PROJECT OF

STRATEGIC MANAGEMENT

SUBMITTED BY:
NIKUNJ GOEL
MBA (M&S) SEC A
ROLL NO.35
Under Armour, Inc. is an American company that manufactures footwear, sports,
and casual apparel. Under Armour's global headquarters are located in Baltimore,
Maryland with additional offices located in Amsterdam (European
headquarters), Austin, Guangzhou, Hong Kong, Houston, Jakarta, London, Mexico
City, Munich, New York City, Panama City (international
headquarters), Paris, Pittsburgh, Portland, San Francisco, São
Paulo, Santiago, Seoul, Shanghai (Greater Chinese headquarters), and Toronto.

Early history

Kevin Plank, founder of Under Armour

Under Armour was founded on September 25, 1996 by Kevin Plank, a then 24-
year-old former special teams captain of the University of Maryland football team.
Plank initially began the business from his grandmother's basement in Washington,
D.C.[4] He spent his time traveling up and down the East Coast with nothing but
apparel in the trunk of his car. His first team sale came at the end of 1996 with a
$17,000 sale. From his grandmother's basement, Plank moved to Baltimore. After a
few moves in the city he landed at his current headquarters in Tide Point.
As a fullback at the University of Maryland, Plank got tired of having to change
out of the sweat-soaked T-shirts worn under his jersey; however, he noticed that
his compression shorts worn during practice stayed dry. This inspired him to make
a T-shirt using moisture-wicking synthetic fabric. After graduating from
the University of Maryland, Plank developed his first prototype of the shirt, which
he gave to his Maryland teammates and friends who had gone on to play in
the NFL. Plank soon perfected the design creating a new T-shirt built
from microfibers that wicked moisture and kept athletes cool, dry, and
light.[4] Major competing brands including UA, Adidas and Reebok would soon
follow in Plank's footsteps with their own moisture-wicking apparel.[7] Plank opted
to use the British spelling "armour" in the company name because the toll-
free vanity number was still available for that version.
People began to take notice of the brand when a front-page photo of USA
Today featured Oakland Raiders quarterback Jeff George wearing an Under
Armour mock turtleneck. Following that front page, Under Armour's first major
sale came, when an equipment manager from Georgia Techrequested 10 shirts
from Plank. This deal opened the door to a contract with NC State, Arizona State,
and other Division I football teams. With positive reviews from players, word
began to spread and orders began to increase. That same year, Under Armour
launched with several new apparel lines including ColdGear, TurfGear,
AllseasonGear, and StreetGear.[6] By the end of 1996, Under Armour had sold 500
Under Armour HeatGear shirts, generating $17,000 for the company. In 1997,
Plank had $100,000 in orders to fill and found a factory in Ohio to make the shirts.

Mission Statement
Under Armour mission statement is “to make all athletes better through passion,
design and the relentless pursuit of innovation.” The statement focuses on the
various ways that the company uses to make a difference in the sports sector. It
particularly emphasizes on the need to direct its effects on the first-hand
beneficiary of its products. Based on this mission statement, the following
characteristics emerge:

1. Make all athletes better. In this component, Under Armour makes it clear
that the company does not in any way favor or discriminate any athletes
when it comes to giving them the best products. This declaration agrees with
the fact that the company has a wide range of categories in all its stores.
There is virtually something for everyone, making Under Armour a favorite
online store to go for all athletic products needs.
2. Focusing on passion. All the products that Under Armour showcases have
one thing in common – they are a reflection of the passion the company has
always demonstrated in the sector. It is not a wonder the quality they have is
undoubtedly unmatched, and of the top-level. Particularly, the company
understands the needs of different sports and individual athletes. The bottom
line is that Under Armour remains passionate about getting the best out of
everything it touches.
3. Unique design. It is clear Under Armour is not a duplication of the many
sports companies existing today. The firm has carved itself a name among
the best as shown by the brand the company represents. The design that it
progressively strives to improve can only be described as a masterpiece or
simply, only one of its kind. This is directly related to the second component
of the Under Armour mission statement as the exceptionality of the company
adds to the passion.
4. The relentless pursuit of innovation. At the base of everything Under
Armour is known for, there is innovation. With innovation, the management
 has been able to create a brand that identifies what the company holds dear.
For instance, the company is leading in the creativity it is putting in
the fabric and footwear, especially with its latest cutting edge tech that gives
the gear it produces efficiency beyond the norm.

