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    Case Study UnderArmour

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    Ney J
    Under Armour's current strategy is broad differentiation through expanding its product lines across men's, women's and youth apparel and footwear. However, it is facing issues like unstable financial performance with declining revenue and operating income. It is also seeing reductions in sales across North America and decreasing stock prices. To address these issues, the recommendations are to increase sales through new promotional strategies and product lines, and invest in technological advancements, though this would require raising funds which may be difficult given its current financial position.

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    Case Study UnderArmour

    Uploaded by

    Ney J
    77 views2 pages
    Under Armour's current strategy is broad differentiation through expanding its product lines across men's, women's and youth apparel and footwear. However, it is facing issues like unstable financial performance with declining revenue and operating income. It is also seeing reductions in sales across North America and decreasing stock prices. To address these issues, the recommendations are to increase sales through new promotional strategies and product lines, and invest in technological advancements, though this would require raising funds which may be difficult given its current financial position.

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    Under Armour's current strategy is broad differentiation through expanding its product lines across men's, women's and youth apparel and footwear. However, it is facing issues like unstable financial performance with declining revenue and operating income. It is also seeing reductions in sales across North America and decreasing stock prices. To address these issues, the recommendations are to increase sales through new promotional strategies and product lines, and invest in technological advancements, though this would require raising funds which may be difficult given its current financial position.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    77 views2 pages

    Case Study UnderArmour

    Uploaded by

    Ney J
    Under Armour's current strategy is broad differentiation through expanding its product lines across men's, women's and youth apparel and footwear. However, it is facing issues like unstable financial performance with declining revenue and operating income. It is also seeing reductions in sales across North America and decreasing stock prices. To address these issues, the recommendations are to increase sales through new promotional strategies and product lines, and invest in technological advancements, though this would require raising funds which may be difficult given its current financial position.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 2

    Strategy Analysis on Under Armour

    Student: Neha Jadhav (21201702)

    Current Strategy
    The current strategy of the firm is broad differentiation. It wants to grow by offering products for men,
    women and the young generation with a variety of sports and other commodities. The company wants to
    increase its sales in the footwear segment along with an increase in market share. The strategy of the
    company is to open a large number of stores and outlets to enhance its distribution. Promotional
    techniques and new product lines are also part of the growth strategy of the company.
    Key Issues
     Unstable Financial Performance
    The operating income of the company was declined by 6.1%. The company’s revenue was increasing in
    the fourth quarter but the company’s performance was affected by other financial situations. The
    lowest annual growth rate of the company was 11 to 12 percent.

     Reduction in Sales
    The management of the company announced that there is a reduction in sales and earnings for the
    fourth quarter of the company in North America. Quarter 1 showed 25.7%, quarter 2 showed 21.5%
    and quarter 3 showed a 15.6% decrease in sales.

     Decreasing Stock Prices


    A major issue for the investors is a decrease in stock price. A major challenge for the company was to
    rebuild its brand image in the market. Kevin planks class C shares were sold to raise funds for the
    creation of the Plank industry.

    Financial Analysis
    Ratios 2017 2016 2015 Analysis
    Asset Turnover Ratio 33% 37% 40% Asset turnover ratio is in better
    condition. The company is generating
    income with its assets.
    Inventory Turnover 66% 76% 78% The inventory turnover ratio is
    ratio approximately 70%. Inventory
    contributes majorly to sales of the
    company.
    Debt to Equity Ratio 39% 40% 40% The debt-to-equity ratio for 3 years is
    close to 40%. This means that there is a
    visible change and the company is
    growing
    Debt to Asset Ratio 20% 22% 23% The debt to asset ratio for 3 years is
    21%. This shows that the company is
    not that stable to let go of its liabilities
    from its assets
    Value Chain Analysis
    Primary Activities
     Inbound Logistics
    To maintain inbound logistics well, Under Armour had built a close relationship with its suppliers. It
    created a system to supply the goods to its customers by working with its suppliers. To deliver products
    on time to the customers, they had to closely work with suppliers.

     Operations
    Under Armour developed a highly competent operations and distributions network to produce and
    distribute its products effectively in the market. A wide range of network partners to distribute the
    branded products was developed for the customers.

     Outbound Logistics
    To explore competitive advantage sources and to achieve its business growth objective, Under Armour
    can analyse and optimize the outbound logistics. Customer satisfaction can be maximized by timely
    managing outbound activities and putting a minimum negative effect on quality. It also helps increase
    growth opportunities for the firm.

     Marketing and Sales


    The biggest strength of Under Armour is industry-leading marketing and sales activities. Wholesale
    distribution and Licensed distributors were used for sales and distribution of its products. Under
    Armour maintained a good rapport with teams by helping them resolve queries faster.

    Secondary Activities
     Procurement
    Under Armour is dependent on outside suppliers for fabrics required for manufacturing its products. It
    relied on just eight suppliers for the raw material. Under Armour should diversify its suppliers to
    eliminate the threat of bargaining power of buyers.

     Technology
    Under Armour’s products are a little expensive as compared to its competitors. Technology, which is a
    crucial component of the value chain helped Under Armour achieve physical differentiation for its
    products. Consumers were majorly drawn towards T-shirts that could control temperature. To stay
    ahead of its competitors, Under Armour needs to constantly work on developing its technology.

    Recommendation
     Increase Sales
    For increasing sales, the company needs to incorporate promotional strategies to increase demand. A
    new product line must be introduced by the company to attract customers. To gain positive returns,
    the company needs to consider promotional opportunities.

     Technological Advancement
    Inventory cost can be reduced by implementing technological advancement but it would require a huge
    investment. Currently, the company is not in a position to raise funds. Also, Under Armour needs to
    work on different technologies to stay ahead of its competitors.

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