under armour inc. - ido.ge · pdf file5.2 porter’s five forces ..... 13 5.3 pestel...

Anglo-American University Graduation Thesis by Otar Bedoshvili Mentor Simon Gordon-Smith MBA

1

Under Armour Inc

A thesis submitted to the Anglo-American University for the degree of Bachelor of Business

Administration

Spring 2011

OTAR BEDOSHVILI

SCHOOL OF BUSINESS ADMINISTRATION


2

DECLARATION

No portion of the work referred to in this thesis has been submitted in support of an

application for another degree or qualification of this or any other university or other institute

of learning

I hereby also declare that this thesis is my independent work All sources and literature are

cited and included

Please sign here


3

Table of Contents

1 Abstract 4

2 Introduction 6

3 Product Lines 7

4 General Current Strategy 7

41 Growth Strategy 8

42 Differentiation Strategy 8

43 Innovation Strategy 9

44 Corporate Strategy 9

45 Product Positioning 10

5 External Analysis 11

51 The Athletic Apparel and Footwear Industry Review 11

52 Porterrsquos Five Forces 13

53 PESTEL Analysis 25

531 Political Analysis 25

532 Economic Analysis 27

533 Social Analysis 28

534 Technological Analysis 30

535 Environmental Analysis 31

536 Legal Analysis 33

6 Financial Analysis 34

7 Internal Analysis 38

71 Competencies 38

72 Value Chain 39

8 SWOT Analysis 46

Strengths 46

Weaknesses 46

Opportunities 46

Threats 46

9 Recommendations 50


4

1 Abstract

This thesis is about a relatively new company operating in the athletic apparel and footwear

business The company is registered and branded by the name Under Armour reg (UA) The

mission statement says that the company serves ldquoto make all athletes better through science

passion and the relentless pursuit of innovationrdquo The analysis of its strategic external

internal and financial standings is aimed to discover in how successfully is Under Armour

serving its mission statement followed by recommendations for improvement

By using the Porterrsquos Five Analysis and Pestle Analysis tools the thesis examines all external

factors that affect the companyrsquos performance The Porterrsquos five is aimed at discovering the

forces that pressure and drive Under Armours business and how the latter chooses to interact

with them The Pestle analysis shows what global factors independent from the company

itself have affect on its progress All operating enterprises need to deal with the external

environment The analysis offers the way UArsquos management handles it

The financial analysis goes through Under Armours Financial statements of the recent years

to discover the companyrsquos standing Covering a number of important financial ratios the

analysis illustrates that Under Armours success has shown itself in its financial condition

The internal analysis covers the core competencies and the value chain of Under Armour Itrsquos

aimed to find out what contributes to the companyrsquos recent success and whether theyrsquoll be

able to continue on with it The value chain analysis covers the nine sections that create the

value of the product Under Armour sells

After the internal analysis the companyrsquos strengths weaknesses opportunities and threats are

evaluated using the well-known SWOT analysis tool This is aimed for deeper evaluation and

making obvious what foundation Under Armour has and where it can go with it also what

needs improvement and caution The SWOT shows that the company is in a promising

condition today with its innovative products and well planned marketing but further

expansion is vital to sustain the progress The thesis recommends UA to cover more markets

geographically and be more aggressive in marketing also to look out for the aggressive rivals

like Nike and Adidas who wonrsquot make Under Armours global struggle easy


5

The last part of the thesis is a number of recommendations suggested for the continuance of

the success and the achievement of global success in the industry After the investigation of

its external internal and financial stances some areas have been found where improvement

and changes are necessary for the enterprise if the management is looking forward to continue

business in the industry and achieve global success


6

2 Introduction

The world today has established itself as a complex place full of various kinds of people

living in various kinds of ways they all have different needs and wants A concept that was

shaped a while ago to satisfy and benefit these needs exists and itrsquos called business

According to the Bible after Adam and Eve sinned they found out what ldquoshamerdquo was and

were filled with the need to cover their bodies One way or another clothing has been one of

the demanded needs by most of the societies and communities we find in todayrsquos world as

these societies developed and diversified tastes and trends in clothing went along Today

many companies provide clothing for these diversified sectors one of these sectors is athletic

sportswear This thesis is about a company named ldquoUnder Armourrdquo ndash an enterprise that

produces and markets athletic apparel and footwear

According to their official website ldquoUnder Armourrdquo was founded by Kevin A Plank on

January 29 1996 with a simple goal ndash to create ldquoA shirt that provided compression and

wicked perspiration off your skin rather than absorb it a shirt that worked with your body to

regulate temperature and enhance performancerdquo (Kevin A Plank 1996) The headquarters of

the company is situated in Baltimore Maryland and the quantity of overall employees it has is

about 2200 (by the year 2008) As time went on and the company expanded this simple goal

diversified and today the company develops and markets branded performance clothes for

men women and kids but the primary and unique goal of the product is still sustained

In 2005 November 18 ldquoUArdquo went public and since then is sold on the New York stock

exchange under the code UA Share prices have been as low as 12$ in 2009 but since then the

prices have been increasing and havenrsquot fallen under 50$ since the beginning of year 2011

ldquoUnder Armourrdquo products are worn by men women and youth ranging from professionals on

the field to people who love sports and live an active life It uses innovative technology to

create apparel focused on whisking away moisture regulating body temperature and

improving comfort The company has four main trademarks ndash UNDER ARMOUR

HEATGEAR COLDGEAR and ALLSEASONGEAR and also the ldquoUnder Armourrdquo UA

Logo

Since 2008 the brand started offering footwear to its consumers and 2 years later it made a

bold move entered a market already dominated by its rivals and offered its first line-up of

basketball shoes ldquoUnder Armourrdquo products are available for sale online and in over 20000


7

retail locations all over the world It has only several stores itself which were opened in 2007-

2008 years in North America and only one outside the continent in Edinburgh Scotland

3 Product Lines

As mentioned in the introduction ldquoUnder Armourrdquo has four main trademarks under which it

markets the product This section will briefly describe the main product lines which the

company offers

HEATGEAR reg ndash Products under this category are made from the original fabric microfiber

for hot weather helps the body breathe and get rid of moisture swiftly keeping the athlete dry

and light This product was also used by US Army forces operating in Iraq and Afghanistan

COLDGEARreg ndash Made for cold weather this is the most expensive product line offered by

ldquoUnder Armourrdquo It also uses the microfiber that HEATGEARreg does keeping the body dry

however its unique characteristic is that itrsquos designed to keep the body warmth trapped The

introduction of COLDGEARreg dramatically increased revenues for the company

ALLSEASONGEARreg ndash This product line is made from different material it does not use

microfiber at all and it uses various technical materials suitable for all kinds of weather

Recovery Gearreg ndash In mid 2009 the company introduced the ldquoRecharge compression suitrdquo It

was designed to be worn after physical activity helping the body to recover decreasing

soreness time and relieving pain and aches after workout Gear with similar goals and

construction are lined up in the Recovery Gearreg

Catalyst reg - Recently UA started a new product line that is made only by recycled plastic

The line is marketed under the slogan ldquoGreen + Performance = The UA Catalyst Trdquo and holds

a very small portion in the business today

Under Armour also sells products in various other categories but the above mentioned five are

the main lines that contribute to the popularity and sales of the company


8

4 General Current Strategy

41 Growth Strategy

Currently ldquoUnder Armourrdquo has to deal with its competitor giants such as ldquoNikerdquo ldquoAdidasrdquo

ldquoPumardquo etc The strategy theyrsquore implementing is primarily derived from this factor

expansion and growth is their main goal They are a relatively small enterprise compared to

the listed rivals and if they donrsquot show constant growth chances of survival are low ldquoNikerdquo

already tried to buy the company in 2008 but the offer was refused if things donrsquot keep on

progressing they might have to surrender next time The presented rivals operate worldwide

however ldquoUnder Armourrdquo-s main revenue stream is from North America They began the

expansion on other continents a few years ago and still continue investing in that direction

For example since 2002 a license agreement has been made with Dome Corporation in Japan

which produces markets and sells UA branded products in the area

42 Differentiation Strategy

Since 2005 when the company went public theyrsquove been concentrating their investments on

five main areas Menrsquos amp Womenrsquos Apparel Footwear International and Direct-to-Consumer

(Annual Report 2009 Section ldquoTo Our Shareholdersrdquo) Year 2009 showed that their

investments have not been in vain net revenues have grown 18 and net profit has grown

22 This is partly due to the fact that the company started to differentiate its product line

since 2008 introducing basketball shoes mountain gear etc The main revenue stream does

come from Menrsquos and Womenrsquos Apparel but Footwear also holds a significant 12 in

overall

(Scoreboard in Annual Reports 2010 page 5)

80

12

4 4

Net Revenue by Product Category

Apparel

Footwear

Accessories

License Revenue


9

43 Innovation Strategy

Another key component in ldquoUnder Armourrdquo-s strategy is innovation As Kevin A Plank

Chairman and CEO of the company says ldquoCotton is the Enemyrdquo

(httpwwwcnbccomid25191727) The company offers the market products that are ldquobest

in classrdquo the main focus is on uniqueness of the material used in production The goal is to

create apparel that will make the athletes better and to deliver the product in such fashion that

makes the benefits more visible to the consumer The primary innovation of the company is

PolyArmour a combination of polyester and elastane which benefits the athletes in many

ways Throughout its existence the company continues to offer new cutting edge technology

products to its wide range of consumers The product development group functions with the

following motto ldquoWe design products with ldquovisible technologyrdquo utilizing color texture and

fabrication to enhance our customersrsquo perception and understanding of product use and

benefitsrdquo (Annual Reports 2009 Product design and development page 14)

Innovation is the key to the companyrsquos success otherwise the rivals would easily drive it out

of business due to their advantage in size

44 Corporate Strategy

Starting from the beginning ldquoUnder Armourrdquo was established to serve athletes The company

considers signing contracts with the teams these athletes represent in many different sports as

its strategic goal In different sports ldquoUnder Armourrdquo goes for different kinds of contracts

On their own continent they dominate the market in some sports and share the plots with their

competitors in others In College Football league they sign contracts as there outfitters with

many teams like the Auburn University Texas Tech University the University of Maryland

Boston College etc They also signed a deal with NFL to be the official supplier of footwear

creating a good basis for sales revenue and also marketing to consumers outside the athletic

community

Another approach demonstrated by ldquoUnder Armourrdquo is signing individual athletes The

mostly try to find the stars of the next generation and sign contracts with them like

Milwaukee Bucks rookie Brandon Jennings US professional skier and Olympic gold medal

winner Lindsey Vonn first round NFL draft prospect Dez Bryant etc

The company has increased international activity through the past years The approach is

similar to the domestic market one They sell their products to Rugby and Soccer teams such


10

as Hannover 96 football club and Welsh Rugby Union They recently signed a contract with

the English Premier League team Tottenham Hotspurs as their official playing kit producer

replacing a rival brand ldquoPumardquo this multi-million pound deal is the biggest in Europe for a

US based company

45 Product Positioning

Product positioning

What the graph above shows is that currently ldquoUnder Armourrdquo keeps average prices and high

innovation in products The market leader ldquoNikerdquo keeps a more expensive profile and prices

its products higher So in terms of product positioning ldquoUnder Armourrdquo keeps a profile of a

brand affordable for many classes and offering a large range of innovative products

The products are priced form the least 15-20$ items such as T-shirts and go up to 250$ coats

and full body outfits 250$ isnrsquot exactly a low price for a coat but with the quality and

features provided by ldquoUArdquo the product is certainly not overpriced it also has a relatively

lower price compared to some of its rivals similar products

3

Low Prices

NIKE

Adidas

1

2

High Prices

High Innovation and

Advancement

Low Innovation and advancement

Under Armour


11

5 External Analysis

51 The Athletic Apparel and Footwear Industry Review

The industry ldquoUnder Armourrdquo operates in is referred to as the athletic apparel and footwear

industry and represents a pretty huge business environment The market is enormous

considering the popularity and diversity of sports we have in the community we live in added

the ordinary people who enjoy a healthy life and use sportswear The competition is fierce and

the market has players of all sizes The biggest among them who dominate the todayrsquos

sportswear industry are ldquoNikerdquo ldquoAdidasrdquo ldquoPumardquo ldquoReebokrdquo (also managed by ldquoAdidas

Grouprdquo) etc The other brands involved in this business with less market share and revenues

would be ldquoUmbrordquo ldquoAsicsrdquo ldquoKappardquo ldquoNew Balancerdquo etc ldquoUnder Armourrdquo is among the

second list having a petite market share in the overall industry still fighting its way to the top

(see market shares on charts below ldquoUArdquo is under the ldquoOtherrdquo section) The worldwide sales

of athletic apparel and footwear were about $2784 billion in 2007 proving the huge size of

the industry ldquoUArdquo competes in Despite the changes the world experienced through the

following 4 years the market still stays huge and very competitive The average gross margin

shown by companies operating in this business sector is also impressive and shows the

competitiveness of the market ndash 456

To divide the market geographically and make an analysis in terms of market opportunities

and trends would be a logical way to go Three main sectors can be identified ndash North

America Europe and Asia (mainly China) First letrsquos discuss the continent ldquoUArdquo started and

still remains to concentrate on ndash North America mainly the USA Regardless of the slow-

growing economy the US still showed the highest growth rate in the sports market (3 gain

overall) among the top six developed countries which sounds like a hospitable environment

to do business in Basically whatrsquos important to see is that ldquoUArdquo-s making a safe bet when

mostly operating and expanding in the US

On the other side of the globe we have the fastest growing market ndash China The high growth

rates include the athletic apparel market increasing by 27 from 2003 to 2007 Events such

as the Beijing 2008 Olympic Games highly contributed to the following growth after year

2007 The Chinese athletic apparel market has doubled in size to $10 Billion what is a very

significant number and itrsquos supposed to attract attention of companies such as ldquoUArdquo


12

The other parts of the world showed either flat or very small growth rates overall in the

athletic apparel markets through 2007-2009 Despite that ldquoUArdquo still has ground to gain in

Europe As stated before the company recently signed an English soccer team the Tottenham

Hotspurs and is planning to invade the continent with more deals in the future Europe is

continent in love with soccer and it was a strong move by ldquoUArdquo to start its ldquoinvasionrdquo

through this sport and then if logical proceed on to other also popular ones


13

52 Porterrsquos Five Forces

(Source Notesdeskcom)

Industry Rivalry ndash Pressures created from existing sellers in the Industry

From the five forces that Porter suggested that companies deal with while operating in any

industry competitive rivalry is the strongest one The greater importance is also underlined in

the picture above and the reason behind it is very logical it all starts from competition with

rivals that is mostly why the other four forces matter and in the end it all comes down to who

overcame whom in the race to success The reason why itrsquos important to keep the supplier

relationship on track and have a good strategy implemented for dealing with buyer

satisfaction is to have a strong foundation to effectively compete with your rivals The reason

why companies are somewhat afraid and careful about new entrants and substitute products is

that the latter two create more pressure in the industry in terms of competition not the most

comfortable news for already operating enterprises

Competition among rival companies is important for all kinds of businesses in all kinds

industries but for ldquoUnder Armourrdquo the current situation gives an even bigger reason to stay

focused on this subject The latter would be that the difference in size is very noticeable and

can have a very negative effect on ldquoUArdquo-s business operations in the long-run if not handled

properly Under Armour management realizes all this and they are aware of the dangers


