Under Armour Executive Summary
Under Armour
Team Developed Strategic Plan
Executive Summary
TEAM D
MGMT 479
October 5, 2014
STRATEGIC ALTERNATIVES
ALTERNATIVE ONE
Changes in the way consumers spend and what they purchase provides a large opportunity for Under Armour to exploit new markets. Expanding widening product lines for women and exploring unexplored territories could jump start UA is looking for. By expanding into China UA may be able to maximize profit while gaining new business. Under Armour seeks to drive consumer demand for their products by creating and building brand equity and awareness as the leading performance athletic brand. China, the Middle Kingdom’s rising stars present possible sponsorship opportunities. The …show more content…
“Asian giant” embraced modern sports only as recently as the 20th century. Through its government 's support and system, and the interest of the people in general, the country has been producing players of immense talent in the world of sports, in recent times” (Buzzle, 2014). Name a Chinese star athlete that 's not Yao Ming or Liu Xiang. Time 's up. How 'd you do? Although China still hasn 't cemented its athletic prowess in our collective consciousness, the Middle 's Kingdom 's rising star are the names you should start memorizing now since they 're not going anywhere any time soon” (Ng, 2009). In the most recent Summer Olympics and Asian games, star athletes like: “Wang Yihan, 21 years old and already the world number one badminton player, she rolled through the competition with seven titles in 2009, including first-place finishes in 5 of 12 Badminton World Federation Super Series tournaments. Guo Jingjing is a crossover cultural icon and the biggest diving star alive today. The current and five-time winner of the 3m and synchro springboard events at the World Championships is also the three-time defending champion of those two events at the Olympics. Wang Meng, China’s one of the four world powers in short-track speed skating, and right now, there’s no faster woman than Wang. The two-time defending champion of the World Championships’ overall individual title will next be seen at the Vancouver Games” (Ng, 2009). All of these international stars present excellent opportunities for sponsorship and possible endorsements to gain a foothold in the rising economy that China represents. Offering expanded athletic clothing and accessories designed for athletes by professional, internationally-known women will broaden the women’s lines and increase UA’s market share not only in China but also in Asia as well as the U.S.
ALTERNATIVE TWO
Both qualitative and quantitative factors considered, Under Armour is a company endowed with at least some measure of competitive advantage. Consumers are attracted to its products and they’re willing to pay above-average prices. It arguably has some bargaining power with the large retailers. The company supported its product positioning with a policy of full retail pricing, rarely allowing its brand to be discounted. The idea was to add to the company’s up-market appeal and position its brand as distinct from competing brands. Limiting distribution through high-end athletic stores like Dick’s Sporting Goods and The Sports Authority, the company discounts a huge market segment. Offering a line of performance apparel to discount wholesalers like Wal-Mart, Target and Kmart, UA could increase their distribution well beyond the current 30% and challenge Champion’s market share. Danskin, Hanes, and OP offer clothing lines in Wal-Mart for reasonable prices that are affordable to the everyday individual. The company has manufacturing facilities in place overseas so creating an alternate line of performance apparel made specifically for the discount wholesaler would not be a fiscal hard ship. Instead of being forced to reduce costs due to poor market performance of a specific line, expand by offering cheaper alternatives. By offering an alternate product line to discount wholesalers UA would capture as yet unexplored opportunity. Under Armour could offer a membership card that tracks purchases and offers benefits such as birthday discounts, notification of new products designed specifically based on past purchase history. It could also provide discounts for end of the season/year sales notifications and automatic discounts when used to purchase UA products in company-owned stores and from the website. Not reducing costs in the same way as their competitors means Under Armour is outlaying more of their profits. Having higher costs than competitors is a major weakness.
