Under Armor Critical Thinkings Examples

Company Introduction:

Established a few years back, Under Armor is now renowned as one of the biggest sports brands around the globe. It has been able to cater to the specific needs of many target segments ranging from professionals, adults to athletes, kids. The brand image that the Company has been able to create is not just because of the quality that the brand believes in, it is also largely because of the impeccable marketing mix used by the Company to attract potential customers. The target market and potential customers for the brand are also well defined. Essentially, all of Under Armor’s customers are in one way or the other, have an interest in sports. The swoosh logo is also a famous testament of the users. The target customers are both male and female who are involved in various professions and fall in different age groups, residing in schools as well as offices.
The operations of Under Armor are differentiated in the way that the US brand is outsourced from its native country. The contract suppliers that have been identified as per the record of the year 2009 are Indonesia, Thailand, China, and Vietnam. The contribution of these suppliers is 6 percent, 22 percent, and 36 percent respectively. There are also independent factories of Nike in nations like Brazil, Argentina, India, Argentina, and Mexico. There remaining supplies are fulfilled by countries like Cambodia, Taiwan, Israel, and El Salvador. The suppliers thus total to 46 countries. The use of this opportunity in choosing of suppliers is to maintain a low cost of production, lower labor costs and lower amounts of tariffs and taxes.
The competition in the industry is high with the presence of big players like Reebok, Adidas, Puma, Nike along with smaller players like Chinese companies, who also produce footwear. The threats to the industry and the company include the rapidly changing trends and preferences in sports apparels and other related products, with the change in technology.
The whole financial change in the Company’s standing may be analyzed by looking at the various ratios and other financial aspects of the Company. If we see the Earnings per share (EPS) of the Company, there has been a steady rise in the recent year and then again dropped by a certain percent, denoting that the financial strength of the Company is strong, however, there was certain fluctuation in the recent year, which may be due to decreasing in disposable income.
The return on capital employed has also been in an increasing trend, despite a fall a few years back. Same is the situation when we analyze the return on assets. The decrease in tax rate from the year resulted in some tax benefits for the Company, which, on the other hand, may also have been the reason for fluctuating return on assets. The turnover ratio has also remained constant, signifying that the strength of the Company is intact. The point of consideration, however, is that the collection cycle seems to be longer than required.
The variation in the current ratios over time still reflects that there is only a limited risk of the liquidity that the Company has. There are additional positive signs when it comes to solvency risks of the long term. The Company has an outstanding record when it comes to earning in relation to the common stock it maintains. The Company seems to follow a looser credit policy. The Company is the owner of such assets, which help to make stronger the financial situation. The simultaneous ability of the Company in managing debts and maintaining profits in comparison to competitors are also added achievements.