under armour in_australia_complete[1]
Post on 14-Jan-2015
739 Views
Preview:
DESCRIPTION
TRANSCRIPT
UNDER ARMOUR IN AUSTRALIA
Brian CasianoCheyne StateznyKatie Rutkowski
Rajiv MahaySuzan HamdanThomas GoresThomas Weber
Commercial
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
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
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 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
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
Competitive AnalysisMain 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
Price Marketing
BudgetSales Quality
Perception
Sales Return on Mktg. Spending
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
Comparative Analysis
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
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
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
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
Modes of Entry
Exporting Pros:
No need for new manufacturing plant in Australia
Short lead time on shipments Cons:
Shipping via ocean is timelyAir Freight is expensive
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
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
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
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
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
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
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
Financial Analysis
Sales $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
Financial Analysis
Return 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
top related