Case Analysis

OK, SUN REONG

ZAMORA, ANTHEA
Table of Contents

I. Under Amour
a. History
b. Vision
c. Mission
d. Values
II. External Environment Assessment
a. Porter’s 5 Forces
b. Sectoral Analysis
III. Internal Assessment
IV. Strategy Formulation and Evaluation
a. Analytical Screen for Internal and External Assessment
b. SWOT Matrix
c. Strategy Evaluation Format: Evaluation of Strategy Alternative
V. Revised VMOs
a. Revisions
b. Suggestions
VI. Strategy Evaluation
a. Issues
b. Action Program Strategy
c. Recommendation
I. Under Armour

Under Armour is a sports apparel company that is specifically developed for athletes. This makes
the company known as one of the pioneers of performance apparel. Under Armour provides a
diverse product assortment for men, women, and youth from clothing lines to gears. The
company started from the idea of Kevin Plank, a former University of Maryland football player,
to design a brand that fits the athlete’s physical activity. In a short span of time, Under Armour
was able to build an incredibly powerful brand penetrating a mature market in North America.

a. History

Since creating his company from one shirt in 1996, Kevin Plank has expanded Under Armour into
footwear, women’s apparel, and even hunting and fishing wear. The original shirt kept players
cool as they sweated; in 1997 UA came out with ColdGear, made to do the opposite: insulate in
the cold. In 2005, UA launched women’s apparel. Items like Duplicity Bra were meant to conform
well to the female body. UA entered footwear, a notoriously competitive market in 2007. It began
with football cleats like the Click Clack, but now makes everything to high-tops.

b. Vision

Under Armour’s vision is “to empower athletes everywhere” through the innovation of
revolutionary fabrics and design that enhance athletes’ performance.

c. Mission

Under Armour was founded with the mission of “making all athletes better through passion,
design, and the relentless pursuit of innovation.” The company’s mission is driven by Kevin A.
Plank pursue to develop a new category of sporting apparel and to deliver a universal guarantee
of performance, with a superior product compared to its competitors and provide an
unparalleled service to its customers.

d. Values

The Four Pillars of Greatness:

▪ Make a Great Product

▪ Tell a Great Story
▪ Provide a Great Service
 ▪ Build a Great Team

Our Wills

▪ Act like a global citizen

▪ Think like an entrepreneur
▪ Create like an innovator
▪ Perform like a teammate

II. External Environment Assessment

a. Porter’s 5 Forces

Competitive Rivalry Threat Level: High

▪ Nike
▪ Adidas
▪ Columbia Sportswear
▪ Sporthill
While there are countless numbers of athletic apparel companies that compete with
UA in certain market niches, only a few companies have the sheer size and established
distribution channels to compete across all the product lines UA offers. The largest of
these competitors are Nike and Adidas. Both of these competitors are older companies
with higher total annual sales than UA. By comparison, Nike's trailing 12-month sales
is over $31 billion, Adidas' trailing 12-month sales is over $16 billion, and UA's trailing
12 months sales is just under $4 billion. While this disparity is enormous, it must also
be noted that UA has achieved a significantly higher growth rate in recent years than
either of its giant competitors. Although it does not possess the same diversification of
products or the international market penetration, UA has been successful in nearly
every industry subsection it has entered.
Threat to New Entry Threat Level: Moderate to High
The global sports and fitness clothing market has witnessed several new trends in its
market such as rise in consumer appeal towards healthy lifestyles, emergence of new
sports and an increase in sports participation rates. Numerous competitors would be
compelled to enter into the market. There are low barriers to enter the sports apparel
industry largely due to common technology and ease of brand switching. However,
 the branding and image of the largest firms in the industry raise the ease of entering
the market. Key players in the industry include Reebok, Adidas, Puma and Nike. A
new entrant would have to spend a lot of money on marketing and advertising to
become competitive with Nike and Adidas.
Threat to Substitutes Threat Level: High
The multi segment global market for sports apparel, athletic footwear, and related
accessories was fragmented among at least 25 brand name competitors. Technology
has tremendously aided to increase the threat of substitute products. More
consumers are using the web to research prices, find sales and read reviews
Bargaining Power of Buyer Threat Level: Medium High
Highly price sensitive customers have a lot of power. There are no switching costs
and customers have several options on which products to choose. Buyers are able to
force down prices and/or demand higher quality services, which may increase a
company’s operating costs (Andriotis, 2004). Although buyers are fragmented and no
singular buyer has the ability to influence a product or price, their diminishing brand
loyalty give them a reasonable amount of power. Overall, there are plenty of choices
for the end user to choose from low costs to highly differentiated. Price points tend to
be pretty uniform across similar products.
*Retail buyers bargaining power lessened by antitrust laws
Bargaining Power of Suppliers Threat Level: Moderate to High
Normally suppliers are able to impose a price increase on their products or reduce
the quality of products supplied which may decrease a company’s overall
profitability. However, in this industry there is a large amount of suppliers which will
usually equate to lower costs. High quality suppliers such as Under Armour, Nike and
Adidas have more leverage.

