Matt Bigelow, Chaz Fiorino, Amber Guinther, Jonathan Levitt, Matt Mehlman, Zac Wolfman

Headquarters: Baltimore, MD  Under Armour focuses on the development, marketing and distribution of branded performance apparel, footwear, and accessories for men, women and youth. 

Why: A member of our team was already in contact with Under Armour and it is an expanding company/brand that is trying to take on the giants of the Sports Apparel industry.

Manufacturers - major sporting goods companies and independent textile makers

Service Providers - retailers, apparel companies 

Buyers - retail stores, individuals, professional and collegiate teams

 Sellers -  retailers and apparel companies themselves

 End Users - athletes/consumers

INTENSITY OF RIVALRY - VERY HIGH

Powerful, large competing brandsSimilar products

Similar prices   

This leads to battles for market share based on BRAND. There are few other ways to differentiate.

THREAT OF ENTRY - LOW to MEDIUM

Interesting because UA was a new entrant not long ago 

Entrants must differentiate somehow

Powerful companies not willing to surrender market share

Increasing apparel technology raises start-up costs 

SUBSTITUTE PRODUCTS - MEDIUM

Low cost apparel attracts casual athletes

Anything that could be worn during a workout could deliver similar value for consumers

SUPPLIER POWER - MEDIUM

Many producers of textiles, raw materials for apparelLarge apparel companies would be attractive to them

However...

Some apparel in this industry is technologically differentiatedSuppliers of these materials could have increased leverage

BUYER POWER - HIGH

Both retail outlets and consumers have many options

Other brands offer similar products and prices

Low switching costs

For some consumers, little to no relationship with brand

Use of Product Endorsers  • Other industries use endorsers, but not to this extent• Bidding wars for top athletes

  Strong Personal and Emotional Connections • Consumers' passion for teams and players carries over to

their apparel choices

Compete in a highly competitive market, that includes a strong mix of new and already established companies that are expanding into performance products. Many are large apparel, footwear and sporting goods companies. Also compete with against companies that specialize in outdoor apparel.

• Nike• Adidas• Columbia Sportswear• The North Face

Vision Statement: To be the world's #1 performance athletic brand BHAGs:• Double sales, to $2 billion by 2013• Have women's sales surpass men's • To overtake Nike

Core Purpose: To make all athletes better through science, passion, and the relentless pursuit of innovation

Core Values:• Innovation• Inspiration• Reliability• Integrity

"It is great to work for someone as motivated as he (Kevin Plank) is - it makes you want to work harder each and every day. You think about his mindset and how hard he had to work to get this company off the ground and to where it is - it makes you realize that when you are tired at 3:30 in the afternoon after a long day that you can still go and you need to still go - never letting up. Working for this company isn't just me representing UA, but it is representing him and this company is and will always be his life." - (Ben Leigh, Manager of grassroots and collegiate marketing)

• CEO and Owner Kevin Plank

• High quality performance apparelo moisture-wicking synthetic fabrics

• Product Endorsers (Tom Brady, Ray Lewis, Cam Newton, Kemba Walker, Jose Reyes, Bryce Harper, Buster Posey, Tyler Seguin)

• Increase in overall PA sales every year

• Core competence in research  development and innovationo 25% of 3,900 employees in R&D

• Rely heavily on wholesale distribution (Dick’s and Sports Authority)

• Global brand recognition (90%> total sales in U.S.)

• Product line expansion experience (ex. footwear, cleats, basketball shoes)

Opportunities

• Global expansion

• Female market

• Sponsorship activation (e.g., critical sales events)

• Exit strategy (e.g. sell to Nike)

Threats

• Intense competition (Nike, Adidas, etc.)

• Substitute Products

• Changes in consumer trends/behavior

• Relatively new company (ability to continuously generate

ideas?)

• 4/5 of all revenue from apparel sales• Also draw revenue from footwear, accessories & licensing• Most sales via wholesale distribution within North America

o 1/4 of revenue from Dick's and Sports Authority

• Inputso Specialized fabrics developed by 3rd parties in collaboration with

UA product development teamo Allows UA to ensure they have the most advanced fabrics

• Productiono Products produced by unaffiliated manufacturers around the

worldo Small production facility at main office

• Distributiono 73% of revenue comes from wholesale distribution

retailers, athletic depts., leagues, teamso Also sell direct to consumer through factory stores & online

• Sales & Marketingo Attention-grabbing effective marketing campaignso Focus on young consumers, leagues and teamso Most sponsored athletes young and up-and-comingo Use variety of marketing mediums including sponsorship, TV and

print

• Customer Serviceo Nothing out of the ordinary for customer service

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• Initially Niche o Technologically advanced apparel

• As company developed and grew, shift to differentiationo More productso Shift towards a more diverse selection of

products More sports

Vertical Structure - Each level has people reporting "up the ladder"

• Partnership with Tottenham Hotspuro Largest European Sponsorship, 1st with a EPL teamo “For us being able to partner with Tottenham is a little

bit like winning the Super Bowl. It’s our most significant investment to date outside the United States.”

