Under Armour Danny Fields. PEST/Industry Analysis.
-
Upload
rory-delanoy -
Category
Documents
-
view
226 -
download
3
Transcript of Under Armour Danny Fields. PEST/Industry Analysis.
![Page 1: Under Armour Danny Fields. PEST/Industry Analysis.](https://reader035.fdocuments.us/reader035/viewer/2022062219/551b19b3550346f70d8b6385/html5/thumbnails/1.jpg)
Under Armour Danny Fields
![Page 2: Under Armour Danny Fields. PEST/Industry Analysis.](https://reader035.fdocuments.us/reader035/viewer/2022062219/551b19b3550346f70d8b6385/html5/thumbnails/2.jpg)
PEST/Industry Analysis
![Page 3: Under Armour Danny Fields. PEST/Industry Analysis.](https://reader035.fdocuments.us/reader035/viewer/2022062219/551b19b3550346f70d8b6385/html5/thumbnails/3.jpg)
Snapshot
• Headquartered in Baltimore, MD• Employ approximately 2200 people• Under Armour has built a leading brand name in hi-tech
athletic gear – which is broken down into HeatGear, ColdGear, AllSeasonGear
• Expanded into wider range of sportswear, casual apparel, and footwear
![Page 4: Under Armour Danny Fields. PEST/Industry Analysis.](https://reader035.fdocuments.us/reader035/viewer/2022062219/551b19b3550346f70d8b6385/html5/thumbnails/4.jpg)
Snapshot
• Under Armour is the clear leader in the athletic apparel market in the U.S. (75% market share, $30 billion industry)
• They have 31% market share of the overall U.S. athletic market (Nike leader at 36%)
• 2010 net income of $68 million ($46 million – 2009)
Company 2010 Net Income
Under Armour $68 million
Nike $1.9 billion
Adidas $800 million
![Page 5: Under Armour Danny Fields. PEST/Industry Analysis.](https://reader035.fdocuments.us/reader035/viewer/2022062219/551b19b3550346f70d8b6385/html5/thumbnails/5.jpg)
Snapshot
• Under Armour depends heavily on the U.S. Market
Country Percentage of Sales (2008)
United States 91%
Canada 4.4%
Other 4.6%
![Page 6: Under Armour Danny Fields. PEST/Industry Analysis.](https://reader035.fdocuments.us/reader035/viewer/2022062219/551b19b3550346f70d8b6385/html5/thumbnails/6.jpg)
PEST- Political
• Some leagues and organizations across the U.S. have banned certain accessories that can be worn during games– Could reduce the number of potential customers in certain regions of the
country
• The U.S. Government has put pressure on performance apparel companies to reduce their carbon footprints– Under Armour has started producing apparel that is made with “green”
technology, leaving less of a carbon footprint
• Unrest in countries where manufacturing takes place– Approximately half of Under Armour’s products are manufactured in Central
America and Mexico, relatively unstable regions with some political violence– This could possibly lead to factories being shut down, shipments being
delayed
![Page 7: Under Armour Danny Fields. PEST/Industry Analysis.](https://reader035.fdocuments.us/reader035/viewer/2022062219/551b19b3550346f70d8b6385/html5/thumbnails/7.jpg)
PEST- Economic
• The economic recession that started in 2008/2009 that led to a significant increase in unemployment– Under Armour’s products tend to be more expensive than their
competitors and that could lead to people looking for cheaper alternatives
• Exchange rate fluctuations– Under Armour has used foreign currency forward contracts to reduce
some of the risk of exchange rate fluctuations
• Increase in raw material prices– This has increased the cost to produce Under Armour products
![Page 8: Under Armour Danny Fields. PEST/Industry Analysis.](https://reader035.fdocuments.us/reader035/viewer/2022062219/551b19b3550346f70d8b6385/html5/thumbnails/8.jpg)
PEST- Social
• The marketplace is becoming more eco-conscious– More pressure from performance apparel companies to reduce their
