Comprehensive

Exam Case
Analysis
Prepared by: Limheya
Lester Glenn R
Table of Contents

I. CASE BACKGROUND

II. ENVIRONMENT ANALYSIS

III. PROBLEM STATEMENT

IV. ALTERNATIVE COURSES OF ACTION

V. RECOMMENDED ALTERNATIVE AND ACTION PLAN

VI. FINANCIAL PROJECTIONS

I. CASE BACKGROUND

K e v i n P l a n k w a s a f o o t b a l l p l a y e r t h a t g r e w t i r e d o f h a v i n g t o c h a n g e t h e d a m p , h e a v y T- s h i r t u n d e r h i s
J e r s e y, s o h e s e t o u t t o c r e a t e a u n i q u e p r o d u c t t h a t w o u l d m e e t t h e n e e d s o f a t h l e t e s . H i s l a b o r a t o r y
was his grandmother's basement in Maryland. After many prototypes, Plank created his first shirt; it
w a s a s h i n y, t i g h t s h i r t m a d e o f h i g h - t e c h f i b e r s t h a t w i c k e d a w a y m o i s t u r e a n d k e p t a t h l e t e s c o o l , d r y
and feeling "Light". Plank's shirts truly did regulate athletes' body temperatures, lending to improved
performance.
Starting Small plank believed that he would make a profitable apparel business with his advanced
feature shirts so he used $20,000 of his savings and put $40,000 onto his credit cards to launch Under
A r m o u r. S u c c e s s w a s i n i t i a l l y s l o w i n c o m i n g , b u t a f t e r P l a n k m a d e h i s b i g s a l e s t o G e o rg i a t e c h
U n i v e r s i t y, U n d e r A r m o u r g r e w r a p i d l y. a t t h e e n d o f i t s f i r s t y e a r o f o p e r a t i o n s , U n d e r A r m o u r h a d f i v e
lines of clothing made for every climate, and the company's operations were moved out of Plank's
grandmother's basement and into a manufacturing warehouse in Mary Land
Growing Into a Recognized Brand
I. CASE BACKGROUND

By the late 90s, under Armour has achieved national recognition. By 1998 it was the official supplier of performance
apparel to NFL Europe. In 1999 it signed a contract to feature Under Armour in warner brother's Movies. By 2000, only
four years since its founding, Under Armour had become a globally recognized brand and was supplying performance
apparel to the National Football League, National Hockey League, Major League Base ball, USA Baseball and the US ski
team as well as other professional league abroad. As of 2005 Under Armour was supplying over 100 NCAA Dvision 1-A
football programs and 30 NFL teams, but it was still looking for other areas to branch into within the performance apparel
industry . Consequently , Under Armour introduced a loose-fit clothing line and added women's clothing to its product
line. Also in 2005 the company went public, seeking to sell as much as $100 million in shares of common stock. Ben
S t u r n e r , p r e s i d e n t o f l e v e r a g e s p o i t s a g e n c y, a N e w Yo r k - B a s e d S p o r t s m a r k e t i n g f i r m , s a i d " U n d e r A r m o u r i s n o l o n g e r
an up and coming brand. It has positioned itself as a real player in the industry and in the eyes of consumers in only a
few years time. During 2006 under armor increased its marketing initiatives by opening company owned retail and outlet
s t o r s . P l a n k r e c o g n i z e d t h a t " Yo u c a n t b e a w o r l d - c l a s s a t h l e t i c b r a n d w i t h o u t t h e a b i l i t y t o o u t f i t t h e a t h l e t e h e a d t o t o e ,
S o U n d e r A r m o u r d e v e l o p e d a t h l e t i c f o o t w e a r. A s o f t h e f i r s t q u a r t e r o f 2 0 0 8 , U n d e r A r m o u r h a d 4 3 p e r c e n t o f t h e t o t a l
US performance apparel business sold through sporting goods stores, versus 32 percent for Nike and 5.1 percent for
Adidas.
I. CASE BACKGROUND

Approximately 94% of Under Armour's sales in 2010 were in North America (The US and Canda)
with the remaining 6% split among international markets (Latin America, Europe , the Middle
E a s t , A f r i c a a n d A s i a ) n e t r e v e n u e s i n We s t e r n E u r o p e w e r e p r i m a r i l y f r o m A u s t r i a , F r a n c e ,
G e r m a n y, I r e l a n d a n d t h e U K N e t r e v e n u e s i n o t h e r f o r e i g n c o u n t r i e s w e r e f r o m p a r t n e r s h i p s a n d
third party distributors, primarily in Australia, Italy Greece, New Zealand, Panama, Scandinavia,
and Spain along with license revenues from a Japanese licensee , Dome Corporation, which has
exclusive rights to distribute Under Armour products in Japan. The International Expansion Plan
received New emphasis in 2006 with the opening of a European headquarters in Amsterdam. In an
e ff o r t t o i n c r e a s e t h e g e o g r a p h i c d i v e r s i t y o f s a l e s , t h i s h e a d q u a r t e r s w a s o p e n e d t o m a n a g e s a l e s
and distribution Channels and   Additional Experience industry talent was brought on board.
H o w e v e r i n 2 0 1 0 U n d e r A r m o u r h a l t e d e ff o r t s t o e x p a n d t h e e x i s t i n g b u s i n e s s t o f o c u s
specifically on reinvesting its footwear lines
II. Environmental Analysis: General
Environment

A.1 A.1 Opportunities 

A . 1 . 1   S O C I O - C U LT U R A L - D E M O G R A P H I C F O R C E S

Heavy Marketing and promotion and the expansion of its wholesale distribution have contributed to Under Armour's Rapid
growth and helped build its reputation..

