ua presentation final

8/8/2019 UA Presentation Final

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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

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