14

ldquoMany of our competitors have significant competitive advantages including greater

financial distribution marketing and other resources longer operating histories better brand

recognition among consumers and greater economies of scalerdquo(Under Armour Annual

Report 2009 page 14)

The two biggest rivals ldquoUArdquo has are ldquoNikerdquo and ldquoAdidasrdquo The products offered by all three

mentioned brands are widely differentiated you can see this by simply looking at their online

stores which offer many different kinds of athletic apparel and footwear The first big

difference is that both ldquoNikerdquo and ldquoAdidasrdquo operate worldwide while ldquoUArdquo does business

mainly on its home continent This provides the mentioned rivals with a bigger market giving

them the chance to have bigger economies of scale what gives a significant competitive

advantage To clearly see the difference in size of these corporations look at the chart below

showing global annual revenues of ldquoNikerdquo ldquoAdidasrdquo and ldquoUnder Armourrdquo

Company

(Company Code)

Revenues (in Thousands)

2010 2009 2008

Nike (NKE) 19014000 19176100 18627000

Adidas (ADSDE) NA 10381000 10799000

Under Armour (UA) 1063927 856411 725244

(Source yahoofinancecom)

The second important difference is that ldquoUArdquo s big rivals produce under various brands ie

ldquoNikerdquo has subsidiaries like ldquoConverserdquo and ldquoUmbrordquo and ldquoAdidasrdquo has ldquoReebokrdquo and

ldquoRockportrdquo which contribute significantly to the success of the companies This approach is

called the multi-branding strategy it ldquorefers to a marketing strategy under which two or more

than two similar products of a firm are marketed under different brand namesrdquo (Sak Onkvisit

and John J Shaw International marketing analysis and strategy year 2007 page 323) To see

what the advantage is for ldquoUArdquo-s rivals simply imagine a buyer that is willing to pay 100$

for a pair of athletic shoes On the market he sees for the sake of argument 10 different

brands including ldquoUArdquo and those marketed by ldquoNikerdquo and ldquoAdidasrdquo brands offering 5

products each which are in his acceptable price range Depending on his taste and some other

factors hersquoll choose one of the 10 and make a purchase While ldquoUArdquo offers only 5 products

its rivals offer much more because they use multi branding and provide the market with


15

several brands having several products each fitting various consumer tastes and preferences

but are in the same category Basically ldquoUArdquo-s main rivals opt to multi brand along with

product differentiation while ldquoUArdquo does not giving them a competitive advantage in the

long-run Today it might not show a huge difference with Under Armour gaining popularity

and market share swiftly but if something goes wrong and some difficulties arise this might

become a more important issue This advantage is particularly important because of the nature

of the industry these enterprises compete in itrsquos mainly based on differentiation and consumer

preferences and not price competition As shown above in the product placement chart the

price difference in products produced by the three companies that were discussed before are

not that different And because wersquore talking about a price difference of about $10 to $30 itrsquos

logical to assume that the buyers would be willing to add that amount if they prefer for

example ldquoNikerdquo to any other brand with a slightly lower price In other words differentiation

is a key factor in this market and multi branding being another way of differentiating brings

ldquoUArdquo under more pressure from the various brands its rivals have

To analyze the intensity of the athletic apparel and footwear industry we should look at some

key factors that define it Rivalry is generally fiercer ldquoas it becomes less costly for buyers to

switch brands when one or two companies employ powerful successful competitive

strategies and the number of rivalrsquos increases and competitors are equal in size and capabilityrdquo

(ldquoCrafting and Executing Strategyrdquo page 64-65 ThompsonStricklandGamble Seventeenth

edition 2010) These are the most relevant reasons in the discussed industry

The first factor is obvious the costs for switching brands are as low as possible a buyer just

has to go to a different selling point a store a web-site etc Therefore this contributes to the

establishment of a fiercer competition

The second mentioned reason is firstly due to the discussed above ndash Multi Branding Strategy

and global market coverage by ldquoNikerdquo and ldquoAdidasrdquo These two factors are parts of the

ldquopowerful successful competitive strategiesrdquo that make competition in general much stronger

Another huge contribution in making this market a harder place to compete is marketing also

falling under the second reason taken from the book ldquoCrafting and Executing Strategyrdquo Both

of the main rivals ldquoUArdquo has are involved in major campaigns attracting a lot of customers

ldquoNikerdquo and ldquoAdidasrdquo both spend huge resources on endorsements of famous athletes The

experience gained in many years of business taught them well and they know this kind of

marketing goes far ldquoNikerdquo knows that when they sign a huge star like LeBron James his


16

whole fan base a huge amount of people will buy basketball shoes that come with his name

As mentioned before ldquoUArdquo has implemented this strategy too They chose to take a bit

different from its competitors and somehow analogical approach to their enterprisesrsquo current

image They are considered a rising star brand most likely to establish a strong position on

the market they sign rising stars that are most likely to replace players like LeBron James in

the future This is a logical strategy it wouldrsquove been much harder for them to go for athletes

already signed by other brands or requiring very high salaries according to their high class

So they sign ldquomore affordablerdquo athletes and provide them with great athletic apparel and

gear hoping for their loyalty in the future

The third incentive of strong market competition is the fact that many enterprises compete in

the athletic apparel and sportswear industry The more teams in the tournament the harder it

is to win The same logic applies to our situation the more brands try to offer various kinds of

products and satisfy customer needs the harder it is to attract customers to your brand

Showing overall revenues of $274 billion is a good basis to consider this a huge market

Taken as a whole there are probably more than 20 noteworthy brand names on the market

today trying to achieve supremacy in the athletic apparel and footwear industry


17

Potential Entrants - pressures form threat of new entrants

The athletic apparel and footwear industry is one with a long history The companies in it

have been functioning for decades Nike was incorporated in 1972 Adidas in 1949 and

Reebok in 1958 Under Armour though is a relatively new organization established in 1996

Many of the organizations that lead the industry today in terms of market share and global

competitiveness have worked their way to the place they are today with good marketing and

corporate strategies theyrsquove managed to establish a healthy foundation and gather valuable

experience in this field The long history also benefits their image and provides advantages in

terms of brand loyalty

In general many factors affect the threat of new entrants making it stronger or weaker While

discussing the athletic apparel and footwear industry the main issues that should be

considered to define the strength of the threat of new entrants are the following number of

entry candidates entry barriers current situation of the operating organizations in terms of

profitability and buyer demand growth rate and the global coverage of the market (ldquoCrafting

and Executing Strategyrdquo page 67 ThompsonStricklandGamble Seventeenth edition) The

number of entry candidates is low the industry is mature and has been functional for decades

therefore the market is less likely to expect new players The entry barriers are quite complex

they are discussed in detail below The currently operating firms are profitable and stable and

the demand growth rate is petit due to the recent recession although Chinarsquos market shows

positive demand growth rates it still isnrsquot exceptional While taking in consideration these

factors it is safe to say that the threat is not high

The entry barriers for this market are the following

High capital requirements

Highly competitive environment

Strong brand preferences and high degrees of customer loyalty


18


As pointed out before the athletic apparel and footwear market is large and global The

operating companies cover the whole world thus serve millions of people and must produce

in high quantities to meet the demand This gives them the advantage of economies of scale

meaning the more they produce the cheaper it is for them So the market isnrsquot attractive to

newcomers they would have to invest high amounts of capital to produce products of

equivalent quality in large quantities to somehow compete with the existing sellers like

Under Armour that already supplies the market with high quantities Basically the potential

entrants would have to invest billions in order to somehow create harm for UA or the other

existing players and there are just not many who would take the risk to compete in this

environment But there always exists a possibility that someone else might come up with an

innovative idea for a new product technology design etc and decide to start up a new

business and enter the market instead of selling the idea to any operating firm Therefore the

high capital requirements do decrease the pressures from potential new entrants but donrsquot

make it impossible If UA could do it so could someone else


Another important barrier for entry in this industry is the highly competitive nature of it

Generally poor market conditions are what drive away businesses from investing but the

athletic apparel and footwear industry doesnrsquot exactly offer these poor conditions In contrary

it is a healthy and competitive environment The latter is exactly what discourages the

potential entrants itrsquos too competitive The existing players have created an environment that

requires a great ability to compete which is very hard to achieve and requires not only large

investments but also years of performance experience


This barrier of entry is particularly important for the athletic apparel and footwear industry

Itrsquos all about brand image that in its part majorly contributes to customer loyalty Nikes

historical example illustrates the point more clearly the transition from an average seller on

the sportswear market to the global market leader started when Nike signed a deal with


19

Michael Jordan in the 1980rsquos which primarily helped establish a brand image This deal

marketed Nikes products perfectly and the great Michael Jordan enabled the company to

become the ldquogreat Nikerdquo it is today Jordan turned out to become a basketball legend and

along with him so did Nike create an extraordinary brand image with supplying the living

legend with his primary equipment ndash athletic shoes All this resulted in customer preference

and eventually a huge customer base was created for the company who stay loyal even after

Jordanrsquos retirement Today the company has been maintaining this buy endorsing existing

stars In this context Under Armour is on its way As mentioned before the management

team chose a suitable strategy which is helping a great deal in brand image and loyalty

establishment

Basically brands like Nike Adidas K-swiss Under Armour etc have managed to create

strong brand images through marketing and excellent corporate performance of many years

what is a very hard barrier for potential entrants making them think twice before trying to

enter the athletic apparel and footwear market


20

Substitutes ndash Threat of substitute products

The third force in Porterrsquos five forces of competition is the threat of substitute products This

issue has been becoming more and more relevant to many businesses today The reason

behind that are mostly technological advancements and innovations For example 20 years

ago newspapers were far more popular but as cable TV became cheaper and more accessible

people started to substitute newspapers with news broadcasts as ways of being up-to-date with

whatrsquos going on around them and instead of reading the morning paper they watch the

morning newscast this resulted in a huge revenue decrease for the newspaper businesses

because they lost a huge customer base

By definition substitute goods are products that appear to be different but satisfy the same

needs for example the internet and fax are substitute goods In case of athletic apparel and

footwear itrsquos hard to define whether substitute goods exist at all for such products Itrsquos hard to

imagine anything that can substitute clothing and footwear for an athlete So Under Armour

is safe in terms of substitute products and the management doesnrsquot need to worry about this

But this logic only applies for the customers that are athletes indeed they make up the

majority of Under Armours consumers but the other part is also important Those who wear

athletic clothing for comfort or any other reason can easily change their preference The main

goods that qualify for substitutes of athletic clothing and footwear are casual and formal types

of apparel and footwear The reasons of substituting could be a preference trend or lifestyle

change in consumers The factors that identify the threats dangerousness are the substitute

products accessibility attractive pricing advantages and switching costs In these terms itrsquos

obvious that the threat is rather high Both casual and formal clothing fit all these factors

making it highly possible that some consumers switch to them


21

Suppliers ndash The supplier bargaining power

The following competitive force of Porterrsquos five analyses is about suppliers of the business

enterprise This part is particularly significant for Under Armour In the sports apparel and

footwear industry fabric is a very important component itrsquos simple - no fabric no product

Therefore a whole lot depends on the suppliers of fabric Under Armour products are made

mostly from polyester and elastane which themselves need petroleum for production The

chain is fairly visible petroleum prices go up and Under Armours fabric prices go up This

can have a negative impact on the profitability of the company But this only applies to the

majority of UA products but recently the company has launched a new product line called the

ldquoCatalystrdquo which only uses recycled material for production That product line is discussed in

more detail below in the Environmental analysis Although what should be mentioned in this

section is that UA uses only plastic bottles for this line and therefore the supplier bargaining

impact on that particular line is minimal

Under Armour management is fully aware of the risk they carry today ldquoWe rely on third-

party suppliers and manufacturers to provide fabrics for and to produce our products and we

have limited control over these suppliers and manufacturers and may not be able to obtain

quality products on a timely basis or in sufficient quantityrdquo (Annual Report 2009 page 14)

The company also has no long-term contracts and currently has more than 10 primary

suppliers If the company will lose a supplier or feel the need to replace one switching costs

will be costly and time consuming 60 of these manufacturers are located in Asia and the

countries they are situated in carry risk of political unrest economic instability etc

potentially risking its abilities to function properly thus creating the need to look for new

suppliers The new suppliers will need training in Under Armours methods and all this will

most likely negatively affect the overall performance of Under Armour

Another issue is that the fabric Under Armour uses for its production is practically

irreplaceable No substitute fabric is available for polyester or elastane to alternate in case of

need Therefore the suppliers have more power over the buyer because the latterrsquos business

fully depends on the fabric Despite the fact that the fabric was invented by Kevin A Plank

the owner and CEO of UA the company doesnrsquot produce it they order the fabric to

subcontractors so the dependence is visible


22

In conclusion itrsquos safe to say that the bargaining power of suppliers is significant on Under

Armours competitiveness The listed factors give a reason big enough to worry about this

potential problem and actively pursue methods of minimizing the risk The company is

working towards the risk reduction in this area by trying to diversify the fabric and find

substitutes to relieve the pressure from suppliers by funding research in using recycled

materials for production while keeping the benefits PolyArmor has

Buyers ndash The bargaining power of buyers

The final competitive force comes from competitive pressures stemming from buyer

bargaining power Under Armours products are offered in over 20000 retail locations

worldwide out of which almost frac34 are located in North America They also sell through

Under Armours factory stores specialty stores website and catalogue In this industry

bargaining power of buyers come from retail stores mainly especially for Under Armour

considering that in 2009 nearly 80 of Under Armours net revenues were generated from

wholesale distribution This trend still continues The main buyers are ldquoAcademy Sports and

Outdoors Dickrsquos Sporting Goods Hibbett Sporting Goods Modellrsquos Sporting Goods and

The Sports Authority also hunting and fishing mountain sports and outdoor retailers such as

Bass Pro Shops and Cabelarsquos and The Army and Air Force Exchange Servicerdquo (Annual

Report 2009 page 13) Since the launch of the footwear line the chain was expanded to

national footwear retailers such as Finish Line and Foot Locker In general having a large

number of wholesale buyers is always positive for brands like Under Armour especially

when this section of sales sums up to a huge portion of overall sales no particular one has too

much power The risk is reduced because if relations worsen with one of them the general

affect is minimal therefore the bargaining power of buyers is decreased Under Armour

management is being smart about this along with differentiating the retailers selling UA

products they also choose those with acceptable prestige The stores that carry the product

reflect on the brand image

Despite the fact that UA management has been trying to reduce the bargaining power of

buyers (Wholesale distributors) it still is high Again the risk is analogical to the one with

suppliers The stake of these resellers is too high in the business without them UA will lose a

huge amount of sales because their own selling locations are not sufficient in number so all

together resellers pressure the business


23

The second segment of buyers is the direct consumers they add up to 18 of overall net

revenues This segment is less dangerous for Under Armour because they donrsquot have much

influence on the business in general

Porterrsquos five forces summery

According to the conducted analysis of Under Armours external environment using Michael

Porterrsquos five forces analysis tool the company has managed to create a stable external

situation and remains competitive Its current market standing as a producer and marketer of

athletic apparel and footwear rising star is safe and if managed efficiently and effectively

stands a chance of a good future

While analyzing Under Armours competitors the source of the strongest pressure itrsquos clear

that the company has chosen the best strategy to operate today The fact that its rivals are

massive and operate globally created a competitive pressure that required careful and clever

management while trying to expand and grab more market share Product placement and

marketing strategies executed by UA have shown positive results and the business is

progressing and expanding in the tough rivalry the net income indicators of its main

competitors and Under Armor are shown below to simply prove this point

(All numbers in thousands)