A.1.2 TECHNOLOGICAL FORCES
Analysts have said that Under Armour would need to make its products attractive to customers outside the locker room to
effectively compete against the Nike, Reebok and Converse Brands. According to research from NPD Group-Almost 80%   of
activewear is worn for non-sports activities

A.1.3 ECONOMIC FORCES

There is a continuing  trend for Under Armour's sales growth increase in the Third and Forth Quarter of year , aligning with
football and basketball seasons   and the traditional holiday gift-giving season in the US, in addition to the seasonality of
Under Armour's higher priced Cold Gear Line.

A.1.4 POLITICO-LEGAL FORCES

Several patent applications were filed in 2010, and the Number is expected to grow as the business grows.
II. Environmental Analysis: General
Environment

A . 2 T H R E AT S
A . 2 . 1 .       S O C I O - C U LT U R A L - D E M O G R A P H I C F O R C E S
Consumers will not pay premium prices for a brand name if they believe the products do not provide premium
quality and performance

A.2.2.    ECONOMIC FORCES

Some of its suppliers are commodities and thus are subject to price fluctuations; for example, petroleum-
based materials are used in Under Armour's products and the petroleum industry has experienced significant
swings in price and relative availability in recent months and years

A . 2 . 3 .       E N V I R O N M E N TA L F O R C E S
70 to 75 percent of the Fabrics used in its products come from only eight suppliers, lending to Under
Armour's weak position relative to its suppliers

A.2.4.  POLITICO-LEGAL FORCES

Prior to 2010, Under Armour did not have a patent on any of the materials used in its products.
 II. Environmental Analysis: Operating
Environment

B. 1 OPP ORTUNIT IES

B. 1. 1R IVALRY AM ONG COM P ETI NG F IR MS
Und er Ar mo ur h as been ab l e t o f ash i o n i ts el f as a p ro fi t ab l e b us i n es s an d r emai n a k ey pl ay er amo n g
com pet i t o r s.

B. 1. 2 P OT ENTIAL ENTR ANTS

Und er Ar mo ur o per at es i n a h i gh l y com pet i t i ve i n d us t ry i n wh i ch t he do mi n an t p l ayer h ave a si g n i fi can t
br eadt h o f mark et , m ak in g i t d i ffi cu l t f or an y n ew co mp an y t o f i n d an En t r y p o in t
B. 1. 3 B ARGAI NING P OWE R OF S UP P LIE RS
Und er Ar mo ur al s o l i cen ses i t s bra nd n ame t o i n dep en den t m anu fact ure rs fo r ot h er m i s cel l an eou s
pr od u ct s s uch as b ags , so ck s , h ead wear, t eam u n i for ms , eyewear, wat ch es , an d cu s t om- mo l d ed mou t h
gu ard s . Th e co mp any wo rk s d i rect l y wi t h mu l t i pl e l i cens es t h r ou gh o ut t he p ro d uct dev el o pme nt p r oces s
t o ens u re t h e p ro du ct s ar e al i gn ed wi t h i t s b ran d and q ual i t y ex pe ct at i on s
II. Environmental Analysis: Operating
Environment

B .1.4.BARGAINING POWER OF B UYER S

C ustomers have been willi ng to pay a premium price for Under Armour's Apparel based
on its reputation for produci ng a quali ty product that wi ll enhance performance

B .1.5.   COMMUNITY P ERCEP TIONS  

Under Armou r is no longer an up-and comi ng brand it has pos itioned its elf as a real
pl ayer in the i ndustry and in the eyes of con sumers in only a few years t ime

B .1.6 INDUSTRY GROW TH

Under Armou r has earned a reputation as a leading innovator of performance apparel
 II. Environmental Analysis: Operating
Environment

B. 2 THR EATS
B. 2. 1.R IVAL RY AMONG C OMP E TING F I RM S
Un der Ar mo ur i n t ro d uced b ask et b al l f oo t wear a pr od u ct cat eg or y hi s t o ri cal l y d om i nat ed b y Ni ke, wi t h
ap pro x i mat el y 9 6 per cent of t h e l ucr at i v e $2 .5 b i l l i o n m ark et

B. 2. 2.B AR GAINI NG P OWE R OF S UP P LIE RS

Un der Ar mo ur re li e s heav i l y on s u pp l i ers and man u fact u rer s o ut s i d e t h e US i n fact 7 0 t o 7 5 p erce nt o f t he
fab ri cs u s ed i n i t s pr od uc t s com e fr o m o nl y 8 S u pp l i ers le nd i ng t o Un d er Armo u r' s weak p os i t i o n r el at i v e
t o i t s s up p l i ers .