ALTERNATIVE THREE
Under Armor needs to think past major sport pastimes like football, basketball, baseball, and golf to other internationallyknown sporting events. Cricket, rugby, Cycling, Wimbledon Tennis, and soccer are all popular collegiate and professional sports in the U.S. and overseas. Creating new lines of equipment and accessories or expanding current product lines would widen the company’s market share past that of Nike and Adidas. “Sport is like passion for the millions of people and when any of the sporting events occur, people follow it with utmost dedication and enthusiasm. There are many sports, which are played in different parts of the world, and almost all of them have a major tournament, which is held on time intervals. There are not so many permanent members of the International Cricket Council but then also there is a huge popularity of this sport in the international arena and when the cricket world cup is organized ”(Abhishek, 2013). UA already manufactures baseball helmets, gloves, and bats, plus the accessories to carry equipment. Cricket helmets, shoes, pads, gloves and performance apparel are very similar and wouldn’t be that far of a stretch to manufacture overseas, plus distribution, marketing and internet sales would be significantly lower than shipping to the U.S. vice England. Rugby is one of the most loved and watched sports in the world. Unlike other sports, it is a physical game and requires strength and stamina. Rugby is played in high school, colleges, and professional leagues all over the U.S. and internationally. “Tour de France is one of the most happening sporting events in France each year. Its popularity is not only in France but also in various parts of the world where it is followed with so much of dedication and enthusiasm” (Abhishek, 2014). Participating cyclists are internationally televised; the performance clothing, helmets and shoes are heavily sponsored. Bloomberg News reports that the Tour De France, which draws sponsors mainly from its home country, is trying to snag a U.S. backer to help bankroll a women 's edition of the cycling race (Bloomberg News, 2014). Wimbledon offers excellent televised marketing for UA. Sponsorship of even one competitor would ensure international visibility. All of these events have one thing in common; UA doesn’t offer performance apparel, footwear, or athletic equipment for any of them. All are internationally televised and followed by millions of potential purchasers, UA could cast a larger net the company would increase their markets share and revenues.
RECOMMENDED STRATEGY
The strategic alternatives provided are all acceptable strategies for helping Under Armour grow, but only one may be selected.
After careful research of both internal and external environments as well as performing a strategic analysis of Under Armour, our team recommends that Under Armour expand internationally, starting with China. This strategy will increase growth of the company and make UA competitive internationally. China’s sporting goods industry revenues have quadrupled since 2006 (China Sporting Goods Industy Report 2010-2011, 2011). By moving into China, Under Armour can tap into a share of the $14.5 billion market industry that is currently led by competitors Nike and Adidas. Moving into China will require using key functional strategy elements such as marketing, operations, and logistics strategies. Of course, the remaining strategies such as financial, R&D, and purchasing also play important roles, however the aforementioned strategies have a larger impact due to Under Armour starting from scratch in China. By successfully breaking into the Chinese sporting goods apparel industry, Under Armour will then be able to replicate that process in other key locations around the globe, thus exponentially growing the Under Armour …show more content…
brand.
IMPLEMENTATION PHASE
Under Armour must first purchase plants and equipment in this country, being that Under Armour already has a large portion of its manufacturing line in Asia this shouldn’t be that big of a problem for Under Armour. Also bringing a plant to China will boost the host countries economy and create good rapport with the government as well as the people of China.
When it comes to how we plan on selling our products, Under Armour plans to open its own set of retail stores across China, selling everything from sporting equipment to Under Armour’s top selling items. Overall Under Armour will have its own stores selling a wide variety of products for all sports played across China. Once it is time for the grand opening of some of our top projected stores we plan to have some of China’s top athletes around sporting our brand ready to meet people once they enter the stores. To market Under Armour’s products to the people of China we plan on using the same strategy that Under Armour uses in the United States.
By taking the most popular athletes out there today and offering them products made by Under Armour and having them showcased in the public’s eye. Not only is this a great marketing tool but at the same time it is cheaper. With China’s recent success in the Olympics and other worldwide sports we have decided to fit some of China’s best athletes with Under Armour products and market them to the people of China. Not only will this give us advertising in the country but also get our products into the hands of athletes that have never been sponsored or given access to such products. As with all phases of implementation this will be one that Under Armour plans to tackle fast not only to get the products out into the hands of that market but to also capitalize on the upcoming Olympics and other large sporting events that China is hosting this
year.
EVALUTION AND CONTROL
Evaluation and control are high priorities for managers and executives. Evaluation helps in a few different ways; it can help find new opportunities and avoid threats, and it can keep performance in line and solve problems that may arise. Controls are used to provide benchmarks to assess how well the company is dong on meeting their goals.