- Blair Tripodi, Director of Int’l Marketing

• Increased focus on the footwear industryo Footsteps Campaign

Largest footwear ad campaign and 1st to be solely focused on footwear

o Introduced line of Basketball shoes in 2010

• Focus on women’s marketo 2nd attempt to increase presence in women’s market

Shrink it and Pink ito “Protect This House I Will” campaignoUnder Armour Women Facebook fan page

• Sign up and coming stars to sponsorshipoStrategy= Find the next generation of stars to

represent the brand along with established stars o "We have positioned ourselves as a brand for the next

generation of athletes.“- Matt Mirchin, Senior VP of

Sports Marketing

• Tottenham Hotspur Partnershipo Increase presence in Europeo Futbol fans extremely loyal

• Footwear Industryo 3rd quarter footwear net revs grew 97%, from

$26.5 million in the prior year’s period to $52 million.

o $19 billion footwear market

• Focus on Female Marketo Represents only 25% of UA’s $800 million

revenue o “It is the only sports apparel sector where

sales are forecast to grow” – Analyst for NPD Group

• Sponsorship with next generation of athleteso Brand grows with athleteo Keeps sponsorship dollars downo NBA lockout

Expansion in Global Markets • Greater than 90% of sales come from within North America• Limited distribution channels abroad

o Nike & Adidas already have well-established distribution channels across the globe

• Much of brand strength and knowledge in US is connected with football

 Establishing Larger Market Share in Female Market  • Under Armour perceived as a male-oriented brand

o Comes from start in footballo Ad campaigns' very aggressive tone

• “Women’s apparel some day will be larger than our men’s apparel business, which is our goal” -Kevin Plank

Getting into Soccer• Many of the larger clubs and national teams are already

signed onto long-term deals with giants like Nike, Adidas, Puma and other established football brands 

• Relatively unknown in the football worldo has kit sponsorships in only 4 leagues throughout the

world (Greek Superleague, Japanese J-League, Mexico's Primera Division & EPL/BPL)

Footwear Product Line Expansion (Basketball)• Nike - a top competitor, controls around 95 percent of the

$2.4 billion U.S. basketball shoe market between its signature Jordan Brand line and Converse. (Sept. 2011)

• Lack of experience and advertising/marketing in basketball division

Keeping Organized & Successful with Accelerated Growth• Net revenues reached over $1 billion in 2010 from just

430.7 million in 2006• Must be able to anticipate and respond to changing

consumer preferences

Increase Efforts Toward Global Markets

• Focus efforts on establishing distribution channels through Europeo Consider acquisition of established company in Europe

e.g. Joma Sports in Spain• Re-brand UA abroad as a futbol company, not a football

companyo Already sponsoring Tottenham Hotspur in EPL

Sign more teamso Sign at least one national team to have a presence in

upcoming 2014 World Cup

“Intelligent Assistant” Customer Service

• Valuable for consumers with inadequate knowledge of Under Armour products and high-performance appareloParents purchasing for their athleteso 24/7 availabilityo First to act advantage

Establishing Larger Share in Female Market    • “Women’s apparel some day will be larger than

our men’s apparel business, which is our goal” - Kevin

Plank• Women account for 80% of buying decisions,

which includes shopping for family members, as well as purchasing for own use o Further use of "Intelligent Assistant"

• Women athletes are much more particular about what they wear for working outo Don't just make decisions based on what

looks good, rather the functionality of the item

Open More "Factory House" Locations • Outlet style stores • Less than 100 total locations in 34 states • Expansion builds distribution channels

without having to compete for shelf space at retail stores 

 Attempt to Become Official Apparel Company for Professional Leagues  • "Official" gear has higher margins• Penetrates a market held by competitors• Important marketing tool

Focus on basketball footwear to grow shoe sales

• Run more ad campaigns focused on basketball footwear to educate consumersoHired CP&B to oversee basketball advertising; shift

from in-house control• Continue to gradually introduce footwear to generate

hype• Continue to sign young elite athletes as endorsers

oBrand can grow as the athlete grows and becomes more successful

Implement Critical Sales Events (CSE)

• Customer loyalty

• Lower cost through customer retention

• Positive word of mouth

• Develop deeper positive relationships and continue relationship life cycle.

• Companies take after the personality of their leaderso Kevin Plank's years of hard work has instilled a culture of

"never letting up" • By sticking to core competencies you can still grow in a

weak economy• It's not impossible to compete with the Nikes and Adidas of

the world

2010 Under Armour Annual Report. (2010) Under Armour, Inc. Annual Report Retrieved from http://files.shareholder.com/downloads/UARM/14902 05677x0x452384C8786075-4201-

4DF1-9FC8D9740F8D59AA/2010_Annual_Report.pdf

Brennan, B. (2009). Why she buys, the new strategy for reaching the world's most powerful consumers. Crown Business.

Burke, M. (2011, January 27). Under Armour's About-Face Page 2 of 2 - Forbes.com. Information for the             World's Business Leaders - Forbes.com. Retrieved November 16, 2011, from http://www.forbes.com /forbes/2011/0214/focus-kevin-plank-under-armour-clothing-about-face_2.html

Dickens, C. (2011, March 8). “Tottenham sign kit deal with UA worth $16 million annually.” SportsPro. Retrieved from http://www.sportspromedia.com/news/tottenham_sign_surprise_multi-

million_dollar_deal_with_major_american_backe/

Olson, Elizabeth. "Under Armour Aims at Athletic Young Women - NYTimes.com." The New York Times - Breaking News, World News & Multimedia. 31 Aug. 2010. Web. 16 Nov. 2011.                     <http://www.nytimes.com/2010/09/01/business/media/01adco.html>.   

UABiz.com - Under Armour, Inc. - Code of Ethics and Business Conduct. (n.d.). UABiz.com - Under               Armour, Inc. - . Retrieved November 16, 2011, from http://www.uabiz.com/corpResponsibility.cfm

Walker, A. (2011, July 25). “Under Armour's rookie strategy for endorsement deals.” The Baltimore Sun. Web. Retrieved from http://www.baltimoresun.com/business/bs-bz-under-armour-endorsement-

20110725,0,4089835.story?page=1 

Ben Leigh - Manager of Grassroots & Collegiate Marketing     bleigh@underarmour.com     UMass Sport Management '04

Michael Cutting - Brand Manager

    mcutting@underarmour.com    UMass Sport Management '01

Questions???QUESTIONS?