FACULTY OF BUSINESS AND MANAGEMENT

BACHELOR OF BUSINESS ADMINISTRATION (HONS) FINANCE

JBA2425C

STRATEGIC MANAGEMENT

MGT657

INDIVIDUAL ASSIGNMENT – CASE STUDY 2

PREPARED BY:

MUHAMAD FARIS BIN YUSOF

2020975129

PREPARED FOR:

DR AMIR IMRAN BIN ZAINODDIN

1. Under Armour was founded by a former undergraduate named Kevin Plank at the very
young age. In 1996, Kevin invented a new t-shirt in the basement of his grandmother’s resident
and later noticed some fault in his t-shirt. After few enhancements and modifications, Kevin’s
t-shirt received positive reviews with start-up of turnover up to $100,000. Later, the demand
keeps increasing and in the early of 20th century, Under Armour expanded the business and
did some collaboration including outfitting Warner Brothers to produce film and XFL football
league. Until in the year of 2013, the business has expanded with big store house and distributed
the factory outlet stores in 34 states. Under Armour also has contracts with sport teams, leagues,
and mega stars. Under Armour offers apparel in compression, fitted, and loose and designed to
be worn in multi-climate. Under Armour’s uniqueness in moisture-wicking fabrication
allocates apparel, footwear, and accessories. With additional employees, the products offered
by Under Armour beneficial to sportspersons, from youth to professionals worldwide. Later in
the first half of 2013, Under Armour has maximized its revenues up to 23 percent and
profitability up to 163 percent. The growth made by Under Armour has led the company into
adding more products such as Armour Bra products and Spine running footwear.

2. Swot Framework

Organization’s Internal Strengths

• Ability in having presence worldwide

Under Armour has the capability in expanding its business to North America, Europe,
Middle East, and Africa (EMEA), Asia, and Latin America.
• Unique branding of fabric
Aside from high competition with other competitors, Under Armour still survived in
the market with its quality and unique branding of fabric. The quality of the fabric can
be determined by its ability in whisking away water from the body.

Organization’s Internal Weaknesses

• No fabric or process patents

Under Armour has no patents for either fabric or process, thus enables other companies
copying or duplicate the design and technology in producing the fabric from Under
Armour.
• High cost of goods sold
 Under Armour has high amount of cost of goods sold that leads to a low profitability
for the year of 2012, 2011 and 2010. Besides, the company has to bear high volume of
selling, general and administrative expenses for the three years.

Organizations External Opportunities

• Exert technological innovation to sustain in the market

With vast innovation in the technology, Under Armour can keep pace with other
competitors in the same industry, simultaneously adding more advantage to Under
Armour in penetrating market faster.
• Differentiation in quality provision
Providing products that have superiority in the quality assists the customers in having
confidence to buy the products and assure them to value the advantage of Under
Armour over other products.

Organization’s External Threats

• Weak economy
The weak economy such as intolerant income from consumers and economic inflation
has led Under Armour bear difficulties in reaching maximum profitability while suffer
high cost of materials for the production.
• Advancement of technology development from competitor
Another threat faced by Under Armour is the advancement of technology from Nike
with development of better and improved shoe and apparel design. With the offering
made by the competitor, the loyalty towards the brand may switched to Nike.

Proposed New Mission Statement with 9 Essential Components

3. Component of a good mission statement:

• Customers
• Products/services
• Markets
• Technology
• Concern for survival, growth and profitability
 • Philosophy
• Self-concept
• Concern for public image
• Concern for employees

Referring to the essential components of mission statement, Under Armour produce products
with the purpose of serving the athletes for both males and females, and all demographic with
various sports practices. The company has the intentions to give the best quality available to
the consumers as Under Armour’s target market. Among the products rendered by Under
Armour is high quality apparel, footwear, and accessories including bags, hats, and gloves. One
of the major advantages of Under Armour’s is the establishment of three gear lines that has
option for all weather conditions, namely HEATGEAR for hot weather, COLDGEAR for cold
weather, and ALLSEASONGEAR for between the extremes. Aside from the main concern for
the market in the United States, Under Armour operates the business in four main geographic
markets, including North America, EMEA (Europe, Middle East, and Africa), Asia and Latin
America. These four segments operate with the same manner which is to design and distribute
Under Armour products. Meanwhile, Under Armour has its own quality and unique branding
of fabric. The quality of the fabric can be determined by its ability in whisking away water
from the body, and the establishment of apparel that is durable towards any weather and
temperature. To sustain in the market, Under Armour has its own strategy in giving the best of
its products, including rendering the best quality of sportwear to the consumer and rigorous
marketing through its brand equity and consumer awareness of its superiority. Furthermore,
Under Armour has its own beliefs for its whole performance. This includes the philosophy in
delivering the best to its customers especially for the athletes in better performance. The
advantage of Under Armour over its competitors is Under Armour has its own uniqueness in
the apparel and the collaboration with sportspersons and sports leagues in United States. The
responsibility of Under Armour towards the community and environment is to increase the
awareness to the athletes in using the best quality possible sportwear and pursuing the people
to have healthy lifestyle. The value of the firm’s employees is giving the best possible
performance in producing the best quality products with the same purpose which is maximizing
the sales and profitability. According to the data for the profitability from the employees, Under
Armour has the highest ranking over other competitors in the same industry.
4. Competitive Profile Matrix

Critical Success Factor Weight Under Armour Nike Adidas

Company
Rating Score Rating Score Rating Score
1. Brand Equity 0.08 2 0.16 4 0.32 3 0.24
2. Global Image 0.10 2 0.2 4 0.4 4 0.4
3. Profitability 0.15 2 0.3 4 0.6 3 0.45
4. Revenue 0.16 1 0.16 4 0.64 3 0.48
5. Revenue/Employee 0.08 4 0.32 3 0.24 2 0.16
6. Market Shares 0.11 1 0.11 4 0.44 3 0.33
7. Product Quality 0.12 4 0.48 2 0.24 2 0.24
8. Advertising 0.09 1 0.09 3 0.27 4 0.36
9. Contract with 0.06 1 0.06 3 0.18 4 0.24
Ambassador
10. Innovation 0.05 3 0.15 2 0.10 2 0.10
TOTAL 1.00 2.03 3.43 3.00

5. One of the recommendations for Under Armour to enhance the performance is by

appointing endorsement or ambassador with the group of people who has big influence towards
crowds. For instance, Under Armour may collaborate with superstars who has big followers
and promoting healthy lifestyle. Among of the influencer who has the capabilities in promoting
Under Armour into next level is Dwayne Johnson who is currently among the most paid actors
and consistently promoting healthy lifestyle with his followers. Another way to enhance
performance of Under Armour is by building more new branches around the world. Asides
from four main geographic segments for its operation, Under Armour can penetrates market in
other continents such as South America and Oceania to have more profitability generation.
Moreover, Under Armour can develop more indirect marketing especially through social
medias. The company may focus more on conducting brand awareness and educating the
potential consumers on the availability of the products while grow a sustained relationship with
the consumers. This is due to the advantage of indirect marketing over direct marketing in term
of cost as indirect marketing is more cost-effective.