To evaluate and implement controls for finding a new plant and equipment, Under Armour will need to test the market to find the best location. After the new warehouse is up and running, Under Armour will want to perform continuous walkthroughs. The purpose in this is to observe the operating conditions and the effectiveness of the processes being used. This can give Under Armour a general assessment of the current level of the productivity and service they are putting out. Once the walkthrough is complete Under Armour will be able to make a report to see how well the internal operations are working. They will be able to see what level the shipping accuracy is, how the order turnaround is working and check for quality assurance.
Once Under Armour has done their assessment they will be able to make benchmarks. Under Armour will want to compare what they think their performance should be with what they are actually performing. Then Under Armour will be able to make a new benchmark for new goals, providing Under Armour the opportunity to see trends that are coming through as well.
As for Under Armour using the most popular athletes in China to market and promote their products, they will need to make sure those athletes are able to increase sales. Marketing must choose athletes that are able to give the most effective message about the product, that they are trustworthy in the customer’s eye, and make sure they are respected and that customers are familiar with the chosen athletes.
Under Armour will also need to make sure the athletes are used as a link between the sport they play and the product that the company is trying to promote. By using the most popular athletes in China they will need to make sure that athlete is able to generate enough excitement to drive customers to buy Under Armour products instead of the competitor’s.
Works Cited
China Sporting Goods Industy Report 2010-2011. (2011, March). Retrieved from Research in China: http://www.researchinchina.com/Htmls/Report/2011/6059.html
Wheelen, T. L. (2012). Strategic Management and Business Policy, Globalization, Innovation and Sustainability. Upper Saddle River: Pearson.
UNDER ARMOUR FINANCIAL RATIO ANALYSIS
LIQUIDITY RATIOS
CURRENT RATIO
3.07
QUICK RATIO
2.7
WORKING CAPITAL
0.37
CASH RATIO
1.56
PROFITABILITY RATIOS
NET PROFIT MARGIN
5.40%
GROSS PROFIT MARGIN
48.20%
RETURN ON INVESTMENT
8.60%
RETURN ON EQUITY
11.70%
EARNINGS PER SHARE
0.94
ACTIVITY RATIOS
INVENTORY TURNOVER
5.75
DAYS OF INVENTORY
0.33
NET WORKING CAPITAL
2.61
ASSET TURNOVER
1.57
TURNOVER
FIXED ASSET TURNOVER
1.57
AVERAGE COLLECTION
0.092
ACCOUNTS RECEIVABLE
0
ACCOUNTS PAYABLE
0
TURNOVER PERIOD
DAYS OF CASH
79.82
LEVERAGE RATIOS
DEBT-TO-ASSET RATIO
0.267
DEBT-TO-EQUITY RATIO
0.364
LONG-TERM DEBT TO
0.027
TIMES INTEREST EARNED
34.16
CAPITAL STRUCTURE
COVERAGE OF FIXED
2.88
CURRENT LIABILITIES TO
0.3
CHARGES EQUITY OTHER RATIOS
PRICE/EARNINGS RATIO
38.81
DIVIDEND PAYOUT RATIO
NO DIV PAID
DIVIDEND YIELD ON
NO DIV PAID
COMMON STOCK
Sporting Goods Industry Matrix
Key Success Factors
Weight
UA Rating
UA Wgtd Score
Nike Rating
Nike Wgtd Score
Design
0.2
4
0.8
4
0.8
Manufacturing
0.1
4
0.4
4
0.4
Source Inputs for Purchasing PWR
0.1
3
0.3
4
0.4
Marketing
0.3
4
1.2
5
1.5
Brand Name
0.3
3
0.9
5
1.5
Total
1
3.6 4.6
External Strategic Factors
Opportunities
Weight
Rating
Wgtd Score
Comments
Products manufactured in Asia
0.15
1.4
0.21
Moving to Asian Market will help with costs of shipping
Weak economy improving
0.05
3
0.15
With the increase more disposable income
Current generation health-concious
0.05
2
0.1
More active leading to increase in active wear products
Millenials focused on performance
0.2
3.1
0.62
UA products are based on increased performance
Large entry barriers help growth
0.05
4
0.2
UA can grow without losing market share
Threats
Import tax w/Asia increase prices
0.1
1.5
0.15
Current market is mainly United States
Negative publicity from outsourcing
0.05
1
0.05
Media and economy need to keep jobs in U.S
Suppliers have bargaining power
0.1
2.5
0.25
Could for larger companies and hurt prices
Large rivals: Nike, Adidas, Champ.