Vision Statement
Under Armour vision statement is “to inspire you with performance solutions
you never knew you needed and can’t imagine living without.” The vision
statement shows how influential and impactful the company can be to the overall
performance of an athlete. Particularly, it refers to the ability of the company to be
a change-maker wherever and whenever its products are part of the game. The
following elements form part of this vision statement:

1. Inspire with performance solutions. Under Armour is a company that does

not rely on being repetitive and doing what everyone else does. Through its
innovation prowess, the firm is always on the lookout for the most adaptive
product designs to get rid of persistent and recurrent sports errors. In fact,
its innovation section is specially purposed to offer the best and most
competitive sports solutions.
2. Beyond local expectations. Under Armour recognizes that few sportspeople
recognize the efforts that go into creating the products they use. In the same
way, few are aware of the technicalities and improvements that can be
effected to boost their performance, and this is where Under Armour comes
in – treating these individuals and teams to benefits beyond their
understanding.
3. Dependability. The company ensures that the high quality associated with it
and its products gives the customers a worthwhile experience. By doing so,
the company ensures the products are part and parcel of the victory,
something that boosts their reliability.
FIVE FORCES ANALYSIS

UA is known as a brand of sports shoes mainly. However, it also makes athletic

apparel and gear. The recent years have been quite profitable for the brand. It is
because of the athletic sure trends and for the high demand during the Olympics.
UA’s Just do it slogan and the Swoosh logo set it apart from the crowd of brands.
In history, it has kept signing the best athletes for endorsing its brand and
products. Here is a Porter’s five forces analysis of UA. Michael E Porter had
developed this strategic tool in 1980. It analyses five important forces that affect
the state of competition in an industry and its profitability. These forces are there
in every industry and market. The tool can be used to understand the state of
competition and reduce competitive pressure.
Bargaining power of suppliers: low

The bargaining power of UA’s suppliers is low. Its products are made globally in 42
countries in 620 factories. While individual suppliers are small in size, they do not
have the ability of forward integration either.

Bargaining power of buyers: High

The bargaining power of UA’s buyers is high . The number of its competitors is
very large in number. Apart from Adidas and Under Armour, there are other
competitors like Puma and Reebok. There are many other local and international
brands also that compete with UA. The switching costs for customers are low.

Threat of substitutes: High

The threat of substitute products is high for UA. It is because a large number of
competing brands make similar or matching products. There are several brands in
local and international markets that make low priced shoes compared to UA.

Threat of new entrants: High

The threat of new entrants for UA can be considered low to moderate. It is

because while the investment for starting the business is not very large, still there
are other requirements that are not easy to fulfill. Any new competitor may have
to start at a local or small level initially. Apart from production, there are
marketing, distribution and supply chain management that require investment,
skilled workers and time. Building a brand image and equity are also difficult.

Level of competitive rivalry: Strong

The level of competition in the sports industry is strong. Some of the major
competitors of UA are Adidas, nike and Puma. The industry has grown saturated
and the existing players are engaged in tough competition for deeper market
penetration and to snatch away market share from each other.
 PESTEL ANALYSES OF UNDER ARMOUR

Political Factors that Impact Under Armour, Inc.

