Brian Casiano                  Cheyne Statezny                  Katie Rutkowski                      Rajiv Mahay          ...
Commercial
Environmental Analysis Economy   $1 Australian Dollar = $1.05 US Dollar   GDP per capita very close to US Business Env...
Environmental Analysis Demographic Trends   Population grew 3m last ten years   1.04 males per female (under 65) Cultu...
Why Australia? Educated workforce Ease of doing business Athletic orientation Individualistic culture Stable economy
Industry Analysis Sales History   Industry Revenues (in millions):                    2010       2009         2008 Nike ...
Industry Trends Australian retail industry   Grew 2.9% in 2009   Forecasted to increase 16% by 2014 Seasonality has an...
Competitive Analysis   Main Competitors         • Nike               – World’s leading athletic apparel company           ...
Company Analysis Products   Athletic footwear, weather specific apparel, fan gear, golf    apparel, swimwear, etc.   Co...
SWOT Analysis Strengths   Innovation   Affiliation with Professional athletes   Stable Profitability Weaknesses   Hi...
SWOT Analysis Opportunities   Untapped markets of major ball sports   Possible market outside of sports   Competitors ...
Target Market Regular athletic participants Athletics fan or participants Fashion seeking individuals Demographics of ...
Modes of Entry Exporting   Pros:     No need for new manufacturing plant      in Australia     Short lead time on ship...
Modes of Entry Licensing: Sell temporary usage rights for  Under Armour brand name to Australian  company   Pros:     N...
Objectives  Sales    $50 million by Dec 31, 2012  Profits    4% or $2 million net by Dec 31, 2012  Distribution by De...
Objectives Consumer Awareness   75% brand awareness across all Australian    consumers by 12/31/2012   90% brand awaren...
Strategies Sales & Profits   Price breaks on HeatGear line for first buyers     Incentive to be early adopter   Initia...
Strategies Distribution   Establish efficient supply chain   Sell in department store chains, sporting goods    stores,...
Strategies Consumer Awareness   Partner with Australian Football League   Television advertisements     Major sporting...
Tactics Establish online store Signage and appearances Enter 3 year partnership with Collingwood  FC Magpies (of Melbou...
Financial AnalysisSales                                    $1,000,000Cost of goods sold                       $450,000Gros...
Financial AnalysisReturn on Investment= Net marketing contribution / Investment= 4,685,060 / 5,235,060= -89.4% Large firs...
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Under armour in_australia_complete[1]

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Under armour in_australia_complete[1]

  1. 1. Brian Casiano Cheyne Statezny Katie Rutkowski Rajiv Mahay Suzan Hamdan Thomas Gores Thomas WeberUNDER ARMOUR IN AUSTRALIA
  2. 2. Commercial
  3. 3. Environmental Analysis Economy  $1 Australian Dollar = $1.05 US Dollar  GDP per capita very close to US Business Environment  $13.47 minimum wage  Skilled workforce  Lower-than-average business start-up time
  4. 4. Environmental Analysis Demographic Trends  Population grew 3m last ten years  1.04 males per female (under 65) Culture  Very similar to US (per Hofstede’s Five Dimensions)  No language barrier  Sports are a key aspect
  5. 5. Why Australia? Educated workforce Ease of doing business Athletic orientation Individualistic culture Stable economy
  6. 6. Industry Analysis Sales History  Industry Revenues (in millions): 2010 2009 2008 Nike 19,014.00 19,176.10 18,627.00 Columbia 1,483.52 1,244.02 1,317.84 Under Armour 1,063.93 856.41 725.24
  7. 7. Industry Trends Australian retail industry  Grew 2.9% in 2009  Forecasted to increase 16% by 2014 Seasonality has an effect on sales Comparable to global fashion trends Women’s wear is largest segment
