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Final Powerpoint - J375
- 1. UNDER ARMOUR FINAL ANALYSIS PRESENTED BY: REBECCA BROUGHER, LYDIA ERTEL, CORY PIERCE, TAYLOR RUDEN, AND JILLIAN SPECK
- 2. History Becoming A Company CEO Kevin Plank “A product will sell itself”
- 3. History Competitors • Company Culture • Innovation leads to success • Celebrity Endorsements • Increased U.S. presence
- 5. P.E.E.S.T Analysis Political Increase in online shopping: Less customers in physical retail locations Less public liability cases arise since less customers in stores Positive: Lower litigation costs in terms of financial resources and less harm to brand image
- 6. P.E.E.S.T Analysis Economic 2014 GDP Growth Rate: 2.2% 2015 GDP Growth Rate: 3.1% Increasing Public and Private Consumption
- 7. P.E.E.S.T Analysis Ecological 83% of consumers want companies to support causes
- 9. P.E.E.S.T Analysis Technological 1. Reactive Material/Fabric 2. Wearable Device Technology 3. Smart Clothing
- 10. Porter’s Five Forces Analysis Threat of Substitutes
- 11. Porter’s Five Forces Analysis Threat of New Entrants 0 10 20 30 40 50 60 70 80 90 100 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Under Armour: Capital Expenditures Increase To Finance Growth CapitalExpenditures(USDMillions)
- 12. Porter’s Five Forces Analysis Threat of New Entrants http://marketrealist.com/2014/12/armour-versus-nike-can-david-beat-footwear-goliath/http://marketrealist.com/2014/12/key-revenue-earners-drive-pricing-power-nike/
- 13. Porter’s Five Forces Analysis Power of Buyers Wholesale Buyers Customers
- 14. Low- Medium Bargaining PowerSupplier Base is very Diverse 27 Manufacturers across 14 countries Top 10 account for only 49% of products Porter’s Five Forces Analysis Power of Suppliers
- 15. Porter’s Five Forces Analysis Intensity of Rivalry Among Competitors • Adidas • $1.6 billion in sales • Under Armour • $2.6 billion in sales • Nike • $11.8 billion in sales
- 17. Internal Analysis SWOT Analysis Strengths • Good Leadership • Innovative New Products • R&D and Marketing Weaknesses • No Proprietary Product Rights • 26% of Sales from Dick’s Sporting Goods • Sales Mostly Domestic (Compared to Competition) • High Prices
- 18. Internal Analysis SWOT Analysis Opportunities • Expanding Internationally (Financially Stable) • Female Market • Consumers Focusing on Quality (Not Price) • Corporate Social Responsibility Threats • Easily Replicated Products • Not Diversified in Retailers • Too Dependent on a Few Third-Party Suppliers
- 19. Internal Analysis Resources: Financial Under Armour Industry Gross Profit Margin 50.10% 37.50% Return on Equity 18.18% 10.3% Return on Assets 13.47% 3.8% Total Debt/Eqiuty 0.03 0.41
- 21. Internal Analysis Value Chain Analysis Primary Activities Operations Jim Calo, Supply Chain Officer Marketing Increased marketing budget Popular brand ambassadors Support Activities Human Resource Management 87th on America’s Best Employers list Technology Development Armour39 Concept Suit
- 22. Internal Analysis VRIO Framework Valuable Rare Imitable Organization Implication Financial Resources YES YES YES NO Potential Sustainable Competitive Advantage Production SOMEWHAT NO NO NO Competitive Disadvantage Innovation and Marketing YES YES YES YES Realized Temporary Competitive Advantage Products YES NO YES NO Temporary Competitive Advantage
- 23. Internal Analysis Organizational Structure Board of Directors North America Latin America Europe Asia Pacific Kerry Chandler: CHRO Brad Dickerson: COO, CFO Kip J. Fulks: President, Footwear Innovation James Hardy: Executive VP, Global Operations Karl-Heinz Maurath: President, International Matthew Mirchin: President, North America Adam Peake: Executive VP, Global Marketing Henry Stafford: Chief Merchandising Officer Kevin Plank, CEO
- 25. Began making shirts and have since expanded into the entire athletic apparel industry Operate under a related diversification strategy as each product line is interdependent For example, clothing, footwear, and athletic gear Strategic Analysis Diversification
- 26. Strategic Analysis BCG Growth Share Matrix
- 28. Strategic Analysis Differentiation Strategy High Price High Quality Highly Differentiated Product
- 29. Strategic Analysis Strategic ProblemsLack of Proprietary Rights Small International Presence Dependence on Outsourcing
- 31. Corporate Social Responsibility Core Values and Business Partners Innovation Inspiration Reliability Integrity
- 32. Protect This House Empowering Athletes of the Next Generation She’s a Fighter Corporate Social Responsibility How They Give Back
- 33. Recommendations
- 34. Consider protecting proprietary technology, especially with the release of smart clothing Develop deeper market penetration in key global markets in order to keep up with competitors Diversify retailing outlets in order to grow customer base
- 35. Questions?