carbon footprint and create eco-friendly products
• Consumer trends in the performance apparel industry:– Compression (clothing that fits closely to the body, increases circulation
and can increase strength, stamina, endurance, and recovery time)– Moisture wicking synthetics (takes moisture away from the body and is
hydrophobic, meaning that it won’t become wet and heavy like cotton)– Antimicrobial fabrics (prohibits growth of bacteria)– Lifestyle integration (performing outside of fitness club, use in everyday
life)– Fashionable (looks attractive to wear)
![Page 9: Under Armour Danny Fields. PEST/Industry Analysis.](https://reader035.fdocuments.us/reader035/viewer/2022062219/551b19b3550346f70d8b6385/html5/thumbnails/9.jpg)
PEST- Social
• Dominance of soccer in foreign countries– Getting involved with soccer in these countries could help increase
market share and awareness overseas
![Page 10: Under Armour Danny Fields. PEST/Industry Analysis.](https://reader035.fdocuments.us/reader035/viewer/2022062219/551b19b3550346f70d8b6385/html5/thumbnails/10.jpg)
PEST- Technological
• E-Commerce– Websites allow for customers to purchase apparel over the internet
without having to go through retailers
• Social Networking– This allows for companies to interact with their consumers and
increase interest in their products
![Page 11: Under Armour Danny Fields. PEST/Industry Analysis.](https://reader035.fdocuments.us/reader035/viewer/2022062219/551b19b3550346f70d8b6385/html5/thumbnails/11.jpg)
PEST- SummaryFactor Trend Evaluation Impact
(1=low5=high)
Rank in terms of importance
Political League bans
Carbon footprint
Unrest in manufacturing countries
Threat
Opportunity
Threat
2
3
4
4
Economic Recession
Exchange rate fluctuations
Increase in raw material prices
Threat
Threat
Threat
5
3
5
1
Social Eco-Conscious market
Performance apparel trends
International Sports (soccer)
Opportunity
Opportunity
Opportunity
4
5
3
2
Technological E-Commerce
Social Networking
Opportunity
Opportunity
4
33
![Page 12: Under Armour Danny Fields. PEST/Industry Analysis.](https://reader035.fdocuments.us/reader035/viewer/2022062219/551b19b3550346f70d8b6385/html5/thumbnails/12.jpg)
Defining the Industry
• The performance apparel industry has been growing significantly over the past few years
• Performance apparel accounts for over 10% of the sportswear market
• Forecast to be worth $4.29 billion in 2012• Sold to the individual consumer at retail prices and business-
to-business at wholesale prices• The competition is global with the major players (Under
Armour, Nike Adidas) selling products worldwide
![Page 13: Under Armour Danny Fields. PEST/Industry Analysis.](https://reader035.fdocuments.us/reader035/viewer/2022062219/551b19b3550346f70d8b6385/html5/thumbnails/13.jpg)
Industry Analysis - Buyers
• Retailers are the major buyer in this industry– Including: Dick’s Sporting Goods, Modell’s, The Sports Authority,
Footlocker, Finish Line, etc– In 2010, 73% of Under Armour’s net revenue came from wholesale
distribution
• Individual consumers are another buyer– Through factory house stores, website, catalog, specialty stores, etc– In 2010, 23% of Under Armour’s net revenue were from direct sales to
consumers (through e-commerce and factory stores)
![Page 14: Under Armour Danny Fields. PEST/Industry Analysis.](https://reader035.fdocuments.us/reader035/viewer/2022062219/551b19b3550346f70d8b6385/html5/thumbnails/14.jpg)
Industry Analysis - Suppliers
• Under Armour products are supplied from manufacturers all over the world
• The suppliers have low power since Under Armour has many suppliers and they could easily switch to suppliers in other countries.