S om e o f i ts s u pp l i er s are co m mo di t i es an d t hu s ar e s ub j ect t o p ri ce f l uct u at i o n s; f o r ex amp l e p et ro l eu m

ba sed ma te ri al s are us ed i n Un der Arm ou r' s P ro du ct s
II. Environmental Analysis: Operating
Environment

B .2 .3 IN D U S TRY G R O W TH
U n de r A r mou r intr odu ced b asketball fo otw ear, a pr odu ct catego ry histo rically d ominated
b y N ik e , w ith N ik e app ro ximately havin g 9 6 p ercent o f th e lucrativ e $2 .5 Billio n M ar ket  

A ltho ug h A na ly sts are optimistic abo ut U n der A rmo ur 's con tin ued gro w th, they believe its
e ntry in to n e w p rodu ct catego ries su ch as f ootw ear w ill b e pa rticu larly ch allen gin g.

B .2 .4. BA R G A IN IN G PO W ER O F B U Y ER S
C o ns ume r s w ill n ot pay pr emium prices fo r a b rand na me if th ey b eliev e the p ro ducts do
n ot p ro vide p remium qu ality and p er for mance
II. Environmental Analysis: INTERNAL
ENVIRONMENT

C .1            S TR ENGTHS

C .1 .1 .       MAR KETI NG

He avy Mar ket i n g an d p ro m ot i o n a nd t h e ex pan s i on o f i t s wh o l es al e d i s t ri bu t i o n hav e co n t ri b ut ed t o

Un d er Arm o ur' s R api d g ro wt h an d h el p ed bu i l d i t s rep u t at i on .

T he Co mp any h as reac hed o ut t o cap t u re m u ch o f th e y o ut h s p or t s i n du st ry by s p on s or i ng r ecreat i o n al

t e ams an d maj o r y ou t h t o ur nam ent s , i ncl u d i ng Amer i can Yo ut h F oo t bal l , t h e Und er Ar mo ur Al l Amer i ca
Hi g h s cho ol fo o tb al l an d l acro s se gam es an d t he U nd er Arm ou r S eni o r Bo wl . Und er Arm ou r i s al s o t h e
r epr es ent i n g s po n s or fo r t h e 2 01 0 NF L S cou t i n g Co mb i ne
II. Environmental Analysis: INTERNAL
ENVIRONMENT

C.1.2.      PRODUCTION/OPERATIONS

Under Armour invested in a new SAP system. This system has been essential to the company's
ability to add products to its list of offerings and it has allowed Under Armour to Manage a more
diverse inventory to ship directly to distributors

Under Armour   has recently developed its own headwear and bags that will be sold exclusively by
Under Armour instead of its licenses as of 2011.

C 1.3 FINANCE
Under Armour reached an important milestone it met and surpassed $1 Billion in sales, a 24 percent
increase over 2009.  
II. Environmental Analysis: INTERNAL
ENVIRONMENT

C.1.4.ORGANIZATION & MANAGEMENT

Under Armour's Executive team represents a significant Degree of Industry expertise. For Example
Chief Operating Officer Wayne A. Marino's prior positions include Chief Financial Officer of
Nautica Enterprises, Inc and Divisional CFO of Polo Ralph Lauren Corporation. Senior Vice
President of Footwear Gene McCarthy served as Co-President of Timberland Brand, Senior Vice
President of Product and Design for Reebok international and Global Director of Sales and Retail
Marketing of brand Jordan for Nike. Vice President of Retail Dan J. has held leadership positions
with Golfsmith, Nike, Pacific Sun wear , Guess, and Dillard's Department Stores and Henry B
Stafford, Senior Vice President of Apparel has worked for such well-known companies as American
Eagle Outfitters, Old Navy and Abercrombie and Fitch
II. Environmental Analysis: INTERNAL
ENVIRONMENT

C .1 .5 R ES EAR CH & DEVE LOP ME NT

T he t echn ol og y beh i n d Un d er Arm ou r' s d i ve rs e p ro du ct l i n es fo r men , wo men an d y o ut h i s co mp l ex b ut
t h e m es sag e i s s i m pl e; wear Heat Gear w hen i t ' s h o t , C ol d Gear wh en i t s col d an d Al l -S eas on Gear
b et ween t h e ex t remes .

T he t echn ol og y i n t h e f abr i c an d t he des i g n an d t h e feat ures sat i s f y wh at t h e at h l et e n eed s . Ou r Mo d el i s

g et t i n g t o t he a t hl et es s u pp l yi ng t h em wi t h g reat pr od uc t t hat hel p s p erf or m b et t er.

