Loading presentation...

Present Remotely

Send the link below via email or IM


Present to your audience

Start remote presentation

  • Invited audience members will follow you as you navigate and present
  • People invited to a presentation do not need a Prezi account
  • This link expires 10 minutes after you close the presentation
  • A maximum of 30 users can follow your presentation
  • Learn more about this feature in our knowledge base article

Do you really want to delete this prezi?

Neither you, nor the coeditors you shared it with will be able to recover it again.


Under Armour - Management 491 Team 3

No description

Brad Dawes

on 6 November 2013

Comments (0)

Please log in to add your comment.

Report abuse

Transcript of Under Armour - Management 491 Team 3

Team Strategic Recommendation
Apply a domestic and internationally integrated cost leadership/differentiation strategy.
Emerging footwear line
Outsource manufacturing
Build E-commerce presence through wholesale
Industry Analysis Overview
Threat of substitute products or services
Bargaining power of suppliers
Bargaining power of buyers
Threat of new entrants
Rivalry among existing competitors
SWOT Analysis Overivew
Strategic Alternatives
Expand Internationally (Weakness)
Adopt focused differentiation strategy (Opportunity)
General Environment Overview
Economic Trends
Sociocultural Trends
Demographic Trends
Technical/Global Trends
Legal Trends
Teams Key Recommendation
Apply a domestic and internationally integrated cost leadership/differentiation strategy.
Emerging footwear line focus
Outsource manufacturing to reduce costs
Build E-commerce presence through wholesale and retail
Diverse product lines: men, women, and youth
HeatGear, ColdGear, AllSeasonGear
Three fit types: Compression (tight fit) Fitted (athletic), Loose (relaxed fit)
Mission Statement: To make all athletes better through passion, science, and the relentless pursuit of innovation.
Founded in 1996 - Kevin Plank
Company's headquarters Baltimore, Maryland
Synthetic shirts
Five year compound annual growth rate of 30.5%
2010, $1.06 billion in sales revenue
Increased Q3 & Q4 Sales
Aligns with football/basketball seasons
Gift-giving season
ColdGear core competence
Higher priced product
Analyists predicted 30% wholesale apparel growth in 2011 and 25% growth in footwear sales
Endorsements, Sponsorship Competition
Professional Athletes
Tom Brady, NFL
Ryan Howard, MLB
Michael Phelps, Olympian
NFL Scouting Combine
Licensing Competition
Official provider
Collegiate athletics

Diverse customer segments
Men, women, youth, athletes, non-athletes.
Research firm NPD Group study:
80% of activewear is worn for non-sports activities
85% footwear worn for other purpose
Fashion vs. Athletic credibility
Threat of Substitute Products or Services: High
This includes all other athletic apparel companies in the market, specifically:
Columbia Sportswear
Because of the high amount of competitors, the threat is high.
Nike's Asian market presence
Adidas' European market presence
Only eight suppliers provide Under Armour with 70% to 75% of its fabric used in their production

Inferior international presence
Small percentage of revenue comes from international markets
Lack of management during growth
High risk footwear line
12% revenue
New Designs - Fashion
Different Marketing strategy
Under Armour uses focused differentiation when they should be marketing to several more target markets.
Outsourcing opportunities
Footwear line
Expand further into the international market while keeping organized in the management sector.
Tap into other sports markets
Identify major international influences
Moving from concentrated marketing strategy domestically into a broad differentiation strategy internationally to expand customer base.
More fashionable clothing for the new target markets
Non athletes vs. athletes
Soccer apparel (International expansion)
Rationale of Key Recommendation
Potential in international markets
Under Armour must adopt integrated cost leader/differentiation strategy in order to remain competitive with Nike and Adidas abroad
Save on costs
Allocate savings back to R&D for footwear line and core competency Coldgear
Rationale of Key Recommendation
Outsourcing manufacturing to reduce power of suppliers
Widespread manufacturing
High risk footwear line investment is necessary in order to remain competitive
Studies show products purpose varies
E-commerce efficiency is vital for profitability and growth in domestic and foreign markets
Based on Jim Harvey's speech structures
Critical Issues
Highly competitive industry
Nike, Adidas, Columbia Sportswear
Lack of international revenue, presence, and market share
2010 Total Revenue: $1,063,927,000
US & Canada Sales: $997,816,000 (94% of sales)
Other Foreign Countries:
2010, Under Armour halted efforts to expand internationally due to footwear line focus
Domestic In-House Manufacturing, Glen Burnie, MD
High risk footwear line
12% of gross revenue
Potential affect on core competency - Apparel line R&D
Technical & Global
Technical Trends
E-commerce online sales
Amazon, Ebay, Zappoz
Efficient company logistics
Sales, Manufacturing, Demand, Supplies
Global Trends
Footwear line dominated by Nike
96% market share of $2.5 billion market
2008 Q1: Under Armour 43% of total US performance apparel, 32% Nike, 5.1% Adidas
Summary of General Environment
Rivalry among Existing Competitors: High
High level of competition
Diverse market based on geographic location
Competition among endorsements, sponsorships, and legal contracts
Major firms force others' to differentiate
Under Armour footwear
Bargaining Power of Buyers: Low
Bargaining Power of Suppliers: High
Threat of New Entrants: Low
Market controlled by major firms
Smaller businesses find market niches, such as Patagonia.
Market loyalty to major firms due to reputation and brand name
Summary of Industry Environment
Threat of Substitute Products
Bargaining Power of Suppliers
Bargaining Power of Buyers
Threat of New Entrants
Rivalry among Existing Competitors
Lack of proprietary product rights and intellectual property rights in foreign countries due to limitations.
Strong reliability on suppliers
Footwear line focus may impact core competency of Under Armour athletic apparel
Athletic apparel line
Strong brand image in US
Corporate Readiness
Sponsorships, Endorsements, Legal Contracts
Slogan: "Every Under Armour product is doing something for you; it's making you better"
Revisiting the Critical Strategic Issues
Teams Final Recommendation
Develop integrated cost leader/differentiation strategy
Focus on international market and diversification through differentiation
Identify international leadership to grow footwear line
Outsource manufacturing
Marketing campaign towards both athlete & non-athlete
Emphasis towards fashion
Expand internationally while marketing to more segments by:
Targetting popular sports in international markets and receive additional athlete endorsements
Research markets to increase revenue from non-athlete consumers
Diversify product lines to reach these consumers

International presence
European headquarters - Netherlands
Support offices in Hong Kong and Guangzhou, China
Primary sales through wholesale distribution and licensing to distributors

Lack of proprietary product rights and IP rights in foreign countries
IP rights in technology, materials, processes owned or controlled by suppliers
2010, recent surge by Under Armour to file patents
Suppliers control and own IP rights for the technology, materials, and processes used to manufacture Under Armour's products
Commodity goods used in manufacturing
Petroleum price fluctuations
Under Armour is in a highly competitive industry
Lack of revenue, presence, and market share internationally
Domestic in-house manufacturing
High risk footwear line
Weak brand name
Compromising core competency in lieu of footwear line
Expand internationally using integrated cost leader/differentiation strategy by:
Targeting key sports leaders
Athletic endorsements, Legal contracts
Outsourcing manufacturing
Manufacturing is not a core competency!
R&D emphasis
Athletes vs. Non athletes
Create desired, fashionable products while maintaining athletic integrity
Full transcript