Country/Region Units produced
Asia 53%
Central America 25%
Mexico 19%
![Page 15: Under Armour Danny Fields. PEST/Industry Analysis.](https://reader035.fdocuments.us/reader035/viewer/2022062219/551b19b3550346f70d8b6385/html5/thumbnails/15.jpg)
Industry Analysis – Intensity of Rivalry
• The intensity of rivalry is high in the performance apparel industry
• The industry has continued to grow– The market is estimated at $6.40 billion, up 19.4% over the past 4
years– Expected to grow another 18.75% by 2014
• Many competitors– Nike, Adidas, Columbia, Champion, Russell, etc.
![Page 16: Under Armour Danny Fields. PEST/Industry Analysis.](https://reader035.fdocuments.us/reader035/viewer/2022062219/551b19b3550346f70d8b6385/html5/thumbnails/16.jpg)
Industry Analysis – Threat of Substitute Products
• Substitute products for this industry could include:– Brands like Polo or Tommy Hilfiger– Consumers opting to dress more casual or professional, instead of
going with the sports apparel look
![Page 17: Under Armour Danny Fields. PEST/Industry Analysis.](https://reader035.fdocuments.us/reader035/viewer/2022062219/551b19b3550346f70d8b6385/html5/thumbnails/17.jpg)
Industry Analysis – Threat of New Entrants
• The threat of new entrants into the performance apparel market is relatively high
• Even though there are well-known established brands in the industry (Nike, Adidas) the barriers to entry are relatively low– Low switching costs, access to distribution channels, low government
restrictions
• Under Armour is an example of a new entrant to come into the industry and have success using innovation and a differentiation strategy
![Page 18: Under Armour Danny Fields. PEST/Industry Analysis.](https://reader035.fdocuments.us/reader035/viewer/2022062219/551b19b3550346f70d8b6385/html5/thumbnails/18.jpg)
Industry Analysis SummaryFactor Evaluation
Buyer Power Strong Force (UA relies too heavily on few number of distributors. They rely on good faith policy and do not enter into any long-term customer contracts.)
Supplier Power Benign (UA has many suppliers and it would be easy to switch)
Intensity of Rivalry Strong (Due to the fact that the industry has been growing continually and the number of competitors in the industry)
Threat of Substitute Products Benign (The possible substitutes don’t seem like they will have a likely impact on the industry)
Threat of New Entrants Strong Force (Low switching costs, access to distribution, and low government restriction)
![Page 19: Under Armour Danny Fields. PEST/Industry Analysis.](https://reader035.fdocuments.us/reader035/viewer/2022062219/551b19b3550346f70d8b6385/html5/thumbnails/19.jpg)
Industry Analysis – Suggestions
• Under Armour relies too heavily on a limited number of distributors – 31% of their 2008 sales came from two retailers (Dick’s Sporting Goods
and The Sports Authority)
• Under Armour needs to work harder on direct customer sales– If they increase their direct sales through their website, factory stores,
or specialty stores, then they would lower their dependency on retailers
• They could also look into forward integration and buying retail space to sell their products
![Page 20: Under Armour Danny Fields. PEST/Industry Analysis.](https://reader035.fdocuments.us/reader035/viewer/2022062219/551b19b3550346f70d8b6385/html5/thumbnails/20.jpg)
Conclusion
• Performance apparel is a growing industry– Market is up 19.4% over the past 4 years
• The recession and increase in raw material prices are major threats to companies in the industry
• The biggest opportunities come from the trend of more active lifestyles, e-commerce, and international sports
• Overall the economic factor is the most important to companies in the performance apparel industry
![Page 21: Under Armour Danny Fields. PEST/Industry Analysis.](https://reader035.fdocuments.us/reader035/viewer/2022062219/551b19b3550346f70d8b6385/html5/thumbnails/21.jpg)