0.2
3.3
0.66
Companies trying to get market share on similar products
Govt regs and human rights policies
0.05
1.6
0.08
Poses threats to production
Total
1 2.47 Internal Strategic Factors
Strengths
Weight
Rating
Wgtd Score
Comments
Innovative culture
0.15
4
0.6
Team concept in top management Great Product
0.2
4
0.8
Quaility of products Strong brand
0.2
4.1
0.82
Well known around the world Official outfitter to schools/univ
0.2
3.7
0.74
Maryland, Utah State, Texas Tech, S. Carolina, Auburn Weaknesses
Limited product line
0.1
2.2
0.22
Broaden in other sports and sports gear Narrow focus
0.05
2.4
0.12
Only workout gear Male targeted
0.1
2.7
0.27
Collegiate athletes, focused on male sports Total
1
3.57 Strategic Factors Weight
Rating
Weighted Score
Comments
Duration
S1 Strong brand
0.1
4.1
0.41
Well known around the world
S I
S2 Innovative culture
0.05
4
0.2
Team concept in top management
S I
S3 Official outfitter to schools/univ.
0.2
3.7
0.74
Maryland, Utah State, Texas Tech, S. Carolina, Auburn
S I
W2 Narrow focus
0.1
2.4
0.24
Only workout gear
S I
O1 Products man 'd in Asia
0.2
1.4
0.28
Moving to Asian Market will help with costs of shipping
S
O2 Weak economy improving
0.15
3
0.45
With the increase more disposable income
I
O3 Millenials focused on perform.
0.1
3.1
0.31
UA products are based on increased performance
I L
O4 Current gen health-conscious
0.05
2
0.1
More active leading to increase in active wear products
I L
T1 Import tax w/Asia incr prices
0.05
1.5
0.075
Current marketing is mainly United States
S
Total
1
2.805
Team Developed Strategic Plan
Executive Summary
TEAM D
MGMT 479
October 5, 2014
STRATEGIC ALTERNATIVES
ALTERNATIVE ONE
Changes in the way consumers spend and what they purchase provides a large opportunity for Under Armour to exploit new markets. Expanding widening product lines for women and exploring unexplored territories could jump start UA is looking for. By expanding into China UA may be able to maximize profit while gaining new business. Under Armour seeks to drive consumer demand for their products by creating and building brand equity and awareness as the leading performance athletic brand. China, the Middle Kingdom’s rising stars present possible sponsorship opportunities. The …show more content…
“Asian giant” embraced modern sports only as recently as the 20th century. Through its government 's support and system, and the interest of the people in general, the country has been producing players of immense talent in the world of sports, in recent times” (Buzzle, 2014). Name a Chinese star athlete that 's not Yao Ming or Liu Xiang. Time 's up. How 'd you do? Although China still hasn 't cemented its athletic prowess in our collective consciousness, the Middle 's Kingdom 's rising star are the names you should start memorizing now since they 're not going anywhere any time soon” (Ng, 2009). In the most recent Summer Olympics and Asian games, star athletes like: “Wang Yihan, 21 years old and already the world number one badminton player, she rolled through the competition with seven titles in 2009, including first-place finishes in 5 of 12 Badminton World Federation Super Series tournaments. Guo Jingjing is a crossover cultural icon and the biggest diving star alive today. The current and five-time winner of the 3m and synchro springboard events at the World Championships is also the three-time defending champion of those two events at the Olympics. Wang Meng, China’s one of the four world powers in short-track speed skating, and right now, there’s no faster woman than Wang. The two-time defending champion of the World Championships’ overall individual title will next be seen at the Vancouver Games” (Ng, 2009). All of these international stars present excellent opportunities for sponsorship and possible endorsements to gain a foothold in the rising economy that China represents. Offering expanded athletic clothing and accessories designed for athletes by professional, internationally-known women will broaden the women’s lines and increase UA’s market share not only in China but also in Asia as well as the U.S.