Company 2007 2008 2009 2010

Nike 1492000 1883400 1486700 1906700

Adidas 551000 642000 245000 NA

Under Armour 52552 38229 46785 68477

(financeyahoocom hotstockedcom Under Armour Annual Report 2007 page 26)

As shown on the chart Nike and Adidas have been struggling with unstable net income

streams through the past while Under Armour has been showing stable increases in these

terms in the past 3 years What is implied under this logic is that despite the pressure from its

main rivals Under Armour has succeeded to operate not only profitably but also continued to

grow and expand Although this does not mean that the company has time to relax the

management must continue working towards the future Under Armour has only made the


24

statement that it wishes to take market share and profits from Nike and Adidas which

definitely wonrsquot please them and will only alert them to fight back

Under Armour should also be aware of pressures from the powers behind the manufacturing

process and the ones who help in bringing the product to the market Those two segments are

variables that canrsquot be directly controlled and require very careful handling Risk reduction is

the key strategy for reducing the tension produced on this district As stated before the

companyrsquos suppliers are limited and hard to replace and in addition vital for the

manufacturing process therefore the burden is high on them UAs management should

somehow try to increase the quantity of suppliers or strengthen the relationships with existing

ones thus reducing risk them and relieving pressure associated with them

Retail is the key in this business and while not having a strong retail chain of its own Under

Armour highly depends on the retailers buying and distributing its products This indicates

that the pressures derived from buyers are also significant The management acknowledges

this problem ldquowe must compete with others for purchasing decisions as well as limited floor

space at retailersrdquo (Annual Reports 2009 page 17) Under Armour has started to build a retail

chain of its own and should definitely carry on with building it because it is vital for

expansion and growth Having a retail chain of their own will open new opportunities for

marketing brand image establishment etc relieve the pressures from buyers and strengthen

their overall competitiveness on the market

The industry and product itself relieve Under Armour from the next pressure Porter suggests ndash

substitute products As explained before this factor is the one UA has to worry the least

about The products nature provides it with a monopoly having no possible substitutes for

most of the targeted market representatives And the last pressure is produced from new

possible entrants on the market which also is minimized by the industry itself Currently the

huge size of the athletic apparel and footwear industry creates such high barriers of entry that

existing sellers donrsquot feel the pressure of potential ones No major new competitor has entered

the market in the past decade So Under Armour should be more concerned with existing

pressures coming from four other fields then from potential new entrants


25

53 PESTEL Analysis

531 Political Analysis

Another tool used to analyze Under Armours external environment is the PESTLE analysis

The first part of it is the political analysis of the countries the company operates in This is a

very important aspect of any business any kind of political disturbance or instability can

cause serious damage to companies and put their operations at risk Plus the local regulations

in terms of tax policies tariffs and trade restrictions environmental regulations etc can also

affect a business and its stable growth

Under Armour headquarters are situated in Baltimore Maryland USA The company mainly

operates on its homeland which is ranked 8th out of 82 countries as evaluated by the

Economist Intelligence Unit in 2010 April 4th The standing US holds is fairly strong and

says that the political environment is safe and secure to operate in The democratic

government and strong legal system work in favor of business in general and help create a

safe competitive environment Basically Under Armour doesnrsquot need to worry about any

internal political disturbance that can get in the way of its business operations in the US

Externally the US might pose a threat to Under Armour Even though not on its own soil the

country is at war which might be a political issue threatening the company in the future

Since 2006 Under Armour opened a new office in Amsterdam Netherlands from which the

company conducts its marketing sales and logistics functions in Europe The Netherlands is

ranked even higher by the Economist Intelligence Unit on the grounds of having a stable

political environment and a friendly policy towards foreign investment and a stable political

environment with no unrest in the relevant past and no grounds to suspect any in the future

The latter two mentioned countries were those where Under Armour conducts all business

except product manufacturing As many others Under Armour has outsourced its

manufacturing processes as stated in its Annual Reports 2009 ldquoour apparel and footwear

were manufactured by 22 primary manufacturers operating in 17 countries Of these eight

manufactured approximately 55 of our products at locations in Cambodia China the

Dominican Republic Honduras Mexico Nicaragua and the Philippinesrdquo (Annual Reports

2009 page 23) 60 of Under Armour branded products was manufactured in Asia 18 in

Central and South America and 17 in Mexico making these locations crucial to Under

Armours business The companyrsquos management also recognizes the risk by writing the


26

political risk of these countries und the Risk Factors section in the Annual Reports of 2009

page 23 ldquoPolitical unrest terrorism and economic instabilityrdquo (Annual Reports 2009 page

23) can cause disruptions in the manufacturing process which will most likely result in loss

of manufacturing deals or delays in shipments thus have a negative result for Under Armour

The risks connected to international manufacturing also raise threats like new labor condition

quality and safety standard guideline in the listed manufacturing host countries Also

importexport quotas and tariffs new tax laws restrictions on transfer of funds etc

Overall Asian countries have many problems with political stability The continent being a

major manufacturing location for Under Armour has a critical role in its business Political

problems between North and South Korea can affect China because itrsquos a neighbor country

and has its interest in these circumstances The US also engaged in the situation and despite

the fact that today stability has been reached no one knows what will happen in the future

Tensions between the US and China can build into tensions between the businesses resulting

in problems for Under Armours manufacturing operations

The other mentioned countries holding minor manufacturing operations for Under Armour

also have instability problems of their own Cambodia has political problems with Vietnam

organized crime rates are very high in Mexico the Philippines government has major

problems with the budget etc Maybe these countries donrsquot pose big threats if something goes

wrong because of their petite share in the manufacturing process but they are certainly worth

mentioning


27

532 Economic Analysis

The economic situation also has its say in the athletic apparel and footwear industry After the

global financial crisis of that hit the economic world a few years ago the economies affected the most

still struggle to find their way back to a stable economic environment The USA was the host of the

whole financial world downturn and the US Dollar was affected the most The USA being one of the

world largest economies and the USD being a global currency quickly globalized the problem and the

crisis spread all over the globe Shortly after that consumers started losing trust in the USD a clear

indicator of it being the price of gold increasing with such swiftness in such small terms The crisis

also affected the consumersrsquo willingness to spend money and the overall demand fell on many

consumer goods including the athletic apparel and footwear industry therefore affecting Under

Armour Nike Adidas etc Under Armour management stated the following in the Annual Reports of

2009 under the Risk Factors section ldquoWe have limited experience operating a business during a

recessionary period and can therefore not predict the full impact of a downturn in the economy on our

sales and profitability including how our business responds when the economy is recovering from a

recessionrdquo This means they were aware of the possible problems and the decline in overall sales

resulted in a decrease of net income from $ 52558000 in 2007 to $38229000 in 2008 This was the

only year with a decline though the recovered efficiently and showed increases in the following years

(discussed in more detail in the financial analysis below)

Another question that needs to be addressed while analyzing the economic environment of a company

operating globally is the currency fluctuation As mentioned before the company operates on many

continents manufacturing and marketing and selling the goods all around the world therefore it must

deal with many currencies The Under Armour management also acknowledges the risk of currency

fluctuations talking about it in the Annual Reports 2009 in the Risk Section mentioning that

unrealized gains or losses might arise through international transactions generated by worldwide

subsidiaries (Annual Reports 2010 Risk Factors page 18) The USD being in a very unstable

situation today raises the chance of such problems


28

533 Social Analysis

The world is full of various cultures nationalities races etc and businesses which operate

worldwide should acknowledge the difference between lifestyles traditions and preferences

that vary among these cultures Each of these societies have different perceptions of many

issues what might be acceptable for some cultures can be even offending to others Even

everyday ones that might seem to produce no difference for companies like Under Armour

can be decisive for its success in a certain marketplace

Socio-cultural aspects affect several parts of the overall business Under Armour finds them in

the following

Marketing and advertising

The manufacturing process

International workspace

Marketing and advertising is one of the most important parts of the Under Armours business

The socio-cultural affect is substantial to say the least Brand image and the target markets

perception depend on correct and effective marketing of the product and the details of the

advertising strategy should vary from culture to culture When a person feels the need to buy a

new pair of sports shoes for example the brand image plays a vital role in his decision so

Under Armour has to watch out for the advertising it puts out in the market The brand image

and slogan can inspire a person to buy an Under Armour produced shoe but can also deny

him the desire to do it Therefore the company must consider that the adverts that suit one

culture and produce positive results in it can turn out to be catastrophic in others One of the

most common differences can be the regional difference For example endorsing a famous

Major League Baseball player for a training suit advertising campaign could prove very

effective in the US but far less effective in France because the French simply donrsquot watch the

MLB like the Americans do and donrsquot perceive the athletes as celebrities

Another social factor that needs consideration and affects Under Armour advertising is the

fast changing trends Sometimes it only takes a new team in the NBA to win the

championship and all basketball fans will want the shoes with the logos the championrsquos ware

Whoever signed the contract with the team gets all the sales Also advertising methods

change Two decades ago the internet was not at all important but today it is one of the most

effective methods for advertising If the company manages to keep up with the changing trend


29

in consumer preferences it should also manage to keep up with the new methods of reaching

the consumers

So in conclusion the two main ways social factors have affect on marketing are the

differences in various cultures the advertisers must take notice of and the fast changing

consumer preferences

The second business sector in Under Armours operations affected by social factors is the

manufacturing process The sports apparel business already witnessed the negative effects that

mistreating this section can bring Nike encountered this problem a decade ago when people

started to refuse buying Nike products because of the under-aged and highly under-paid labor

its subcontracting manufacturers used So despite the fact that Under Armour manufacturing

is outsourced it can still affect the companyrsquos position Therefore the management must

assure that no illegal and socially unacceptable actions are performed in the subcontractor

manufacturersrsquo locations According to their corporate website UAbizcom to tackle this

problem they implemented a ldquoCode of Ethics and Business Conductrdquo that states that Under

Armour is against and acknowledges as breach of the Manufacturing Agreement if any of the

following are detected in progress forced labor child labor harassment or abuse

discrimination (on the basis of gender race religion etc) In addition the wages provided

should be reasonable the hours of work should be acceptable and health and safety must be

ensured by the subcontractors or else the company will not cooperate in the future

The third important environment where Under Armour will find cultural and social

differences noteworthy is the international workplace meaning offices out of the US located

in Europe and Asia These offices have local employees which require different treatment

and have different traditions from the ones that work in the US offices For example religion

differs in USA and Japan meaning that religious holidays differ in these two countries

Therefore if Under Armour does not acknowledge that the Japanese office employees should

manage these factors locally and coherent to the local traditions they might lose morale and

efficiency the lack of morale might lead to overall negative results and loss of

competitiveness


30

534 Technological Analysis

Most big companies in the athletic apparel and footwear business have RampD departments that cover

the technological advancements and innovations needed to stay competitive in the market This

department carries a huge part in the companyrsquos overall success especially for Under Armour When

UA entered the market in 1996 it was already dominated with big companies like Nike and Adidas

The brilliant innovative fabric components and exciting design held major parts in its success It would

be very hard if not impossible to compete with Nike and Adidas without these two

Constant technological improvements are necessary for producers in order to keep up with each other

and the quickly changing trends in consumer preferences UAs competitors acknowledge this fact too

In fact Nikersquos one of the biggest organizational units is the RampD department ldquoWe believe our

research and development efforts are a key factor in our past and future successrdquo (NKE 10-K filed Jul

28 2008)

Still Under Armour continues to introduce new products full of exciting new trends For example the

Recharge Suit trade was a product with breakthrough qualities and design which achieved admirable

success and turned what appeared to be a niche market at first into a whole industry (cnbccom

ldquoUnder Armours new Recover Suitreg Published Wednesday 15 Jul 2009)


31

535 Environmental Analysis

The 21st century brought new tendencies and trends to the business world One of them is that

today many companies strive to be environmentally friendly The reason behind this might be

that they started caring about the world or it might be that itrsquos a competitive advantage ndash

being ldquogreenrdquo attracts customers This way or that many started following the trend As the

concept progressed new ideas and visions started emerging from the bright minds of the

business world today One of the biggest is Michael Porters idea about the sustainability of

business being dependant on the shared value it possesses value shared by the business and

society (bbccouk radio In Business a new Capitalism 2011 23rd January) This idea

includes being environmentally friend if possible The value produced from a business that is

ldquogreenrdquo isnrsquot just profit for the business itself it also is preservation of earth and its valuable

resources and creating benefits for the community Therefore itrsquos shared by the society as

well

Under Armour has joined the ldquomovementrdquo It started producing merchandise made from

recycled materials for example the T-shirt below is made 100 from recycled bottles and

still has the positive qualities Under Armours products have and itrsquos also very affordable ndash

about 35$

The company offers a whole series of products that are made only from recycled material in

its online stores and retail locations the product line is called ldquoCatalystrdquo Basically what the

product development team in Under Armour has achieved is combining the advantages

offered by their UA with being eco-friendly

To prove that theyrsquore an environmentally friendly business Under Armour also participates in

various events organized to promote the idea Its biggest success was the 2009 ldquoBaltimorersquos


32

Green Marathonrdquo On October 10th 2009 Under Armour and the City of Baltimore hosted the

event with 20rsquo000 participants from all over the world It was managed by and came from UA

GREEN the companyrsquos environmental sustainability program which also includes the

Catalyst product line The results of the ldquogreen marathonrdquo were respectable the runners

donated large quantities of clothes and footwear to the organization Souls4Souls (a non-profit

establishment helping those who are in need) UA employees and residents of the city planted

more than 100 trees around the race course ldquobut most importantly the message that reached

more than 50000 runners friends and family was clear Under Armour and the City of

Baltimore believe in the green economyrdquo (Baltimore city Annual Sustainability Report 2009

page 44) The race has become an annual event in Under Armours home city

Under Armours management chose an excellent strategy that will improve the brand image

permanently As mentioned before the society is starting to understand the shared value

concept and joining the cause with such persistency and meaning is a brave and smart

strategic step for the company The environmental factors that might concern the company in

the future have been inserted in their strategy and will most likely show results soon


33

536 Legal Analysis

The legal analysis of a business is about all the aspects of the business associated with the

laws of the countries it operates in While most other points covered were not obligatory the

laws must be followed or else the company might find itself facing legal prosecutions high

financial penalties and in most cases bringing huge damage to reputation and brand image

For Under Armour itrsquos important to follow the laws in the countries it operates During its

history the company hasnrsquot faced any serious legal problems which gives ground to assume

that Under Armours management operates in accordance with the legal systems it faces The

2009 Annual Reports clarify this by stating ndash ldquoFrom time to time we have been involved in

various legal proceedings We believe that all such litigation is routine in nature and

incidental to the conduct of our business and we believe that no such litigation will have a

material adverse effect on our financial condition cash flows or results of operationsrdquo

(Annual Reports 2009 Item 3 Legal Proceedings page 28)

Despite the fact that during its 15 years of existence no serious legal problems have occurred

Under Armour should be careful about and ready to address the following potential legal

problems

Customers unsatisfied with the merchandise or service

Discrimination amongst employees of customers or between companies The latter

problems most frequently come from inappropriate advertising

Employment matters such as wage tensions etc These might occur with sub-

contractors Nike had similar problems with sweatshops as mentioned earlier

Intellectual property

Problems with trade partners for example contract breaches cuts in profits etc


34

6 Financial Analysis

This section is dedicated to analyzing Under Armours financial situation progress or regress

through the past 3 years The data given is selected from Under Armours official Annual

