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Under Armor Strategic Audit
Under Armor Strategic Audit (2009 – 2010)
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Order Number |
636738393092 |
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Type of Project |
ESSAY |
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Writer Level |
PHD VERIFIED |
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Format |
APA |
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Academic Sources |
10 |
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Page Count |
3-12 PAGES |
Instructions/Descriptions
Under Armor Strategic Audit (2009 – 2010)
EXHIBIT 1
EXTERNAL FACTOR ANALYSIS SUMMARY (EFAS) on UNDER ARMOUR (UA)
| External Factors | Weight: | Rating: | Weighted
Score |
Comments |
| Opportunities: | ||||
| O1: Expanding Brand Name | .15 | 3.0 | .45 | UA was started by Plank in 1996 and he used inexpensive marketing strategies and techniques to introduce UAs products into the sports apparel market. This category is given a weight of .15 and a rating of 3.0 because Plank expanded his brand by sending out free T-shirts with his brand name Under Armor to a network of equipment managers at the college level. |
| O2: Innovation/Research | .15 | 3.5 | .525 | Ten companies account for 30% of sports apparel. UA created a product that was made from synthetic material. Innovation is weight at .15 and has a rating of 3.5 because of the performance apparel that is compressed and controls temperature/moisture. |
| O3: Outsourcing | .10 | 3.5 | .35 | Just like the other big-name sports apparel companies, UA took advantage of outsourcing to manufacturers in Asian and Latin countries. This is weighted at .10 and given a rating of 3.5 because of the purchasing power of the raw material used to produce its apparel. |
| O4: Customers | .20 | 4.0 | .80 | UA sports appeal was sold at major retail stores. For example, Dick’s Sporting Goods and The Sports Authority, are frequently visited by customers. Just these two retailers alone accounted for over 30% of its wholesale. This factor is given a weight of .20 and a rating of 4.0 for the expansion to independent retailers, Foot Locker, Finished Line and the internet. |
| Threats: | ||||
| T1: Competition from Nike, Adidas, Champion, New Balance, and Puma | .10 | 4.0 | .40 | Nike and Adidas are UA’s biggest competitors overall but when it comes to sports apparel, Champion is their main competitor. UA’s weight is 1.0 and rating is 4.0 for its apparel but must focus on other products outside of apparel to stay competitive. |
| T2: Footwear Line | .15 | 2.0 | .30 | UA’s footwear line was second only to Nike. So, in 2009 UA released a new running shoe line to be competitive in the 5 billion dollars athletic footwear market. The running shoes featured technology that would help enhance performance. This category’s weight is .15 and the rating is 2.0 because the footwear line did not live up to expectations and had to discount its inventory. |
| T3: Global Market | .10 | 2.5 | .25 | UA’s leadership understood the importance of the global markets for its apparel products. UA depended on the U.S. market and the lack of effort to market their products in other geographic areas has affected their revenues compared to other companies such as Nike. This area has a weight of .10 and the rating is 2.5 due to its lack of expansion into the global market. |
| T4: Apparel Prices | .05 | 2.0 | .10 | UA’s prices for its apparel are comparable to Nike and Adidas. But UA’s product policy is to ask for full price on its merchandise because of the brand name. In this case, the weight is .05 and the rating is 2.0 because the company’s position is not to offer discounts on its product but was forced to on footwear. |
| Total Scores: | 1.00 | 3.175 | UA is performing at above average as a company. |
EXHIBIT 2
INTERNAL FACTOR ANALYSIS SUMMARY (IFAS) on UNDER ARMOUR (UA)
| Internal Factors | Weight: | Rating: | Weighted
Score |
Comments |
| Strengths: | ||||
| S1: Marketing Strategy | .15 | 4.5 | .675 | UA should provide more options of apparel and target a larger diverse audience for their products. The company generated millions of dollars by advertising its products through movies and with professional athletes. The weight is .15 and the rating is 4.5 because the company uses sports and media marketing to improve its profit. |