ALTERNATIVE TWO
Both qualitative and quantitative factors considered, Under Armour is a company endowed with at least some measure of competitive advantage. Consumers are attracted to its products and they’re willing to pay above-average prices. It arguably has some bargaining power with the large retailers. The company supported its product positioning with a policy of full retail pricing, rarely allowing its brand to be discounted. The idea was to add to the company’s up-market appeal and position its brand as distinct from competing brands. Limiting distribution through high-end athletic stores like Dick’s Sporting Goods and The Sports Authority, the company discounts a huge market segment. Offering a line of performance apparel to discount wholesalers like Wal-Mart, Target and Kmart, UA could increase their distribution well beyond the current 30% and challenge Champion’s market share. Danskin, Hanes, and OP offer clothing lines in Wal-Mart for reasonable prices that are affordable to the everyday individual. The company has manufacturing facilities in place overseas so creating an alternate line of performance apparel made specifically for the discount wholesaler would not be a fiscal hard ship. Instead of being forced to reduce costs due to poor market performance of a specific line, expand by offering cheaper alternatives. By offering an alternate product line to discount wholesalers UA would capture as yet unexplored opportunity. Under Armour could offer a membership card that tracks purchases and offers benefits such as birthday discounts, notification of new products designed specifically based on past purchase history. It could also provide discounts for end of the season/year sales notifications and automatic discounts when used to purchase UA products in company-owned stores and from the website. Not reducing costs in the same way as their competitors means Under Armour is outlaying more of their profits. Having higher costs than competitors is a major weakness.
ALTERNATIVE THREE
Under Armor needs to think past major sport pastimes like football, basketball, baseball, and golf to other internationallyknown sporting events. Cricket, rugby, Cycling, Wimbledon Tennis, and soccer are all popular collegiate and professional sports in the U.S. and overseas. Creating new lines of equipment and accessories or expanding current product lines would widen the company’s market share past that of Nike and Adidas. “Sport is like passion for the millions of people and when any of the sporting events occur, people follow it with utmost dedication and enthusiasm. There are many sports, which are played in different parts of the world, and almost all of them have a major tournament, which is held on time intervals. There are not so many permanent members of the International Cricket Council but then also there is a huge popularity of this sport in the international arena and when the cricket world cup is organized ”(Abhishek, 2013). UA already manufactures baseball helmets, gloves, and bats, plus the accessories to carry equipment. Cricket helmets, shoes, pads, gloves and performance apparel are very similar and wouldn’t be that far of a stretch to manufacture overseas, plus distribution, marketing and internet sales would be significantly lower than shipping to the U.S. vice England. Rugby is one of the most loved and watched sports in the world. Unlike other sports, it is a physical game and requires strength and stamina. Rugby is played in high school, colleges, and professional leagues all over the U.S. and internationally. “Tour de France is one of the most happening sporting events in France each year. Its popularity is not only in France but also in various parts of the world where it is followed with so much of dedication and enthusiasm” (Abhishek, 2014). Participating cyclists are internationally televised; the performance clothing, helmets and shoes are heavily sponsored. Bloomberg News reports that the Tour De France, which draws sponsors mainly from its home country, is trying to snag a U.S. backer to help bankroll a women 's edition of the cycling race (Bloomberg News, 2014). Wimbledon offers excellent televised marketing for UA. Sponsorship of even one competitor would ensure international visibility. All of these events have one thing in common; UA doesn’t offer performance apparel, footwear, or athletic equipment for any of them. All are internationally televised and followed by millions of potential purchasers, UA could cast a larger net the company would increase their markets share and revenues.
RECOMMENDED STRATEGY
The strategic alternatives provided are all acceptable strategies for helping Under Armour grow, but only one may be selected.
After careful research of both internal and external environments as well as performing a strategic analysis of Under Armour, our team recommends that Under Armour expand internationally, starting with China. This strategy will increase growth of the company and make UA competitive internationally. China’s sporting goods industry revenues have quadrupled since 2006 (China Sporting Goods Industy Report 2010-2011, 2011). By moving into China, Under Armour can tap into a share of the $14.5 billion market industry that is currently led by competitors Nike and Adidas. Moving into China will require using key functional strategy elements such as marketing, operations, and logistics strategies. Of course, the remaining strategies such as financial, R&D, and purchasing also play important roles, however the aforementioned strategies have a larger impact due to Under Armour starting from scratch in China. By successfully breaking into the Chinese sporting goods apparel industry, Under Armour will then be able to replicate that process in other key locations around the globe, thus exponentially growing the Under Armour …show more content…
brand.
