

Huge Market Potential


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MARKET ENTRY

STRATEGY


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Social Media Overview

I S S U E S

Change in management style

The tower

Censorship problem

New staff

S O L U T I O N S

UnderArmoursculture

Blogging

Chinas popular websites

Tracking changes


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Under Armour Culture


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Under Armour Culture

EMBRACECHANGE

We cant use culture as an

excuse to not changeproduct, process, or people


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Online Presence

513

millionpeople

= +

Worlds largest Internet user base


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Online Presence

MicroblogsOnline

Communities

SocialNetworking

Sites


300 million social media users

Blogs


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Online Presence

40%



40% of time spent online


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Online Presence



40% of time spent online

Hire blogging specialists

DE DAYU2 98HSU


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Sino Weibo

DE DAYU2 98HSU


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Sino Weibo

DE DAYU2 98HSU


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Sino Weibo

DE DAYU2 98HSU


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Costs

$250

Ghost-writing

BlogPosts

BlogPosts

$100 $50

$500

$75 - 200


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QQ = Yahoo


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Youku = Youtube


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RenRen = Facebook


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Baidu = Google


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Advertising

PPC

Pay per click

Keyword phrases

Banner ads

SEO

Visibility

Trustworthiness

Traffic


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Social Media

SetupCost Range

$500-$5,000

MaintenanceCost Range

$500-$7,500 amonth

ImprovementsCost Range

$10,000-$30,000


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OPERATIONSOVERVIEWDistribution Strategies


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Wholesale Distribution Target top tier retailers

Valuable locations

Price products at premium

Have sponsored athletes make presence

Distribution


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Additional Distribution 8

Target Elite Sports Universities in China Enhance image of Under Armour

Distribute in bulk sales Promotion

Discount


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CONCLUSIONBrief Recap


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Summary

Why China Largest Projected Profitability (Largest Target Market Here)

Low Average Risk (Grade B)

Culture Encourages Performance Athletics and Physical Activity

SocialMedia

China has Worlds Largest Online Presence

Break into Market with PPC Advertisement and SEO

Hire Bloggers (Reasonable Costs)

Operations Target Top Tier Wholesale Retailers

Strategically Position Retailers Near Sports Universities

Sponsor Elite Sports Universities to Enhance Brand Image

Offer Promotions and Discounts for Bulk Sales

Under Armour Final.pptx

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