Appendix 3
Return on Equity: Under Armor has less ROE than Nike between the years 2007 to 2016. This shows that Under Armor is not as efficient as Nike when generating profit from capitol that has been invested by the shareholders. Per the Dupont Formula, the ROE is effected by both profit margins and asset turnover.
Return on Assets: Under armor has a smaller averaged ROA than Nike. The smaller ROA indicates that Under Armor is putting money towards its future to increase growth and drive innovation. Per the Dupont formula, the ROA is effected by both profit margins and asset turnover. It is interesting to see the ROA is smaller for Nike in 2007, showing that Nike was investing the most
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The low profit margin that Under Armor is showing is due to many reasons. Under Armor spends more money on advertising and endorsements for its products. Also, Under Armor is expanding its product line into shoes and new technology for its clothing. Nike is already a large company with great brand recognition so it is making a much larger profit. It is no secret that Under Armor has been making money with margins that are low. The margins becomif even lower in years 2015 and 2016 because of retailers closing and Under Armor having to find new retailers to sell their products.
Total Asset Turnover: Under Armor has a higher Total Asset Turnover than Nike. This shows that Under Amour exploits its physical assets better than Nike. It is shown in year 2016 that Nike has a higher Total Asset Turnover than Under Armor. This is more than likely an effect of retailers such as sports authority closing stores.
Inventory Turnover: Under Armor has a lower Inventory Turnover than Nike. This shows that Nike is better at annually turning its inventory over. The reasons that Nike is better at inventory turnover is the recognition of its brand over Under Armor, Its advertising and the discounts on their inventory. Nike is an older, larger company. This means that the brand recognition is better with Nike because of the relative newness of Under
Adidas and Under Armour’s advertisements are similar but sell a different product and sell in different ways. Adidas and Under Armour use pathos to sell as well. This essay is about why they use pathos, how they use pathos, how they sell it with pathos, and what the visual is in the advertisement, and does it work.
Under Armour provides innovatively designed performance products that incorporated a variety of technologically advanced fabrics and specialized manufacturing techniques, all in attempt to make the wearer feel “drier, lighter, and more comfortable.” This is Under Armour’s core competitive strength.
Overall, Under Armor did an outstanding job targeting young, aspiring athletes to do what they want to do with their life. They used logic to show how hard the athletes work along with emotion to show how serious they take their training. Finally, Under Armor used the credibility of the athletes to sell their new training shoe. This commercial will make anyone want to purchase a pair of shoes and workout themselves. Since the commercial is on such a serious level, viewers emotionally connect with it which makes Under Armor seem like the best brand
Return on equity (ROE) measures profitability from the stockholders perspective. The ROE is a calculation of the return earned on the common stockholders' investment in the firm. Generally, the higher this return, the better off the stockholders are. Harley Davidson's return on equity was 24.92% for 2001, 24.74% for 2000. They have sustained consistent, positive, returns for their shareholders for the past two years.
They could overtake Adidas if they continue with their innovative strategy because they’re only $3.5 billion away. Since now-a-days consumers are all about technology and new innovative products, if Under Armour continues with their innovative strategy they will continue to see an increase of financial growth, become a major competitor for Adidas, and a closer competitor to Nike.
Under Armour is a leading athletic clothing line directed towards the overall athlete who is looking for the most comfort during extracurricular activities. The mission of the company is, "to provide the world with technically advanced products engineered with exclusive fabric construction, supreme moisture management, and proven innovation. In short, every Under Armour product is doing something for you; it's making you better."
Only a week earlier, on June 28, 2001, Nike had held an analysts' meeting to disclose its fiscal-year 2001 results.1 The meeting, however, had another purpose: Nike management wanted to communicate a strategy for revitalizing the company. Since 1997, its revenues had plateaued at around $9 billion, while net income had fallen from almost $800 million to $580 million (see Exhibit 1). Nike's market share in U.S. athletic shoes had fallen from 48%, in 1997, to 42% in 2000.2 In addition, recent supply-chain issues and the adverse effect of a strong dollar had negatively affected revenue.