IMPLEMENTATION PHASE
Under Armour must first purchase plants and equipment in this country, being that Under Armour already has a large portion of its manufacturing line in Asia this shouldn’t be that big of a problem for Under Armour. Also bringing a plant to China will boost the host countries economy and create good rapport with the government as well as the people of China.
When it comes to how we plan on selling our products, Under Armour plans to open its own set of retail stores across China, selling everything from sporting equipment to Under Armour’s top selling items. Overall Under Armour will have its own stores selling a wide variety of products for all sports played across China. Once it is time for the grand opening of some of our top projected stores we plan to have some of China’s top athletes around sporting our brand ready to meet people once they enter the stores. To market Under Armour’s products to the people of China we plan on using the same strategy that Under Armour uses in the United States.
By taking the most popular athletes out there today and offering them products made by Under Armour and having them showcased in the public’s eye. Not only is this a great marketing tool but at the same time it is cheaper. With China’s recent success in the Olympics and other worldwide sports we have decided to fit some of China’s best athletes with Under Armour products and market them to the people of China. Not only will this give us advertising in the country but also get our products into the hands of athletes that have never been sponsored or given access to such products. As with all phases of implementation this will be one that Under Armour plans to tackle fast not only to get the products out into the hands of that market but to also capitalize on the upcoming Olympics and other large sporting events that China is hosting this
year.
EVALUTION AND CONTROL
Evaluation and control are high priorities for managers and executives. Evaluation helps in a few different ways; it can help find new opportunities and avoid threats, and it can keep performance in line and solve problems that may arise. Controls are used to provide benchmarks to assess how well the company is dong on meeting their goals.
To evaluate and implement controls for finding a new plant and equipment, Under Armour will need to test the market to find the best location. After the new warehouse is up and running, Under Armour will want to perform continuous walkthroughs. The purpose in this is to observe the operating conditions and the effectiveness of the processes being used. This can give Under Armour a general assessment of the current level of the productivity and service they are putting out. Once the walkthrough is complete Under Armour will be able to make a report to see how well the internal operations are working. They will be able to see what level the shipping accuracy is, how the order turnaround is working and check for quality assurance.
Once Under Armour has done their assessment they will be able to make benchmarks. Under Armour will want to compare what they think their performance should be with what they are actually performing. Then Under Armour will be able to make a new benchmark for new goals, providing Under Armour the opportunity to see trends that are coming through as well.
As for Under Armour using the most popular athletes in China to market and promote their products, they will need to make sure those athletes are able to increase sales. Marketing must choose athletes that are able to give the most effective message about the product, that they are trustworthy in the customer’s eye, and make sure they are respected and that customers are familiar with the chosen athletes.
Under Armour will also need to make sure the athletes are used as a link between the sport they play and the product that the company is trying to promote. By using the most popular athletes in China they will need to make sure that athlete is able to generate enough excitement to drive customers to buy Under Armour products instead of the competitor’s.
Works Cited
China Sporting Goods Industy Report 2010-2011. (2011, March). Retrieved from Research in China: http://www.researchinchina.com/Htmls/Report/2011/6059.html
Wheelen, T. L. (2012). Strategic Management and Business Policy, Globalization, Innovation and Sustainability. Upper Saddle River: Pearson.