C .1 .6 INF ORMATION TEC HNOLOGY

Un d er Arm o ur i nv es t ed i n a ne w S AP s y st e m. Th i s s ys t em h as b een es s ent i al t o t h e co mp an y' s ab i l i t y t o
a dd p ro du ct s t o i t s l i s t o f o ffer i ng s , an d i t h as al l owed Un d er Arm ou r t o M anag e a m or e d i ve rs e
i n v ent o r y t o s h i p d i r ect l y t o d i s t ri b u t or s
II. Environmental Analysis: INTERNAL
ENVIRONMENT

C .2           WE AKNE SSE S

C .2 .1 .      P R ODUC TION/ OP E RATI ONS
Un d e r Armo u r's we a k p o s i t io n re la t i v e t o i t s su p p l i e rs Ad d i ti o n a ll y s o me o f i t s s u p p l i e s a re
c o mmo d it i e s.

He a v y R e l i a n c e o n t h i rd p a rt y s u p p l i e rs a n d ma n u f ac t u re rs th at c o u ld a d v e rse l y a ff ec t
t h e l o n g -t er m su s ta i n a b i l i t y o f t h e fi rm.

Un d e r Armo u r a ls o l i c en se s i t s b ran d n a me to in d e p e n d e n t ma n u fa c t u re rs fo r o t h e r
mi s ce l l a n e o u s p ro d u c t s su c h a s b a g s, s o c k , t e am u n i fo rms e y e we a r, wat c h e s an d c u st o m-
mo l d e d mo u t h g u a rd s  
II. Environmental Analysis: INTERNAL
ENVIRONMENT

C.2.2.     RESEARCH & DEVELOPMENT

Lack of proprietary product rights and intellectual property rights in foreign
countries 

The Company's ability to obtain patent production for its products has
historically been limited;  

C.2.3 FINANCE
typically spent approximately 13% of its annual net income on marketing
 II. Environmental Analysis: External
Factor Evaluation Matrix
KEY EXTERNAL FACTORS WEIGHT RATING WEIGHTED SCORE RATING VALUES
OPPORTUNITIES:       (4) – superior response
Heavy Marketing and promotion and the expansion of its wholesale distribution have       (3) – above average
contributed to Under Armour's Rapid growth and helped build its reputation. 0.10 4 1.)0.40 response
0.30 4 2.)1.20 (2) – ave. response
Analysts have said that Under Armour would need to make its products attractive 0.10 4 3.) 0.40 (1) – poor response
customers outside the locker room to effectively compete against the Nike, 0.15 3 4.) 0.45
Reebok and Converse Brands. According to research from NPD Group-Almost
80%  of activewear is worn for non-sports activities.

A reputation as a leading innovator of performance apparel

,
Customers have been willing to pay a premium price for Under Armour's Apparel
based on its reputation for producing a quality product that will enhance
performance
THREATS:       Overall Rating:
0.15 2 0.30 >2.5 – high response
Footwear a product category historically dominated by Nike, with approximately 0.05 1 0.05 2.5 – medium response
96 percent of the lucrative $2.5 billion market 0.10 4 0.4 <2.5 – low response
0.05 3 0.15
 Heavy Reliance on suppliers and manufacturers outside the US in fact 70 to 75
percent of the fabrics used in its products come from only 8 Suppliers lending to
Under Armour's weak position relative to its suppliers.

Consumers will not pay premium prices for a brand name if they believe the
products do not provide premium quality and performance

Some of its suppliers are commodities and thus are subject to price
fluctuations; for example, petroleum-based materials are used in Under
Armour's products and the petroleum industry has experienced
significant swings in price and relative availability in recent months and
years

TOTAL WEIGHTED SCORE 1.00 - (Overall Rating) Firm’s Strategies Take advantage of existing opportunities and minimize potential
3.35 0 adverse effects of the presented threats.
 II. Environmental Analysis: Internal Factor Evaluati on
KEY INTERNAL FACTORS WEIGHT RATING WEIGHTED SCORE RATING VALUES

STRENGTHS:       (4) - major strength

1. The Company has reached out to capture much of the youth       (3) - minor strength
sports industry by sponsoring recreational teams and major 1) 0.15 1.) 4 1) 0.60 (2) – minor weakness
youth tournaments, including American Youth Football, the 2) 0.10 2.) 4 2) 0.40 (1) - major weakness
Under Armour All America Highschool football and lacrosse 3) 0.20 3.) 3 3) 0.60
games and the Under Armour Senior Bowl. Under Armour is 4) 0.15 4.) 3 4) 0.45
also the representing sponsor for the 2010 NFL Scouting
Combine
2. Under Armour reached an important milestone it met and
surpassed $1 Billion in sales, a 24 percent increase over 2009. 
3. Under Armour's Executive team represents a significant Degree
of Industry expertise. For Example Chief Operating Officer
Wayne A. Marino's prior positions include Chief Financial Officer
of Nautica Enterprises, Inc and Divisional CFO of Polo Ralph
Lauren Corporation. Senior Vice President of Footwear Gene
McCarthy served as Co-President of Timberland Brand, Senior
Vice President of Product and Design for Reebok international
and Global Director of Sales and Retail Marketing of brand
Jordan for Nike. Vice President of Retail Dan J. has held
leadership positions with Golfsmith, Nike, Pacific Sun wear ,
Guess, and Dillard's Department Stores and Henry B Stafford,
Senior Vice President of Apparel has worked for such well-
known companies as American Eagle Outfitters, Old Navy and
Abercrombie and Fitch

4. The technology behind Under Armour's diverse product lines for

men, women and youth is complex but the message is simple;
wear Heat Gear when it's hot, Cold Gear when its cold and All
Season Gear between the extremes.