Under Amour Company ventured into a market segment that was overcrowded, it had thousands of companies that competed against each other. Out of the many companies involved in the trade, the two most formidable threats seemed to be orchestrated by Nike and Adidas. These are two giant sports apparel and footwear, which pride themselves as having been long term veterans in the industry. Nike in particular was christened as the ultimate shoe and athletic apparel company with revenues of $18.6 billion, net income of $1.9 billion and more than thirty two thousand employees globally in the year 2008. This makes it the largest athletic shoe and apparel seller in the world. This company has seen major expansions in outlets throughout the world over the years. Adidas on its part has managed to build a powerful brand through its technological innovations and aggressive marketing where they spend up to thirteen per cent of their revenue besides offering high quality services. These scenarios seem to present Under Armour with a massive competitive disadvantage.
The sports apparel and accessories industry has a highly competitive market. Businesses are constantly competing for elite athletes to sponsor, raw materials, and every opportunity to expand. Under Armour is able to not only survive but thrive in this market because of their ability to think outside of the box. They are constantly creating new and exciting products that help athletes everywhere.
Nike American Sportswear generated revenue of 7495 million US dollars in 2014, which was almost double of 2009 revenue of Nike Sportswear (Statista, 2015).The sales of (Athletic) Sportswear of Nike 90 million US dollars, however, the sale of Adidas Sportswear (Competitor of Nike) was 25 million US dollars, which was not even one third of Nike Sportswear sales (Statista, 2015).Nonetheless, the return on assets and equity are 13.41% and 26.43% respectively (Yahoo Finanace, 2015).
Executive Summary Introduction Kimi Ford, a portfolio manager at NorthPoint Group, a mutual-fund management firm, was considering buying shares in the fund she manages, the NorthPoint Large-Cap Fund, with an emphasis on value investing. Ford held an analysts’ meeting to disclose its fiscal-year 2001 results and, most importantly, to communicate a strategy for revitalizing the company. Nike has maintained revenue of about $9 billion since 1997. However, its net income had fallen from almost $800 million to $580 million. Moreover, Nike’s market share in U.S. athletic shoes has fallen from 48% in 1997 to 42% in 2000.
Under Armour has always set aggressive targets for themselves and they should not change that now. The leadership team believes that “a 3% share of the (athletic footwear) market would nearly double UA’s total revenue” (Wheelen, Hunger, Hoffman, & Bamford, 2015, 2012, 2010), and this should be another one of the metrics that Under Armour monitors and grows.
...ual Income Statement). Adidas has chosen not to make their advertising plans publicly known (How Much Money Does Adidas Spend on Advertising?).Under Armour is an up and coming company founded in 1996, their net income starting at 46.79 million and by 2013 ending with 162.17 million dollars (UA Annual Income Statement). Under Armour is focusing their advertising on internet marketing and mobile marketing, 6,500 dollars towards a mobile app and an overall advertising budget of 40,000 (Zoe Suffety).
Nike’s positioning in the market has more of a mass appeal compared to their main competitor Adidas who strive to make products for elite athletes. The positioning strategy for Nike is currently working at a satisfactory level as Nikes global annual sales between 2013-2014 was reported as 27.8 billion (Statista, 2014) compared to Adidas’ 19.95 billion (Statista, 2014). The global market for sports apparel is expected to grow at a compound annual growth rate of 4% between 2012-2019, Nikes compound annual growth rate during 2010-2012 was 12.3% which is an excellent result as the brand’s growth was larger than the market as well as outgrowing Nike’s closest competitors Adidas, Puma and Asics (Forbes,
With their 1998 acquisition of Salomon, the company became adidas-Salomon, and the number 2 sporting goods company in the world. Although there were good strategic fits between adidas' and Salomon's core competencies, its obvious that the divisions failed to uncover these synergies. The future performance of Salomon have lagged behind expectations and It failed to provide much anticipated growth. Even more so, it dragged down the growth rates for adidas-Salomon overall.