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Under Armour, Inc. - Strategic Growth in a Competitive Market Building a Case for Change Team 2:   Brendan Crowley, Belen Molina, Guru Velasco Friday April 17th, 2009
Contents
The Case for Change
Under Armour is currently laden with numerous operational inefficiencies, and needs to revamp their strategy for growth. Under Armour stock is viewed as Overvalued There is no system in place for meaningful customer analysis. Different divisions store data in different ways Marketing efforts are not as strong Supply Chain Management predictions are more difficult Management feels overburdened.  Insufficient communication between different branches This results in major operational inefficiencies Managers feel unable to implement changes The Case for Change The Case for Change The restructuring of Under Armour’s IT system will increase operational efficiency and allow more meaningful customer analysis.   ,[object Object]
Internal operational inefficiencies will be reduced by useful collection, analysis and transference of data
Revitalized marketing efforts and further international expansion will be founded upon new business intelligencePrimary Goals : Obtaining Meaningful Customer Analysis and Reducing Operational Inefficiency.
“Cotton is the Enemy” We strongly believe that Under Armour should continue to grow by capturing a larger share of the athletic apparel market through International Expansion. In addition, the restructuring of Under Armour’s IT system will increase operational efficiency and allow more meaningful customer analysis.  This will provide the foundation for success without having to include additional product lines within the U.S. Declining consumer confidence in the U.S. has impacted domestic sales However, growth in the global market has continued In 2011, the global apparel, accessories, & luxury goods market is forecast to have a value of $1,405.8 Billion, an increase of 24.7% since 2006 The Case for Change We are convinced that Under Armour should continue to grow by capturing a greater share in athletic apparel as opposed to penetrating the overall apparel market with non-athletic products aimed at replacing cotton.  ,[object Object]
UA’s core competency is its form-fitting, moisture wicking performance apparel designed to be worn under sportswear
Penetrating the overall apparel market would signify reaching out to a different market sector and changing the image the company has worked so hard to convey
The image Under Armour has built around its products is one of invulnerability, athletic performance, and Source: http://en.wikipedia.org/wiki/Under_Armour NYTimes.com- “Muscling Into the Mainstream”
Recommendations & Cost-Benefit Analysis
Revamped IT System and Business Intelligence United States Market International Market Revitalized Marketing Effort Recommendations & Cost-Benefit Analysis Overarching Recommendations The restructuring of Under Armour’s IT system will increase operational efficiency and allow more meaningful customer analysis. This will be the foundation for all the changes to be made at Under Armour. Restructured system will utilize all collected data to create useful business intelligence Operation inefficiencies will be reduced by more efficient information systems Changes will be easier to implement and Managers will be less overburdened The ability to analyze and manipulate data from all branches of Under Armour will provide the basis for more effective marketing campaigns both within the US as well as internationally ,[object Object]
Operation inefficiencies will be reduced by more efficient information systems
Changes will be easier to implement and Managers will be less overburdenedCurrently the 4000 international stores out of a total 12000 stores Under Armour is sold in provide only 4% of total revenue. Given the state of the economy at home, additional international revenue is critical ,[object Object]
Work through this company to gain market share
Initial penetration of Swedish market, then the rest of the Nordic regionWe strongly believe that Under Armour should continue to grow by capturing a larger share of the athletic apparel market.  This will be achieved through the following goals: ,[object Object]
Utilize business intelligence to better sculpt effective marketing campaigns for both genders
Push for increased Web Sales
Web Sales are providing a larger amount of total sales every year in the online apparel industry,[object Object]
Both in the United States and Internationally
Immediate increase in productivity when data is consolidated in data warehouse on a server that can be accessed by all departments
Managers can pull “read-only” data to use for their purposes
No modification of data outside your own department to ensure data integrity
Increase in operational efficiency between departments saves costs and time
Upper managers can pull data from all areas and use it to guide lower managers without having to waste each other’s time
Both Upper and Lower managers can better handle their responsibilities when information is readily available to assist in decision making,[object Object]
Project Plan & Timeline Basic Project Plan & Timeline Research Preparation Implementation Maintenance
Operational & Organizational Assessment:
Capabilities Risks Operational & Organizational Assessment Operational Recommendations & Risks The current IT system needs to be restructured to increase operational efficiency and allow more meaningful customer analysis Improved data analysis will allow better forecasting which helps control the supply chain management and inventory  saving costs Software as a Service can lighten the hardware costs of Under Armour by taking care of back-ups, and potentially even the storage of data The new system should fit Under Armour well as it will bridge the gap between different departments and allow easy access to critical data across the company Marketing efforts are strong within the United States but still need to be revitalized.  International efforts need to seek out popular professional sports contracts to promote the brand Expansion of international sales is critical to balance predicted slow domestic industry growth ,[object Object]
Most managers in accounting wont want anyone in marketing “touching their stuff” – i.e. data integrity is critical
If international expansion is slow, it can raise costs
Market is highly competitive in both the national and international arenas,[object Object]

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Under Armour Growth Strategy

  • 1. Under Armour, Inc. - Strategic Growth in a Competitive Market Building a Case for Change Team 2: Brendan Crowley, Belen Molina, Guru Velasco Friday April 17th, 2009
  • 3. The Case for Change
  • 4.