WEAKNESSES:       Overall Rating:

1. Under Armour's weak position relative to its suppliers Additionally 1) 0.07 1.) 1 1) 0.07 >2.5 - strong internal position
 II. Environmental Analysis: Competi ti ve Profi le Matrix

CRITICAL SUCCESS FACTORS WEIGHT Under Armour Nike Adidas

Rating Weighted Rating Weighted Rating Weighted

Score Score Score

1. Price Competitiveness 0.18 2 0.36 3 0.54 3 0.54

2. Market Share 0.24 3 0.72 3 0.72 3 0.72

3. Product Quality 0.26 4 1.04 3 0.78 2 1.04

4. Customer Loyalty 0.32 3 1.28 3 0.96 2 0.64

OVERALL SCORE 1.00 - 3.08 - 3.00 - 2.94

Rating Values: 4 = major strength, 3 = minor strength 2 = minor weakness, 1 = major weakness

  Conclusion: Under Armour is the strongest.

Based on relative strength of the firms. Under has an edge in focusing more on customer loyalty and quality product lines.
 Assumptions:

G.1 General Environmental Stability

• The socio-cultural demographic forces are stable due to Heavy Marketing and promotion and the expansion of its wholesale distribution have contributed
to Under Armour's Rapid growth and helped build its reputation.

• The technological forces are stable since the Analysts said that Under Armour would need to make its products attractive to customers outside the locker room to
effectively compete against the Nike, Reebok and Converse Brands. According to research from NPD Group-Almost 80%   of activewear is worn for non-sports
activities

• The Economic forces are stable due to There is a continuing   trend for Under Armour's sales growth increase in the Third and Forth Quarter of year , aligning
with football and basketball seasons  and the traditional holiday gift-giving season in the US, in addition to the seasonality of Under Armour's higher priced Cold
Gear Line.

• The Politico-Legal forces are stable due to Several patent applications that were filed in 2010, and the Number is expected to grow as the business grows.

G.2 Industry Growth

• The market presents a promising opportunity due to Under Armour has been able to fashion itself as a profitable business and remain a key player among
competitors.

G.3 Competitive Position:

• The Competitive strength of the company are Market Shares ,Product Quality and Customer Loyalty
III. Problem Statement

T h e M a jo r P r o b le m in t h e   b u s i n e s s p o l i cy c a s e is th e c h a ll en g e o f I m p r o v in g I n t e r n at i o n al
c r e d en c e th r o u g h b r an c h in g o u t i n d iff e r en t s p o rt s ap p a r el s ec t o r s .

1 . ) G o a l t o d o u b l e g r o w th w i th i n th e n e x t 3 y e a r s b y e ff ec ti v e ma n a g em en t o f i t s r a p id
g r o w th f r o m i t s m aj o r r i v al s : N i k e an d A d i d a s .

2 . )  E s ta bl i s h i n g i t s ai m to reta i n i t s c u r re nt c u sto m e rs w h i l e att rac ti ng new o ne s by fi nd i ng

ways to ke e p i t f re s h

3 . )    U n d e r A r m o ur ' s we ak po s i ti o n re l ati ve to i t s s u pp l i e rs A d di ti o na l l y s om e o f i t s s up p l i e s
a re co m m o d i ti e s .

4 . )  By t he com pa ny ’s eff o r t to cap t ure m u c h o f t he yo ut h s po r t s i n du st r y by s p on s o r i n g

re c re ati o n al te am s i n m a j or you t h to ur na m e nt s .
III. Problem Statement: View Point and
Time Frame

We Follow the viewpoint of Kevin Plank

Time Frame Early September 2010

 IV. ALTERNATIVE COURSES OF
ACTION

Th e p ro po s ed cou rs es o f a ct i on (AC A) were i den t i fi ed b as ed fro m t he S tr at eg i c F act o r An al ys i s , C o mp et i t i v e P ro fi l e