Political factors play a significant role in determining the factors that can impact
Under Armour, Inc.'s long term profitability in a certain country or market. Under
Armour, Inc. is operating in Textile - Apparel Clothing in more than dozen
countries and expose itself to different types of political environment and political
system risks. The achieve success in such a dynamic Textile - Apparel Clothing
industry across various countries is to diversify the systematic risks of political
environment. Under Armour, Inc. can closely analyze the following factors before
entering or investing in a certain market-

 Political stability and importance of Textile - Apparel Clothing sector in the

country's economy.
 Risk of military invasion
 Level of corruption - especially levels of regulation in Consumer Goods sector.
 Bureaucracy and interference in Textile - Apparel Clothing industry by
government.
 Legal framework for contract enforcement
 Intellectual property protection
 Trade regulations & tariffs related to Consumer Goods
 Favored trading partners
 Anti-trust laws related to Textile - Apparel Clothing
 Pricing regulations – Are there any pricing regulatory mechanism for Consumer
Goods
 Taxation - tax rates and incentives
 Wage legislation - minimum wage and overtime
 Work week regulations in Textile - Apparel Clothing
 Mandatory employee benefits
 Industrial safety regulations in the Consumer Goods sector.
 Product labeling and other requirements in Textile - Apparel Clothing
 Economic Factors that Impact Under Armour, Inc.

The Macro environment factors such as – inflation rate, savings rate, interest rate,
foreign exchange rate and economic cycle determine the aggregate demand and
aggregate investment in an economy. While micro environment factors such as
competition norms impact the competitive advantage of the firm. Under Armour,
Inc. can use country’s economic factor such as growth rate, inflation & industry’s
economic indicators such as Textile - Apparel Clothing industry growth rate,
consumer spending etc to forecast the growth trajectory of not only --sectoryname-
- sector but also that of the organization. Economic factors that Under Armour, Inc.
should consider while conducting PESTEL analysis are -

 Type of economic system in countries of operation – what type of economic

system there is and how stable it is.
 Government intervention in the free market and related Consumer Goods
 Exchange rates & stability of host country currency.
 Efficiency of financial markets – Does Under Armour, Inc. needs to raise capital in
local market?
 Infrastructure quality in Textile - Apparel Clothing industry
 Comparative advantages of host country and Consumer Goods sector in the
particular country.
 Skill level of workforce in Textile - Apparel Clothing industry.
 Education level in the economy
 Labor costs and productivity in the economy
 Business cycle stage (e.g. prosperity, recession, recovery)
 Economic growth rate
 Discretionary income
 Unemployment rate
 Inflation rate
 Interest rates

Social Factors that Impact Under Armour, Inc.

Society’s culture and way of doing things impact the culture of an organization in
an environment. Shared beliefs and attitudes of the population play a great role in
how marketers at Under Armour, Inc. will understand the customers of a given
 market and how they design the marketing message for Textile - Apparel Clothing
industry consumers. Social factors that leadership of Under Armour, Inc. should
analyze for PESTEL analysis are -

 Demographics and skill level of the population

 Class structure, hierarchy and power structure in the society.
 Education level as well as education standard in the Under Armour, Inc. ’s industry
 Culture (gender roles, social conventions etc.)
 Entrepreneurial spirit and broader nature of the society. Some societies encourage
entrepreneurship while some don’t.
 Attitudes (health, environmental consciousness, etc.)
 Leisure interests

Technological Factors that Impact Under Armour, Inc.

Technology is fast disrupting various industries across the board. Transportation

industry is a good case to illustrate this point. Over the last 5 years the industry has
been transforming really fast, not even giving chance to the established players to
cope with the changes. Taxi industry is now dominated by players like Uber and
Lyft. Car industry is fast moving toward automation led by technology firm such
as Google & manufacturing is disrupted by Tesla, which has stated an electronic
car revolution.

A firm should not only do technological analysis of the industry but also the speed
at which technology disrupts that industry. Slow speed will give more time while
fast speed of technological disruption may give a firm little time to cope and be
profitable. Technology analysis involves understanding the following impacts -

 Recent technological developments by Under Armour, Inc. competitors

 Technology's impact on product offering
 Impact on cost structure in Textile - Apparel Clothing industry
 Impact on value chain structure in Consumer Goods sector
 Rate of technological diffusion

Environmental Factors that Impact Under Armour, Inc.

Different markets have different norms or environmental standards which can

impact the profitability of an organization in those markets. Even within a country
 often states can have different environmental laws and liability laws. For example
in United States – Texas and Florida have different liability clauses in case of
mishaps or environmental disaster. Similarly a lot of European countries give
healthy tax breaks to companies that operate in the renewable sector.