UNDER ARMOUR FINANCIAL RATIO ANALYSIS
LIQUIDITY RATIOS
CURRENT RATIO
3.07
QUICK RATIO
2.7
WORKING CAPITAL
0.37
CASH RATIO
1.56
PROFITABILITY RATIOS
NET PROFIT MARGIN
5.40%
GROSS PROFIT MARGIN
48.20%
RETURN ON INVESTMENT
8.60%
RETURN ON EQUITY
11.70%
EARNINGS PER SHARE
0.94
ACTIVITY RATIOS
INVENTORY TURNOVER
5.75
DAYS OF INVENTORY
0.33
NET WORKING CAPITAL
2.61
ASSET TURNOVER
1.57
TURNOVER
FIXED ASSET TURNOVER
1.57
AVERAGE COLLECTION
0.092
ACCOUNTS RECEIVABLE
0
ACCOUNTS PAYABLE
0
TURNOVER PERIOD
DAYS OF CASH
79.82
LEVERAGE RATIOS
DEBT-TO-ASSET RATIO
0.267
DEBT-TO-EQUITY RATIO
0.364
LONG-TERM DEBT TO
0.027
TIMES INTEREST EARNED
34.16
CAPITAL STRUCTURE
COVERAGE OF FIXED
2.88
CURRENT LIABILITIES TO
0.3
CHARGES EQUITY OTHER RATIOS
PRICE/EARNINGS RATIO
38.81
DIVIDEND PAYOUT RATIO
NO DIV PAID
DIVIDEND YIELD ON
NO DIV PAID
COMMON STOCK
Sporting Goods Industry Matrix
Key Success Factors
Weight
UA Rating
UA Wgtd Score
Nike Rating
Nike Wgtd Score
Design
0.2
4
0.8
4
0.8
Manufacturing
0.1
4
0.4
4
0.4
Source Inputs for Purchasing PWR
0.1
3
0.3
4
0.4
Marketing
0.3
4
1.2
5
1.5
Brand Name
0.3
3
0.9
5
1.5
Total
1
3.6 4.6
External Strategic Factors
Opportunities
Weight
Rating
Wgtd Score
Comments
Products manufactured in Asia
0.15
1.4
0.21
Moving to Asian Market will help with costs of shipping
Weak economy improving
0.05
3
0.15
With the increase more disposable income
Current generation health-concious
0.05
2
0.1
More active leading to increase in active wear products
Millenials focused on performance
0.2
3.1
0.62
UA products are based on increased performance
Large entry barriers help growth
0.05
4
0.2
UA can grow without losing market share
Threats
Import tax w/Asia increase prices
0.1
1.5
0.15
Current market is mainly United States
Negative publicity from outsourcing
0.05
1
0.05
Media and economy need to keep jobs in U.S
Suppliers have bargaining power
0.1
2.5
0.25
Could for larger companies and hurt prices
Large rivals: Nike, Adidas, Champ.
0.2
3.3
0.66
Companies trying to get market share on similar products
Govt regs and human rights policies
0.05
1.6
0.08
Poses threats to production
Total
1 2.47 Internal Strategic Factors
Strengths
Weight
Rating
Wgtd Score
Comments
Innovative culture
0.15
4
0.6
Team concept in top management Great Product
0.2
4
0.8
Quaility of products Strong brand
0.2
4.1
0.82
Well known around the world Official outfitter to schools/univ
0.2
3.7
0.74
Maryland, Utah State, Texas Tech, S. Carolina, Auburn Weaknesses
Limited product line
0.1
2.2
0.22
Broaden in other sports and sports gear Narrow focus
0.05
2.4
0.12
Only workout gear Male targeted
0.1
2.7
0.27
Collegiate athletes, focused on male sports Total
1
3.57 Strategic Factors Weight
Rating
Weighted Score
Comments
Duration
S1 Strong brand
0.1
4.1
0.41
Well known around the world
S I
S2 Innovative culture
0.05
4
0.2
Team concept in top management
S I
S3 Official outfitter to schools/univ.
0.2
3.7
0.74
Maryland, Utah State, Texas Tech, S. Carolina, Auburn
S I
W2 Narrow focus
0.1
2.4
0.24
Only workout gear
S I
O1 Products man 'd in Asia
0.2
1.4
0.28
Moving to Asian Market will help with costs of shipping
S
O2 Weak economy improving
0.15
3
0.45
With the increase more disposable income
I
O3 Millenials focused on perform.
0.1
3.1
0.31
UA products are based on increased performance
I L
O4 Current gen health-conscious
0.05
2
0.1
More active leading to increase in active wear products
I L
T1 Import tax w/Asia incr prices
0.05
1.5
0.075
Current marketing is mainly United States
S
Total
1
2.805