Mat r i x, TOW S Mat r i x , In t ern al - Ext er na l Mat ri x an d F ur t he r v al i dat ed t h ro u gh t h e ev al uat i v e d i men s i on s o f t he Gr an d
S t rat eg y Mat r i x. T he S t r at eg i c F act o r An al ys i s r ev eal ed t h at t h e com p any h as a R api d Mar k et Gro wt h and t h e
Co m pet i t i v e P r of i l e Mat r i x i nd i cat ed t h at we ar e a S t ro n g C o mp et i t i v e ad van t ag e com par ed t o Ni ke a nd Adi d as , TOWs
Mat r i x po i nt ed o ut Mark et Dev el o pm ent , P ro d uct Dev el o pm en t an d B ackwa rd In t eg rat i o n ar e t h e b es t al t ern at i v e
co ur ses of Act i o n . Th e In t ern al - Ex t ern al Mat r i x r evea l ed I n t ens i v e an d I n t egr at i ve. Mo reo ver, t h e Anal y s i s o f t h e
mar ke t gr owt h an d co mpe t i ti v e p o s i ti o n o f t h e co mp an y f ro m t h e Gr an d S t r at egy M at ri x i n di cat ed t h at t h e ap pr op ri a te
s t rat eg i es t h at mu s t b e pu r sed b y t h e com pan y F al l u nd er Quad ra nt I . Th ese fi n d i ng s cou l d b e at t ri b ut ed t o t h e R api d
Gro wt h i n t h e Mark et an d t he IF E res ul t s. i n Tot a l it y t h e s u mm ary   t h e s um mar y of s t rat eg i es Mat r i x co n fi r med t h at t h e
mo s t fe asi b l e al t er na t i ves ar e A( Ba ckwar d I n t egr at i on )   B( Mar ket Devel o p men t )   & C (P r od u ct Deve lo p men t ). t her efo re,
al t er nat i v es A B & C   wo ul d b e be st t o a dd res s t h e Maj o r P rob l em o f t h e fi r m un der s t ud y
IV. ALTERNATIVE COURSES OF
ACTION :TOWS MATRIX
STRENGTHS: WEAKNESSES:
1. The Company has reached out to capture much of the youth 1. Under Armour's weak position relative to its suppliers Additionally
sports industry by sponsoring recreational teams and major youth some of its supplies are commodities.
tournaments, including American Youth Football, the Under Armour 2. typically spent approximately 13% of its annual net income on
All America Highschool football and lacrosse games and the Under marketing
Armour Senior Bowl. Under Armour is also the representing sponsor 3. Heavy Reliance on third party suppliers and manufacturers that could
for the 2010 NFL Scouting Combine adversely affect
  the long-term sustainability of the firm.
2. Under Armour reached an important milestone it met and 4. The Company's ability to obtain patent production for its products has
surpassed $1 Billion in sales, a 24 percent increase over 2009.  historically been limited; 
 
3. Under Armour's Executive team represents a significant Degree of
Industry expertise. For Example Chief Operating Officer Wayne A.
Marino's prior positions include Chief Financial Officer of Nautica
Enterprises, Inc and Divisional CFO of Polo Ralph Lauren
Corporation. Senior Vice President of Footwear Gene McCarthy
served as Co-President of Timberland Brand, Senior Vice President
of Product and Design for Reebok international and Global Director of
Sales and Retail Marketing of brand Jordan for Nike. Vice President
of Retail Dan J. has held leadership positions with Golfsmith, Nike,
Pacific Sun wear , Guess, and Dillard's Department Stores and Henry
B Stafford, Senior Vice President of Apparel has worked for such
well-known companies as American Eagle Outfitters, Old Navy and
Abercrombie and Fitch
 
4. The technology behind Under Armour's diverse product lines men,
IV. ALTERNATIVE COURSES OF ACTION : Internal-External Matrix

IFE TOTAL WEIGHTED SCORE=2.98

Strong Average Weak

(3.0 – 4.0) (2.0 – 2.99) (1.0 – 1.99)

EFE High I IIII III

TOTAL (3.0 – 4.0)
WEIGHTED
SCORE = 3.35
Medium IV V VI
(2.0 – 2.99)

Low VII VIII IX

(1.0 – 1.99)

GROW & BUILD (cells I, II, IV) - intensive, integrative

HOLD & MAINTAIN (cells III, V, VII) - market penetration, product dev’t.
HARVEST or DIVEST (cells VI, VIII, IX) - retrenchment, divestiture
 Grand Strategy Matrix
IFE= 2.98
G.2 Industry Growth is Rapid

IV. ALTERNATIVE COURSES OF ACTION :Grand

Strategy Matrix
QUADRANT II QUADRANT I
RAPID MARKET GROWTH
Market development Market development
Market penetration Market penetration
Product development Product development
Horizontal integration Forward integration
Divestiture Backward integration
Liquidation Horizontal integration
Concentric diversification

WEAK STRONG
COMPETITIVE COMPETITIVE
POSITION POSITION
Retrenchment Concentric diversification
Concentric diversification Horizontal diversification
Horizontal diversification Conglomerate diversification
Conglomerate diversification Joint venture
Divestiture
Liquidation