Competitor/ Market Analysis
![Page 22: Under Armour Danny Fields. PEST/Industry Analysis.](https://reader035.fdocuments.us/reader035/viewer/2022062219/551b19b3550346f70d8b6385/html5/thumbnails/22.jpg)
Key CompetitorsCompany Headquarters Brands Sales (2009)
Nike Beaverton, OR Umbro, Converse, Hurley, Jordan
$5.24 billion (apparel only)
Adidas Herzogenaurach, Germany Reebok, Ashworth, Rockport
$14.6 billion (total)
Columbia Portland, OR Sorel Corporation, Mountain Hardwear, Pacific Trail, Montrail
$1.24 billion
Russell Corporation (subsidiary of Berkshire Hathaway)
Bowling Green, KY Spalding, Huffy, Brooks
N/A
Champion (subsidiary of HanesBrands)
Winston-Salem, NC N/A
Under Armour Baltimore, MD $606 million
![Page 23: Under Armour Danny Fields. PEST/Industry Analysis.](https://reader035.fdocuments.us/reader035/viewer/2022062219/551b19b3550346f70d8b6385/html5/thumbnails/23.jpg)
Strategic GroupingCompany Product Diversity Geographic
CoverageMarketing Effort
Nike Performance apparel, casual apparel, jerseys, footwear, equipment
Global Strong brand identity, well known logo and slogan, athlete sponsorships
Adidas Footwear, performance apparel, casual apparel, jerseys, soccer kits, equipment
Global Focus on promoting running and soccer products, international sports and events sponsorships
Columbia Outerwear, footwear, headgear, camping equipment, accessories, skiwear
Global Focus on outdoors activities (skiing, hiking, camping)
Russell Footwear, apparel, sports equipment, uniforms
Global Lower cost clothing, provides uniforms for some high schools and colleges
Champion Sportswear (Hoodies, t-shirts, mesh clothing) Global Lower cost clothing, urban fashion
Under Armour Performance apparel (Heatgear, Coldgear, AllSeasongear), footwear
Global High quality products, international sponsorships to increase global reach
![Page 24: Under Armour Danny Fields. PEST/Industry Analysis.](https://reader035.fdocuments.us/reader035/viewer/2022062219/551b19b3550346f70d8b6385/html5/thumbnails/24.jpg)
Strategic Grouping
• Because of the similar products and geographic coverage, Nike, Adidas, Russell, and Champion are the main competitors to Under Armour in performance apparel
![Page 25: Under Armour Danny Fields. PEST/Industry Analysis.](https://reader035.fdocuments.us/reader035/viewer/2022062219/551b19b3550346f70d8b6385/html5/thumbnails/25.jpg)
How they compete
• Strong marketing campaigns– Nike, Adidas, Under Armour are well known for their marketing campaigns– Adidas was sponsor for the FIFA World Cup but Nike is better known for their
commercial using popular players like Ronaldo, Rooney, Ronaldinho, Landon Donovan, etc
– UA used “Click-Clack” and “We must protect this house” slogans
• Low cost outsourcing for manufacturing• Innovation• Distribution
– Through retailers and factory stores
• Endorsements– Nike – Michael Jordan, Tiger Woods, Lance Armstrong, Ronaldinho, LeBron James,
etc– Adidas – David Beckham, Lionel Messi, etc– UA – Michael Phelps, Ray Lewis, Lindsey Vonn, etc
![Page 26: Under Armour Danny Fields. PEST/Industry Analysis.](https://reader035.fdocuments.us/reader035/viewer/2022062219/551b19b3550346f70d8b6385/html5/thumbnails/26.jpg)
Product Scope
• The products are all sports related in some fashion– Performance apparel that is used for a sport activity– Licensed apparel that is worn casually– Footwear that can be used for both sport and everyday life– Uniforms provided to leagues, teams, and schools
![Page 27: Under Armour Danny Fields. PEST/Industry Analysis.](https://reader035.fdocuments.us/reader035/viewer/2022062219/551b19b3550346f70d8b6385/html5/thumbnails/27.jpg)
Geographic ScopeCompany Regions Percentage of Sales (2009)
Nike United States
Europe
Middle East and Africa
Asia Pacific/Latin America
34.1%
28.7%
17.3%
20%
Adidas North America
