Never too small to take on industry leaders Full retail pricing, rarely discounting Current Situation *See note section for more details Board of Directors Included eight members within the timeshare of the Case period Varied backgrounds, most serving since 2004 or earlier Top Management Eight executives made up Aqua’s top management Founder Kevin Plank was President, CEO, and Chairman of the Board Divided into operational departments Very experienced in the industry Corporate Governance Natural Environment Rapid growth in performance based apparel and gear globally – Difficult for original industry leaders to satisfy the ports market.
Growing population staying in shape – leading to new consumers. External Environment Societal Environment Growing buyer preference for the apparel that is differentiated from the rest – current economic situation reveals consumer spending decreasing due to product selection and pricing. Cone… Corporate Structure Internal analysis reveals AU is a strong company with an excellent product, low production cost, significant brand recognition, and room for growth. Divisional structure with manufacturing, distribution, and marketing.
Differentiates itself from competitors by expanding its operations and growth with efficient use of resources, expertise, and core competencies. Corporate Culture Football dominated culture from employees (teammates) to company offices (Under Armor Huddles). Aggressive approach in the market with offensive tactics. Internal Environment Corporate Resources, Capabilities, & Core Competencies Marketing Finance the NFG. Distribution focus through department stores, specialty stores, etc. Apparel & accessory revenues are up overall while cash flows are down.
Debt to asset ratios are good with stockholders’ equity slightly increasing over the years. Failure to protect intellectual property – biggest issue facing the brand. Innovation technology through material use creates a competitive edge. Corporate Resources, Capabilities, and Core Competencies Operations – Under Armor’s core competencies Human Resources – Strong Corporate Environment Supply Chain Management – Under Armor set up two distribution facilities to improve inventory time management.
Value Chain Analysis – Effective use of raw materials through overseas manufacturers consisting of natural and synthetic fibers. Strong code of conduct based on core values innovation, reliability and integrity. Operations divided with top management serving as division leads. Under Armor would benefit from an information system that tracks all manufacturing and distribution operations. Useful for industry trends and operational division tracking to stay competitive in the industry.
SOOT Analysts Strengths – Sponsorships, Distribution, Brand, Innovation, Official Outfitter Weaknesses – Pricing, Marketing, Product lines Opportunities – Global Expansion, Female Market, Product Innovation Threats – Major Competitors, Substitute Products, New Products, Changing Consumer trends & Behaviors Review of Mission & Objectives Mission – Engineer technically advanced products using superior fabrics to provide maximum moisture protection, Seems appropriate. Objectives – More like goals, adding timeliness and budget plans would enhance company performance.
Factors International Marketing: Focus on product quality and appeal to global market sports outside of American Football. Pros: Brand awareness to more consumers. Cons: Temporary Decrease in company profits. Competitive Pricing: Reevaluate pricing strategies against competitors Pros: Increase competitive advantage. Cons: Sales expectations unmet, Increase in obstruction products . Strategic Alternatives Product Expansion/Diversification: Develop more product variations aimed at the female market, diversify apparel for various world sports and non-athletic wearers.
Pros: Increased market share both domestically and internationally. Cons: Decreases focus on the heart of the company’s targeted market where football dominates the company’s product category. Recommendation Focus: Expand products into the international market Develop new product lines at affordable prices Produce products for non-athletes Recommendations for Under Armor to stay competitive . Increase the international market to be more competitive with Industry leader Mike. 2.
Increase investments in R and marketing for continued growth and to minimize substitution products in the market. Recommendation Strategy International Market To expand and increase profitability Under Armor needs to shorten design & production time through their overseas sourcing. This would allow for customization. Could be costly, Product Field Expansion Creation of more apparel for women and nonetheless or leisure activity would broaden consumer market increasing sales outside of just the Football season.
Implementation Company Management Board members & Top management division leads should increase synergy throughout the company and with the overseas offices that support and monitor the company’s outsourced manufacturing activities. Temporary Cross Functional Task Force Should be established to devote time and focus on product expansions/innovations. Implementation Cone… R&D/Marketing Needs to be a priority for the footwear and apparel product lines for both the U. S. And International markets. Implementation strategies should occur over a short period of time to increase success and become a leader in the industry.
Especially for an offensive tactic as a frontal assault against Mike. Utilization of Information Technology Management Information System (MIS) or Enterprise Resource Planning (ERP) software should be established for evaluation and control of production & distribution. Evaluation & Control Performance Measures Use bench marking to evaluate how top competitors (Mike & Champion) are selling and distributing footwear and apparel product lines against the company’s international markets for comparison value and control. Use a balanced scorecard to see if R and marketing fees are creating a ROI.