Strategic Plan: Under Armour, Inc.

1.0 Vision & Mission Statement Analysis

1.1 Evaluation of Current Vision Statement

Characteristic	Meets Criterion?	Critique / Comment
1. Clear	Partially	Identifies the industry (empowering athletes), but multiple conflicting visions create a lack of a single, clear direction.
2. Futuristic	Yes	CEO Plank's vision sets ambitious long-term goals for key segments like women's apparel and international business.
3. Concise	No	The company presents several visions; a single, powerful, and concise statement is missing.
4. Unique	Partially	"Empowering athletes" is generic. Plank's internal goals are unique but not a proper external-facing vision.
5. Inspiring	Weak	The language is positive but generic and may not motivate all stakeholders during a period of financial struggle.

1.2 Proposed Vision Statement

"To be the world’s most trusted performance brand, inspiring all athletes to push their limits through relentless innovation."

1.3 Evaluation of Current Mission Statement (vs. 9 Components)

Component	Status	Comment
1. Customers	Present	"Athletes" are clearly identified.
2. Products/Services	Present	"Exemplary design" and "innovation" point to core offerings.
3. Markets	Missing	Does not specify where UA competes geographically.
4. Technology	Present	"Relentless pursuit of innovation" implies a focus on technology.
5. Survival/Growth/Profitability	Missing	No mention of financial objectives.
6. Philosophy	Present	The "four wills" (act responsibly, be innovative) serve as company philosophy.
7. Distinctive Competence	Missing	Case states tech is easily copied; "innovation" is a goal, not a proven competence.
8. Public Image	Missing	No mention of social or environmental responsibility.
9. Employees	Present	The "four wills" are required of all employees, showing their importance.

1.4 Proposed Mission Statement

"We are committed to empowering athletes (1) at all levels across the globe (3) by delivering the most innovative performance apparel, footwear, and digital fitness solutions (2, 4). We strive for profitable growth (5) by fostering a culture of entrepreneurial spirit and teamwork among our diverse employees (9, 6), ensuring our brand is a positive and responsible force in the communities we serve (8). Our passion for performance is our competitive advantage (7)."

2.0 HR - Organizational Structure Analysis

2.1 Problems with Existing Structure

Lack of Diversity: The case explicitly notes that "all eleven top executives are male," which is a major governance weakness limiting strategic perspectives.
Over-centralization & Confusion: The structure with presidents for "Global Sourcing" and "North America" is unbalanced and likely contributes to the operational "disarray" mentioned in the case.
No Clear Product Focus: The structure is regional, failing to create accountability for key product goals like making "footwear to be larger than apparel."

2.2 Proposed Organizational Structure: Divisional by Product & Region

This revised structure introduces a clear hierarchy, separates the CEO and Chairperson roles for better governance, creates a Chief People & Diversity Officer role, and establishes clear accountability for key products and regions under a President & COO.

1. Chairperson of the Board

2. CEO - Kevin Plank

3. CFO 4. Chief People & Diversity Officer 5. CTO

6. President & COO - Patrik Frisk

7. Pres. N. America 8. Pres. International 9. Pres. Global Footwear 10. Pres. Global Apparel 11. Pres. Connected Fitness

3.0 External Factor Evaluation (EFE) Matrix

Opportunities (10 Factors)	Weight	Rating	Score
1. Global sports apparel market projected to reach $231.7B by 2024.	0.12	4	0.48
2. Asia-Pacific is the fastest-growing region for sportswear.	0.10	4	0.40
3. Growth of e-commerce/Direct-to-Consumer (DTC) sales channels.	0.09	3	0.27
4. The "athleisure" trend remains popular and growing.	0.08	2	0.16
5. Growing health consciousness and fitness participation globally.	0.07	3	0.21
6. Technology integration in apparel (smart clothing).	0.06	2	0.12
7. Ability to collect customer data via DTC and apps.	0.05	2	0.10
8. Hyper-growth in emerging markets like India and Thailand.	0.05	2	0.10
9. Main competitors' distributors (Dick's, Foot Locker) are losing market share.	0.04	3	0.12
10. Trend towards product personalization (e.g., NikeID).	0.03	1	0.03
Threats (10 Factors)	Weight	Rating	Score
1. Intense competition from dominant rivals Nike and Adidas.	0.12	1	0.12
2. Key wholesale distributors going bankrupt.	0.08	2	0.16
3. Decreasing brand loyalty and rise of "brand polygamists."	0.07	1	0.07
4. Competitors easily copy UA's designs and technology (no patents).	0.07	2	0.14
5. Rise of powerful niche competitors (e.g., Lululemon).	0.06	1	0.06
6. Retailers developing private-label brands.	0.05	2	0.10
7. Poor stock performance leading to investor pressure.	0.05	1	0.05
8. Potential for "athleisure" trend to slow down.	0.04	2	0.08
9. High reliance on image of celebrity endorsers.	0.03	2	0.06
10. Economic downturn could reduce spending on premium apparel.	0.02	3	0.06
TOTAL	1.00		2.53