  • 5. Internal operational inefficiencies will be reduced by useful collection, analysis and transference of data
  • 6. Revitalized marketing efforts and further international expansion will be founded upon new business intelligencePrimary Goals : Obtaining Meaningful Customer Analysis and Reducing Operational Inefficiency.
  • 7.
  • 8. UA’s core competency is its form-fitting, moisture wicking performance apparel designed to be worn under sportswear
  • 9. Penetrating the overall apparel market would signify reaching out to a different market sector and changing the image the company has worked so hard to convey
  • 10. The image Under Armour has built around its products is one of invulnerability, athletic performance, and Source: http://en.wikipedia.org/wiki/Under_Armour NYTimes.com- “Muscling Into the Mainstream”
  • 12.
  • 13. Operation inefficiencies will be reduced by more efficient information systems
  • 14.
  • 15. Work through this company to gain market share
  • 16.
  • 17. Utilize business intelligence to better sculpt effective marketing campaigns for both genders
  • 18. Push for increased Web Sales
  • 19.
  • 20. Both in the United States and Internationally
  • 21. Immediate increase in productivity when data is consolidated in data warehouse on a server that can be accessed by all departments
  • 22. Managers can pull “read-only” data to use for their purposes
  • 23. No modification of data outside your own department to ensure data integrity
  • 24. Increase in operational efficiency between departments saves costs and time
  • 25. Upper managers can pull data from all areas and use it to guide lower managers without having to waste each other’s time
  • 26.
  • 27. Project Plan & Timeline Basic Project Plan & Timeline Research Preparation Implementation Maintenance
  • 29.
  • 30. Most managers in accounting wont want anyone in marketing “touching their stuff” – i.e. data integrity is critical
  • 31. If international expansion is slow, it can raise costs
  • 32.
  • 33.
  • 34. Information will be accessible
  • 35. Take advantage of features such as website personalization and customization
  • 36. Build an enormous database of product and customer information that supports functions such as customer service and Web site serving
  • 37. Trends show that online apparel sales are increasing
  • 38. Electronic commerce increased 15% in Sweden in 2008
  • 39. In addition, UA could create a dedicated site to Sweden and in the future, the rest of the Nordic countries
  • 40. Take our experience supporting the Fulham team in England and apply it in Sweden:
  • 41. Sponsor a popular local soccer team
  • 42. Swedish soccer teams lack the international recognition that European teams have
  • 43. This implies a lower sponsorship cost
  • 44. Since soccer is the number one sport in Sweden, the risk associated is low
  • 45. Picking the right distribution channel can be of great importance when entering the Swedish market
  • 47. The most effective advertising is done in magazines and mailing catalogues
  • 48. Television commercials are not the major advertising channels
  • 49. Take advantage of sporting events such as local soccer games to use television ads as advertising mediumSource: http://www.infomat.com/research/infre0000238.html http://www.emarketservices.com/start/News/International/news/Electronic-commerce-increases-15--in-Sweden-in-2008.html?xz=0&sd=1&ci=2157
  • 50.