Before entering new markets or starting a new business in existing market the firm
should carefully evaluate the environmental standards that are required to operate
in those markets. Some of the environmental factors that a firm should consider
beforehand are -

 Weather
 Climate change
 Laws regulating environment pollution
 Air and water pollution regulations in Textile - Apparel Clothing industry
 Recycling
 Waste management in Consumer Goods sector
 Attitudes toward “green” or ecological products
 Endangered species
 Attitudes toward and support for renewable energy

Legal Factors that Impact Under Armour, Inc.

In number of countries, the legal framework and institutions are not robust enough
to protect the intellectual property rights of an organization. A firm should
carefully evaluate before entering such markets as it can lead to theft of
organization’s secret sauce thus the overall competitive edge. Some of the legal
factors that Under Armour, Inc. leadership should consider while entering a new
market are -

 Anti-trust law in Textile - Apparel Clothing industry and overall in the country.
 Discrimination law
 Copyright, patents / Intellectual property law
 Consumer protection and e-commerce
 Employment law
 Health and safety law
 Data Protection
UNDER ARMOUR EXTERNAL OPPORTUNITIES

o Growing markets in Asia-pacific region.

o E-commerce popularity
o Positive outlook in the US athletic footwear market
 Women’s sales in the apparel industry account for 55% of sales, with men
around 28% and children accounting for 17% of sales.
 Since the middle of 2011 to the end of 2013, the specialty retail index has
risen 70%.
 The top 10 national brands only account for 16 percent of wholesale apparel
sales.
 Sports footwear is expected to be one of the most significant areas of growth
moving forward in the footwear industry.
 People are becoming more health conscious and exercising more worldwide.
 Latin America, Eastern Europe, China, and India are all emerging markets
with large population bases.
 US cotton active wear market is a $12 billion industry, four times the size of
the performance wear market that UA was limited to with its synthetic only
line
 Expiring apparel contracts with existing major college and professional
sports teams.
 Children are more easily persuaded about products and account for 17% of
industrywide apparel sales.
 Customers are increasingly shopping at outlet stores.

UNDER ARMOUR THREATS

1. UA and Adidas were quick to copy UA’s fabric technology.

2. Fabrics UA uses are not unique to them, and UA does not control any
patents on fabrics or processes.
3. Based on total revenues, UA and Adidas both are around 10 times the
size of UA.
4. Apparel industry has a mediocre outlook where consumers are faced
with less discretionary income for higher end items.
 5. Cotton and other commodities’ prices used in the production of
apparel can be quite volatile in nature.
6. Apparel industry is extremely fragmented with many firms competing
for the same customers.
7. High product substitution in the market (Ex. Starter’s brand at
Walmart).
8. Adidas based in Germany has a large presence in Europe
9. Footwear industry is growing at a much slower rate than apparel.
10.Increasing downward pressure on prices.

EFE MATRIX
Opportunities Weight Rating Weighted Score
1. Women’s sales in the apparel industry account for 55% of sales, 0.04 4 0.16
with men around 28% and children accounting for 17% of sales.
2. Since the middle of 2011 to the end of 2013, the specialty retail 0.06 3 0.18
index has risen 70%.
3. The top 10 national brands only account for 16 percent of 0.04 3 0.12
wholesale apparel sales.
4. Sports footwear is expected to be on of the most significant 0.05 2 0.10
areas of growth moving forward in the footwear industry.
5. People are becoming more health conscious and exercising 0.03 3 0.09
increasingly more worldwide.
6. Latin America, Eastern Europe, China, and India are all emerging 0.06 2 0.12
markets with large population bases.
7. US cotton active wear market is a $12 billion industry, four times 0.05 2 0.10
the size of the performance wear market that UA was limited to
with its synthetic only line
8. Expiring apparel contracts with existing major college and 0.04 3 0.12
professional sports teams.
9. Children are more easily persuaded about products and account 0.04 2 0.08
for 17% of industry wide apparel sales.
10. Customers are increasingly shopping at outlet stores. 0.02 3 0.06
 Threats Weight Rating Weighted Score
1. Nike and Adidas were quick to copy UA’s fabric technology. 0.07 2 0.14
2. Fabrics UA uses are not unique to them, and UA does not
0.07 2 0.14
control any patents on fabrics or processes.
3. Based on total revenues, Nike and Adidas both are around 10
0.08 2 0.16
times the size of UA.
4. Apparel industry has a mediocre outlook where consumers are
0.04 2 0.08
faced with less discretionary income for higher end items.
5. Cotton and other commodities’ prices used in the production of
0.05 2 0.10
apparel can be quite volatile in nature.
6. Apparel industry is extremely fragmented with many firms
0.04 2 0.08
competing for the same customers.
7. High product substitution in the market (Ex. Starter’s brand at
0.07 2 0.14
Walmart).
8. Adidas based in Germany has a large presence in Europe 0.05 2 0.10
9. Footwear industry is growing at a much slower rate than apparel. 0.05 2 0.10
10. Increasing downward pressure on prices. 0.05 2 0.10
TOTALS 1.00 2.27