Records of the past 3 years

(Annual Reports 2010 Consolidated Statement of Income page 54)

It can be easily observed on the Consolidated Statements of Income above that the company

has been improving its financial performance over the past 3 years The revenues and income

have been constantly increasing with also increasing growth rates Below is provided an

analysis of these statements using various ratios to prove that these figures also provide a

strong financial background not just a lucky streak

The first figure on the income statement is the revenues of the company For the past three

years significant increases can be seen From in year 2009 revenues grew for about 18 and

in 2010 the increase rate was about 24 Increasing revenue in a situation when unit price and


35

costs remain approximately the same means increase in quantity of sales itrsquos safe to say that

Under Armour is becoming more popular

Another important indicator of a companyrsquos strength is the gross margin showing the

difference between sales and direct costs needed to produce the product or service The gross

margin numerical strength differs from industry to industry Under Armour has had a gross

margin of about 50 in the past 3 years with minor changes +- 1 This is a fairly strong

gross margin and the fact that its stable growth in the years while revenues were increasing

significantly means that Under Armour has been able to keep costs under control increasing a

stable 19 yearly

The next step in the analysis is the turnover of inventory This ratio shows how many times

UArsquos inventory is sold and replaced over a period of time and itrsquos calculated by dividing Sales

Revenue of the income statement by the Inventory account in the Balance Sheet of the same

period of time For UArsquos case the following is the Inventory Turnover for the past year 2010

was 49 This indicator should also be evaluate by comparison to industry rivals in the same

year Nikersquos inventory turnover was 93 and Adidasrsquos was 70 The comparison of UArsquos

inventory turnover with its rivalrsquos inventory turnover shows that the difference is large A

logical assumption is that UA sells far less products than its competitors and this is true

because it controls less market share and still is less popular then Nike or Adidas plus

operates in a smaller section of the world

Overall looking at the income statement a very positive pattern is visible The companyrsquos Net

Income has totaled over $68 million in 2010 from about $47 million in 2009 therefore its

earnings per share are also increasing establishing the company as a very interesting

investment to many Since its record low on March 2 2009 of $ 1233 per share on the stock

exchange itrsquos been increasing regularly and has reached $ 7387 also a record for the past

five years and this time a record high (Yahoo Finance Stock exchange data 2011)

To carry on with the financial analysis of Under Armour the balance sheet should be the next

item to look at The debt equity ratio ldquoindicates what proportion of equity and debt the

company is using to finance its assetsrdquo (Investopediacom Debt Equity Ratio 2011) The

ratio is calculated by simply dividing the total debt by the total equity In Under Armours

case


36

Debt equity ratio for 2010 - Debt equity ratio for 2009 -

178412 496966 = 035 145591 399997 = 036

(Annual Reports 2010 Consolidated Balance Sheets page 53)

In general the debt equity ratiorsquos analysis differs from industry to industry In the athletic

apparel and footwear industry enterprises tend to be less capital intensive therefore mostly

show low debt equity ratios For Under Armour a 035 DE ratio with only a petite difference

from last yearrsquos ratio means it finances most of the operations with equity and finds it

efficient since the companyrsquos yearly performance results have been improving over the years

The current ratio of the company shows its liquidity how well the company is able to pay

back its short term debts This is also important for investors it somehow protects them in

case anything goes wrong and itrsquos necessary to sell out the company Under Armours current

ratio Current Assets Current Liabilities = 555850 149147 = 37 (Annual Reports 2010

Consolidated Balance Sheets page 53) looks promising and provides a strong incentive to

invest

The last ratio used in the financial analysis of Under Armour is the Return on Equity ratio It

provides a measurement of the companyrsquos profitability in terms of how much profit it has

yielded from the shareholders investment The calculations are the following

RoE = Net Profit Average SE for period

RoE = 68477 (496966 + 399997) 2 = 68477 4484815 = 015

(Annual Reports 2010 Consolidated Balance Sheets page 53 Consolidated Statements of

Income page 54)

To define the strength of RoE again a comparison should be made with other companies

operating in the same industry With Nikersquos Return on Equity of 5 and Adidas 1 (Yahoo

Finance Annual Reports Adidas Group Financial Statements Balance Sheet) Under Armours

15 looks very strong and promising The reason behind this is that Under Armour is still in

the fast growth stage while the other two have already established themselves in the industry

Still Under Armour management should try to keep the high RoE and stay very attractive to

investors in this industry


37

Overall Under Armours financial analysis shows us that the company is standing strong As

shown in the Financial Statements cash is stably growing along with the profitability of the

enterprise while debts and expenses are held under control Itrsquos becoming more and more

interesting for customers and investors As referenced before UA management pointed out

that they are not used to operating in times of economic recessions but they managed to

power through and stay financially healthy and very competitive on the market


38

7 Internal Analysis

The internal environment of a business is the part on which the management has direct control

over the events and processes ongoing in the internal setting can be influenced primarily by

the managers of the firm The internal analysis is about assessing the strengths and

weaknesses of the company which are managed by the executives and staff in order to achieve

efficiency and effectiveness in running the business While trying to analyze different aspects

of the business should be taken in consideration

71 Competencies

The first point is the competencies of a business enterprise which are the activities it

performs or the fields it operates in with more precision and success than others Mostly

resources and their capable use are admitted as competencies of a business but not all of

them only those that the business acquires a competitive advantage with and that contribute

to its success

Core competencies are the actions fundamental to the businesses success very hard or

impossible for others to copy The core competencies must be distinctive meaning they must

be done better than the rivals As mentioned this usually occurs by implementing resources at

hand capably The most important core competence of Under Armour is innovation The only

reason the company was able to enter a market which was already dominated with

experienced players like Nike and Adidas for many decades was the innovation that the

current CEO Kevin A Plank showed He was innovative in many ways the most important

was the cutting edge technology Plank came up with - a unique textile a combination of

polyester and elastane that offered the customer advantages the rival brands did not The

company manages to keep this core competence alive and provides the market with

innovative products The CEO was also innovative in market penetration (Product-Market

Growth Matrix Igor Ansoff) He started with direct marketing selling the products directly to

equipment managers of college sports teams what offered him the advantages of personal

marketing and made it easier to communicate the benefits of Under Armour products and

helped in winning over the market share needed to grow the business The management was

able to develop a successful strategy built on these competencies


39

72 Value Chain

The next point in the internal analysis is the value chain analysis As the father of the theory

Michael E Porter explained ldquoThe value chain is a systematic approach to examining the

development of competitive advantagerdquo (Michael E Porter Competitive Advantage 1980)

(Source themanagerorg)

The competitive advantage Porter talks about derives from the activities on the image above

The functions of the company are broken down into 9 pieces that contribute to value creation

Generally all companies should use this tool to analyze the internal situation in detail and try

to manage with more efficiency itrsquos much more valuable to understand the importance of the

value chain analysis for companies who operate with a Low-cost or Best-cost generic

strategies If managed correctly it would be a helpful tool to view the details of each part and

try to cut costs and reduce expenses

Under Armour has chosen the broad differentiation strategy and has been able to keep up with

the expectations of the definition They provide a broad market with a wide range of products

that are differentiated in many ways However the management should stay mobilized and

continue with the improvement of value creation processes which will in no doubt help the

company in further expansion It has a very important role in the future development of the

enterprise Under Armour operates in a very competitive market and cost-cutting can go a

long way It should seek such opportunities in all the activities primary and secondary listed

in the value chain Despite the fact that in the near past Under Armour has showed great


40

financial success if the management intends to maximize profitability and continue this

positive trend they should pay a great deal of attention to the value chain and try to seek the

problems after all therersquos always room for improvement

As illustrated above the value chain of a business consists of two main sections the primary

and secondary activities Each single process adds value to the end product the lsquomarginrsquo on

the image is equivalent to the sum of these individual values

Primary Value Chain Activities of Under Armour

Inbound Logistics

There are five main primary activities in each organization The first one is the inbound

logistics section The latter is the management of the goods received from suppliers

warehousing material handling inventory control costs etc As discussed before Under

Armour outsources most of its production in Asia and South America The outsourcing

strategy is very common and implemented by most of Under Armours rivals The reason is

lower production costs therefore if Under Armour missed out on these tactics they would

lose competitiveness in terms of having higher manufacturing costs Fortunately they did not

Shipments received from outsourced producers must have space to accommodate until their

final retail locations In Baltimore Under Armour holds about 700000 square feet of

inventory space therefore the management should acknowledge the importance of correct

handling in the businessrsquos success They also have a large facility in Netherlands and sign

third-parties for more capacity The management team doesnrsquot miss the significance of this

issue ldquoInventory management is important to the financial condition and operating results of

our businessrdquo (Annual Reports 2010 Distribution and Inventory management page 15) The

inventory strategy is focused on meeting customer demands and improving long-term

efficiency by implementing new inventory management systems and procedures Shipping

and Handling costs was about $14 million

Operations

The second primary activity in the value chain is the operations of taking inputs from inbound

logistics and transforming them into final products They both are activities connected to

relations with suppliers The operations section carries significant importance as well This

process mostly includes processing raw materials into finished products sports apparel and


41

footwear and is handled by the manufacturers These processes need careful evaluation

correct planning can save up valuable production time and costs

Outbound Logistics

The third activity in the value chain is the first one that is in relevance to the relationships

with buyers ndash Outbound logistics This section includes activities like product distribution and

store space arrangements Under Armour distributes its products from several locations two

of its own facilities are located close to its headquarters in Baltimore another in Netherlands

and they also use a third-party distributor for North America whose facilities are located in

California and Florida (Annual Reports 2010 Distribution and Inventory management page

15) It can also be costly and if not managed correctly can produce avoidable expenses

Sales and Marketing

Next in the chain is Sales and Marketing This part is probably the most important one for

Under Armour and companies in the same industry While in the previous sections value was

being added to the product marketing and sales doesnrsquot only contribute to the value itrsquos the

part where the latter is delivered to the end consumers The marketing of brands in the athletic

apparel and footwear industry plays a vital role in the consumersrsquo decision Managers of such

companies should pay extra attention to Sales and Marketing of the company In this industry

only an excellent end product is not enough itrsquos vital to promote and market the products in a

customer appealing way

The fact that marketing is very important in this industry isnrsquot a secret All major players in

the industry achieved success through marketing Nike and Adidas have been paying huge

amounts of money for endorsement deals promotion campaigns etc Under Armour has also

engaged in this some sort of brand image war The campaigns offered by UA are designed

and planned in an in-house marketing and promotions department that designs and produces

most of the advertising campaigns and works on the endorsement deals The way UA operates

its sales and marketing activities is the following ldquoOur marketing and promotion strategy

begins with selling our products to high-performing athletes and teams on the high school

collegiate and professional levelsrdquo (Annual Reports 2010 Marketing and Promotion page

10) They also sell directly to team equipment managers thus outfitting the whole team

Through these sales UA products are seen on the fields receiving exposure to various

consumer audiences through internet TV magazines sporting events etc At this stage it


42

adds value through the deals with famous athletes and teams and also delivers it to the

customers The teams and athletes UA sells to were discussed before but some great deals

should be mentioned again such as the deal with Brandon Jennings - Milwaukee Bucks star

player Lindsey Vonn ndash US Olympic gold winning pro skier NFL stars Tom Brady

Brandon Jacobs etc International deals include official outfitter deals with the Tottenham

Hotspurs a Premier League grand Hannover 96 a German soccer team the Welsh Rugby

Union etc (Annual Reports 2010 Marketing and Promotion page 10) They all promote

Under Armours catchy and some might say powerful slogan ldquoProtect the Houserdquo

Advertising costs for year 2010 were $1282 million $20 million more than 2009

If marketing is defined as one of the main drivers of success in this business then Under

Armour has been implementing a great marketing strategy their success in the past few years

is not one that the business world often witnesses

Service

Service is the last of the primary activities in a companyrsquos value chain Its quality is almost as

important as marketing for the brand image and overall company reputation and isnrsquot the

place that management should save money on Basically the aftermath of the value creation

and transfer to the customers is as important as the rest the business should offer a place

where the consumers can express all kinds of claims and receive answers to questions Under

Armour operates a customer service phone line and the web-site offers a separate section for

this topic The company offers a service experience where customers receive timely answers

to their questions and experience no discomfort This helps keep the company value alive and

raises brand loyalty


43

Secondary Value Chain Activities of Under Armour

The word secondary doesnrsquot mean less important in this case The secondary value chain

activities of a company basically create the fundament for the primary value chain activities

and support their successful execution Without healthy contribution from these sectors the

whole process will most likely be confused and it will make the value creation a whole lot

harder if not impossible The general administration human resource management product

and technology development and procurement are the four parts of the value chain that

provide crucial assistance for the primary value chain creation process

General Administration

The first of the four secondary activities of the value chain is the general administrative part

of running a business in other words the infrastructure of a firm that handles the general

management future planning organizational structure company culture legal factors

governmental affairs finance management etc This sector supports the value creation

process in both short and long terms The general administrative structure should be organized

in an efficient way and manage the ongoing processes

There are six main players in the companyrsquos top management team run by CEO and founder

of the company Kevin A Plank These are the people who inspire the whole company form

the strategy and make sure of its execution Kevin A Plank has been a remarkable figure in

Under Armours history and backs most of its innovative product developments Hersquos also an

inspirational and charismatic leader with an active role in the day to day routine of the

company Anyone who watches any of his many performances can easily verify this

As for the financial management part UA gathers an Audit Committee who is in charge of

relations with the external auditors and evaluations of internal financial reporting and risks

associated to these matters For the past years UAs Audit Committee has been opting to work

with one of the most successful and reliable audit companies PricewaterhouseCoopers LLP

(Proxy Statement 2011 Independent Auditors page 42)

The Annual report shows that the Selling General and Administrative expenses have been

increasing in the past years In general these are fixed costs and their constant increase might

mean that problems are in order profits might stop rising and if these fixed expenses

continue net loss might occur UA Selling General and Administrative costs for the past year

have increase by 28 which is a rather significant increase But in Under Armours case itrsquos


44

logical that the businessrsquos selling general and administrative costs are rising the business is

in a growth stage and the company is expanding day by day As mentioned before it even

expanded to a new region building a company branch in Amsterdam Therefore building

maintenance new salaries etc costs that are associated with a new branch are added

Advertising costs are also included in this section Along with its expansion advertising also

needs to grow and become more effective therefore larger budgets are required Also

Product innovation costs and corporate service costs are included in this section they both

increased in the year 2010 again due to the growth of the company Consequently itrsquos logical

and necessary that Selling General and Administrative costs are growing for the past years

Human Resource Management

Human resources is a vital part of the support activities It adheres to recruiting hiring

training development and compensation Management is key factor in manufacturing

Sometimes one decision can change the whole process in a very efficient manner A

company must have trustworthy people employed for inbound logistics operations and

outbound logistics These are the three main areas where the product is manufactured and

value is added if something goes wrong in these processes the whole value chain is

worthless Sales marketing and service staff should be compiled with friendly and positive

individuals who will be able to create value outside the company Their role is big in

bargaining with buyers without buyer satisfaction the whole business will collapse

ldquoAs of December 31 2010 we had approximately thirty nine hundred employees including

approximately twenty two hundred in our factory house and specialty stores and six hundred

at our distribution facilitiesrdquo (Annual Reports 2010 Employees page 17) Most of Under