QUADRANT III QUADRANT IV

SLOW MARKET GROWTH

 IV. ALTERNATIVE COURSES OF
ACTION :Summary of Strategies
STRATEGY OPTIONS TOWS IEM GSM TOTAL
A. INTEGRATION STRATEGIES
1. Forward Integration 1 1 2
2. Backward Integration 3 1 1 5
3. Horizontal Integration 1 1 2
B. INTENSIVE STRATEGIES
1. Market Penetration 1 1 2
2. Market Development 4 1 1 6
3. Product Development 5 1 1 7
C. DIVERSIFICATION STRATEGIES
1. Concentric Diversification 1 1
2. Conglomerate Diversification
3. Horizontal Diversification
D. DEFENSIVE STRATEGIES
1. Retrenchment
 V. RECOMMENDED ALTERNATIVE AND ACTION PLAN:QUANTITATIVE STRATEGIC PLANNING MATRIX
KEY STRATEGIC FACTORS WEIGHT Backward Integration Market Development Product Development
Rating Weighted Score Rating Weighted Score Rating Weighted Score
OPPORTUNITIES:
1. Heavy Marketing and promotion and the expansion of its wholesale distribution 1) 0.21 2 0.42 4 0.84 3 0.63
have contributed to Under Armour's Rapid growth and helped build its reputation. 2) 0.08 1 0.08 2 0.16 4 0.32
  3) 0.10 2 0.20 1 0.10 3 0.30
2. Analysts have said that Under Armour would need to make its products attractive 4) 0.12 2 0.24 2 0.24 4 0.24
to customers outside the locker room to effectively compete against the Nike, Reebok
and Converse Brands. According to research from NPD Group-Almost 80%  of
activewear is worn for non-sports activities
 
3. Under Armour has earned a reputation as a leading innovator of performance
apparel,
 
4. Customers have been willing to pay a premium price for Under Armour's Apparel
based on its reputation for producing a quality product that will enhance performance

 
THREATS:
1. Footwear a product category historically dominated by Nike, with approximately 1) 0.14 1 0.14 3 0.42 3 0.42
96 percent of the lucrative $2.5 billion market 2) 0.10 4 0.40 2 0.20 2 0.20
  3) 0.12 3 0.36 2 0.24 4 0.36
2. Heavy Reliance on suppliers and manufacturers outside the US in fact 70 to 75 4) 0.14 4 0.56 1 0.14 2 0.28
percent of the fabrics used in its products come from only 8 Suppliers lending to  
Under Armour's weak position relative to its suppliers.  
   
3. Consumers will not pay premium prices for a brand name if they believe the  
products do not provide premium quality and performance

4, Some of its suppliers are commodities and thus are subject to price fluctuations;
for example, petroleum-based materials are used in Under Armour's products and the
 V. RECOMMENDED ALTERNATIVE AND ACTION PLAN:QUANTITATIVE STRATEGIC PLANNING MATRIX

STRENGTHS:
1. The Company has reached out to capture much of the youth sports industry by sponsoring recreational teams and 1) 0.15 1 0.15 4 0.60 2 0.30
major youth tournaments, including American Youth Football, the Under Armour All America Highschool football and 2) 0.10 2 0.20 2 0.20 2 0.20
lacrosse games and the Under Armour Senior Bowl. Under Armour is also the representing sponsor for the 2010 NFL 3) 0.10 1 0.10 2 0.20 2 0.20
Scouting Combine 4) 0.20 3 0.60 3 0.60 4 0.80
         
2. Under Armour reached an important milestone it met and surpassed $1 Billion in sales, a 24 percent increase over      
2009. 
 
3. Under Armour's Executive team represents a significant Degree of Industry expertise. For Example Chief Operating
Officer Wayne A. Marino's prior positions include Chief Financial Officer of Nautica Enterprises, Inc and Divisional CFO of
Polo Ralph Lauren Corporation. Senior Vice President of Footwear Gene McCarthy served as Co-President of Timberland
Brand, Senior Vice President of Product and Design for Reebok international and Global Director of Sales and Retail
Marketing of brand Jordan for Nike. Vice President of Retail Dan J. has held leadership positions with Golfsmith, Nike,
Pacific Sun wear , Guess, and Dillard's Department Stores and Henry B Stafford, Senior Vice President of Apparel has
worked for such well-known companies as American Eagle Outfitters, Old Navy and Abercrombie and Fitch

4.The technology behind Under Armour's diverse product lines for men, women and youth is complex but the message
is simple; wear Heat Gear when it's hot, Cold Gear when its cold and All Season Gear between the extremes.
WEAKNESSES:
1. Under Armour's weak position relative to its suppliers Additionally some of its supplies are commodities. 1) 0.12 4 0.48 2 0.24 2 0.24
2. typically spent approximately 13% of its annual net income on marketing 2) 0.18 1 0.18 4 0.72 4 0.72
3. Heavy Reliance on third party suppliers and manufacturers that could adversely affect 3) 0.08 4 0.32 2 0.16 3 0.24
the long-term sustainability of the firm. 4) 0.07 2 0.14 3 0.21 3 0.21
4. The Company's ability to obtain patent production for its products has historically been limited; 