Interpretation: An EFE score of 2.53 indicates an average response to the external environment. UA capitalizes on international growth but fails to defend against critical threats from competitors and changing consumer behavior.

4.0 Internal Factor Evaluation (IFE) Matrix

Strengths (10 Factors)	Weight	Rating	Score
1. Strong international revenue growth (27% overall, 35% in Asia).	0.15	4	0.60
2. Strong, edgy brand identity and marketing ("underdog").	0.12	4	0.48
3. Growing Direct-to-Consumer (DTC) channel (31% of revenue).	0.10	4	0.40
4. High-profile portfolio of celebrity endorsers (Curry, Brady).	0.09	4	0.36
5. Founder and CEO Kevin Plank as a passionate, visionary leader.	0.07	3	0.21
6. Established contracts with major sports leagues (NFL, NBA).	0.06	3	0.18
7. Strong seasonal performance in Q3 and Q4.	0.05	3	0.15
8. Ownership of 181 retail and brand house stores.	0.04	3	0.12
9. Segmented apparel technology (HeatGear, ColdGear).	0.04	2	0.08
10. Connected Fitness platform provides access to customer data.	0.02	2	0.04
Weaknesses (10 Factors)	Weight	Rating	Score
1. Poor financial performance (net loss of $48M in 2017).	0.12	1	0.12
2. Heavy revenue concentration (76%) in declining N. American market.	0.10	1	0.10
3. Rapidly rising inventory levels (up 26%).	0.09	1	0.09
4. Executive turmoil and all-male top executive team.	0.08	1	0.08
5. Lack of patents on fabrics, making innovation easy to copy.	0.07	2	0.14
6. Lagging competitors in the women's apparel segment.	0.06	1	0.06
7. Small market share in footwear (2.5%).	0.05	1	0.05
8. Over-reliance on struggling wholesale partners.	0.05	2	0.10
9. Ineffective organizational structure causing "disarray."	0.04	2	0.08
10. Connected Fitness platform is unprofitable.	0.02	2	0.04
TOTAL	1.00		2.58

Interpretation: An IFE score of 2.58 indicates a slightly above-average internal position. UA's powerful brand and international growth are significant strengths, but they are severely offset by critical weaknesses in finance, operations, and North American performance.

5.0 TOWS Matrix

	Strengths (S)	Weaknesses (W)
Opportunities (O)	SO Strategies (Aggressive) SO1: Aggressively expand branded retail stores (S8) in the Asia-Pacific region (O2). SO2: Launch a major marketing campaign featuring key endorsers (S4) specifically targeting emerging markets like India and Thailand (O8). SO3: Leverage the strong brand identity (S2) to expand the DTC e-commerce platform (S3) internationally. SO4: Use customer data from Connected Fitness (S10) to develop new "athleisure" products (O4).	WO Strategies (Turnaround) WO1: Divest the unprofitable Connected Fitness platform (W10) to fund DTC channel growth (O3). WO2: Form a strategic partnership with a fashion-focused design house to create a new women's line (W6) to capitalize on the athleisure trend (O4). WO3: Launch a DTC marketing campaign in North America (W2) focused on personalization (O10). WO4: Implement a new inventory management system using AI and tech (O6) to reduce high inventory levels (W3).
Threats (T)	ST Strategies (Defensive) ST1: Use the strong brand identity and endorser portfolio (S2, S4) to launch a loyalty program to combat decreasing brand loyalty (T3). ST2: Leverage strong international growth (S1) to offset poor North American performance and reassure investors (T7). ST3: Increase marketing spend on the "us vs. them" underdog story (S2) to differentiate from Nike and Adidas (T1). ST4: Acquire a small, innovative footwear company to gain patented technology (S9 is weak) and defend against copycats (T4).	WT Strategies (Defensive) WT1: Restructure the North American division (W2) and reduce overhead to improve financial performance (W1) against intense competition (T1). WT2: Divest underperforming stores in North America (W8) to pay down debt (W1) and reduce vulnerability to economic downturns (T10). WT3: Hire a new President for the Women's division and a Chief Diversity Officer (W4) to better compete against niche brands (T5). WT4: Reduce reliance on third-party retailers (W8) to mitigate the risk of further bankruptcies (T2).