b. Sectoral Analysis
Five A’s Evaluation
Accessibility Under Armour sells in 13 countries
including in-house distribution in UK,
Germany, and France. As for Western
Europe and Asia, sales are done through
 partnerships and third-party
distributors. In 2007, 93% of its sales
were from the US.
Availability Sports apparel, footwear, and
accessories are the company’s main
products. UA offers three variations of
its apparel gear for various weather
conditions: HeatGear® for hot weather
conditions; ColdGear® for cold weather
conditions; and AllSeasonGear® for
mild weather conditions.
Adequacy From the company’s humble beginnings
to now, UA has kept a continuous focus
on meeting the changing needs of the
athletic industry with new, innovative
technology. Despite being expensive,
the company is able to live up to its
prices by providing products made of
high-tech fibers that wicked away
moisture, keeping athletes cool dry and
feeling light.
Acceptability Since its first big sale to Georgia Tech
University, Under Armour has
maintained praise and recognition
through marketing and sponsorships.
This is strengthened by their V/M of
empowering athletes through passion,
design, and the relentless pursuit of
innovation. As of 2007, 30-32 NFL
teams wore UA products.
Affordability Under Armour is positioned with the
highest quality and advertised as being
the best available, enabling them to
 enjoy the advantage of higher price
points.
Driving Forces
1. Favorable Policies
- “To make a superior t-shirt and
nothing more”
- Unique marketing
2. Institutional Allies
- Celebrity sponsorships
- School team sponsorships
- NFL sponsorships
3. Positive Reinforcing Conditions
- Product innovation and
differentiation
- Value of teamwork in the
workplace
- As stated in the company’s
VMGO, their main goal is to
empower athletes through
innovation. UA boasts its ability
to provide shirts made of high-
tech fibers, likening it to a
“second skin” rather than a
regular sportswear.
- UA was also enable to widen
their audience by coming up
with unique marketing
strategies. In 1999, for example,
UA partnered with Warner Bros
which enabled their products to
be featured in their movies.
- In marketing, the company
believes that customers
perceive value based on
associations. Partnerships with
known celebrities, athletes, NFL
groups, as well as school teams
have dramatically increased
sales for UA.
- UA has been consistent in
meeting the changing needs of
the athletic industry with new,
innovative technology. This
shows the company’s ability to
innovate and provide increased