Asia/Latin America
22.9%
34.8%
Under Armour United States/Canada
Rest of the world
91% (2008)
4.6% (2008)
• Nike and Adidas have a much bigger global reach than Under Armour.• All 3 have sponsorship deals with international sports teams and events to help increase exposure and awareness
![Page 28: Under Armour Danny Fields. PEST/Industry Analysis.](https://reader035.fdocuments.us/reader035/viewer/2022062219/551b19b3550346f70d8b6385/html5/thumbnails/28.jpg)
Core Competencies
Company Core Competencies
Nike Innovative products, marketing, globalization, teamwork, competitiveness
Adidas Brand identity with running and soccer
Columbia Brand association with outdoor activities
Champion Staple in hip-hop and urban fashion
Under Armour High quality, innovative products that increase athlete performance
![Page 29: Under Armour Danny Fields. PEST/Industry Analysis.](https://reader035.fdocuments.us/reader035/viewer/2022062219/551b19b3550346f70d8b6385/html5/thumbnails/29.jpg)
Market Size
• Performance sportswear global market is estimated at $6.40 billion
• Risen 19.4% over the past 4 years
• Forecasted to rise to $7.6 billion by 2014
![Page 30: Under Armour Danny Fields. PEST/Industry Analysis.](https://reader035.fdocuments.us/reader035/viewer/2022062219/551b19b3550346f70d8b6385/html5/thumbnails/30.jpg)
Key trends
• Consumers are becoming more eco-conscious– Impacts the type of technology that will be used in performance
apparel
• Performance apparel being worn in everyday life– This makes style and fashion more important in product design
• People are more conscious about their health– An increase in active lifestyles will increase the demand for
performance apparel products
![Page 31: Under Armour Danny Fields. PEST/Industry Analysis.](https://reader035.fdocuments.us/reader035/viewer/2022062219/551b19b3550346f70d8b6385/html5/thumbnails/31.jpg)
Market/Product Growth
• Performance apparel is a fast growing retail segment in Asia– Average sales of $3 billion annually– 2008 Beijing Olympics helped increase exposure of performance
apparel
• Competitors are also looking to other emerging markets like Turkey, Russia, and Brazil for growth opportunities– Sales for competitors have increased over the years in these countries
![Page 32: Under Armour Danny Fields. PEST/Industry Analysis.](https://reader035.fdocuments.us/reader035/viewer/2022062219/551b19b3550346f70d8b6385/html5/thumbnails/32.jpg)
Target Market
Company Target Consumer
Nike Active people who want high quality sporting goods
Adidas Athletes mainly involved in running and soccer
Columbia People who enjoy the outdoors (hiking, skiing, camping)
Russell People looking for low cost alternatives to Nike, UA, Adidas
Champion Low cost alternative to Nike, UA, Adidas. As well as people living in urban areas
Under Armour Athletes who are serious about increasing performance in their respective sport
![Page 33: Under Armour Danny Fields. PEST/Industry Analysis.](https://reader035.fdocuments.us/reader035/viewer/2022062219/551b19b3550346f70d8b6385/html5/thumbnails/33.jpg)
BCG Matrix
![Page 34: Under Armour Danny Fields. PEST/Industry Analysis.](https://reader035.fdocuments.us/reader035/viewer/2022062219/551b19b3550346f70d8b6385/html5/thumbnails/34.jpg)
Social Media
• Social Media allows companies to reach consumers directly and receive feedback– Under Armour ran a social media advertising campaign to try to
engage hard-to-reach females– Nike’s Jordan brand uses social media to increase brand loyalty– During the 2009 NBA All-Star Game, Adidas allowed fans of their
facebook page to follow Dwight Howard throughout the All-Star Game with videos and photos from him
![Page 35: Under Armour Danny Fields. PEST/Industry Analysis.](https://reader035.fdocuments.us/reader035/viewer/2022062219/551b19b3550346f70d8b6385/html5/thumbnails/35.jpg)
Conclusion