UNDER ARMOUR’S INTERNAL

Strengths

1. UA products are worn by some of the largest American college football

and European soccer teams and are worn by mega stars such as Tom
Brady, Cam Newton, Bryce Harper, Michael Phelps, and many more.
2. UA products are sold in major retailers, online, and in outlet stores
worldwide.
3. UA's moisture-wicking fabrications are designed to wear in nearly every
climate to provide a performance alternative to traditional products.
4. By hosting camps, clinics, and other activities for young athletes, they are
able to gain a first-hand appreciation for UA’s product quality and brand
equity.
5. UA's bold logo and brash and edgy marketing campaigns inspire
movement and physical fitness, positioning the company very well within
the healthier lifestyle megatrend.
6. European products are distributed out of the Netherlands, and products
sold in Japan are distributed out of Japan.
7. Many items are produced in Mexico, providing better quality control and
reduced shipping costs.
8. CEO Plank’s vision is for women’s products to outpace men’s in
revenues, and for the international revenues to be larger than USA
revenues.
9. 5 year annual sales growth rate is 25% compared to UA’s 6%.
10.UA compression products have great brand recognition.

Weaknesses

1. With no long-term debt, UA is not utilizing cheap financing as well as it

could.
2. Inventory turnover is 2.3 compared to 4.3 for UA.
3. Footwear and accessories only account for 20% of total revenue.
4. Only 6% of 2017 revenues were derived from outside of North America.
5. Latin American products are distributed out of the USA.
6. Majority of UA apparel is high priced. The average price for clothing
apparel for UA is $29.99, for UA is $19.99 & for Adidas is $15.00.
7. High majority of UA apparel and stores are male focused.
8. UA hasn’t patented their “sweat-wicking” material and technology.
9. UA hasn’t made much progress in athletic shoes outside of cleats.
10.Currently, no one endorses a particular shoe from UA in a manner similar
to UA producing the Air Jordan’s.
IFE MATRIX
Strengths Weight Rating Weighted Score
1. UA products are worn by some of the largest American college
football and European soccer teams and are worn by mega stars
0.04 4 0.16
such as Tom Brady, Cam Newton, Bryce Harper, Michael Phelps,
and many more.
2. UA products are sold in major retailers, online, and in outlet
0.06 4 0.24
stores worldwide.
3. UA's moisture-wicking fabrications are designed to wear in
nearly every climate to provide a performance alternative to 0.04 4 0.16
traditional products.
4. By hosting camps, clinics, and other activities for young
athletes, they are able to gain a first hand appreciation for UA’s 0.03 3 0.09
product quality and brand equity.
5. UA's bold logo and brash and edgy marketing campaigns
inspire movement and physical fitness, positioning the company 0.04 4 0.16
very well within the healthier lifestyle megatrend.
6. European products are distributed out of the Netherlands and
0.04 3 0.12
products sold in Japan are distributed out of Japan.
7. Many items are produced in Mexico, providing better quality
0.06 3 0.18
control and reduced shipping costs.
8. CEO Plank’s vision is for women’s products to outpace men’s in
revenues, and for the international revenues to be larger than 0.08 4 0.32
USA revenues.
9. 5 year annual sales growth rate is 25% compared to Nike’s 6%. 0.10 4 0.40
10. UA compression products have great brand recognition. 0.04 4 0.16