| S2: Product Development | .15 | 4.0 | .60 | UA created high-performance apparel made from synthetic fabric that kept customers dryer than competitors’ products. The weight is .20 and the rate is 5.0 because apparel absorbs sweat faster, kept the body cooler, and prevented skin irritation. |
| S3: Operations | .20 | 5.0 | 1.0 | UA created a special manufactory that catered to its loyal and special customers. The apparel for major sports teams and athletes is produced in a 17,000 square factory in Maryland. Operations weight is .20 and its rating is 5.0 because they provide great customer service and meet the customers’ needs and expectations. |
| S4: Culture | .10 | 3.5 | .35 | UA’s top management team consisted of Plank’s family, and friends and they are a close network. The company leadership embodied the teamwork culture, just like their customers. Plank set the tone to be competitive against Nike and Adidas. Culture is given a weight of .10 and a rating of 3.5 because the management team shared the same values, beliefs, and ideas to grow the company. Also, they worked out every Saturday morning to keep that bond intact. |
| Weaknesses: | ||||
| W1: Seasonal Profit | .05 | 1.5 | .075 | UA’s profits are based on seasonal sporting events. The company should focus on producing products for other sports that will create profits. For example, soccer, tennis, track, golf, etc. Seasonal profits are weighted at .05 and the rating is at 1.5 mainly because its footwear has fallen behind its competitors and the lack of optional gear. |
| W2: Finances | .10 | 3.5 | .35 | Apparel, footwear, accessories, and licensing generate most of the AU’s revenue. The company’s 2009 gross profit margins declined because of both the liquidation of unsold footwear and apparel products. Finances are weighted a .10 and the rating is 3.5 because of the declining profits. UA’s products must stay competitive with Nike, Adidas, and other companies. |
| W3: Global Market | .15 | 2.5 | .375 | The United States and Canada generated 94% of UA’s revenue. Top management understands that in order to be successful, its’ company must strive in the international markets. The global market is weighted at .15 and the rating is 2.5 because UA products mainly depend on the U.S. market, which generated around 78% of its revenues. Outside of U.S. distribution channels revenue is less than 25%. |
| W4: Distribution Network | .10 | 2.0 | .20 | UA only had two distribution facilities in the U.S. and a third party delivered its products. The weight is .10 and the rating is .20 because retailers are responsible for returning products and outsourcing production was slow. |
| Total Scores: | 1.00 | 3.6.25 | UA’s overall operation is competitive and above average. |
EXHIBIT 3
STRATEGIC FACTOR ANALYSIS SUMMARY (SFAS) on UNDER ARMOUR (UA)
| Strategic Factors | Weight | Rating | Weighted Score | S
H O R T |
I
N T E R M E D I A T E |
L
O N G |
Comments |
| S3: Operations | .15 | 4.5 | .675 | X | UA created a special manufactory that catered to its loyal customers. The apparel for major sports teams and athletes is produced in a 17,000 square factory in Maryland. This SF weight is high at .15 as the quality of its products meets customers’ expectations. The rating is 4.5 because UA provides great customer service to sports teams. | ||
| S1: Marketing Strategy | .05 | 4.5 | .225 | X | X | X | UA should provide more options of apparel and target a larger diverse audience for their products. The company generated millions of dollars by advertising its products through movies and with professional athletes. The SF weight is .10 because of the target audience. The rating is 4.5 as using professional athletes generated millions of dollars. |
| Its S2: Product Development | .10 | 4.0 | .40 | X | X | UA created high-performance apparel made from synthetic fabric that kept customers dryer than competitors’ products. The weight is high at .10 with the development of Performance Apparel. The rating is 4.0 because apparel absorbs sweat faster, kept the body cooler, and prevented skin irritation. | |
| W3: Global Market | .05 | 2.0 | .10 | X | X | The United States and Canada generated 94% of UA’s revenue. Top management understands that to be successful, its’ company must strive in the international markets. This weight is a low .05 as they lag behind other companies. The rating is 2.0 UA mainly depends on the U.S. market, which generated around 78% of its revenues. Outside of U.S. distribution channels revenue is less than 25%. | |