Hindering Forces
1. Unfavorable Policies
- Not geographically diverse
2. Institutional Antagonists
- Celebrity endorsement failure
perceived value to its
customers due to intense
competition.
- Kevin Plank manages his
company with a unique team-
driven style. According to him,
“Under Armour is one team and
my job is to help ensure we
operate and execute as one
team. Because there’s a lot of
noise and clutter surrounding
our brand, I try to simplify our
story and objectives for the
team to help keep everyone
running on the same
wavelength and working
towards the same goal: to
become the world’s number
one performance athletic
brand.”
- Although UA has made an effort
to expand to other countries,
the US still accounted for
majority (93%) of its sales.
Moving into other areas will
allow UA to diversify their
product offerings as well as
minimize risk associated with a
majority of sales coming from a
single geographic location.
- Since UA relies on various
athletic endorsements, this
 - Nike, Adidas, Columbia
Sportswear, Sporthill
3. Negative Unsupportive Conditions
- Outsource of manufacturing
through third-parties
III. Internal Assessment
1st Level of Assessment: Evaluating Performance of Outputs and Outcomes
Output Outcome
Advanced technology in Customer loyalty
sports apparel specifically from men
athletes
creates inherent risk and
uncertainty due to the athletic
performance and social
behavior of that athlete.
- The company’s rivals are able
to offer the same yet cheaper
wide range of products to
customers. Its two main
competitors, Nike and Adidas,
are older companies with
higher total annual sales than
UA.
- Most of the special raw
materials UA use are developed
and manufactured by third
parties and are only available
from a limited number of
sources. Since innovation and
development is such a key
component to the company’s
competitive advantage, the
development of specialty
fabrics by a third party could be
a risk to UA’s competencies.
Evaluation
Men’s Apparel share the
‘lion share’ of UA
businesses
Sports apparel, footwear,
and accessories
Consistent differentiation
strategy through innovation
Team strategy in the
workplace
Manufacturing plant in
China for overseas products
Products are offered in a
variety of
styles and fits intended to
reduce friction, enhance
comfort and keep the body
cool and dry
Ability to innovate and
provide increased perceived their price
value to its customers due
to intense competition
Employees are focused on
the main goal of creating a
superior t-shirt
The new offices in Europe
are primarily geared
toward marketing and
distribution
In 2007, sales of men’s,
women’s, and youth apparel
products and footwear
products represented
approximately 57%, 19%,
8% and 7% of net revenues,
respectively. In addition, the
sale of accessories and our
license revenues
represented
approximately 5% and 4%
of net revenues, respectively
Their quality lives up to
Skilled and proficient
employees leading to
employee loyalty
UA does not have to
contend with the challenges
associated with establishing
manufacturing plants in
foreign countries
 2nd Level: Evaluating organizational competencies & capabilities
SPAT
Strategies:
- Product differentiation
- Appealing design and performance
features
- Technological superiority
- Product line strategy
- Simplified objectives in the workplace
- Marketing to high-performing athletes
and teams on the collegiate and
professional levels
Programs: Creating a link in the consumer
market between the products and
professional and collegiate athletes
Activities: Acquiring collegiate
sponsorships, individual athlete
agreements, and by selling our products
directly to team equipment managers
and to individual athletes (product
placement)
Tasks: Enhance appropriate supplier
relationships and have an understanding of
the inherent economic impacts on raw
materials
Evaluation
- UA is trying to outperform its competitors
and achieve superior profitability by
enhancing visibility of their product and
increase brand awareness.
- Simplified objectives help keep everyone
running on the same wavelength and
working towards the same goal with less
distractions
UA is gaining significant publicity and
brand name recognition from the perceived
sponsorships associated with professional
and collegiate athletes and sports
programs using UA’s products
This exposure to consumers helps UA
establish on-field authenticity as
consumers can see UA’s
products being worn by high-performing
athletes.
UA has a weak position relative to its
suppliers (75% of fabric used only comes
from 6 suppliers)
 3rd Level: Evaluating utilization of resources

Resources Evaluation
Human Resources - Employees are trained to focus on the goal
- CEO and Employees of creating a superior t-shirt through Plank’s
“team” strategy
Natural Resources: - Materials from suppliers. Materials are
- Materials used from third-parties. Under Armour does not
have a patent on any of the materials used in
its products. Therefore, it needs to be
cautious in its licensing agreements so
companies do not steal its know-how and
introduce their own versions.
Financial Resources: - UA is able to generate profit through
- Investments, sponsorships, partnerships associations with celebrities and NFL sports
teams