Armours employees are located in the US and the company believes that their relationships

between each other are good

The company has been able to hire employees that show a very high quality and highly

innovative range of products


45

Product RampD Technology and System Development

The next supporting activity is one partially covered in this thesis - Product RampD technology

innovation and development As mentioned before innovation is a key element in this

business especially for a relevantly new enterprise like Under Armour The company is

technically driven to provide the world with high quality performance apparel and footwear

that are engineered with superior fabric construction called PolyArmour characterized with

exclusive moisture management and proven innovation Profit is also maximized in this

supporting step of the value chain the better the technology the more interesting and

appealing for customers the product - the more effective the outcome is and the more

efficiently it is made

Under Armour is investing more and more in product development and innovation They

understand that only with new innovative and appealing products can they grab more and

more market share from rivals ldquoProduct innovation and supply chain costs increased $250

million to $968 million in 2010 from $718 million in 2009 primarily due to higher personnel

costs for the design and sourcing of our expanding apparel footwear and accessories linesrdquo

(Annual Reports 2010 Results of Operations page 33) The UA management understands the

importance of this section and funds it appropriately


46

8 SWOT Analysis

SWOT analysis stands for strengths weaknesses opportunities and threats analysis itrsquos a tool

used to identify a companyrsquos current position in terms of the four listed categories Managers

can answer questions like what needs reassessment what can be capitalized on what needs to

be prevented etc based on a healthy SWOT analysis

For Under Armour below is the chart for the SWOT analysis

Strengths Innovative Technology

Diversified products

Fast Growing Profits financial

stability

Room to Grow

Reputation and Brand Image

Well built supply and distribution

chain

Weaknesses Small market coverage

Weak company-owned retail chain

Higher costs than competitors

Limited product lines

Mainly targets males

Opportunities Emphasize variety of sports

Expand in other regions

Expand in other related industries

Reduce Prices

Strategic alliances and partnerships

Threats o Huge competitors holding major

market shares

o The unstable US and global

economies

o Unstable currencies

o Changes in the business world

o Transform consumer tastes and

lifestyles


47

Strengths

At this stage of development Under Armour has a quite strong background The financial

achievements discussed above are what give credibility to other strengths listed in the SWOT

chart Without this the rest wouldnrsquot be considered at all Therefore one of the main strengths

UA has today is its well-built and stable financial position The latter gives sustainability to

the other strengths of UA The innovative technology and design that UA offers is a major

strong point of the company The greatness of UAs innovations was mentioned many times

before in this thesis and not by chance it is the most obvious reason of the companyrsquos

success The management should capitalize on the strength to deliver more innovation and

carry on with the success Itrsquos obviously on track a couple months ago on February 15 2011

opened a new innovation center in Baltimore focused on new creative and cutting edge

technology performance apparel

After more than a decade of functioning in the athletic apparel and footwear business UA has

obtained a reputation on the market of a quality goods manufacturer offering a wide range of

products diversified in many ways along with a number benefits for athletes and all

customers The brand image also serves as a current strength for the company through

effective marketing and endorsement deals Under Armour managed to build up a brand image

appealing to more and more customers Another benefit and strength of a healthy reputation is

that it helps create a loyal customer base Its name also says that itrsquos an ethical and business

oriented company allowing business conduct to be easier for them UAs management team

has a clean sleet in the business world and companies should be glad to work with them This

strength allows the company to easily seek out partners needed for any activity

The last strength listed in the chart above is a well built supply chain Cost efficiency and

good customer service are the two benefits of the latter and itrsquos convenient to consider this

strength of UA Management must keep all these strengths in tact and continue capitalizing on

them because they provide the foundation of growth and survival in this competitive industry


48

Weaknesses

The main weaknesses of Under Armour are small market coverage a weak company-owned

retail location chain and higher production costs than competitors The first of the three is a

weakness because it denies UA the chance to interact with a vastly higher number of

customers and thus increase sales and contribute to the enterprises growth UAs main

competitors cover a wider market and have higher economies of scale resulting in lower

costs If UA doesnrsquot think more globally soon the markets it occupies might run out of

growth capacity and the business wonrsquot be able to progress No growth and non-competitive

production costs create a weakness which might have severe results and while playing with

experienced players like Nike or Adidas the chances of bad exposure are much higher

The fourth weakness UA has is a weak company-owned retail chain It would add sufficient

strength to the company to have its own ground to market and sell on Despite the fact that the

management is planning to expand its retail chain today this is a weakness where UA gives

away a portion of its competitiveness Nike and Adidas have well organized retail chains all

around the world making their production more reachable

Opportunities

As visible on the SWOT chart the opportunities section mainly contains prospects connected

to expansion and growth Under Armours nowadays situation is excellent for conquering new

markets and stealing market share from its rivals Europe Asia South America and Australia

are four vast continents full of potential customers of UAs production Unfortunately only

minorities are aware that this brand even exists UAs success in the home continent brings the

opportunity to attract investors and expand as fast as possible The brand holds potential to

become very popular in the four listed regions Of course marketing will be essential to

achieve positive results in these markets but assuming it will be as effective as it is in North

America many should volunteer to ldquoProtect This House regrdquo (UA slogan)

Along with regional expansion the campaign should involve emphasizing on suitable sports

in each region For example India is a huge market for cricket apparel and equipment it

would be more logical to enter the Indian market with a line of the latter than with Under

Armour produced basketball shoes Despite the fact that UA has no experience in the field

until theyrsquore in a healthy financial position they should try new markets and new fields to

achieve even bigger success and reach their goals


49

Another opportunity for the company would be to differentiate in an even higher level and

enter different industries somewhat related to the athletic apparel and footwear industry For

example along with its line of sportswear Adidas produces shower gels Itrsquos an opportunity

to sell these types of related products with the primary goods because the new offered

product will receive exposure just by being available on store shelves If the company will

show half of the innovation in this field as it shows in its primary activities success is highly

likely

The last opportunity listed is strategic alliances and partnerships The management has a

limited amount of resources and wonrsquot be able to finance all the listed opportunities along

with those not on the list Therefore by creating alliances with other business units more

accustomed to the conducts in other fields might benefit the company For example if UA

forms an alliance with a common shower gel producer adds value and benefits to the

products brands it with its logo and puts it in the retail locations of UA might achieve more

profits than by starting up a whole new business unit to produce these goods themselves In

addition the overall risk is less because the potential partner would be more experienced and

accurate in the manufacturing process

Threats

Under Armours major threat is the number of rival companies with more experience and

global exposure These companies have the potential to pressure UA and threaten its success

They spend millions of dollars on marketing and enjoy high brand loyalty and awareness

The importance of the economic environment surrounding the business was already

mentioned in the external analysis It should also enter the list of threats that Under Armour

has today The commodity prices are inflating and the national currency is unstable therefore

itrsquos hard to predict what might happen in the future Some ways the problem might develop

can seriously hurt UAs profitability so the management should keep an eye for such threats

The rest listed threats are the changing business environment and consumer lifestyles and

tastes This is something that every business with multiple sellers should be afraid of Itrsquos

always possible that someone else predicts the shift in consumer tastes and becomes the first

to satisfy the demand So the company should be ready to convert to new tastes and stay

appealing to the customer Under Armour also should stay an up-to-date business unit by

keeping up with the constant changing business world Otherwise they threat to become


50

uninteresting to partners and this can damage their progress as a whole and the strategy

theyrsquore implementing might be at risk The latter is that UA has been trying to keep good

relations with all b2b affairs The buyer and supplier bargaining pressures have been

discussed above in the ldquoPorterrsquos fiverdquo analysis and for UA itrsquos very important to keep the

relationships strong and healthy because of their practically non-existing own retail chain and

limited suppliers of merchandise

9 Recommendations

Recommendations on regional expansion

Since Under Armour went public in 2005 the company has seen nothing but growth and

success Even in the tough recession year it showed strength and stability and went on

growing in the problematic market of North America Today itrsquos time to grow The industry

demands for Under Armour to expand and ldquoinvaderdquo new regions If handled efficiently and

effectively the results are bound to be good The company has a high quality product and has

the capabilities to market it around the globe In case they decide to stay put and continue

operations only on one continent their future might be at risk Theyrsquove been testing the waters

of Asia and Europe recently by licensing and contracting third-party logistics organizations

and the products showed promise Now maybe itrsquos time to enter the new markets by

themselves As mentioned in the External Analysis section China is a market showing great

promise for relatively small producers and marketers such as UA therefore as a

recommendation the thesis suggests to the company to attempt to enter the Chinese market

with its products

Expansion will also raise the quantity of production thus enabling Under Armour higher

economies of scale this way they could lower costs and raise their competitiveness

UA has an ambition to be first in the ldquoperformance apparelrdquo business and to achieve this

goal they should grow out of the North American market and aim for the globe with a clear

focus on market coverage and supply of sustainable products

The latter are ldquothose products providing environmental social and economic benefits while

protecting public health welfare and environment over their full commercial cycle from the

extraction of raw materials to final dispositionrdquo (Sustainable Products Corporation 2001)

The world is becoming more conscious to the concept of sustainability and businesses will


51

find it hard to operate in the future if not cohering with the concept While expanding

globally Under Armour should also consider the sustainability factor and try to make its

products benefit the surroundings

Recommendations on retail stores

While analyzing the company itrsquos obvious that a company-owned retail chain would be a

great addition that would support the whole organization The retailers selling UArsquos products

receive all the benefits from holding the product on their store shelves Despite the fact that it

might require large amounts of capital a company based retail chain would increase the

profitability and credibility in the long-term It would enable UA to study customer behavior

and taste with more understanding also it would relieve the company from a large part of

pressure from buyers Today if something goes wrong with the relationships between Under

Armour and Dickrsquos Sporting Goods for example the company will face a crisis because the

latter accounts for a huge amount of sales for UA If theyrsquod own a retail chain these kinds of

problems wonrsquot be possible

The retail chain will also bring more exposure to Under Armour Today we can see their

products on the internet and in local athletic stores and in very few specialty shops There is a

possibility for them to establish a strong retail chain and lure customers in with their smart

and tactful advertising Many might find it appealing to see what ldquoProtect this house regrdquo

means and enter the store thus resulting in a sale Also as mentioned before the rivals chose

to multi-brand and when a buyer sees 20 different brands in a store and only 1 brings profit to

UA and 5 to Nike the odds are against them some might choose another brand for its price

some for its appearance etc More specialty stores will deny this possibility and increase the

chance for sales

Recommendations on Marketing and Endorsements

Despite the fact that this thesis states the cleverness and success of UArsquos marketing it is never

enough in this business When companies like Nike and Adidas sign deals so often and

endorse stars so effectively itrsquos hard to compete with less activity Endorsement has become a

necessary and vital part of the way companies advertise in this business Under Armour

should continue on and sign more stars Every cent invested in a proper endorsement will pay

off in the future with sales and revenues this is a fact proved by time


52

Bibliography (Reference List)

Google Finance 2011 Under Armour stock prices retrieved from

httpwwwgooglecomfinanceq=NYSE3AUA

Under Armour official website 2011 Historic background retrieved from

httpinvestorunderarmourcominvestorscfm

Wikipedia 2011 Under Armour retail operations information retrieved from

httpenwikipediaorgwikiUnder_ArmourRetail_operations

Bloomberg Businessweek 2011 Under Armour stock information retrieved from

httpinvestingbusinessweekcomresearchstockssnapshotsnapshotaspticker=UAUS

Wikinvest 2011 Under Armour product lines retrieved from

httpwwwwikinvestcomwikiUnder_Armour_(UA)

Jigsaw 2011 Under Armour background information retrieved from

httpwwwjigsawcomid238164under_armour_inc_companyxhtml

The Washington Post 2008 Kevin A Plank about innovation retrieved from

httpwwwwashingtonpostcomwp-dyncontentarticle20080224AR2008022401743html

BBCco 2011 Tottenham Hotspur contract retrieved from

httpwwwbbccouknewsbusiness-12685894

Under Armour 2011 Product price information

httpwwwunderarmourcomshopusenmensnew-arrivalstagspropssort-

HLlr=c29ydA3D3D|HL

Wikinvest 2011 Athletic apparel and footwear market shares retrieved from

httpwwwwikinvestcomstockNike_(NKE)

Marketing Charts 2007 Industry Market size information retrieved from


53

httpwwwmarketingchartscomdirectglobal-sports-equipment-apparel-and-footwear-market-nearly-

280b-5548npd-sports-market-growth-by-global-region-2007jpg

HKEX news 2009 Chinese Sportswear market size retrieved from

httpwwwhkexnewshklistedcolistconewssehk2008062700977_357111E112pdf

Yahoo Finance 2011 Athletic apparel and footwear market gross margin average retrieved

from

httpfinanceyahoocomqcos=UA+Competitors

Wikipedia 2011 Adidas Group background information retrieved from

httpenwikipediaorgwikiAdidas

Wikipedia 2011 Nike background information retrieved from

httpenwikipediaorgwikiNike_Inc

Maps of world Finance 2009 Multi-branding definition retrieved from

httpfinancemapsofworldcombrandstrategymultihtml

Yahoo Finance 2011 Nike Adidas Group and UA revenues retrieved from

httpyahoofinancecom

Article base April 29 2010 Demand growth rates of sports apparel industry retrieved from

httpwwwarticlesbasecominternational-business-articlessports-apparel-industry-into-the-era-of-

competition-standardization-2260256html

Kyle Mauch January 6 2011 The Nike Story retrieved from

httpkylemauchcomtagphil-knight

Wikipedia 2011 Polyester and Elastane retrieved from

httpenwikipediaorgwikiPolyester httpenwikipediaorgwikiElastane

Economist Intelligence Unit 2011 USA rank in business environment retrieved from


54

httpcountryeiucomarticleaspxarticleid=1707046955ampCountry=USamptopic=Businessampsubtopic=B

usiness+environmentampsubsubtopic=United+States+of+America--

highlights3a+Business+environment+outlook

Economist Intelligence Unit 2011 Netherlands rank in business environment retrieved from

httpcountryeiucomarticleaspxarticleid=1967080981ampCountry=Netherlandsamptopic=Businessampsu

btopic=Business+environmentampsubsubtopic=Netherlands--


Stephan McDonell ABC news November 27 2010 China steps in to defuse Korean War

threat retrieved from

httpwwwabcnetaunewsstories201011273078142htm

Choe Sang-Hun NY Times July 25 2010 ldquoAs Tensions Rise US and S Korea Begin

Drillsrdquo retrieved from

httpwwwnytimescom20100726worldasia26koreahtml

Wikipedia 2011 Financial crisis 2007 information retrieved from

httpenwikipediaorgwikiLate-2000s_financial_crisis

Google Finance 2011 Gold price fluctuations retrieved from

httpwwwgooglecomfinanceq=NASDAQGOLD

Bloomberg Businessweek date ND ldquoNikes New Game Plan for Sweatshopsrdquo retrieved

from

httpwwwbusinessweekcommagazinecontent04_38b3900011_mz001htm

Under Armour 2011 Company code of ethics and business conduct retrieved from

httpwwwuabizcomcorpResponsibilitycfm

Darren Rovell CNBC news 15 July 2009 ldquoUnder Armours New Recovery suitrdquo retrieved

from

httpwwwcnbccomid31923265Under_Armour_s_New_Recovery_Suit

BBC Radio 23 January 2011 Michael Porter about Shared Value retrieved from

httpwwwbbccoukiplayerconsoleb00xj0r4In_Business_A_New_Capitalism


55

Performance Sports Stuff date ND ldquoCatalystrdquo T-Shirt retrieved from

httpwwwperformancesportsstuffcompr391womens-catalyst-short-sleeve-tee-starfruit-yellow