| W2: Finances | .05 | 3.0 | .15 | X | X | X | Apparel, footwear, accessories, and licensing generate most of the AU’s revenue. The company’s 2009 gross profit margins declined because of both the liquidation of unsold footwear and apparel products. This weight is low .05 as sales of products dropped. The rating is 3.0 because of the decline in gross profits margins. |
| W4: Distribution Network | .05 | 2.5 | .125 | X | X | UA only had two distribution facilities in the U.S. and a third party delivered its products. The weight is low at .05 because retailers are responsible for returning products. The rating is 2.5 as the outsourcing production is slow at times which affects the delivery of the products. | |
| O4: Customers | .15 | 3.0 | .45 | X | X | UA sports appeal is sold at major retail stores. For example, Dick’s Sporting Goods and The Sports Authority. These two retailers accounted for over 30% of its wholesale. This SF is high at .15 because apparel is sold at major retail stores. The rating is 3.0 for expansion to independent retailers, Foot Locker, Finished Line, and the internet. | |
| O2: Innovation/Research | .10 | 4.0 | .40 | X | X | Ten companies account for 30% of sports apparel. UA created a product made from synthetic material. The weight is .10 for using synthetic material to make apparel. I give this a rating of 4.0 because the performance apparel is compressed for comfort and controls temperature/moisture. | |
| O1: Expanding Brand Name | .15 | 3.0 | .45 | X | UA was started by Plank in 1996 and he used inexpensive marketing strategies and techniques to introduce UAs products into the sports apparel market. This SF weight is .15 for UA’s inexpensive marketing of its products. The rating of 3.0 is for expanding the brand by sending out free T-shirts with his brand name Under Armor to a network of equipment managers at the college level. | ||
| T2: Footwear Line | .05 | 1.5 | .075 | X | In 2009, UA released a new running shoe line to be competitive in the 5 billion dollars athletic footwear market. The running shoes featured technology that would help enhance performance. This category’s weight is .05 as UA invested a lot of money in its’ footwear to stay competitive. The rating is 1.5 because the footwear line did not live up to expectations and had to discount its inventory. | ||
| T1: Competition from Nike, Adidas, Champion, New Balance, and Puma | .10 | 3.5 | .35 | X | X | X | Nike and Adidas are UA’s biggest competitors but when it comes to sports apparel, Champion is their main competitor. This SF weight is .10 because UA must produce more products outside of apparel. The rating is 3.5 for its apparel staying very competitive in the sports apparel market. |
| T3: Global Market | .05 | 2.5 | .125 | UA’s leadership understands the importance of the global markets for its apparel products. This SF weight is .05 because UA depends on the U.S. market. I give this a rating of 2.5 for the ineffective marketing of its products in other geographic areas. | |||
| Total Scores: | 1.00 | 3.525 | UA’s overall performance is above average. |
EXHIBIT 7
TOWS MATRIX on UNDER ARMOUR (UA)
Internal Factors (from IFAS)
| External Factors (from EFAS) | Strengths (S)
S1 Marketing Strategy S2 Product Development S3 Operations S4 Culture |
Weaknesses (W)
W1 Seasonal Profit W2 Finances W3 Global Market W4 Distribution Network |
| Opportunities (O)
O1 Expanding Brand Name O2 Innovation/Research O3 Outsourcing O4 Customers |
S/O Strategies
· Target a larger group of customers (O1, O4, S1, S2, S4). · Continue to capitalize with marketing athletes (O1, O2, O4, S1, S4). · Infiltrate competitor’s product market (O2, O4, S1, S2, S4). |
W/O Strategies
· Expand seasonal apparel and accessories (W1, W2, O1, O4). · Management of supply chain (W3, W4, O1, O3). · More investments in promoting the brand (W1, W2, O1, O4). |
| Threats (T)
T1 Competition from Nike, Adidas, Champion, New Balance, and Puma T2 Footwear Line T3 Global Market T4 Apparel Prices |
S/T Strategies
· Revise company product policy to be more competitive (T1, T4, S1, S2, S4). · Develop strategies to promote new footwear build (T1, T2, S1, S2). · Trendsetter for new product technology (T1, T3, S1, S2, S4). |
W/T Strategies
· Promote international growth in the market (W2, W3, W4, T3). · Strategic plan to generate revenue outside of the U.S. (W1, W3, T1, T3). · Improve global procurement of key inputs (W3, W4, T3). |
Under Armor Strategic Audit (2009 – 2010)