Weaknesses Weight Rating Weighted Score

1. With no long-term debt, UA is not utilizing cheap financing as
0.05 2 0.10
well as they could.
2. Inventory turnover is 2.3 compared to 4.3 for Nike. 0.05 1 0.05
3. Footwear and accessories only account for 20% of total revenue. 0.05 2 0.10
4. Only 6% of 2012 revenues were derived from outside of North
0.07 1 0.07
America.
5. Latin American products are distributed out of the USA. 0.04 2 0.08
6. Majority of UA apparel is high priced. The average price for
clothing apparel for UA is $29.99, for Nike is $19.99 & for Adidas 0.05 2 0.10
is $15.00.
7. High majority of UA apparel and stores are male focused. 0.04 2 0.08
8. UA hasn’t patented their “sweat-wicking” material and
0.04 1 0.04
technology.
9. UA hasn’t made much progress in athletic shoes outside of
0.04 1 0.04
cleats.
10. Currently, no one endorses a particular shoe from UA in a
0.04 1 0.04
manner similar to Nike producing the Air Jordan’s.
TOTALS 1.00 2.69
SWOT MATRIX

SO Strategies

1. Develop a line of jogging shoes for $20 million (S2, S9, O4, O5).
2. Sign contracts with 10 major sports teams for $100 million per year
(S1, O8).
3. Build 20 new outlet stores in the USA over 3 years at $1 million each
(S2, O10).
4. Build 20 new UA stores in Eastern Europe over 3 years at $500k
each (S6, O6).

WO Strategies

1. Develop a line of jogging shoes for $20 million (W3, W9, O4, O5).
2. Spend $100 million to market and develop products to women (W7,
O1).
3. Build 20 new outlet stores in the USA over 3 years at $1 million each
(W4, O6).
4. Sign a shoe contract deal with Tom Brady and Bryce Harper for $20
million each (W10, O4).

ST Strategies

1. Spend $100 million in extra advertising to promote to kids and young

adults (S5, T3, T7).
2. Move all production and distribution to Mexico for all North and
South American sales (S7, T10).
3. Spend $50 million promoting how UA products are superior for
casual exercise use (S3, T2, T7).

WT Strategies

1. Develop a line of cheaper products for a more price conscious

customer (W6, T7, T10).
2. File for patent protection on the process in which UA products are
produced (W8, T1, T2).
Competitive Profile Matrix
Under
Nike Adidas
Armour
Critical Success Factors Weight Rating Score Rating Score Rating Score
Advertising 0.05 2 0.10 4 0.20 3 0.15
Market Penetration 0.06 2 0.12 3 0.18 4 0.24
Apparel Sales 0.12 2 0.24 4 0.48 3 0.36
Footwear Sales 0.12 1 0.12 4 0.48 3 0.36
Profit 0.12 1 0.12 4 0.48 3 0.36
Debt/Equity 0.07 4 0.28 3 0.21 2 0.14
ROA 0.07 3 0.21 4 0.28 1 0.07
Customer Loyalty 0.07 2 0.14 4 0.28 3 0.21
Market Share 0.12 1 0.12 4 0.48 3 0.36
Product Quality 0.06 4 0.24 2 0.12 3 0.18
International Scope 0.09 1 0.09 3 0.27 4 0.36
Contracts With Major Sports Teams 0.05 1 0.05 3 0.15 4 0.20
Totals 1.00 1.83 3.61 2.99

UA is performing well in the industry despite a score of only 1.83. UA

and Adidas arejust so much larger than UA, which derives 97 percent of
its revenue from the USA, that economies of scale hurt UA’s competitive
position.
Grand Strategy Matrix