Baltimore Office of Sustainability 2009 Under Armourrsquos green marathon retrieved from

httpcleanergreenerbaltimoreorguploadsfilesAnnual20Report20Final20(online20download

20version)pdf

Kevin A Plank CEO of UA October 3 2008 Under Armour presentation retrieved from

httpwwwyoutubecomwatchv=_sNaIGv0ZwE

Stephanie Rawlings-Blake Baltimore City Mayor February 11 2011 Under Armour

Innovation Lab opening retrieved from

httpwwwyoutubecomwatchv=cSc8m46RPPQ

Sustainable Products 2001 Sustainable products description retrieved from

httpwwwsustainableproductscomsusproddefhtml


2

DECLARATION

No portion of the work referred to in this thesis has been submitted in support of an

application for another degree or qualification of this or any other university or other institute

of learning

I hereby also declare that this thesis is my independent work All sources and literature are

cited and included

Please sign here


3

Table of Contents

1 Abstract 4

2 Introduction 6

3 Product Lines 7



















71 Competencies 38

72 Value Chain 39

8 SWOT Analysis 46

Strengths 46

Weaknesses 46

Opportunities 46

Threats 46



4

1 Abstract





























5







6

2 Introduction



























Logo





7



3 Product Lines



company offers




















8


41 Growth Strategy



















overall


80

12

4 4


Apparel

Footwear

Accessories

License Revenue


9

























community








10




US based company


Product positioning









3

Low Prices

NIKE

Adidas

1

2

High Prices

High Innovation and

Advancement


Under Armour


11

5 External Analysis































12








13




















14













Company

(Company Code)


2010 2009 2008

Nike (NKE) 19014000 19176100 18627000

Adidas (ADSDE) NA 10381000 10799000

Under Armour (UA) 1063927 856411 725244















15


































16


















17



























18






























19










establishment






20

























21
































22

































23


















Company 2007 2008 2009 2010

Nike 1492000 1883400 1486700 1906700

Adidas 551000 642000 245000 NA

Under Armour 52552 38229 46785 68477









24






























25

53 PESTEL Analysis
































26




















mentioning


27




























28

533 Social Analysis








the following
























29


the consumers


























competitiveness


30












28 2008)






31













well




about 35$








32

















33

536 Legal Analysis















problems









34















35









stable 19 yearly





















case


36


178412 496966 = 035 145591 399997 = 036












invest





RoE = 68477 (496966 + 399997) 2 = 68477 4484815 = 015


Income page 54)









37








38

7 Internal Analysis







71 Competencies





to its success


















39

72 Value Chain





















40








Inbound Logistics


















Operations






41



Outbound Logistics








Sales and Marketing






















42













Service











43

































44




























45



















46

8 SWOT Analysis









stability

Room to Grow



chain









Reduce Prices



market shares


economies




lifestyles


47

Strengths



























48

Weaknesses















Opportunities

















49







likely










Threats
















50







9 Recommendations














with its products











51























chance for sales









52




















HLlr=c29ydA3D3D|HL





53






from









httpyahoofinancecom










54



















from





from





55





20version)pdf









3

Table of Contents

1 Abstract 4

2 Introduction 6

3 Product Lines 7



















71 Competencies 38

72 Value Chain 39

8 SWOT Analysis 46

Strengths 46

Weaknesses 46

Opportunities 46

Threats 46



4

1 Abstract





























5







6

2 Introduction



























Logo





7



3 Product Lines



company offers




















8


41 Growth Strategy



















overall


80

12

4 4


Apparel

Footwear

Accessories

License Revenue


9

























community








10




US based company


Product positioning









3

Low Prices

NIKE

Adidas

1

2

High Prices

High Innovation and

Advancement


Under Armour


11

5 External Analysis































12








13




















14













Company

(Company Code)


2010 2009 2008

Nike (NKE) 19014000 19176100 18627000

Adidas (ADSDE) NA 10381000 10799000

Under Armour (UA) 1063927 856411 725244















15


































16


















17



























18






























19










establishment






20

























21
































22

































23


















Company 2007 2008 2009 2010

Nike 1492000 1883400 1486700 1906700

Adidas 551000 642000 245000 NA

Under Armour 52552 38229 46785 68477









24






























25

53 PESTEL Analysis
































26




















mentioning


27




























28

533 Social Analysis








the following
























29


the consumers


























competitiveness


30












28 2008)






31













well




about 35$








32

















33

536 Legal Analysis















problems









34















35









stable 19 yearly





















case


36


178412 496966 = 035 145591 399997 = 036












invest





RoE = 68477 (496966 + 399997) 2 = 68477 4484815 = 015


Income page 54)









37








38

7 Internal Analysis







71 Competencies





to its success


















39

72 Value Chain





















40








Inbound Logistics


















Operations






41



Outbound Logistics








Sales and Marketing






















42













Service











43

































44




























45



















46

8 SWOT Analysis









stability

Room to Grow



chain









Reduce Prices



market shares


economies




lifestyles


47

Strengths



























48

Weaknesses















Opportunities

















49







likely










Threats
















50







9 Recommendations














with its products











51























chance for sales









52




















HLlr=c29ydA3D3D|HL





53






from









httpyahoofinancecom










54



















from





from





55





20version)pdf









4

1 Abstract





























5







6

2 Introduction



























Logo





7



3 Product Lines



company offers




















8


41 Growth Strategy



















overall


80

12

4 4


Apparel

Footwear

Accessories

License Revenue


9

























community








10




US based company


Product positioning









3

Low Prices

NIKE

Adidas

1

2

High Prices

High Innovation and

Advancement


Under Armour


11

5 External Analysis































12








13




















14













Company

(Company Code)


2010 2009 2008

Nike (NKE) 19014000 19176100 18627000

Adidas (ADSDE) NA 10381000 10799000

Under Armour (UA) 1063927 856411 725244















15


































16


















17



























18






























19










establishment






20

























21
































22

































23


















Company 2007 2008 2009 2010

Nike 1492000 1883400 1486700 1906700

Adidas 551000 642000 245000 NA

Under Armour 52552 38229 46785 68477









24






























25

53 PESTEL Analysis
































26




















mentioning


27




























28

533 Social Analysis








the following
























29


the consumers


























competitiveness


30












28 2008)






31













well




about 35$








32

















33

536 Legal Analysis















problems









34















35









stable 19 yearly





















case


36


178412 496966 = 035 145591 399997 = 036












invest





RoE = 68477 (496966 + 399997) 2 = 68477 4484815 = 015


Income page 54)









37








38

7 Internal Analysis







71 Competencies





to its success


















39

72 Value Chain





















40








Inbound Logistics


















Operations






41



Outbound Logistics








Sales and Marketing






















42













Service











43

































44




























45



















46

8 SWOT Analysis









stability

Room to Grow



chain









Reduce Prices



market shares


economies




lifestyles


47

Strengths



























48

Weaknesses















Opportunities

















49







likely










Threats
















50







9 Recommendations














with its products











51























chance for sales









52




















HLlr=c29ydA3D3D|HL





53






from









httpyahoofinancecom










54



















from





from





55





20version)pdf









5







6

2 Introduction



























Logo





7



3 Product Lines



company offers




















8


41 Growth Strategy



















overall


80

12

4 4


Apparel

Footwear

Accessories

License Revenue


9

























community








10




US based company


Product positioning









3

Low Prices

NIKE

Adidas

1

2

High Prices

High Innovation and

Advancement


Under Armour


11

5 External Analysis































12








13




















14













Company

(Company Code)


2010 2009 2008

Nike (NKE) 19014000 19176100 18627000

Adidas (ADSDE) NA 10381000 10799000

Under Armour (UA) 1063927 856411 725244















15


































16


















17



























18






























19










establishment






20

























21
































22

































23


















Company 2007 2008 2009 2010

Nike 1492000 1883400 1486700 1906700

Adidas 551000 642000 245000 NA

Under Armour 52552 38229 46785 68477









24






























25

53 PESTEL Analysis
































26




















mentioning


27




























28

533 Social Analysis








the following
























29


the consumers


























competitiveness


30












28 2008)






31













well




about 35$








32

















33

536 Legal Analysis















problems









34















35









stable 19 yearly





















case


36


178412 496966 = 035 145591 399997 = 036












invest





RoE = 68477 (496966 + 399997) 2 = 68477 4484815 = 015


Income page 54)









37








38

7 Internal Analysis







71 Competencies





to its success


















39

72 Value Chain





















40








Inbound Logistics


















Operations






41



Outbound Logistics








Sales and Marketing






















42













Service











43

































44




























45



















46

8 SWOT Analysis









stability

Room to Grow



chain









Reduce Prices



market shares


economies




lifestyles


47

Strengths



























48

Weaknesses















Opportunities

















49







likely










Threats
















50







9 Recommendations














with its products











51























chance for sales









52




















HLlr=c29ydA3D3D|HL





53






from









httpyahoofinancecom










54



















from





from





55





20version)pdf









6

2 Introduction



























Logo





7



3 Product Lines



company offers




















8


41 Growth Strategy



















overall


80

12

4 4


Apparel

Footwear

Accessories

License Revenue


9

























community








10




US based company


Product positioning









3

Low Prices

NIKE

Adidas

1

2

High Prices

High Innovation and

Advancement


Under Armour


11

5 External Analysis































12








13




















14













Company

(Company Code)


2010 2009 2008

Nike (NKE) 19014000 19176100 18627000

Adidas (ADSDE) NA 10381000 10799000

Under Armour (UA) 1063927 856411 725244















15


































16


















17



























18






























19










establishment






20

























21
































22

































23


















Company 2007 2008 2009 2010

Nike 1492000 1883400 1486700 1906700

Adidas 551000 642000 245000 NA

Under Armour 52552 38229 46785 68477









24






























25

53 PESTEL Analysis
































26




















mentioning


27




























28

533 Social Analysis








the following
























29


the consumers


























competitiveness


30












28 2008)






31













well




about 35$








32

















33

536 Legal Analysis















problems









34















35









stable 19 yearly





















case


36


178412 496966 = 035 145591 399997 = 036












invest





RoE = 68477 (496966 + 399997) 2 = 68477 4484815 = 015


Income page 54)









37








38

7 Internal Analysis







71 Competencies





to its success


















39

72 Value Chain





















40








Inbound Logistics


















Operations






41



Outbound Logistics








Sales and Marketing






















42













Service











43

































44




























45



















46

8 SWOT Analysis









stability

Room to Grow



chain









Reduce Prices



market shares


economies




lifestyles


47

Strengths



























48

Weaknesses















Opportunities

















49







likely










Threats
















50







9 Recommendations














with its products











51























chance for sales









52




















HLlr=c29ydA3D3D|HL





53






from









httpyahoofinancecom










54



















from





from





55





20version)pdf









7



3 Product Lines



company offers




















8


41 Growth Strategy



















overall


80

12

4 4


Apparel

Footwear

Accessories

License Revenue


9

























community








10




US based company


Product positioning









3

Low Prices

NIKE

Adidas

1

2

High Prices

High Innovation and

Advancement


Under Armour


11

5 External Analysis































12








13




















14













Company

(Company Code)


2010 2009 2008

Nike (NKE) 19014000 19176100 18627000

Adidas (ADSDE) NA 10381000 10799000

Under Armour (UA) 1063927 856411 725244















15


































16


















17



























18






























19










establishment






20

























21
































22

































23


















Company 2007 2008 2009 2010

Nike 1492000 1883400 1486700 1906700

Adidas 551000 642000 245000 NA

Under Armour 52552 38229 46785 68477









24






























25

53 PESTEL Analysis
































26




















mentioning


27




























28

533 Social Analysis








the following
























29


the consumers


























competitiveness


30












28 2008)






31













well




about 35$








32

















33

536 Legal Analysis















problems









34















35









stable 19 yearly





















case


36


178412 496966 = 035 145591 399997 = 036












invest





RoE = 68477 (496966 + 399997) 2 = 68477 4484815 = 015


Income page 54)









37








38

7 Internal Analysis







71 Competencies





to its success


















39

72 Value Chain





















40








Inbound Logistics


















Operations






41



Outbound Logistics








Sales and Marketing






















42













Service











43

































44




























45



















46

8 SWOT Analysis









stability

Room to Grow



chain









Reduce Prices



market shares


economies




lifestyles


47

Strengths



























48

Weaknesses















Opportunities

















49







likely










Threats
















50







9 Recommendations














with its products











51























chance for sales









52




















HLlr=c29ydA3D3D|HL





53






from









httpyahoofinancecom










54



















from





from





55





20version)pdf









8


41 Growth Strategy



















overall


80

12

4 4


Apparel

Footwear

Accessories

License Revenue


9

























community








10




US based company


Product positioning









3

Low Prices

NIKE

Adidas

1

2

High Prices

High Innovation and

Advancement


Under Armour


11

5 External Analysis































12








13




















14













Company

(Company Code)


2010 2009 2008

Nike (NKE) 19014000 19176100 18627000

Adidas (ADSDE) NA 10381000 10799000

Under Armour (UA) 1063927 856411 725244















15


































16


















17



























18






























19










establishment






20

























21
































22

































23


















Company 2007 2008 2009 2010

Nike 1492000 1883400 1486700 1906700

Adidas 551000 642000 245000 NA

Under Armour 52552 38229 46785 68477









24






























25

53 PESTEL Analysis
































26




















mentioning


27




























28

533 Social Analysis








the following
























29


the consumers


























competitiveness


30












28 2008)






31













well




about 35$








32

















33

536 Legal Analysis















problems









34















35









stable 19 yearly





















case


36


178412 496966 = 035 145591 399997 = 036












invest





RoE = 68477 (496966 + 399997) 2 = 68477 4484815 = 015


Income page 54)









37








38

7 Internal Analysis







71 Competencies





to its success


















39

72 Value Chain





















40








Inbound Logistics


















Operations






41



Outbound Logistics








Sales and Marketing






















42













Service











43

































44




























45



















46

8 SWOT Analysis









stability

Room to Grow



chain









Reduce Prices



market shares


economies




lifestyles


47

Strengths



























48

Weaknesses















Opportunities

















49







likely










Threats
















50







9 Recommendations














with its products











51























chance for sales









52




















HLlr=c29ydA3D3D|HL





53






from









httpyahoofinancecom










54



















from





from





55





20version)pdf









9

























community








10




US based company


Product positioning









3

Low Prices

NIKE

Adidas

1

2

High Prices

High Innovation and

Advancement


Under Armour


11

5 External Analysis































12








13




















14













Company

(Company Code)


2010 2009 2008

Nike (NKE) 19014000 19176100 18627000

Adidas (ADSDE) NA 10381000 10799000

Under Armour (UA) 1063927 856411 725244















15


































16


















17



























18






























19










establishment






20

























21
































22

































23


















Company 2007 2008 2009 2010

Nike 1492000 1883400 1486700 1906700

Adidas 551000 642000 245000 NA

Under Armour 52552 38229 46785 68477









24






























25

53 PESTEL Analysis
































26




















mentioning


27




























28

533 Social Analysis








the following
























29


the consumers


























competitiveness


30












28 2008)