4th Level: Evaluating management processes

Management Processes Evaluation

Planning & Budgeting Budget for advertising, innovation cost, and corporate service
cost are highly prioritized
Organizing & Staffing UA should try to employ more staff in order to create a more
diverse workplace
Evaluating & Monitoring After it went public in 2006, Under Armour invested in a new
SAP system. This system is key to the company’s ability to add
products to its list of offerings, as it allows Under Armour to
manage a more diverse inventory and to ship directly to
distributors
Leading & Directing Plank manages to keep a team environment in the workplace
which helps employees focus on working towards their goals
Coordinating and UA’s products are already manufactured overseas in China;
Orchestrating therefore, the new offices in Europe are primarily geared toward
marketing and distribution and do not have to contend with the
challenges associated with establishing manufacturing plants in
foreign countries
 5th Level: Evaluating the four management functions

Functions Categories Evaluation

Marketing - Positioning - Under Armour is the originator of performance
- Product apparel - gear engineered to keep athletes cool, dry
- Package and light throughout the course of a game, practice or
- Place workout
- Price - Aims to maintain their reputation of creating
- People superior t-shirt through differentiation and
- Promotions innovation
- Sells sports apparel, footwear, and accessories;
Three variations of its apparel gear are available for
various weather conditions: HeatGear® for hot
weather conditions; ColdGear® for cold weather
conditions; and AllSeasonGear® for mild weather
conditions
- Sells products in 13 countries; Sales in Western
European and Asian countries are done through
partnerships and third-party distributors
- Products are positioned with the highest quality and
advertised as being the best available thus the
expensive prices. Despite their reputation, this could
be detrimental as low-income consumers would
prefer cheaper substitutes
- Should sponsor more international sports teams and
events: maybe focus on women, schools, local
marathons, and other demographics
- Should put more effort in their women audience
Operations - Manpower - Many of his first employees were his college
- Machines classmates and teammates. Most of them are still
- Materials with Under Armour and play important roles in
- Methods management
- Management - Under Armour’s products are sold worldwide, with
the company’s headquarters located in the United
States and support offices in Hong Kong and
Guangzhou, China
- Primary sales are achieved through wholesale
distribution and licensing to distributors.
- Products are offered through the company website
and retailers, and company stores in the United
States, Europe, Japan, Canada, South Africa, Australia,
and New Zealand
- To remind him of his critical role every day, Plank has
written on a whiteboard in his office four things that
define his job: (1) make a great product, (2) tell a
great story about the product, (3) service the
business, and (4) build a great team
Human - Recruitment - As of December 31, 2007, Under Armour had
Resource - Retooling approximately 1,400 employees, including
Management - Routing approximately 400 each in distribution centers and
- Retaining in 17 retail stores
- Reviewing - Plank manages his company with a unique team-
- Rewarding driven style, treating it as one team and ensuring that
- Recycling it operates and executes like one
Finance - Financing - Not highly financed through debt
- Investing - Company is able to pay short-term liabilities as
- Negotiating determined by their positive working capital
- Administrating - Highly efficient production processes
Numbers - Highly profitable company
- Cash
Management
Programs and - Projects - Professional and collegiate sponsorships, individual athlete
Projects - Programs agreements and by selling our products directly to team
equipment managers and to individual athletes

6th Level: Evaluating teams and individuals

Teams Evaluation
United States Support offices in Hong Kong and Guangzhou, China
- Europe - Primary sales are achieved through wholesale distribution
- Japan and licensing to distributors
- Canada - Products are offered through
- South Africa the company website and retailers, and company stores
- Australia - 93% of sales are from the US, 4% from Canada, and 3% from
- New Zealand other countries

7th Level: Evaluating physical assets and set-up, working conditions and environmental
surroundings

Physical Set-up Evaluation

Facilities are computer controlled and
automated equipment
Only two distribution facilities in Glen
Operations are complicated and may be subject to a
Burnie, Maryland
number of risks related to security or computer
Under Armour’s products are sold
viruses, the
worldwide, with the company’s
proper operation of software and hardware, power
headquarters located in the United
interruptions or other system failures
States and support offices in Hong
Operations could also be interrupted by
Kong and Guangzhou, China
floods, fires or other natural disasters near our
distribution facilities, as well as labor difficulties
Primary sales are achieved through
wholesale distribution and licensing to
distributors.
Products are offered through
the company website and retailers,
and company stores in the United
States, Europe, Japan, Canada, South
Africa, Australia, and New Zealand