Strengths (S)

Weaknesses (W)

Opportunities (O)

SO Strategies (Aggressive)

SO1: Aggressively expand branded retail stores (S8) in the Asia-Pacific region (O2).
SO2: Launch a major marketing campaign featuring key endorsers (S4) specifically targeting emerging markets like India and Thailand (O8).
SO3: Leverage the strong brand identity (S2) to expand the DTC e-commerce platform (S3) internationally.
SO4: Use customer data from Connected Fitness (S10) to develop new "athleisure" products (O4).

WO Strategies (Turnaround)

WO1: Divest the unprofitable Connected Fitness platform (W10) to fund DTC channel growth (O3).
WO2: Form a strategic partnership with a fashion-focused design house to create a new women's line (W6) to capitalize on the athleisure trend (O4).
WO3: Launch a DTC marketing campaign in North America (W2) focused on personalization (O10).
WO4: Implement a new inventory management system using AI and tech (O6) to reduce high inventory levels (W3).

Threats (T)

ST Strategies (Defensive)

ST1: Use the strong brand identity and endorser portfolio (S2, S4) to launch a loyalty program to combat decreasing brand loyalty (T3).
ST2: Leverage strong international growth (S1) to offset poor North American performance and reassure investors (T7).
ST3: Increase marketing spend on the "us vs. them" underdog story (S2) to differentiate from Nike and Adidas (T1).
ST4: Acquire a small, innovative footwear company to gain patented technology (S9 is weak) and defend against copycats (T4).

WT Strategies (Defensive)

WT1: Restructure the North American division (W2) and reduce overhead to improve financial performance (W1) against intense competition (T1).
WT2: Divest underperforming stores in North America (W8) to pay down debt (W1) and reduce vulnerability to economic downturns (T10).
WT3: Hire a new President for the Women's division and a Chief Diversity Officer (W4) to better compete against niche brands (T5).
WT4: Reduce reliance on third-party retailers (W8) to mitigate the risk of further bankruptcies (T2).

6.0 Financial Ratio Analysis (2016 vs. 2017)

Ratio	2016	2017	Trend & Interpretation
Current Ratio	2.86	2.20	Deteriorating. A significant drop in liquidity. While still above 2.0, the sharp decline, driven by a 55% increase in current liabilities, is a major concern.
Debt-to-Equity	0.79	0.98	Deteriorating. The company is taking on more debt relative to its equity, increasing its financial risk, which is alarming given the net loss.
Gross Profit Margin	46.4%	45.0%	Stable but Slightly Decreasing. Margins are being slightly compressed, likely due to competitive pressure or higher costs.
Net Profit Margin	5.3%	-0.97%	Collapse. The company has gone from profitable to unprofitable, indicating severe operational and strategic failure.
Return on Equity (ROE)	12.7%	-2.4%	Collapse. The company is now destroying shareholder value instead of creating it, which explains the stock's poor performance.

Overall Financial Health: The financial ratios paint a picture of a company in crisis. Profitability has collapsed, leverage is increasing, and liquidity is worsening. The current strategy is financially unsustainable.

7.0 Competitive Profile Matrix (CPM)

Critical Success Factor	Weight	Under Armour (Rating/Score)	Nike (Rating/Score)	Adidas (Rating/Score)
Brand Image & Recognition	0.20	3 / 0.60	4 / 0.80	4 / 0.80
Product Innovation	0.15	3 / 0.45	4 / 0.60	3 / 0.45
Financial Strength	0.15	1 / 0.15	4 / 0.60	3 / 0.45
Global Distribution Network	0.15	2 / 0.30	4 / 0.60	4 / 0.60
Endorser Portfolio	0.10	4 / 0.40	4 / 0.40	3 / 0.30
Market Share	0.10	2 / 0.20	4 / 0.40	3 / 0.30
Women's Apparel Line	0.05	1 / 0.05	3 / 0.15	2 / 0.10
E-Commerce / DTC Capability	0.05	3 / 0.15	4 / 0.20	3 / 0.15
TOTAL	1.00	2.30 (Weak)	3.75 (Strong)	3.15 (Strong)

Interpretation: With a total score of 2.30, Under Armour is significantly weaker than its main competitors, Nike (3.75) and Adidas (3.15). Its only competitive strength is its endorser portfolio. Its critical weaknesses in financial strength and global distribution prevent it from competing effectively.