  8. 8. Competitive Analysis Main Competitors • Nike – World’s leading athletic apparel company – Sold in 100 countries worldwide – Extensive use of primetime advertising & celebrities • Adidas – Sold in 96 countries worldwide – Extensive use of primetime advertising – Comparable to Nike; has pervaded American culture beyond the bounds of athletics Comparative Analysis Price Marketing Sales Quality Sales Return on Mktg. Spending Budget Perception Nike High $2.3b $19.2b Highest 8.34:1 Columbia Moderately High $77m $1.24b High 16.1:1 Adidas Moderately High $1.9b $14.32b Highest 7.54:1*note here that sales numbers are 2009, while marketing budget is 2010; as a result, sales return on marketing spending is a ballpark estimate
  9. 9. Company Analysis Products  Athletic footwear, weather specific apparel, fan gear, golf apparel, swimwear, etc.  ColdGear / HeatGear Under Armour has seen an increase in net revenues to $856.4 million in 2009  Up from $281.1 million in 2005 Future  Introducing new high-tech product lines (2012)  Growth by…  Expansion into int’l markets  Increasing wholesale distribution  Increasing growth in D2C channel
  10. 10. SWOT Analysis Strengths  Innovation  Affiliation with Professional athletes  Stable Profitability Weaknesses  High Cost of production/innovation  Narrow focus on certain sports  Lack of advertising compared to market  Some product line perceived as too expensive
  11. 11. SWOT Analysis Opportunities  Untapped markets of major ball sports  Possible market outside of sports  Competitors receive bad reputation for outsource  Consumer loyalty Threats  Economy in recession  Powerful competitors  Male dominant focus  Distribution lacking compared to competitors
  12. 12. Target Market Regular athletic participants Athletics fan or participants Fashion seeking individuals Demographics of target market - Age, Gender, and Income Comprises 8,000,000 Australians
  13. 13. Modes of Entry Exporting  Pros:  No need for new manufacturing plant in Australia  Short lead time on shipments  Cons:  Shipping via ocean is timely  Air Freight is expensive
  14. 14. Modes of Entry Licensing: Sell temporary usage rights for Under Armour brand name to Australian company  Pros:  No shipping or manufacturing costs  Reduced lead time over exporting  Cons:  Less quality control  Risk associated allowing outside firm to use brand names
  15. 15. Objectives  Sales  $50 million by Dec 31, 2012  Profits  4% or $2 million net by Dec 31, 2012  Distribution by Dec 31, 2012  Online store  Partner with one department store and one athletic apparel store
  16. 16. Objectives Consumer Awareness  75% brand awareness across all Australian consumers by 12/31/2012  90% brand awareness among Australian athletics-oriented consumers by 12/31/2012  Advertising partnership  Australian sports league by 3/31/2012 Customer Satisfaction  95% by 12/31/2012  Functioning customer service operation by 12/31/2012
  17. 17. Strategies Sales & Profits  Price breaks on HeatGear line for first buyers  Incentive to be early adopter  Initiate driven advertising campaign  Control costs to enhance profits  Competitive pricing compared to existing firms  Mid-level pricing
  18. 18. Strategies Distribution  Establish efficient supply chain  Sell in department store chains, sporting goods stores, athletic apparel stores  Discount price to retailers stocking UA products  Push strategy  Partner with existing internet distribution and logistics company  Create successful UA online store
  19. 19. Strategies Consumer Awareness  Partner with Australian Football League  Television advertisements  Major sporting events  Sports news programs  Celebrity endorsements  Sponsor youth sports programs and social benefit athletic events
  20. 20. Tactics Establish online store Signage and appearances Enter 3 year partnership with Collingwood FC Magpies (of Melbourne) Banner ads Search engine optimization Create customer satisfaction surveys & call center
  21. 21. Financial AnalysisSales $1,000,000Cost of goods sold $450,000Gross profit $550,000Marketing expense $5,235,060Net marketing contribution ($4,685,060)Break-even point: 28,500 units at average cost of $50 Note that this is unlikely in first year of operations, but most definitely attainable in future years
  22. 22. Financial AnalysisReturn on Investment= Net marketing contribution / Investment= 4,685,060 / 5,235,060= -89.4% Large first year loss reflects high cost of marketing competitively in our industry
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