8th Level: Evaluating organizational affiliations, alliances, and linkages

List of Alliances Description Evaluation

- High-performing
athletes and teams on the
collegiate and professional
levels:
- Official outfitter of the
Texas Tech University and
University of South Carolina
football teams, several teams
at the University of Maryland
and the Auburn University
athletic program
- Official supplier of footwear
to the National Football
League (“NFL”)
- Partnership with Warner
Bros
- The company implement
this strategy through
professional and collegiate
sponsorships, individual
athlete agreements and by
selling our products directly
to team equipment managers
and to individual athletes
- Partnership with Warner
Bros enabled UA products to
appear in their movies
The company’s uniforms,
gloves, socks, footwear and
other items of apparel are
seen on the field, giving our
products exposure to various
consumer audiences, through
television, magazines and
live at sporting events. This
exposure to consumers helps
the company establish on-
field authenticity as
consumers can see the
products being worn by high-
performing athletes

9th Level: Evaluating top management, board members and leadership

Team Leaders Evaluation

Kevin Plank - To remind him of his critical role every day, Plank has
- founder of Under Armour written on a whiteboard in his office four things that define his
job: (1) make a great product, (2) tell a great story about the
product, (3) service the business, and (4) build a great team
- President, Chief Executive
Officer and Chairman of the
Board of Directors
Suzanne Karkus
- leads the apparel
organization
- joined Izod Womenswear
where she was President
Peter Mahrer
- President & Managing
Director of Under Armour
Europe
- Plank believes that motivation should come from the top and
that a positive attitude is contagious. He makes sure he
communicates with his team on a regular basis, so that they
know that they’re an important part of the company’s
objectives and that their voices matter
Brought great industry experience to her role and will be
instrumental in helping the company capitalize on the growth
opportunity in apparel, particularly in its Women’s category
A former executive committee member of Puma, brings
extensive industry experience to his role, and has put in place
the strategy that will entrench Under Armour as an authentic
athletic brand in Europe
IV. Strategy Formulation and Evaluation
a. Analytical Screen for Internal and External Assessment
External
Assessment
Four Levels of Analytical Screen
Assessment
1. Macro •The democratic government if US and strong legal system work
in favor of business in general and help create a safe,
Environment: competitive environment
Social, P •Political instability of international manufacturing

Political,
Economic,
•Fluctuating international economic environment can cause
Ecological, unrealized gains of losses through international transactions
E
Technological

•Marketing & advertising according to customer preferences

•Ethical manufacturing process to protect image
S

•Globalization has helped them acess different manufacturers to

support in outsourcing effieciently.
T •Took advantage of e-commerce (low operating cost(

•Outsourcing is done by third-party manufacturers (UA not

affecting directly)
E •Outsourced 3rd parties in Asia (60% and Latin America 35%)

•Litigation routines does not have adverse ffect on financial

condition, cash flows or result of operations
L

2. Industry Its current market standing as a producer and marketer of

Sector Areas athletic apparel and footwear rising star is safe and if managed
efficiently and effectively stands a chance of a good future.
 Product placement and marketing strategies executed by UA
have shown positive results and the business is progressing and
expanding in the tough rivalry
3. Market In their Financial Statements, cash is stably growing along with
Analysis the profitability of the enterprise, while debts and expenses are
held under control.