8.0 Marketing Issues

Brand Identity Crisis: The company is caught between its authentic, high-performance roots and a push toward "everyday wear," which has "lost its identity" and confused consumers.
Over-Reliance on Wholesale: Its primary sales channel is under threat from distributor bankruptcies and the rise of private-label brands.
Ineffective Marketing to Women: Despite it being a key growth vision, the case states UA "definitely lags" competitors like Lululemon in attracting female customers.
Underutilization of DTC Data: The company is failing to use the "priceless" data from its apps to personalize marketing and drive sales, as evidenced by the platform's unprofitability.

9.0 Grand Strategy Matrix

RAPID MARKET GROWTH SLOW MARKET GROWTH WEAK COMPETITIVE POSITION STRONG COMPETITIVE POSITION

Quadrant II

UA

Quadrant I

Quadrant III

Quadrant IV

Conclusion: Under Armour is in Quadrant II.

Market Growth (Rapid): The global sportswear market is growing quickly, driven by athleisure, health trends, and emerging markets.
Competitive Position (Weak): UA is financially weak, has a small market share, and is significantly outmatched by its primary rivals, Nike and Adidas.

Strategic Implications: Firms in Quadrant II must make significant changes to improve their competitive position. The recommended path is intensive strategies (Market Development, Product Development) to gain ground. If improvement is not possible, divestiture or retrenchment is necessary.

How-To Guide: Performing a Financial Ratio Analysis

Financial ratio analysis helps you understand a company's performance by comparing numbers from its financial statements. Here’s a step-by-step guide based on the Under Armour case.

Step 1: Gather the Necessary Financial Data

You need the Income Statement and the Balance Sheet. For this case, all the data comes from **Exhibit 2 (Income Statement)** and **Exhibit 3 (Balance Sheet)** for the years 2016 and 2017.

From the Balance Sheet: Current Assets, Current Liabilities, Total Liabilities, Total Equity.
From the Income Statement: Revenue, Gross Profit, Net Income.

Step 2: Know the Formulas for Key Ratios

These formulas measure different aspects of the company's health:

Current Ratio (Liquidity): Current Assets / Current Liabilities — Measures ability to pay short-term debts.
Debt-to-Equity (Leverage): Total Liabilities / Total Equity — Measures how much debt the company uses to finance its assets versus equity.
Gross Profit Margin (Profitability): Gross Profit / Revenue — Shows the profitability of the core business before other expenses.
Net Profit Margin (Profitability): Net Income / Revenue — The ultimate measure of profitability after all expenses.
Return on Equity (ROE) (Profitability): Net Income / Total Equity — Shows how much profit the company generates with the money shareholders have invested.

Step 3: Calculate the Ratios for Each Year (Example: Current Ratio 2017)

Let's calculate the Current Ratio for 2017 using data from Exhibit 3 (all numbers in thousands USD).

Find Current Assets for 2017: $2,337,679
Find Current Liabilities for 2017: $1,060,375
Apply the formula: $2,337,679 / $1,060,375 = 2.20

Repeat this process for the same ratio in 2016 to establish a trend. Then, do this for all the other key ratios.

Step 4: Analyze the Trend (2016 vs. 2017)

Compare the results from both years to see the direction of the company's performance.

Improving: The number is getting better (e.g., higher profit margin, lower debt ratio).
Deteriorating: The number is getting worse (e.g., lower current ratio, negative net margin).
Stable: The number is relatively unchanged.

Example: The Current Ratio went from 2.86 in 2016 to 2.20 in 2017. This is a clear **deteriorating** trend.

Step 5: Write the Interpretation

This is the most important step. Explain what the numbers and the trend mean in a business context. Don't just state the numbers; explain their significance.

Example Interpretation for Net Profit Margin:

"The company's Net Profit Margin collapsed from a healthy 5.3% in 2016 to a negative 0.97% in 2017. This dramatic shift from profitability to unprofitability is the most critical financial problem facing the company. It indicates that despite a small increase in revenue, soaring operating expenses completely wiped out any profits, signaling that the company's current operational strategy is failing and unsustainable."