final powerpoint - j375
TRANSCRIPT
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UNDER ARMOUR FINAL ANALYSISPRESENTED BY: REBECCA BROUGHER, LYDIA ERTEL, CORY PIERCE, TAYLOR RUDEN, AND JILLIAN SPECK
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History Becoming A Company
CEO Kevin Plank “A product will sell itself”
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History Competitors
• Company Culture• Innovation leads to success
• Celebrity Endorsements• Increased U.S. presence
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External Analysis
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P.E.E.S.T AnalysisPolitical
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
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P.E.E.S.T AnalysisEconomic
2014 GDP Growth Rate:
2.2%
2015 GDP Growth Rate:
3.1%
Increasing Public and
Private Consumption
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P.E.E.S.T AnalysisEcological
83% of consumers want companies to support causes
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P.E.E.S.T AnalysisSociocultural
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P.E.E.S.T AnalysisTechnological1. Reactive Material/Fabric
2. Wearable Device Technology3. Smart Clothing
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Porter’s Five Forces AnalysisThreat of Substitutes
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Porter’s Five Forces Analysis Threat of New Entrants
2004 2005 2006 2007 2008 2009 2010 2011 2012 20130102030405060708090
100
Under Armour: Capital Expenditures Increase To Finance Growth
Capi
tal E
xpen
ditu
res (
USD
Milli
ons)
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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/
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Porter’s Five Forces Analysis Power of BuyersWholesale Buyers Customers
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Low- Medium
Bargaining Power
Supplier 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
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Porter’s Five Forces AnalysisIntensity of Rivalry Among Competitors• Adidas• $1.6 billion in
sales• Under Armour• $2.6 billion in
sales• Nike• $11.8 billion in
sales
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Internal Analysis
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Internal AnalysisSWOT 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
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Internal AnalysisSWOT 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
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Internal AnalysisResources: 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
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Internal AnalysisCore Competencies
Marketing
Technology
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Internal AnalysisValue Chain Analysis
Primary ActivitiesOperations
Jim Calo, Supply Chain Officer
MarketingIncreased marketing budgetPopular brand ambassadors
Support ActivitiesHuman Resource
Management 87th on America’s Best
Employers listTechnology Development
Armour39Concept Suit
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Internal AnalysisVRIO 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
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Internal AnalysisOrganizational Structure
Board of Director
s
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
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Strategic Analysis
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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 AnalysisDiversification
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Strategic AnalysisBCG Growth Share Matrix
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Strategic AnalysisMarketing
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Strategic AnalysisDifferentiation Strategy
High Price
High Quality
Highly Differentiated Product
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Strategic AnalysisStrategic ProblemsLack of Proprietary Rights
Small International Presence
Dependence on Outsourcing
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Corporate Social Responsibility
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Corporate Social Responsibility Core Valuesand Business Partners
Innovation
Inspiration
Reliability
Integrity
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Protect This House
Empowering Athletes of the Next Generation
She’s a Fighter
Corporate Social ResponsibilityHow They Give Back
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Recommendations
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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
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Questions?