ORourke_Joshua_Milestone_Two.docx - Under Armour Inc Joshua O'Rourke MBA-520 Milestone Two Success Factors and Risk Priorities Under Armour\u2019s

ORourke_Joshua_Milestone_Two.docx - Under Armour Inc Joshua...

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Under Armour, Inc. Joshua O'Rourke MBA-520 Milestone Two
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Success Factors and Risk Priorities Under Armour’s currently strategy is to try and transition from being a domestic brand and into being a global brand (Under Armour, 2017). This is the company’s number one priority, as doing this increases the number of potential customers they can reach. The domestic segment, North America, has less of a population than the rest of the world, so it makes sense for Under Armour to go global. The strategy requires Under Armour to alter it reporting because they must report their annual sales in accordance with each countries regulation that they sell in. Meaning they would have to pay taxes twice on the same revenue. The first one on the country in question where the product was sold, and again to the United States (How does the current system of international taxation work?). This strategy is directly affecting Under Armour’s financial situation. When altering a company’s revenue strategy, there is a cost to making changes. But this is a growth-oriented move, and while the results may be mixed, the overall outcome was positive. A horizontal analysis of each of Under Armour’s geographical segments showed that this new strategy hurt the North American segment, which saw a decrease of 5.07% in revenue from the previous year. However, the rest of Under Armour’s geographical segments all saw increases in revenue from the previous year. This trade off of more sales outside North America and fewer inside North America paid off as Under Armour’s total revenue increased from the previous year by 3.13% (Under Armour, 2017). In short, this means Under Armour’s financial strategy is to take on short term losses, in order to build long term gains down the road. A costly strategy at the beginning of its implementation, but it has the potential to create a financially stronger company once fully implemented.
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