• The main competitors to Under Armour are Nike, Adidas, Russell, and Champion due to their similar product categories– Nike and Adidas compete on a differentiation strategy with Under
Armour, while Champion and Russell compete on a low cost strategy
• They compete using effective marketing campaigns– Well known logos and slogans
• Nike and Adidas have large geographical coverage– Which lowers the dependency on their home country for sales: Nike
(U.S.), Adidas (Germany)
![Page 36: Under Armour Danny Fields. PEST/Industry Analysis.](https://reader035.fdocuments.us/reader035/viewer/2022062219/551b19b3550346f70d8b6385/html5/thumbnails/36.jpg)
Conclusion
• The performance apparel market continues to increase– 19.4% rise in worth over the past 4 years
• People are having more active lifestyles– Increased demand for performance apparel
• Emerging markets will be important for future growth– Competitors have seen an increase in sales in China, Turkey, Russia
and Brazil
![Page 37: Under Armour Danny Fields. PEST/Industry Analysis.](https://reader035.fdocuments.us/reader035/viewer/2022062219/551b19b3550346f70d8b6385/html5/thumbnails/37.jpg)
Internal Analysis/SWOT/Strategy
![Page 38: Under Armour Danny Fields. PEST/Industry Analysis.](https://reader035.fdocuments.us/reader035/viewer/2022062219/551b19b3550346f70d8b6385/html5/thumbnails/38.jpg)
Business Model
• Under Armour develops innovative products• They outsource their production to low cost subcontractors• They distribute to large retail stores (Dick’s, Sports Authority)
and have their own retail stores• Secure endorsements with high-profile athletes and
sponsorships with teams and events• Develop a strong brand
![Page 39: Under Armour Danny Fields. PEST/Industry Analysis.](https://reader035.fdocuments.us/reader035/viewer/2022062219/551b19b3550346f70d8b6385/html5/thumbnails/39.jpg)
Performance
Year Sales Net Income
2010 $1.06 billion $68.5 million
2009 $856.4 million $46.8 million
2008 $725.2 million $38.2 million
2007 $606.6 million $52.6 million
2006 $430.7 million $39 million
![Page 40: Under Armour Danny Fields. PEST/Industry Analysis.](https://reader035.fdocuments.us/reader035/viewer/2022062219/551b19b3550346f70d8b6385/html5/thumbnails/40.jpg)
Performance
• Increased performance was a result of higher revenue margins in their Direct-to-Consumer channel– Expansion of factory house stores– Less reliant on retailers (Dick’s, Sports Authority)
![Page 41: Under Armour Danny Fields. PEST/Industry Analysis.](https://reader035.fdocuments.us/reader035/viewer/2022062219/551b19b3550346f70d8b6385/html5/thumbnails/41.jpg)
Product Performance
2010 2009 % Change
Apparel $853,493 $651,779 30.9
Footwear $127,175 $136,224 (6.6)
Accessories $43,882 $35,077 25.1
Total Net Sales $1,024,550 $823,080 24.5
Licensing Revenues $39,377 $33,331 18.1
Total Net Revenues $1,063,927 $856,411 24.2
![Page 42: Under Armour Danny Fields. PEST/Industry Analysis.](https://reader035.fdocuments.us/reader035/viewer/2022062219/551b19b3550346f70d8b6385/html5/thumbnails/42.jpg)
BCG Matrix
Performance Apparel
Footwear
Accessories
![Page 43: Under Armour Danny Fields. PEST/Industry Analysis.](https://reader035.fdocuments.us/reader035/viewer/2022062219/551b19b3550346f70d8b6385/html5/thumbnails/43.jpg)
Value Chain Analysis
Primary Activity
Inbound Logistics Manufacturers receive raw materials
Operations Raw materials used to create UA products
Outbound Logistics Finished products are sent to retailers and UA owned stores
Marketing and Sales UA has well recognized athletes to endorse their products and sponsorships deals with many teams around the world
Service Websites and social media allow for interaction with customers
![Page 44: Under Armour Danny Fields. PEST/Industry Analysis.](https://reader035.fdocuments.us/reader035/viewer/2022062219/551b19b3550346f70d8b6385/html5/thumbnails/44.jpg)
SWOT