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.
4. Micro The independent and specialty retailers are serviced by a
Market combination of in-house sales personnel and third-party
Analysis: commissioned manufacturer’s representatives and continue to
Location, represent an important part of our product distribution strategy
Immediate and help build on the authenticity of our products.
Customers or
Constituency The purchasing decisions of consumers for our products also
often reflect highly subjective preferences that can be influenced
by many factors, including advertising, media, product
sponsorships, product improvements and changing styles
Internal
Assessment
Ten Levels of Analytical Screen
Assessment
1. The financial strength of the company has helped achieved its
Performance expansion strategy and delivery of outstanding
Outcome &
Outputs
2. Good leading capabilities by leaders and workers are trustful of
Organizational their seniors.
Capabilities
3. Resources Manufacturing process are advanced products developed by
Sourcing and third parties. UA gets its supplies from limited countries: China,
Allocation Malaysia, Mexico, Taiwan, and Vietnam.

The fabrics used by their suppliers and manufacturers are

synthetic fabrics and involve raw materials, including
petroleum-based products, that may be subject to price
fluctuations and shortages.

The wholesale channels which comprise of national and regional

sporting goods chains, independent and specialty retailers,
department store chains, institutional athletic departments and
leagues and teams makes the majority of the company’s sales.
4. UA manages their inventory levels based on any existing orders,
Management anticipated sales and the rapid-delivery requirements of
Processes customers. Additionally, shipping seasonal product at the start
of the shipping window in order to maximize the productivity of
our floor sets and earmarking any seasonal excess for our retail
outlet stores.

UA uses the latest technology in order to facilitate accurate, real-

time data sharing with its suppliers. It can track the status of
 inbound products and deliveries and also allows to update these
information by suppliers without the occurrence of additional
cost
5. Business The success of UA can be traced to its unique approach of
Functions, creating consumer demand by building brand equity
Programs, and
Projects In 2007, approximately 84% of our net revenues were derived
from wholesale distribution. In addition to generating revenues
through wholesale distribution and direct to consumer sales,
they generate revenues from licensing arrangements to
manufacture and distribute Under Armour branded products In
2007, license revenues accounted for approximately 4% of
our net revenues.

Most of their employees are located in the United States and

none of their employees are currently covered by a collective
bargaining agreement. They have had no labor-related
work stoppages and relations with the employees are believed
to be good.
6. Teams and Teams are geographically close enough to work closely together
Individuals to identify the opportunity and market for professional and
collegiate athletes to identify product trends and determine
market needs
7. Physical UA continuously evaluate whether events and circumstances
Assets, have occurred that indicate the remaining estimated useful life
Environmenta of long-lived assets may warrant revision or that the remaining
l Conditions balance may not be recoverable. (long-lived assets, including
furniture, office equipment, plant equipment, leasehold
improvements, computer hardware and software and in-store
fixtures and displays)
Property and equipment are stated at cost, including the cost of
internal labor for software customized for internal use, less
accumulated depreciation and amortization. Property and
 equipment is depreciated using the straight-line method over
the estimated useful lives of the assets: 3-19 years for furniture,
office equipment, software and plant equipment and 10-35 years
for site improvements, buildings and building equipment.
8. Affiliations, Affiliations by having deals with professional athletes and
Alliances, and university teams can market UA’s product globally as well as
Linkages increase their brand identity
9. Top The future success is substantially dependent on the continued
Management service of our senior management and other key employees,
Board, and particularly Kevin A. Plank, our founder and Chief Executive
Leaders Officer. The loss of the services of the senior management or
other key employees could make it more difficult to successfully
operate our business and achieve our business goals. This
dependency is risky.

b. SWOT Matrix
Opportunity
1. Emphasize variety of
sports
2. Expand in other
regions
3. Expand in other
related industries
Strengths
1. Core competence in
innovation
2. Brand Loyalty
3. Strong information and
technology systems
S-O Options
1. Continue developing
innovative products into
existing and emerging
markets
2. Sponsorship as a form
of advertisement and
promotion
Weaknesses
1. Weak global
positioning (European)
2. Dependent on
domestic market (93% of
sales is from US alone)
3. Limited product line
W-O Options
1. Expand into
International Market
2. Expand product line
and further diversity to
be distributed into wide
range of possible target
markets to spread fixed
component of labor costs
 3. Increase advertising
using social networking
and other means of
technology
3. Consider marketing on
fitness activities
involving women rather
than focusing on athletic
activities alone.

