Strategic Management Analysis

1. UA Executive Summary
Strategic Alternatives
Growth Strategies
Under Armour (UA) has an opportunity to expand their growth. If UA were to
increase their global presence, it would open new business opportunities and ultimately
increase revenue. Tapping into the overseas market is an important decision and they
must merge with to take advantage of. UA understands that most of their current revenue
comes from sales in the US, and expanding their customer base overseas taps into a huge
market for consumers who would benefit from UA’s entire lineup. Aside from working
deals to add their products to current overseas retailers, UA may focus on acquisitions of
companies offering similar products and/or companies with technology in-line with UA’s
interests.
Currently UA has long lead times due to overseas distribution. This forces UA to
produce product orders long before customer orders are placed. Using the vertical
growth concept will benefit UA in many ways. UA will need to leverage revenue to tap
into this over seas demographic location and take over this function that provides their
company with supplies. This strategy will assist in reducing cost, gaining control of the
scarce resource, guarantee quality of a key input and obtain access to potential customers.
UA has a high energy work environment based around football. This football
culture will need to be expanded within UA’s department stores. Considering multiple
areas of the sports realm like golf, soccer, hockey, and baseball, this change will have its
benefits. Training employees in all types of sports will assist in future research and
development ideas. Cross training their employees will also help to ensure their

2. employees are all well-rounded in all aspects of UA’s product line. An additional benefit
that comes with expanding outside of just football is employee retention and higher level
of potential future candidates. Not all people are football fans and pushing a more well
rounded culture will be more inviting for new employees.
UA can leverage its brand loyalty it has created with its performance apparel
customers to increase their market share and expand their accessory product lines. An
additional leverage that can be utilized is UA’s influencers. These influencers include
famous NFL football players. This resource should be expanded on and continued
because it provides huge company growth in sales due to the players loyal fans. The
expansion that needs to be considered is advertising with other professional athletes
outside of football, including professionals from golf, soccer, hockey, and baseball. With
this expansion, it will deliver an increased level of loyal customers which in turn provides
additional revenue.
Demographically speaking UA’s strategy typically targeted individuals in the 15-
25 age group. This isn’t a very large demographic and should be expanded. Expanding
this demographic would increase overall profit and provide revenues for additional
product growth. Researching the different demographics and what interest they desire
would give UA the strategic advantage in their marketing and development of the desired
products.
Retrenchment Strategies
Products that are not performing well should be discontinued immediately to
ensure revenue is not lost. If old stock is not being sold at retail price, the items should be
discounted and sold off immediately. Sitting on old stock is a waste of resources. UA

3. should liquidate products whose sales are stagnant by discounting through
domestic/international/outlet locations. After breaking into the overseas market, UA will
be able to revamp their pricing in line with the additional revenue being generated.
Lowering manufacturing costs through growth will raise profit margins.
Product Diversification
Diversifying their product line would be a wise decision for UA since it would
increase the purchases from current customer who use the athletic gear, but also bring in
a wide range of new customers who may not be interested in athletic-type gear. Adding a
casual wear line with UA’s technologies results in high-quality clothing/accessories for
everyday use. There are loyal customers who wear their products during sports-type
activities would appreciate UA quality products to wear for daily use. Take that same
concept and create a specialized cold/warm weather lineup, adding a niche product with a
huge customer base who will continue to purchase loyally if the product performs how
they need it to. UA’s technology allowing sweat to be wicked away is extremely
beneficial in extreme temperature environments. UA should capitalize, opening avenues
in cold weather gear and warm weather gear.
To add on to that, UA should take those same concepts and create a product
category towards hunting. Similar to the cold/warm weather gear, but tailored for the
hunter. Hunters spend billions each year on hunting clothing and accessories. If UA can
create tiered hunting gear for specific geographic hunting locations, they can enter an
additional specific market that appreciates quality gear. This would give an opportunity
for additional accessory and footwear revenue. Limiting the focus on football and
changing direction to increase focus onto other sports would be paramount. Other sports

4. such as baseball, football, hockey, and golf have a large fanbase. If UA can reach out and
market to those additional groups it would increase their market share substantially. For
instance; Nike did very well by having Tiger Woods become their sponsor. UA is
missing out on opportunities by not broadening their target base.
Recommendation
Growth Strategies
UA would best benefit from a Global Manufacturing Expansion plan, strategically
targeting Southeast Asia, the industrialized Europe and Latin America. There exists an
enormous opportunity in unrealized Economies of Scale as part of their Global
Operations Value Chain. This global operations value chain could, effectively, be
leveraged to utilize Advanced Manufacturing Technologies (AMT’s). A value chain
analysis uncovers rather significant profit potential in investing in AMT’s. By
implementing a directional strategy such as this, a deeper focus would be brought to light
in analyzing UA’s product life cycles. Likewise, there is hidden profit in uncovering
inefficiencies within these various product life cycles. A significant factor that should not
be overlooked are the abundant resources located in these regions that UA has been
accessing as inputs in their inbound logistical process. By strategically situating proposed
facilities closer to these inputs, further economies of scale can be realized. A complete
analysis of the global operations Value Chain provides for the following benefits:
● Inbound Logistics can provide reduced shipping costs on many of the inputs that
UA relies upon
● Operations strategy reveals a lower overall production cost by investing in
modern facilities, machining and assembly
● Outbound logistics can continue to be outsourced to take advantage of new
frontiers in mass customization