SUB-TOTAL 1.00 2.17 2.93 2.91

OVERALL SCORE - - 4.57 - 5.27 - 5.66
Rating Values: 4 = highly attractive, 3 = reasonably attractive 2 = somewhat attractive, 1 = not attractive
 V. RECOMMENDED ALTERNATIVE AND ACTION PLAN:ACTION PLAN
FUNCTIONAL OBJECTIVE STRATEGIES TIME BUDGET
AREA FRAME
Marketing To Introduce and Marketing Campaigns 3 months 200,000,000 Budget (Based on the amounts
Promote new Product 1) Youth Sports Program Sponsorships Projected for 3 years)
Lines to the market 2) Promotional Activities (Special Buy one take 1.) $50,000,000 For Youth Sports Program
one, Customer Membership Promos and 2.) $75,000,000 (Special Buy one take one,
Special Discounts for new Products) Customer Membership Promos and Special
3) Marketing Ads targeted in Promoting the Discounts for new Products)
New product Line 3.) $75,000,000 Marketing Ads targeted in
Promoting the New product Line

Production/Operations To Minimize the Cost of 1) Canvasing several Suppliers of the Industry 6 Months 30,000,000 Budget
1.) Canvasing Several Suppliers of the Industry( $5,000,000)
Production 2) Establish Standard Costing system to Monitor usage
of Materials in producing products. 2.) Establish Standard Costing system to Monitor usage of
3) Establishing Quality Control Procedures in improving Materials in producing products. ($12,500,000)
3.) Establishing Quality Control Procedures in improving
To Produce new Product quality of Units Produced quality of Units Produced($12,500,000)
Lines

To Improve Product
Quality

Finance To Acquire Funds to 1.) Issuance of Debt – 300,000,000 (half of Immediately No Budget but for Acquisition of Fund
finance the Proposed which would be convertible to attract investors
Project to the growth of the company)

2.) Issuance of Equity -100,000,000

(Total Budget would be 500,000,000 the extra

100,000,000 would come from the company’s
 VI. FINANCIAL PROJECTIONS

Based on the Case Facts the Company desired to increase sales by 2011 by 25%, and a total increase of
100% for the next 3 years hence the Projection has used a rate of 25% compounding.

Additionally Marketing Expense is based on Sales of 4% and is worked backed to come up with the
projected Net Income

due to Limitations of the case it would be difficult to Forecast the Balance Sheet and the Cashflow
Statements
VI. FINANCIAL PROJECTIONS: Sales Projection

Sales Forecast 3 Year Projection ( in Thousands)

2010 2011 2012 2013

₱
Sales 1,063,927.00 ₱ 1,329,908.75 ₱ 1,662,385.94 ₱ 2,077,982.42
 VI. Financial Projection: Income Statement-
Projection Based on Marketing Expenses

Income Statement Forecast 3 Year Projection ( in Thousands)

2010 2011 2012 2013
Sales $ 1,063,927.00 $ 1,329,908.75 $ 1,662,385.94 $ 2,077,982.42

Cost of Goods Sold and Other Expenses $ 542,405.02 $ 678,253.46 $ 847,816.83 $ 1,059,771.04
Gross Profit $ 521,521.98 $ 651,655.29 $ 814,569.11 $ 1,018,211.39

Marketing Expenses $43,500.00 $ 53,196.35 $ 66,495.44 $ 83,119.30

Net Income Before Tax $478,021.98 $ 584,575.27 $ 730,719.09 $ 913,398.87

Taxes (30%) $143,406.59 $ 175,372.58 $ 219,215.73 $ 274,019.66
Net Income $334,615.38 $ 409,202.69 $ 511,503.37 $ 639,379.21
 VI. Financial Projection: Income Statement-
Based on Historical Data Projection

3 Year Projection ( in Thousands)

2010 2011 2012 2013
Net Revenues $ 1,063,927.00 $ 1,329,908.75 $ 1,662,385.94 $ 2,077,982.42
Cost of Goods Sold $ 533,420.00 $ 664,954.38 $ 831,192.97 $ 1,038,991.21
Gross Profit $ 530,507.00 $ 664,954.38 $ 831,192.97 $ 1,038,991.21

Operating Expenses:
Selling and Admin Expense $ 418,152.00 $ 518,664.41 $ 648,330.52 $ 810,413.14
Operating Income/ Income From Operation $ 112,355.00 $ 146,289.96 $ 182,862.45 $ 228,578.07
Interest Expense $ -2,258.00 $ -15,758.00 $ -15,758.00 $ -15,758.00
Other Income /Expense $ -1,178.00 $ -1,472.50 $ -1,840.63 $ -2,300.78
Income Before Taxes $ 108,919.00 $ 129,059.46 $ 165,263.82 $ 210,519.29
Provision for Income Tax $ 40,442.00 $ 47,752 $ 61,147.61 $ 77,892.13
Net Income $ 68,477.00 $ 81,307.46 $ 104,116.21 $ 132,627.16
 END OF
PRESENTATION
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