c. Strategy Evaluation Format: Evaluation of Strategy Alternative

Criteria Very High Ave Low Very Weight Score
High Low
Rating 5 4 3 2 1
Relevance to ○ 2 10
VMO
Revenues ○ 2 8
Returns ○ 2 8
Responsiveness ○ 2 8
to Customers
Reinforcement ○ 1 3
of Existing
Strategies
Resonance with ○ 2 8
Values
Reach ○ 1 2
Range ○ 2 6
Revolutionary ○ 2 4
Impact
Relative Ease of ○ 1 4
Implementation
Resources ○ 1 3
Required
Risks ○ 2 6

Score 70
V. Revised VMOs
a. Revisions
• Vision

Under Armour’s vision is “to empower athletes everywhere” through

the innovation of revolutionary fabrics and design that enhance athletes’
performance. However, a vision statement should be succinct and concrete.
UA’s vision hardly talks of the brand’s future and does not mention how the
brand is striving to achieve that future. The revised vision statement should
include factors like market size, products, markets, CSR, employees and other
important factors. This is essential so managers can accordingly make decisions
and allocate resources to achieve that kind of future.

• Mission

The company’s mission lists three things: passion, design and

innovation for athletes. These can be further explained to provide guidance on
decision making and resource allocation. According to its mission statement, its
customers are mainly athletes but does not discuss in detail what it makes and
for whom it does. Neither is there any discussion of its financial objectives
because shareholder value is also an important purpose of businesses which
this mission statement does not include. The mission statement is too brief and
needs to include several other factors like products, customers, key markets,
financial and competitive position of the brand etc.

b. Objectives
➢Increase recurring revenue
➢Implement new 360-degree product planning process
➢Improve internal employee engagement
➢Activate user-testing
➢Improve annual budgeting and business planning
c. KRAs
Objectives KRAs
1. Increase recurring revenue 1.1 The share of monthly subscriptions
increased to 85%

2. Implement new 360-degree product
planning process
3. Improve internal employee
engagement
4. Activate user-testing
5. Improve annual budgeting and
business planning
1.2 Average subscription size of at least
1.3 Reduce churn to less than 1%
2.1 Divide exact clear roles between
sales, marketing, design, and
development
2.2 Integrate user testing into planning
phase
2.3 Integrate user testing into testing
phase
2.4 Decide on input methods from
design and development back into
product management
3.1 Reach weekly employee satisfaction
score of at least 4.7 points
3.2 Conduct 3 monthly “Fun Friday” all-
hands meetings with an external
motivational speaker
3.3 Start using Objective-Key Results in
all 10 teams and 5 departments
4.1 Conduct at least 4 face testing
sessions per month
4.2 Receive at least 15 video interviews
from usertesting.com
4.3 Make sure at least 80% of people
interviewed are from core target group
(Directors, VP’s, CEO’s, Division
Managers) not random friends
5.1 Receive business line budget
proposals before September 1st
5.2 Conduct a daily planning session
with each division manager before their
proposals
 5.3 Have each business line manager
start using company’s online
dashboards
5.4 Close final budget by November 30th

VI. Strategy Evaluation

a. Issues

1. What technologies should be used by the enterprise?

Under Armour provides sports apparels made of high-tech fibers that wicked
away moisture, keeping athletes cool dry and feeling light. In order to catch up with
its competitors in the market, the company largely depends on the company’s ability
to innovate and provide increased perceived value to its customers. Though the
materials and technology used to create its products are not exclusive, by
implementing an effective corporate strategy, Under Armour has been able to live up
to quality expectations and thus able to fashion itself as a profitable business and
remain a key player among competitors