5. As part of the value chain analysis and the selection of AMT’s, it is suggested that
UA’s operations division implement Manufacturing Resource Planning (MRP) in order
to create efficiency through effectiveness to realize the the following benefits from its
application:
● Optimized production technologies
● Just-in time (JIT) Techniques
● Increased flexibility
● Quicker response times
● Higher productivity
This brings us to the area of product life cycles. These proposed manufacturing
facilities represent a significant move forward in automation and production efficiency
for UA. This investment would, undoubtedly, have significant payback with respect to
the patented dri-fit technology which has plenty of room for future growth, not only for
existing lines of products, but for future generation as well. There is ample room for
growth in production and marketing of this material. In order to synergize these
manufacturing facilities and create the requisite efficiencies of operation, UA would need
to invest in the application, monitoring, and measuring of continuous process
improvements. One major advantage here is the presence of a highly-trained labor force
in Southeast Asia that are capable of working as highly-empowered, cross-functional
teams. Specifically, as it relates to UA, the application of continuous process
methodology presents the following strategic advantages:
● Managers are more like coaches in these manufacturing processes, which ties in
neatly with UA mission and values
● These types of production teams provide a low-cost standard but deliver a high
quality product
● A low-cost competitive strategy provides higher margins, greater Return-on-
Investment, and quicker payback on facility construction
● These types of production teams also allow for mass customization, an emerging
manufacturing trend

6. Implementation of the Recommended Strategy
To begin the implementation process UA should begin by adding board members
that have global business experience and have a clear vision of future growth. These
board members should have some knowledge of the different sports played around the
world, knowledge of foreign currencies, different rates of inflation and know how to take
advantage of the international transfer pricing in order to minimize taxes. Then, UA
should conduct market analysis to decide which markets it can enter and the individuals it
will target in these markets. UA will need to analysis the pros and cons of each market
and targeted consumers. UA will need to meet with their top management teams to
discuss budgets, timeframes for key implementation tasks and activities plus decide
which individuals will be responsible of overseeing current domestic operations and what
structure will be needed to execute the new strategies. Employee training should be
incorporated early in the implementation strategy. It is important for UA to involve
everyone in the implementation plan...plant managers, project managers, unit heads, and
employees.
All UA employees will need to review current workflows, policies,
manuals...etc. and incorporate the new strategies into the daily business activities.
Employees will need to learn about different sports, the rules, key teams, key individuals
in each team and fan types. Employees will need to change from seasonal football to year
round play. Communication is crucial so UA will need to establish a tool where everyone
in the company may submit concerns, questions, comments to project managers. An
individual will need to be assigned to research and answer employees. This individual
should be responsible for reporting to all the pros and cons on the implementation. If

7. necessary, create new job roles or rotate individuals to new roles. Most importantly, UA
board members and top management needs to make sure that everyone knows they are
important and are needed either indirectly or directly in order to implement these new
strategies so the company can grow in this generation and the next.
Evaluation and Control of the Recommended Strategy
To ensure a plan comes together and stays together, the plan must be evaluated
and controlled. The plan will need to be evaluated throughout the process to manage any
uncertainties that could negatively or positively influence the achievement of the
corporation’s objectives. With implementing a new strategy, there is always a possibility
of risk the corporation must be aware of.
To ensure this risk are monitored UA will use Enterprise Risk management
(ERM). The process of rating these risk for UA involve three steps:
1. Identify the risk using scenario analysis or brainstorming or by performing
risk assessments
2. Rank the risk, using a standard scale of impact and likelihood
3. Measure the risks, using the company standard
This process will ensure the newly developed strategy will be appropriately
monitored throughout the process. Management will be a big part of this process and if
for any reason an unlikely financial risk occur the project can be stopped until the issue is
corrected.
In addition to this evaluation process benchmarking will be used to evaluate
performance. Benchmarking is the continual process of measuring products, services, and
practices against the toughest competitors or the ones that are recognized as industry

8. leaders. UA has many competitors but their biggest are Nike, Adidas, and Champion. UA
will need to invest in learning what and how these giants of the industry operate. The
concept here is to not redundantly invent something that someone else is already using.
UA will benchmark the current processes that Nike, Adidas, Champion utilize. In the
recommended strategy that UA is going to implement, benchmarking should be used and
they can evaluate their performance based upon the competitors. UA will identify the
output measure and obtain measurement. Management will take this information to yet
again make executive decisions on if the project is moving in the right direction without
getting into deep. At the same time the new strategy is being implemented, benchmarked,
and risk management assessed UA can bench mark other strategic areas like:
Demographic diversity, overseas presence with new UA product, diversity in casual
wear, advertisement/sponsorship, product promotion including other sports such as; golf,
soccer, hockey, and baseball.