31













well




about 35$








32

















33

536 Legal Analysis















problems









34















35









stable 19 yearly





















case


36


178412 496966 = 035 145591 399997 = 036












invest





RoE = 68477 (496966 + 399997) 2 = 68477 4484815 = 015


Income page 54)









37








38

7 Internal Analysis







71 Competencies





to its success


















39

72 Value Chain





















40








Inbound Logistics


















Operations






41



Outbound Logistics








Sales and Marketing






















42













Service











43

































44




























45



















46

8 SWOT Analysis









stability

Room to Grow



chain









Reduce Prices



market shares


economies




lifestyles


47

Strengths



























48

Weaknesses















Opportunities

















49







likely










Threats
















50







9 Recommendations














with its products











51























chance for sales









52




















HLlr=c29ydA3D3D|HL





53






from









httpyahoofinancecom










54



















from





from





55





20version)pdf









10




US based company


Product positioning









3

Low Prices

NIKE

Adidas

1

2

High Prices

High Innovation and

Advancement


Under Armour


11

5 External Analysis































12








13




















14













Company

(Company Code)


2010 2009 2008

Nike (NKE) 19014000 19176100 18627000

Adidas (ADSDE) NA 10381000 10799000

Under Armour (UA) 1063927 856411 725244















15


































16


















17



























18






























19










establishment






20

























21
































22

































23


















Company 2007 2008 2009 2010

Nike 1492000 1883400 1486700 1906700

Adidas 551000 642000 245000 NA

Under Armour 52552 38229 46785 68477









24






























25

53 PESTEL Analysis
































26




















mentioning


27




























28

533 Social Analysis








the following
























29


the consumers


























competitiveness


30












28 2008)






31













well




about 35$








32

















33

536 Legal Analysis















problems









34















35









stable 19 yearly





















case


36


178412 496966 = 035 145591 399997 = 036












invest





RoE = 68477 (496966 + 399997) 2 = 68477 4484815 = 015


Income page 54)









37








38

7 Internal Analysis







71 Competencies





to its success


















39

72 Value Chain





















40








Inbound Logistics


















Operations






41



Outbound Logistics








Sales and Marketing






















42













Service











43

































44




























45



















46

8 SWOT Analysis









stability

Room to Grow



chain









Reduce Prices



market shares


economies




lifestyles


47

Strengths



























48

Weaknesses















Opportunities

















49







likely










Threats
















50







9 Recommendations














with its products











51























chance for sales









52




















HLlr=c29ydA3D3D|HL





53






from









httpyahoofinancecom










54



















from





from





55





20version)pdf









11

5 External Analysis































12








13




















14













Company

(Company Code)


2010 2009 2008

Nike (NKE) 19014000 19176100 18627000

Adidas (ADSDE) NA 10381000 10799000

Under Armour (UA) 1063927 856411 725244















15


































16


















17



























18






























19










establishment






20

























21
































22

































23


















Company 2007 2008 2009 2010

Nike 1492000 1883400 1486700 1906700

Adidas 551000 642000 245000 NA

Under Armour 52552 38229 46785 68477









24






























25

53 PESTEL Analysis
































26




















mentioning


27




























28

533 Social Analysis








the following
























29


the consumers


























competitiveness


30












28 2008)






31













well




about 35$








32

















33

536 Legal Analysis















problems









34















35









stable 19 yearly





















case


36


178412 496966 = 035 145591 399997 = 036












invest





RoE = 68477 (496966 + 399997) 2 = 68477 4484815 = 015


Income page 54)









37








38

7 Internal Analysis







71 Competencies





to its success


















39

72 Value Chain





















40








Inbound Logistics


















Operations






41



Outbound Logistics








Sales and Marketing






















42













Service











43

































44




























45



















46

8 SWOT Analysis









stability

Room to Grow



chain









Reduce Prices



market shares


economies




lifestyles


47

Strengths



























48

Weaknesses















Opportunities

















49







likely










Threats
















50







9 Recommendations














with its products











51























chance for sales









52




















HLlr=c29ydA3D3D|HL





53






from









httpyahoofinancecom










54



















from





from





55





20version)pdf









12








13




















14













Company

(Company Code)


2010 2009 2008

Nike (NKE) 19014000 19176100 18627000

Adidas (ADSDE) NA 10381000 10799000

Under Armour (UA) 1063927 856411 725244















15


































16


















17



























18






























19










establishment






20

























21
































22

































23


















Company 2007 2008 2009 2010

Nike 1492000 1883400 1486700 1906700

Adidas 551000 642000 245000 NA

Under Armour 52552 38229 46785 68477









24






























25

53 PESTEL Analysis
































26




















mentioning


27




























28

533 Social Analysis








the following
























29


the consumers


























competitiveness


30












28 2008)






31













well




about 35$








32

















33

536 Legal Analysis















problems









34















35









stable 19 yearly





















case


36


178412 496966 = 035 145591 399997 = 036












invest





RoE = 68477 (496966 + 399997) 2 = 68477 4484815 = 015


Income page 54)









37








38

7 Internal Analysis







71 Competencies





to its success


















39

72 Value Chain





















40








Inbound Logistics


















Operations






41



Outbound Logistics








Sales and Marketing






















42













Service











43

































44




























45



















46

8 SWOT Analysis









stability

Room to Grow



chain









Reduce Prices



market shares


economies




lifestyles


47

Strengths



























48

Weaknesses















Opportunities

















49







likely










Threats
















50







9 Recommendations














with its products











51























chance for sales









52




















HLlr=c29ydA3D3D|HL





53






from









httpyahoofinancecom










54



















from





from





55





20version)pdf









13




















14













Company

(Company Code)


2010 2009 2008

Nike (NKE) 19014000 19176100 18627000

Adidas (ADSDE) NA 10381000 10799000

Under Armour (UA) 1063927 856411 725244















15


































16


















17



























18






























19










establishment






20

























21
































22

































23


















Company 2007 2008 2009 2010

Nike 1492000 1883400 1486700 1906700

Adidas 551000 642000 245000 NA

Under Armour 52552 38229 46785 68477









24






























25

53 PESTEL Analysis
































26




















mentioning


27




























28

533 Social Analysis








the following
























29


the consumers


























competitiveness


30












28 2008)






31













well




about 35$








32

















33

536 Legal Analysis















problems









34















35









stable 19 yearly





















case


36


178412 496966 = 035 145591 399997 = 036












invest





RoE = 68477 (496966 + 399997) 2 = 68477 4484815 = 015


Income page 54)









37








38

7 Internal Analysis







71 Competencies





to its success


















39

72 Value Chain





















40








Inbound Logistics


















Operations






41



Outbound Logistics








Sales and Marketing






















42













Service











43

































44




























45



















46

8 SWOT Analysis









stability

Room to Grow



chain









Reduce Prices



market shares


economies




lifestyles


47

Strengths



























48

Weaknesses















Opportunities

















49







likely










Threats
















50







9 Recommendations














with its products











51























chance for sales









52




















HLlr=c29ydA3D3D|HL





53






from









httpyahoofinancecom










54



















from





from





55





20version)pdf









14













Company

(Company Code)


2010 2009 2008

Nike (NKE) 19014000 19176100 18627000

Adidas (ADSDE) NA 10381000 10799000

Under Armour (UA) 1063927 856411 725244















15


































16


















17



























18






























19










establishment






20

























21
































22

































23


















Company 2007 2008 2009 2010

Nike 1492000 1883400 1486700 1906700

Adidas 551000 642000 245000 NA

Under Armour 52552 38229 46785 68477









24






























25

53 PESTEL Analysis
































26




















mentioning


27




























28

533 Social Analysis








the following
























29


the consumers


























competitiveness


30












28 2008)






31













well




about 35$








32

















33

536 Legal Analysis















problems









34















35









stable 19 yearly





















case


36


178412 496966 = 035 145591 399997 = 036












invest





RoE = 68477 (496966 + 399997) 2 = 68477 4484815 = 015


Income page 54)









37








38

7 Internal Analysis







71 Competencies





to its success


















39

72 Value Chain





















40








Inbound Logistics


















Operations






41



Outbound Logistics








Sales and Marketing






















42













Service











43

































44




























45



















46

8 SWOT Analysis









stability

Room to Grow



chain









Reduce Prices



market shares


economies




lifestyles


47

Strengths



























48

Weaknesses















Opportunities

















49







likely










Threats
















50







9 Recommendations














with its products











51























chance for sales









52




















HLlr=c29ydA3D3D|HL





53






from









httpyahoofinancecom










54



















from





from





55





20version)pdf









15


































16


















17



























18






























19










establishment






20

























21
































22

































23


















Company 2007 2008 2009 2010

Nike 1492000 1883400 1486700 1906700

Adidas 551000 642000 245000 NA

Under Armour 52552 38229 46785 68477









24






























25

53 PESTEL Analysis
































26




















mentioning


27




























28

533 Social Analysis








the following
























29


the consumers


























competitiveness


30












28 2008)






31













well




about 35$








32

















33

536 Legal Analysis















problems









34















35









stable 19 yearly





















case


36


178412 496966 = 035 145591 399997 = 036












invest





RoE = 68477 (496966 + 399997) 2 = 68477 4484815 = 015


Income page 54)









37








38

7 Internal Analysis







71 Competencies





to its success


















39

72 Value Chain





















40








Inbound Logistics


















Operations






41



Outbound Logistics








Sales and Marketing






















42













Service











43

































44




























45



















46

8 SWOT Analysis









stability

Room to Grow



chain









Reduce Prices



market shares


economies




lifestyles


47

Strengths



























48

Weaknesses















Opportunities

















49







likely










Threats
















50







9 Recommendations














with its products











51























chance for sales









52




















HLlr=c29ydA3D3D|HL





53






from









httpyahoofinancecom










54



















from





from





55





20version)pdf









16


















17



























18






























19










establishment






20

























21
































22

































23


















Company 2007 2008 2009 2010

Nike 1492000 1883400 1486700 1906700

Adidas 551000 642000 245000 NA

Under Armour 52552 38229 46785 68477









24






























25

53 PESTEL Analysis
































26




















mentioning


27




























28

533 Social Analysis








the following
























29


the consumers


























competitiveness


30












28 2008)






31













well




about 35$








32

















33

536 Legal Analysis















problems









34















35









stable 19 yearly





















case


36


178412 496966 = 035 145591 399997 = 036












invest





RoE = 68477 (496966 + 399997) 2 = 68477 4484815 = 015


Income page 54)









37








38

7 Internal Analysis







71 Competencies





to its success


















39

72 Value Chain





















40








Inbound Logistics


















Operations






41



Outbound Logistics








Sales and Marketing






















42













Service











43

































44




























45



















46

8 SWOT Analysis









stability

Room to Grow



chain









Reduce Prices



market shares


economies




lifestyles


47

Strengths



























48

Weaknesses















Opportunities

















49







likely










Threats
















50







9 Recommendations














with its products











51























chance for sales









52




















HLlr=c29ydA3D3D|HL





53






from









httpyahoofinancecom










54



















from





from





55





20version)pdf









17



























18






























19










establishment






20

























21
































22

































23


















Company 2007 2008 2009 2010

Nike 1492000 1883400 1486700 1906700

Adidas 551000 642000 245000 NA

Under Armour 52552 38229 46785 68477









24






























25

53 PESTEL Analysis
































26




















mentioning


27




























28

533 Social Analysis








the following
























29


the consumers


























competitiveness


30












28 2008)






31













well




about 35$








32

















33

536 Legal Analysis















problems









34















35









stable 19 yearly





















case


36


178412 496966 = 035 145591 399997 = 036












invest





RoE = 68477 (496966 + 399997) 2 = 68477 4484815 = 015


Income page 54)









37








38

7 Internal Analysis







71 Competencies





to its success


















39

72 Value Chain





















40








Inbound Logistics


















Operations






41



Outbound Logistics








Sales and Marketing






















42













Service











43

































44




























45



















46

8 SWOT Analysis









stability

Room to Grow



chain









Reduce Prices



market shares


economies




lifestyles


47

Strengths



























48

Weaknesses















Opportunities

















49







likely










Threats
















50







9 Recommendations














with its products











51























chance for sales









52




















HLlr=c29ydA3D3D|HL





53






from









httpyahoofinancecom










54



















from





from





55





20version)pdf









18






























19










establishment






20

























21
































22

































23


















Company 2007 2008 2009 2010

Nike 1492000 1883400 1486700 1906700

Adidas 551000 642000 245000 NA

Under Armour 52552 38229 46785 68477









24






























25

53 PESTEL Analysis
































26




















mentioning


27




























28

533 Social Analysis








the following
























29


the consumers


























competitiveness


30












28 2008)






31













well




about 35$








32

















33

536 Legal Analysis















problems









34















35









stable 19 yearly





















case


36


178412 496966 = 035 145591 399997 = 036












invest





RoE = 68477 (496966 + 399997) 2 = 68477 4484815 = 015


Income page 54)









37








38

7 Internal Analysis







71 Competencies





to its success


















39

72 Value Chain





















40








Inbound Logistics


















Operations






41



Outbound Logistics








Sales and Marketing






















42













Service











43

































44




























45



















46

8 SWOT Analysis









stability

Room to Grow



chain









Reduce Prices



market shares


economies




lifestyles


47

Strengths



























48

Weaknesses















Opportunities

















49







likely










Threats
















50







9 Recommendations














with its products











51























chance for sales









52




















HLlr=c29ydA3D3D|HL





53






from









httpyahoofinancecom










54



















from





from





55





20version)pdf









19










establishment






20

























21
































22

































23


















Company 2007 2008 2009 2010

Nike 1492000 1883400 1486700 1906700

Adidas 551000 642000 245000 NA

Under Armour 52552 38229 46785 68477









24






























25

53 PESTEL Analysis
































26




















mentioning


27




























28

533 Social Analysis








the following
























29


the consumers


























competitiveness


30












28 2008)






31













well




about 35$








32

















33

536 Legal Analysis















problems









34















35









stable 19 yearly





















case


36


178412 496966 = 035 145591 399997 = 036












invest





RoE = 68477 (496966 + 399997) 2 = 68477 4484815 = 015


Income page 54)









37








38

7 Internal Analysis







71 Competencies





to its success


















39

72 Value Chain





















40








Inbound Logistics


















Operations






41



Outbound Logistics








Sales and Marketing






















42













Service











43

































44




























45



















46

8 SWOT Analysis









stability

Room to Grow



chain









Reduce Prices



market shares


economies




lifestyles


47

Strengths



























48

Weaknesses















Opportunities

















49







likely










Threats
















50







9 Recommendations














with its products











51























chance for sales









52




















HLlr=c29ydA3D3D|HL





53






from









httpyahoofinancecom










54



















from





from





55





20version)pdf









20

























21
































22

































23


















Company 2007 2008 2009 2010

Nike 1492000 1883400 1486700 1906700

Adidas 551000 642000 245000 NA

Under Armour 52552 38229 46785 68477









24






























25

53 PESTEL Analysis
































26




















mentioning


27




























28

533 Social Analysis








the following
























29


the consumers


























competitiveness


30












28 2008)






31













well




about 35$








32

















33

536 Legal Analysis















problems









34















35









stable 19 yearly





















case


36


178412 496966 = 035 145591 399997 = 036












invest





RoE = 68477 (496966 + 399997) 2 = 68477 4484815 = 015


Income page 54)