Strengths Weaknesses Opportunities Threats
• Brand Equity• Innovation•Quality of Products
• Lack of international sales• Prices• Relies heavily on distributors
• Emerging Markets• Performance apparel industry is growing• Consumers are more health conscious• Increase in active lifestyles• E-Commerce
• Increasing cost of raw materials• Rules and Regulations for performance apparel• Economic Recession• Exchange rate fluctuations
![Page 45: Under Armour Danny Fields. PEST/Industry Analysis.](https://reader035.fdocuments.us/reader035/viewer/2022062219/551b19b3550346f70d8b6385/html5/thumbnails/45.jpg)
Generic Strategy
![Page 46: Under Armour Danny Fields. PEST/Industry Analysis.](https://reader035.fdocuments.us/reader035/viewer/2022062219/551b19b3550346f70d8b6385/html5/thumbnails/46.jpg)
Generic Strategy
• UA has always used a differentiation strategy
• Originally, they just sold performance apparel but now that are broadening their scope by adding footwear, accessories and more casual apparel
![Page 47: Under Armour Danny Fields. PEST/Industry Analysis.](https://reader035.fdocuments.us/reader035/viewer/2022062219/551b19b3550346f70d8b6385/html5/thumbnails/47.jpg)
Grand Strategy
Innovation Continue to create innovative products to stay ahead of competitors (Nike, Adidas)
Market Development They need to work on getting their existing products into new markets. UA relies too heavily on North America
Market Penetration They are very successful with performance apparel in the NA market but they need to work on other product categories that are not as successful (footwear, accessories)
Product Development They have also been successful at developing new products in their existing NA market
![Page 48: Under Armour Danny Fields. PEST/Industry Analysis.](https://reader035.fdocuments.us/reader035/viewer/2022062219/551b19b3550346f70d8b6385/html5/thumbnails/48.jpg)
Ansoff Matrix•They are very successful in their market (90% of sales)• They should focus on developing new markets• If they can successfully get their existing products into those new markets, then they can move towards diversification
![Page 49: Under Armour Danny Fields. PEST/Industry Analysis.](https://reader035.fdocuments.us/reader035/viewer/2022062219/551b19b3550346f70d8b6385/html5/thumbnails/49.jpg)
International Performance
• UA is highly dependent on North America for sales– Around 90% of sales comes from North America– About 4% from Europe
• UA is using sponsorships and licensing to increase international exposure– French rugby club ASM Clermont– French champions last year– Wales national rugby team– Tottenham Hotspur (EPL)– Champions League Quarter-finalists– Other teams in Mexico, Greece, Germany
![Page 50: Under Armour Danny Fields. PEST/Industry Analysis.](https://reader035.fdocuments.us/reader035/viewer/2022062219/551b19b3550346f70d8b6385/html5/thumbnails/50.jpg)
Conclusions
• UA has seen an increase in sales over the past 5 years• They have increased their revenue in the Direct-to-Consumer
channel– Expanded factory house stores– Lowered reliance on retailers
• Strengths include innovation and brand equity (North America)
• Biggest weakness is international sales– About 10% of sales from outside North America
• Competes using a differentiation strategy and moving towards a broad scope
![Page 51: Under Armour Danny Fields. PEST/Industry Analysis.](https://reader035.fdocuments.us/reader035/viewer/2022062219/551b19b3550346f70d8b6385/html5/thumbnails/51.jpg)
Recommendations
• Find recognizable international athletes to endorse UA products– They have endorsers that are well recognized world-wide but are U.S.
based (Michael Phelps, Tom Brady)
• Continue to expand on factory house stores (locally and globally) – Lowers dependence on retailers– Will increase their profit margin
• Remain innovative to differentiate from competitors (Nike, Adidas)