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Presented by : Jason McClendon, KylePresented by : Jason McClendon, Kyle
WindhornWindhorn, Nicole Moore, Taylor, Nicole Moore, Taylor
Bemis,Bemis, QianniQianni Zhang,Zhang, and Zachand Zach
ChristiansenChristiansen
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Sector: Consumer Goods
Industry: Apparel/Footwear
Formed in 1996, CEO Kevin Plank
Filed with the SEC for IPO August 25, 2005
Headquartered in Baltimore, Maryland
Brand Mission:
To make all athletes better through passion, science and the relentless pursuitof innovation.
Company Information
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Business ActivitiesDevelopment, marketing and distribution of performance sports equipment
Focus on wholesale distribution
Wholesale distribution currently accounts for 78% of revenues
Only 18% of revenue is derived from direct sales to customers
Products available in over 20,000 stores worldwide
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Products
Apparel
HEATGEAR
COLDGEAR
ALLSEASONGEAR
Footwear
Introduced in 2006
Started as an idea to make a superior T-Shirt
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Sales Categories as a Percentage of Net Revenues
For the 2005 Fiscal Year
Accessories
3%
Footwear0%
Licensing
3%
Apparel
94%
For the 2009 Fiscal Year
Apparel
76%
Footwear
16%
Accessories
4%
Licensing
4%
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$19.71
$38.97
$52.55
$38.22
$47.78
0
10
20
30
40
50
60
2005 2006 2007 2008 2009
Year
NetIncome(InMillion
Close
10/29/10:
$46.68
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Employees
Approximately 3,000 employees
Mostly located in the United States
Have had no labor-related work stoppages, employee relations are good
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CausesUnder Armour Power in Pink
Under Armour Green
Under Armour Freedom
Ronald McDonald House
The V Foundation
The Conservation Fund
The Rock Foundation
Boomer Esiason Foundation
Living Classrooms Foundation
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SalesApproximately 93% in The United States, 4% in Canada, remaining 3% all
other international markets
Sells products in 13 total countries
Apparel sales represent 76% of net revenues, footwear - 16%, accessories -
4% and licensing arrangements for the sale of products - 4%
Supply performance apparel to NFL, NHL, MLB, USA Baseball, and the USSki Team
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US Centric
Mature market 330 million
Competitors
Demo 15-35
Critical IssuesCritical Issues
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Companys Market
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Economic- The athletic apparel industry has a 67% growth rate over last 10 years- 2- 3% growth for Under Armour
Demographic- Focused aged 15- 35, 25% of 330 million
- 10% potential market- Now armed with women's product
Socio-culture- Rapidly changing fashion and customer needs
Technology- innovation
Global- Highly fragmented and competitive- Alliances
Political and legal
- Copyright problem
General Environment
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Cycle: Moderate
Disruptive Technologies:
- Lycra
- Spandex
- Synthetic
External Environment
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Sports- Nike
- Adidas/Reebok
- Puma
Outdoors- REI
- Columbia
- Sporthill
External Environment: Competitors
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Name the Athletic Brands
Games, Games, Games!
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Very strong distribution network.
A lot of financial strength.
Powerful brand name.
Initial exponential growth in net income.
Big market with schools/universities.
Strong product placement.
Strengths
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Very narrow target market focus.
Perceived as a male brand.
High product costs, hampers profitability.
Limited online offerings in an increasingelectronic market.
Smaller marketing strategy than their
competitors.
Currently no patent for UA material.
Weaknesses
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Smart phones and the development of electronicsmerit a possibility to indulge in more of an onlinepresence.
There is a lack of market focus on women andchildren lines in general and could be very profitable.
They are strong in the athletic apparel market andcould explore related product markets with the
Under Armour brand.
Expanding to foreign markets could be veryprofitable, (IE: Europe).
Opportunities
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There is a lot of competition that can offer cheaperathletic products.
The American market has become very cost-conscious in recent years and may not be as receptive
as they used to towards expensive products by UnderArmour.
There are many substitute products on the marketsimilar to Under Armour at a lower expense toconsumers.
Schools/Universities suffering from budget cuts maychoose to use a cheaper substitute of Under Armour
in regards to athletics.
Threats
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Brand recognition and name, very strongmessage portrayed.
Value of the products is great, particularly in
perceived benefits.
Very profitable, margins are exceptional
Distinctive Competencies
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Strategic Alternatives
Focus on penetrating current international markets as well as expanding into newinternational markets
Extreme sports market
Patent the materials used in its products
Lower prices to reach other market segments
Increase scope of distribution, sell to greater number of retailers
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Strategic AlternativesOr use pricing tiers for different product lines
Diversify into other product markets (sports drinks? Sports bars? Bedding?Towels? Workout videos? )
Build more Under Armour specialty stores and outlets
Acquire other companies in niche marketsCreate fabrics with more designs
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Our RecommendationExpand into foreign markets
Secure Patent for material
Diversify wholesale distribution