37








38

7 Internal Analysis







71 Competencies





to its success


















39

72 Value Chain





















40








Inbound Logistics


















Operations






41



Outbound Logistics








Sales and Marketing






















42













Service











43

































44




























45



















46

8 SWOT Analysis









stability

Room to Grow



chain









Reduce Prices



market shares


economies




lifestyles


47

Strengths



























48

Weaknesses















Opportunities

















49







likely










Threats
















50







9 Recommendations














with its products











51























chance for sales









52




















HLlr=c29ydA3D3D|HL





53






from









httpyahoofinancecom










54



















from





from





55





20version)pdf









21
































22

































23


















Company 2007 2008 2009 2010

Nike 1492000 1883400 1486700 1906700

Adidas 551000 642000 245000 NA

Under Armour 52552 38229 46785 68477









24






























25

53 PESTEL Analysis
































26




















mentioning


27




























28

533 Social Analysis








the following
























29


the consumers


























competitiveness


30












28 2008)






31













well




about 35$








32

















33

536 Legal Analysis















problems









34















35









stable 19 yearly





















case


36


178412 496966 = 035 145591 399997 = 036












invest





RoE = 68477 (496966 + 399997) 2 = 68477 4484815 = 015


Income page 54)









37








38

7 Internal Analysis







71 Competencies





to its success


















39

72 Value Chain





















40








Inbound Logistics


















Operations






41



Outbound Logistics








Sales and Marketing






















42













Service











43

































44




























45



















46

8 SWOT Analysis









stability

Room to Grow



chain









Reduce Prices



market shares


economies




lifestyles


47

Strengths



























48

Weaknesses















Opportunities

















49







likely










Threats
















50







9 Recommendations














with its products











51























chance for sales









52




















HLlr=c29ydA3D3D|HL





53






from









httpyahoofinancecom










54



















from





from





55





20version)pdf









22

































23


















Company 2007 2008 2009 2010

Nike 1492000 1883400 1486700 1906700

Adidas 551000 642000 245000 NA

Under Armour 52552 38229 46785 68477









24






























25

53 PESTEL Analysis
































26




















mentioning


27




























28

533 Social Analysis








the following
























29


the consumers


























competitiveness


30












28 2008)






31













well




about 35$








32

















33

536 Legal Analysis















problems









34















35









stable 19 yearly





















case


36


178412 496966 = 035 145591 399997 = 036












invest





RoE = 68477 (496966 + 399997) 2 = 68477 4484815 = 015


Income page 54)









37








38

7 Internal Analysis







71 Competencies





to its success


















39

72 Value Chain





















40








Inbound Logistics


















Operations






41



Outbound Logistics








Sales and Marketing






















42













Service











43

































44




























45



















46

8 SWOT Analysis









stability

Room to Grow



chain









Reduce Prices



market shares


economies




lifestyles


47

Strengths



























48

Weaknesses















Opportunities

















49







likely










Threats
















50







9 Recommendations














with its products











51























chance for sales









52




















HLlr=c29ydA3D3D|HL





53






from









httpyahoofinancecom










54



















from





from





55





20version)pdf









23


















Company 2007 2008 2009 2010

Nike 1492000 1883400 1486700 1906700

Adidas 551000 642000 245000 NA

Under Armour 52552 38229 46785 68477









24






























25

53 PESTEL Analysis
































26




















mentioning


27




























28

533 Social Analysis








the following
























29


the consumers


























competitiveness


30












28 2008)






31













well




about 35$








32

















33

536 Legal Analysis















problems









34















35









stable 19 yearly





















case


36


178412 496966 = 035 145591 399997 = 036












invest





RoE = 68477 (496966 + 399997) 2 = 68477 4484815 = 015


Income page 54)









37








38

7 Internal Analysis







71 Competencies





to its success


















39

72 Value Chain





















40








Inbound Logistics


















Operations






41



Outbound Logistics








Sales and Marketing






















42













Service











43

































44




























45



















46

8 SWOT Analysis









stability

Room to Grow



chain









Reduce Prices



market shares


economies




lifestyles


47

Strengths



























48

Weaknesses















Opportunities

















49







likely










Threats
















50







9 Recommendations














with its products











51























chance for sales









52




















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53






from









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54



















from





from





55





20version)pdf









24






























25

53 PESTEL Analysis
































26




















mentioning


27




























28

533 Social Analysis








the following
























29


the consumers


























competitiveness


30












28 2008)






31













well




about 35$








32

















33

536 Legal Analysis















problems









34















35









stable 19 yearly





















case


36


178412 496966 = 035 145591 399997 = 036












invest





RoE = 68477 (496966 + 399997) 2 = 68477 4484815 = 015


Income page 54)









37








38

7 Internal Analysis







71 Competencies





to its success


















39

72 Value Chain





















40








Inbound Logistics


















Operations






41



Outbound Logistics








Sales and Marketing






















42













Service











43

































44




























45



















46

8 SWOT Analysis









stability

Room to Grow



chain









Reduce Prices



market shares


economies




lifestyles


47

Strengths



























48

Weaknesses















Opportunities

















49







likely










Threats
















50







9 Recommendations














with its products











51























chance for sales









52




















HLlr=c29ydA3D3D|HL





53






from









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54



















from





from





55





20version)pdf









25

53 PESTEL Analysis
































26




















mentioning


27




























28

533 Social Analysis








the following
























29


the consumers


























competitiveness


30












28 2008)






31













well




about 35$








32

















33

536 Legal Analysis















problems









34















35









stable 19 yearly





















case


36


178412 496966 = 035 145591 399997 = 036












invest





RoE = 68477 (496966 + 399997) 2 = 68477 4484815 = 015


Income page 54)









37








38

7 Internal Analysis







71 Competencies





to its success


















39

72 Value Chain





















40








Inbound Logistics


















Operations






41



Outbound Logistics








Sales and Marketing






















42













Service











43

































44




























45



















46

8 SWOT Analysis









stability

Room to Grow



chain









Reduce Prices



market shares


economies




lifestyles


47

Strengths



























48

Weaknesses















Opportunities

















49







likely










Threats
















50







9 Recommendations














with its products











51























chance for sales









52




















HLlr=c29ydA3D3D|HL





53






from









httpyahoofinancecom










54



















from





from





55





20version)pdf









26




















mentioning


27




























28

533 Social Analysis








the following
























29


the consumers


























competitiveness


30












28 2008)






31













well




about 35$








32

















33

536 Legal Analysis















problems









34















35









stable 19 yearly





















case


36


178412 496966 = 035 145591 399997 = 036












invest





RoE = 68477 (496966 + 399997) 2 = 68477 4484815 = 015


Income page 54)









37








38

7 Internal Analysis







71 Competencies





to its success


















39

72 Value Chain





















40








Inbound Logistics


















Operations






41



Outbound Logistics








Sales and Marketing






















42













Service











43

































44




























45



















46

8 SWOT Analysis









stability

Room to Grow



chain









Reduce Prices



market shares


economies




lifestyles


47

Strengths



























48

Weaknesses















Opportunities

















49







likely










Threats
















50







9 Recommendations














with its products











51























chance for sales









52




















HLlr=c29ydA3D3D|HL





53






from









httpyahoofinancecom










54



















from





from





55





20version)pdf









27




























28

533 Social Analysis








the following
























29


the consumers


























competitiveness


30












28 2008)






31













well




about 35$








32

















33

536 Legal Analysis















problems









34















35









stable 19 yearly





















case


36


178412 496966 = 035 145591 399997 = 036












invest





RoE = 68477 (496966 + 399997) 2 = 68477 4484815 = 015


Income page 54)









37








38

7 Internal Analysis







71 Competencies





to its success


















39

72 Value Chain





















40








Inbound Logistics


















Operations






41



Outbound Logistics








Sales and Marketing






















42













Service











43

































44




























45



















46

8 SWOT Analysis









stability

Room to Grow



chain









Reduce Prices



market shares


economies




lifestyles


47

Strengths



























48

Weaknesses















Opportunities

















49







likely










Threats
















50







9 Recommendations














with its products











51























chance for sales









52




















HLlr=c29ydA3D3D|HL





53






from









httpyahoofinancecom










54



















from





from





55





20version)pdf









28

533 Social Analysis








the following
























29


the consumers


























competitiveness


30












28 2008)






31













well




about 35$








32

















33

536 Legal Analysis















problems









34















35









stable 19 yearly





















case


36


178412 496966 = 035 145591 399997 = 036












invest





RoE = 68477 (496966 + 399997) 2 = 68477 4484815 = 015


Income page 54)









37








38

7 Internal Analysis







71 Competencies





to its success


















39

72 Value Chain





















40








Inbound Logistics


















Operations






41



Outbound Logistics








Sales and Marketing






















42













Service











43

































44




























45



















46

8 SWOT Analysis









stability

Room to Grow



chain









Reduce Prices



market shares


economies




lifestyles


47

Strengths



























48

Weaknesses















Opportunities

















49







likely










Threats
















50







9 Recommendations














with its products











51























chance for sales









52




















HLlr=c29ydA3D3D|HL





53






from









httpyahoofinancecom










54



















from





from





55





20version)pdf









29


the consumers


























competitiveness


30












28 2008)






31













well




about 35$








32

















33

536 Legal Analysis















problems









34















35









stable 19 yearly





















case


36


178412 496966 = 035 145591 399997 = 036












invest





RoE = 68477 (496966 + 399997) 2 = 68477 4484815 = 015


Income page 54)









37








38

7 Internal Analysis







71 Competencies





to its success


















39

72 Value Chain





















40








Inbound Logistics


















Operations






41



Outbound Logistics








Sales and Marketing






















42













Service











43

































44




























45



















46

8 SWOT Analysis









stability

Room to Grow



chain









Reduce Prices



market shares


economies




lifestyles


47

Strengths



























48

Weaknesses















Opportunities

















49







likely










Threats
















50







9 Recommendations














with its products











51























chance for sales









52




















HLlr=c29ydA3D3D|HL





53






from









httpyahoofinancecom










54



















from





from





55





20version)pdf









30












28 2008)






31













well




about 35$








32

















33

536 Legal Analysis















problems









34















35









stable 19 yearly





















case


36


178412 496966 = 035 145591 399997 = 036












invest





RoE = 68477 (496966 + 399997) 2 = 68477 4484815 = 015


Income page 54)









37








38

7 Internal Analysis







71 Competencies





to its success


















39

72 Value Chain





















40








Inbound Logistics


















Operations






41



Outbound Logistics








Sales and Marketing






















42













Service











43

































44




























45



















46

8 SWOT Analysis









stability

Room to Grow



chain









Reduce Prices



market shares


economies




lifestyles


47

Strengths



























48

Weaknesses















Opportunities

















49







likely










Threats
















50







9 Recommendations














with its products











51























chance for sales









52




















HLlr=c29ydA3D3D|HL





53






from









httpyahoofinancecom










54



















from





from





55





20version)pdf









31













well




about 35$








32

















33

536 Legal Analysis















problems









34















35









stable 19 yearly





















case


36


178412 496966 = 035 145591 399997 = 036












invest





RoE = 68477 (496966 + 399997) 2 = 68477 4484815 = 015


Income page 54)









37








38

7 Internal Analysis







71 Competencies





to its success


















39

72 Value Chain





















40








Inbound Logistics


















Operations






41



Outbound Logistics








Sales and Marketing






















42













Service











43

































44




























45



















46

8 SWOT Analysis









stability

Room to Grow



chain









Reduce Prices



market shares


economies




lifestyles


47

Strengths



























48

Weaknesses















Opportunities

















49







likely










Threats
















50







9 Recommendations














with its products











51























chance for sales









52




















HLlr=c29ydA3D3D|HL





53






from









httpyahoofinancecom










54



















from





from





55





20version)pdf









32

















33

536 Legal Analysis















problems









34















35









stable 19 yearly





















case


36


178412 496966 = 035 145591 399997 = 036












invest





RoE = 68477 (496966 + 399997) 2 = 68477 4484815 = 015


Income page 54)









37








38

7 Internal Analysis







71 Competencies





to its success


















39

72 Value Chain





















40








Inbound Logistics


















Operations






41



Outbound Logistics








Sales and Marketing






















42













Service











43

































44




























45



















46

8 SWOT Analysis









stability

Room to Grow



chain









Reduce Prices



market shares


economies




lifestyles


47

Strengths



























48

Weaknesses















Opportunities

















49







likely










Threats
















50







9 Recommendations














with its products











51























chance for sales









52




















HLlr=c29ydA3D3D|HL





53






from









httpyahoofinancecom










54



















from





from





55





20version)pdf









33

536 Legal Analysis















problems









34















35









stable 19 yearly





















case


36


178412 496966 = 035 145591 399997 = 036












invest





RoE = 68477 (496966 + 399997) 2 = 68477 4484815 = 015


Income page 54)









37








38

7 Internal Analysis







71 Competencies





to its success


















39

72 Value Chain





















40








Inbound Logistics


















Operations






41



Outbound Logistics








Sales and Marketing






















42













Service











43

































44




























45



















46

8 SWOT Analysis









stability

Room to Grow



chain









Reduce Prices



market shares


economies




lifestyles


47

Strengths



























48

Weaknesses















Opportunities

















49







likely










Threats
















50







9 Recommendations














with its products











51























chance for sales









52




















HLlr=c29ydA3D3D|HL





53






from









httpyahoofinancecom










54



















from





from





55





20version)pdf









34















35









stable 19 yearly





















case


36


178412 496966 = 035 145591 399997 = 036












invest





RoE = 68477 (496966 + 399997) 2 = 68477 4484815 = 015


Income page 54)









37








38

7 Internal Analysis







71 Competencies





to its success


















39

72 Value Chain





















40








Inbound Logistics


















Operations






41



Outbound Logistics








Sales and Marketing






















42













Service











43

































44




























45



















46

8 SWOT Analysis









stability

Room to Grow



chain









Reduce Prices



market shares


economies




lifestyles


47

Strengths



























48

Weaknesses















Opportunities

















49







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Threats
















50







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with its products











51























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stable 19 yearly





















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36


178412 496966 = 035 145591 399997 = 036












invest





RoE = 68477 (496966 + 399997) 2 = 68477 4484815 = 015


Income page 54)









37








38

7 Internal Analysis







71 Competencies





to its success


















39

72 Value Chain





















40








Inbound Logistics


















Operations






41



Outbound Logistics








Sales and Marketing






















42













Service











43

































44




























45



















46

8 SWOT Analysis









stability

Room to Grow



chain









Reduce Prices



market shares


economies




lifestyles


47

Strengths



























48

Weaknesses















Opportunities

















49







likely










Threats
















50







9 Recommendations














with its products











51























chance for sales









52




















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53






from









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54



















from





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55





20version)pdf









36


178412 496966 = 035 145591 399997 = 036












invest





RoE = 68477 (496966 + 399997) 2 = 68477 4484815 = 015


Income page 54)









37








38

7 Internal Analysis







71 Competencies





to its success


















39

72 Value Chain





















40








Inbound Logistics


















Operations






41



Outbound Logistics








Sales and Marketing






















42













Service











43

































44




























45



















46

8 SWOT Analysis









stability

Room to Grow



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Reduce Prices



market shares


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47

Strengths



























48

Weaknesses















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49







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51























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7 Internal Analysis







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39

72 Value Chain





















40








Inbound Logistics


















Operations






41



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Sales and Marketing






















42













Service











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44




























45



















46

8 SWOT Analysis









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40








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Sales and Marketing






















42













Service











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44




























45



















46

8 SWOT Analysis









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8 SWOT Analysis









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