Under Armour:Internal Analysis, SWOT Analysis, Competitive Position, and Conclusions/Recommendations Brian Teufel MGT 490-004 Assignment #3 Professor McDermott March 17, 2011
Under Armour’s Performance • Under Armour’s PA sales and net income have increased every year since 2006.
Under Armour’s Performance • On average, around 80% of Under Armour’s net income comes from PA.
Change in Sales by Product • All $ amounts are in millions • Footwear sales increased every year from 2006-2009 but decreased by 7% in 2010. • PA and accessories sales have increased every year; PA had a huge increase of 24% from 2009 to 2010.
Change in Distribution of Sales by Region • International sales have increased every year since 2008 but UA is still heavily reliable on North America for about 90% of their total sales.
Employee Distribution # of Employees, % of Total Employees • Under Armour has a total of 3,900 employees. • Factory House and Specialty Stores employees are increasing rapidly because UA is opening more branded stores. • Almost ¼ of UA’s employees are devoted to research and development.
Generic Strategy Competitive Advantage Low Cost Differentiation Broad Target Competitive Scope Narrow Target • UA is moving from niche to mainstream in an attempt to compete with Nike and Adidas on other product lines (footwear and accessories) other than performance apparel.
Product BCG Matrix Market Share High Low •Performance Apparel •Footwear High •Accessories Market Growth Low
Value Chain • UA creates value for the consumers and gains its competitive advantage against the competition primarily through technology development. • Innovation is what made UA what it is today, and Innovation is the key for future success.
Ansoff’s Matrix (cont.) 1 = Lowest Level of Effort 4 = Highest Level of Effort Market Penetration Product Development Market Development Diversification • UA is focused on all of these strategies but they must prioritize according to what will achieve them the greatest amount of success and what will put them in the best position to grow in the future.
Sponsorships/Endorsements Domestic Sponsorships/Endorsements International Sponsorships/Endorsements
PA sales and overall sales have increased every year since Under Armour has been founded. PA sales account for more than 80% of total sales. International sales account for less than 10% of sales but they have been increasing slightly since 2008. Under Armour is attempting to make a push into international and emerging markets. The two main strengths for Under Armour are its core competence in innovation and its brand equity. UA is moving from niche to mainstream in an attempt to compete with Nike and Adidas on other product lines (footwear and accessories) other than performance apparel. Conclusions
Under Armour’s primary focus should be to increase their U.S. market share in other products such as footwear and accessories while maintaining market leadership in PA. Under Armour should move into international and emerging markets with caution to assure they do not expand too quickly. Under Armour needs to continue to provide value to consumers through innovation and research and development. Under Armour needs to integrate their marketing plan and make sure than all sponsorships and endorsements contribute to the value of the brand. Recommendations