2. What organizational modality should be adopted for implementing the strategy?

Structurally, Under Armour appears to be moving in a Multi-divisional direction with
multiple offices in large markets. The idea of maintaining an integrated structure
while centralizing decision-making processes seems to be the most efficient and
beneficial structural strategy for Under Armour. By utilizing their research and
development resources, Under Armour can break into foreign markets ahead of
previously established competitors. Opening brick and mortar stores, as well as
allying with sports retailers and professional teams will be Under Armour’s best shot
at success in its expansion plan.
b. Action Program Strategy
International Market Product Diversification Marketing
Presence/Expansion
Research ways to make Perform market research Invest in new
lower-priced, multi- focused on proposed and advanced
purpose apparel that locations/customers technologies in
sustains its brand image yet marketing
caters to geographically
distinct likes or socio-
economic conditions
Establish itself at the Substantial modification of Create
forefront of international existing products or promotional
sports activities to lessen its developing new products tactics for new
reliance on US-centric for currently served markets
activities such as sports or markets and customers
football; the hiring of local
experts might be helpful
here to consult on designs
etc
Examine circulation and Asses availability and IT support and
offer chains on a worldwide accessibility canvass on potential
level to develop efficient smaller regions consulting
sites for transporting and services in new
offering its products foreign markets
Turn to decentralize a few Continuous consultations Asses feedbacks
of its primary functions to with skilled and talented
allow for better functional leaders/ external
efficiencies in consultants
geographically disparate
locations

c. Recommendations
1. Lack of Proprietary Product Rights

Due to constraints, the company would be in a difficult situation in obtaining

proprietary property rights. Constraints include costly and time-consuming
investment that it wouldn’t be feasible to acquire patent rights on every innovative
ideas they got; another constraint is that the technology, fabrics, and processes use to
manufacture UA’s products are not unique to them and are generally owned by their
suppliers, hence, intellectual rights are already owned by them; another is that if
defective products are offered to the market, patent infringement is of high possibility.
Since intellectual property rights cannot be feasibly obtained, our recommendation
would be to establish a secured relationship with its suppliers and producers to
whom the quality of final product depends. This involves constant monitoring,
evaluation and upkeep of security among its products.

2. Concentration on Domestic Sale

UA may have been considered a major player in the Sports Apparel industry within
U.S., but the same is not true in the global market compared to internationally-
renowned Nike and Adidas brands. One component of the overall growth strategy of
Under Armour must be able to expand its international operations instead of focusing
most of its efforts on domestic revenues. Taking these into consideration, our
recommendation would be to increase efforts toward international markets.
Specifically, this would call for an establishment of retail outlets to Asian countries
(e.g. China, Malaysia, India) as potential markets; sponsorship to international sports
teams such as Brazilian National Sports Teams and China Football League; increase
of international advertising through partnering with international television
channels as CNN and AXN and also making use of social media like YouTube, Facebook,
Twitter, and others; and making alliances with international companies in the same
industry such as UNIQLO and Penshoppe. Under Armour's failure to expand in the
market poses a risk of saturation on the current market and also making it difficult
for the company to compete or stay in business in the long run.

3. Too much dependence on few third-party suppliers

UA relies heavily on suppliers and manufacturers outside of United States,

particularly, China and Hong Kong. Furthermore, seventy to 75% of the fabrics used
in its products come from only six suppliers giving them a control over UA’s inbound
logistics. This will, in turn, have an unfavourable effect on its product pricing. Our
recommendations cater two phases. The first is with the existing suppliers. UA must
maintain good relationship with its suppliers by allowing them to participate in the
company’s corporate social responsibility (CSR) activities. UA must also establish
long-term contracts and close communication with its suppliers. The second phase is
to find other potential and reliable suppliers and evaluate the quality of products they
supply. If possible, research on the most feasible suppliers in terms of its geographic
locations so that transportation costs will be reduced when moving products from
suppliers to various distributors across different geographical areas.

4. Increased research and development

The investment in research and development is essential for the company's growth.
This is due to the fact that UA's quality design and strong buying power are the key
success factors to its current market position. As competition and rise of substitutes
increase in the industry, UA needs to invest in not only the development of a new
product, but also in the advertisement of it. Furthermore, UA needs to offer more
street clothing to target a wider demographic, more individual customization, and
more products targeting the female market. By doing so, the company will have the
ability to stay competitive in the industry.