Editor's Notes
- http://money.cnn.com/video/fortune/2009/03/30/fortune.BA.plank.033009.fortune/index.html (0:19) -First year $17,000 in sales -Cash is king to starting a business. Don’t give away half your company, if the product is good then it will sell itself. -Big focus on the private sector, helping high schools build stadiums. Kevin enjoys it and it sends a good message to the community. http://www.washingtonpost.com/business/on-small-business/when-we-were-small-under-armour/2014/11/11/f61e8876-69ce-11e4-b053-65cea7903f2e_story.html Kevin Plank-CEO Student-Athlete at Maryland, wanted a shirt for under his pads that would absorb sweat Used his teammates as his beginning advertisers Start in a D.C. row house “put the freaking pen down and go do something” http://espn.go.com/video/clip?id=11260481
- Bavaria, Germany. Adi Dassler Refocusing on the U.S. Increase brand prominence in U.S. Company Culture Celebrity endorsements NIKE Market cap is five times of Under Armour’s 2012 introduced the Fuel Band CEO Mark Parker 60% increase in revenue since 2006 Experimentation leads to great innovations for Nike. Two in one year which is very rare. Company Culture
- Forbes.com shows that consumers want their companies to be green and care about the environment. UA has a green line and a think pink campaign about breast cancer http://www.bizjournals.com/baltimore/print-edition/2011/04/22/under-armour-aims-to-change-green.html?page=all Green line is shirts made from recycled water bottles
- Sociocultural: The manner in which society conducts itself and what society views as critical values, has a large impact on the potential growth and further success of Under Armour. Currently, society is shifting towards a value system that involves exercise and health. This is a sociocultural change that, if approached correctly, can be a stepping stone to growth for Under Armour. Demographic trends • Capture population characteristics related to age, gender,family size, ethnicity, sexual orientation, religion, andsocioeconomic class.
- Suppliers have low to medium level of bargaining power which is a strongpoint for Under Armour Able to negotiate with their suppliers for lower prices which will keep their costs low
- In 2014, Under Armour was the Marketer of the Year according to Ad Age This was due to the firm’s recent push to attract women and its 18th consecutive quarter of more than 20% sales growth Under Armour started as a company aimed at only male athletes, however lately they have broadened their target to both sexes and more than solely athletes as well
- http://www.uabiz.com/company/corpResponsibility.cfm Core values Innovation Inspiration Reliability Integrity Business partners have similar core values Comply with UA’s Code of Conduct Follow established work place practices Adhere to core values of UA Any violation can be viewed as a breach of Manufacturing Agreement Could lead to termination of business partnership Compare Nike (competitor) to UA Nike has been noted as having low CSR especially when it relates to the manufacturers and suppliers: viewpoint seems to be “cheaper is better” http://www.uabiz.com/company/corpResponsibility.cfm Business partners have similar core values Comply with UA’s Code of Conduct Follow established work place practices Adhere to core values of UA Any violation can be viewed as a breach of Manufacturing Agreement Could lead to termination of business partnership Compare Nike (competitor) to UA Nike has been noted as having low CSR especially when it relates to the manufacturers and suppliers: viewpoint seems to be “cheaper is better”
- http://www.uabiz.com/corporategiving/corp_giving.cfm UA Power in Pink is our campaign that celebrates the many women who use fitness and exercise in their fight for breast health. #UAPowerinPink UA WIN is our commitment to empower athletes of the Next generation by providing kids access to sport. #UAWIN UA Freedom is our way of making sure our heroes get the support they deserve. #UAFreedom