Rapid Market Growth

Quadrant II Quadrant I

Weak Strong
Competitive Competitive
Position Position

Quadrant III Quadrant IV

Slow Market Growth

Industry sales are growing rapidly globally, and UA has a great product, so
adding UA stores globally is one way to capitalize on global demand.
PORTFOLIO ANALYSIS WITH BCG MATRIX

UA BCG Matrix Analysis 2018

UA has six major business units that include, Footwear, Apparel that sells athletic
clothing, and equipment that sells athletic equipment, global brand divisions,
converse and corporate. In 2018, UA had an annual revenue amounting to
$36.40bn that was a 6% increase from its $34.35billion revenue in 2017 with a net
profit of $1.93bn a 54% decrease from its $4.20bn profit in 2017 according to its
annual report (Annual report 2017).

Stars

With its rapid growth and 2.8% market share in the clothing and apparel market,
UA’s apparel business is categorized as a star in the group. (Statista 2018a). In
2018, its annual revenues increased by 9% to $10.73bn from $9.65bn in 2017
fueled by growth in several key categories most notably sportswear, UA
basketball and football according to its annual report (Annual report 2018). The
unit contributed 29.5% to UA’s annual revenue in 2018. However, the apparel
market is expected to grow at a CAGR of 7.1% from 2017 to 2023 which gives UA
several market opportunities to improve its market share and revenues (Allied
Market Research 2018). Since growth needs heavy investments, UA can invest in
the apparel business to facilitate its growth into a cash cow with large market
share and revenues to support other businesses.

Cash cows

UA’s footwear business that sells athletic footwear to consumers has been
operating as a cash cow for UA for many years because of its consistently high
revenues and high market share in the global athletic footwear industry.
According to UA’s 2018 annual report, its footwear business had a $22.27bn
revenue that was a 4% increase from its $21.08bn revenue from 2017. The
increase in footwear revenue was mainly driven by strong growth in sportswear
and running according to UA’s annual report (Annual Report 2018). In 2018, the
footwear business contributed 61.2% to UA’s total revenue. The global sports
athletic market is expected to grow at a CAGR of approximately 3% between 2018
and 2022 (Technavio 2018). With this market growth, the footwear business does
not require huge investments to maintain its high revenues but rather needs to
invest in other businesses such as apparel business and its equipment business to
enable them attain bigger market shares and revenues and develop into cash
cows to support other businesses.

Question marks

UA’s equipment business that sells sports equipment is classified as a question

mark in the group because of its ambivalent growth. In 2018, the business unit
recorded a revenue amounting to $1.40bn that was a 4% decrease from its
$1.43bn revenue in 2017 contributing 3.8% to UA’s annual revenue according to
its annual report (Annual report 2018). According to research, the global apparel
and sports equipment market is expected to grow to $619.28bn in 2023 from
$384.56bn in 2017 which gives the equipment business an opportunity to grow
(Allied Market Research 2018). Given the market opportunities, UA can invest in
its equipment to enable it to attain a bigger market share and revenues to
support UA’s struggling businesses.

Dogs

UA’s corporate business that includes differences between assigned and actual
market shares, foreign currency hedge gains and losses, among others, is
considered a dog in the group because despite heavy capital investments, the
business unit has failed to become popular like its footwear and has failed to
show any significant growth. In 2018, the unit had a revenue amounting to
$26million that was a decrease from its $75million revenue in 2017 according to
UA’s annual report (Annual report 2018). However, given growth of actual market
shares, the business unit can grow attracting large revenues. Therefore, UA can
continue with its investment in the business unit
Recommendations

1. Develop a line of jogging shoes for $20 million.

2. Sign contracts with 10 major sports teams for $100 million per year.
3. Build 20 new outlet stores in the USA over 3 years at $1 million each.
4. Build 20 new Under Armour stores in Eastern Europe over 3 years at
$500k each.
5. Spend $100 million to market and develop products to women.
6. Sign a shoe contract deal with Tom Brady and Bryce Harper for $20
million each.
7. Spend $100 million in extra advertising to promote to kids and young
adults.
8. Move all production and distribution to Mexico for all North and South
American sale.
9. File for patent protection on the process in which UA products are
produced.