  • 51. The 7 largest sporting goods stores sold $375 million of sports apparel in 1996
  • 52. Swedes spend an average of $650 per capita on clothes
  • 53. The market is most receptive to Sports and Casual Wear made in the US
  • 54. Most of the market is controlled by 50 of the largest apparel companies.
  • 55. This is where we want to sell our UA athletic apparel
  • 56.
  • 57. The Swedish market has few regulations and no trade barriers since it joined the EU in 1995
  • 58. Note:
  • 59. Most people in Sweden exercise regularly
  • 60. According to the United States of American Department of Commerce, “Sports and Leisure Products” are listed in the top 15 industry sectors that will provide the best opportunities for US exports to SwedenSource:http://www.infomat.com/research/infre0000238.html
  • 62. UA Balance Sheet (Assets) Financial Assessment Source: UA-Thomson Annual Financials, 2007.
  • 63. UA Balance Sheet (Liabilities & Shareholder’s Equity) Financial Assessment Source: UA-Thomson Annual Financials, 2007.
  • 64. UA Income Statement Financial Assessment Source: UA-Thomson Annual Financials, 2007.
  • 65.
  • 66. Company is able to pay short-term liabilities as determined by their positive working capital
  • 69.
  • 70. Current Data Storage Technology Assessment UA Departmental Systems Accounting Marketing Service Operations Marketing UA Store, Public Web Product Distribution Consumer Care Consumer Relations Retail Service Contracts UA Touch Points Consumer Interactions Direct and Retail Consumer
  • 71.
  • 72.
  • 73.
  • 74.
  • 75. Addition of a database
  • 76. ELT process can extract the information from all the spreadsheets and update a database, and that data would be then extracted and transformed to be loaded into the data warehouse
  • 78. Behind the scenes processes in charge of data update into the data warehouse
  • 79. Events in the spreadsheet ranging from specific activity to time elapsing can trigger events that continuously update changes in the spreadsheet directly to data warehouse.
  • 80. Other data integration softwareSource: http://msdn.microsoft.com/en-us/library/ms978572.aspx
  • 81.
  • 83. Rapid execution timeTime variant refers to the data warehouse focus on analyzing change over time. Source: http://www.mcs.csueastbay.edu/support/oracle/doc/10.2/server.102/b14223/concept.htm
  • 84.
  • 85. Finds trends and patterns hidden in data
  • 86. Feature to automate business intelligence discovery and distribution
  • 89. Establishment of metrics to use current data and measure current performance
  • 91. All levels of enterprise have access to data
  • 93. RISK: Granting full access to all departments can cause tensionSource: http://www.avanco.com/_assets/img/gfx-bi_diagram.gif
  • 94. New Storage Structure Technology Assessment Source Data Warehouse Data Marts Business Users
  • 96. Goals Conclusion Conclusion Reduce Operational Inefficiency Data Integration & Data Sharing Boost Marketing Efforts domestically and internationally Provide competent information to make strategic decisions concerning growth and expansion Ensure that international expansion is targeted where populations has large purchasing power Increase profit by: Decreasing costs Increasing sales Increasing market share in athletic apparel
  • 98. Sources Appendix Appendix http://en.wikipedia.org/wiki/Extract,_transform,_load http://www.mcs.csueastbay.edu/support/oracle/doc/10.2/server.102/b14223/concept.htm#i1006237 http://www.avanco.com/sol_business_intel.html http://www.oracle.com/solutions/business_intelligence/data-mining.html http://www.oracle.com/solutions/business_intelligence/olap.html http://msdn.microsoft.com/en-us/library/ms978572.aspx http://www.dwinfocenter.org/defined.html http://en.wikipedia.org/wiki/Under_Armour NYTimes.com- “Muscling Into the Mainstream” http://blog.oregonlive.com/playbooksandprofits/2008/04/pp_blog_suspects_some_sportswe.html http://www.infomat.com/research/infre0000238.htmlhttp://www.emarketservices.com/start/News/International/news/Electronic-commerce-increases-15--in-Sweden-in-2008.html?xz=0&sd=1&ci=2157