Natalie Rabb, Eric Camardelle, Alyssa Bordelon, Rachel Smith

EXECUTIVE SUMMARY

EXECUTIVE SUMMARY
Under Armour is the pioneer of the performance
NEAR has come up with two strategies to deal
apparel market, producing innovative lines of
with this crisis. A defensive strategy could be
clothing and shoes and promising to make you
used to deny the false claims about the speed
better.
skating suits and debunk the sources used to
gain the information. The second option is the
Under Armour partners with the U.S. Olympic
use of accommodative strategy to express
Speed Skating team and paired up with
condolences about the failure of the team and
Lockheed Martin in order . Under Armour
investigate how Under Armour can be improved.
boasted that these suits would guarantee
victory for an American team with sky-high
expectations.

With an overall recommendation for the use of

the accommodative strategy, NEAR will take
immediate action in order to rectify Under
As competition in Sochi began, the U.S.
Amours brand image. Print ads, social media,
Speedskating team found themselves
outdoor advertising, radio and Television spots
consistently underperforming, failing to place
will be used in a three month media campaign
any higher than seventh among all races. A Wall
between March and May.
Street Journal report began a blame game in
which the Mach 39 suits were held accountable.
An Under Armour winter sports camp program
for youth held throughout the month of May and
Although Shani Davis and Heather Richardson
the announcement of a sponsorship deal for the
still failed to to place higher than seventh even
2018 Winter Paralympics will aid in creating
after switching to older model suits, Under
both immediate and long-lasting positive PR for
Armour still faces a crisis because they failed to
the brand and repairing Under Armours image
live up to their own expectations on an
in the eye of the public.
international stage and doubt has been set into
the mind of consumers.

CRISIS

CRISIS
The U.S. Speedskating team was heavily favored to win big at the 2014 Winter
Olympics, but when it came time to compete, the athletes has disastrous
results. Four-time speedskating medalist Shani Davis finished 8th in the 1,000meter race. Number 1 ranked female U.S. speedskater Heather Richardson
finished 7th in her race. After six long-track speedskating events, no American
finished better than 7th. Americans won four medals in 2010 and a combined 19
medals over the previous three Winter Games. Team USA athletes, fans and the
media began searching for reasons why these unexpected failures were
happening. One convenient suspect began to emerge: Under Armours brand
new scientifically advanced Mach 39 speedskating suits.

Before the games, Under Armour partnered with Lockheed Martin to develop
the Mach 39 speedskating suit. For weeks, they boasted that the outfit was the
fastest speedskating suit in the world. The suit had been tested under specific
conditions for Sochi and went through 300 hours of wind-tunnel testing. Even
the zippers were a special design. But once the athletes started competing, the
Mach 39 suits did not live up to the hype. The Wall Street Journal reported that
vents on the back of the suit were creating a parachute effect that kept the
racers from reaching their maximum speed. The next day, a whirlwind of media
speculation blamed Under Armour for the speedskaterss lack of performance.

CRISIS

CRISIS
The company went on the defense to say that all uniforms
were tested rigorously to make sure that the needs of the
athletes were met with zero distractions. The athletes even
trained in the suits and made adjustments for fit and comfort,
but never formally competed in them. The athletes were
allowed to switch to old suits without the ventilation, but still
continued to lose. None of the athletes or U.S. speedskating
coaches officially blamed the suits outright for their loses, but
instead said it was a combination of too much travel and lack
of proper training. Regardless of this fact, Under Armours
stock dropped 2.38%.

PROBLEM

PROBLEM
Under Armour has received the brunt of the blame
regarding the U.S. Speedskating Teams performance in
the 2014 Sochi Winter Olympics. Under Armours stock
price fell 2.38% in the aftermath of the Wall Street Journal
article that originally put the Under Armour Mach 39 suit
under fire. Perception is reality in this situation. In the
wake of this crisis, public perception of Under Armour as
an authentic, reliable, performance-enhancing product is
being put into doubt. We must create a sound, cohesive
crisis management strategy where cost-effectiveness
and immediacy is key in order to remain within our
budget and address the problem before the Under
Armour brand perception is tarnished further.

CRITICAL FACTORS

SALES

Synthetic Performance Apparel

Market is $3 Billion
Under Armour holds 70% market
share
Footwear is 13% of UA net revenue
UA holds 2.7% of running shoes
market share and 2.1% footwear
market share
Compared to Nike, Adidas,
and Reebok
Women are 30% of UA net revenues,
up 18% from 8 years ago
Predicted to be $1 billion by 2016
Hope to become No. 1 womens
athletic apparel brand in the
world
Youth are $220 million of company
revenue
Hope to grow more than 100% to
$470 million in 2016

TOP ATHLETIC APPAREL MAKERS, 2010

The industry generated revenues of $10.1 billion in 2010 and could reach $11.8 billion in 2015.

NIKE

19.2%

ADIDAS
UNDER ARMOUR

48.6%

12.38%

VF CORP.
ASICS

8.17%

3.03% 3.74%

PUMA
OTHER

4.89%

Sources: Forbes, Medill, Market Share Reporter

INTERNATIONAL

EXPANSION

International revenues are only 6% of UA net revenues

Predicted growth of 12% by 2016

8-year extension deal with US Speedskating through 2022 Olympics

Gymnastics deal for 2016 Summer Olympics in Rio de Janeiro and

2020 Games in Tokyo

Deals with professional soccer teams, including Tottenham Hotspur

of the English Premier League and Colo-Colo in Chile

Direct sales to consumers in Mexico, Brazil and Chile

13 brand house stores in China, but will grow to more than 50 by the
end of this year

Sources: Medill

PROFIT

Predicted to earn $4 billion in revenue by 2016

Tripled its revenue in the last 5 years to $2

BUDGET

billion in 2013

Cost reduction in athletic wear

STOCK PRICE

After crisis incident, stocks dropped 2.38%

Currently, shares are up 62% year-to-date in
2014
Stocks up about 200% since early 2013
17th consecutive quarter of 20%-plus revenue
growth
More than 20% growth each quarter when
compared with the same period a year ago
Nikes market cap is $68 billion; Under
Armours is only $15 billion

CONSTRAINTS

Only $15 Million to fix Under

Armours biggest
communications crisis yet
One that was global, farreaching and required
immediate action

Sources: Forbes, Medill, Investor Place, UA Case

CORPORATE

IMAGE

Under Armour is known as the highest quality, best available athletic

brand. Their mission is to provide the world with technically
advanced products engineered with superior fabric construction,
exclusive moisture management, and proven innovation.
Under Armour pioneered the performance apparel industry, and this
is why it rises above the rest in this category. Under Armours
moisture-wicking microfibers keep athletes cool, dry, and light under
strenuous conditions. The technology and science used in the creation
of the Under Armour product helps you to perform your absolute best.
Every Under Armour product is doing something for you; its
making you better.

Sources: UA Case, WSJ

Sources: SimmonsOneView

TARGET AUDIENCE

ATHLETE

wants to
provide for
children
110

play
sports/
exercises at
least once a
week
154
it is
important
that companies
act ethically
104

willing
to volunteer
time for a
good cause
117

adventurous
154

tend
to act in the
spur of the
moment
123
likes
to share
knowledge
with others
114
it is
worth paying
extra for better
quality
113

it is
important to
be wellinformed
110

willing
to help others
even when there
is no benefit for
themselves
116

AGES 18-44 PARTICIPATING IN WINTER SPORTS

Sources: SimmonsOneView

TARGET AUDIENCE

it is
worth paying
extra for better
quality
135

important
that a
company acts
ethically
143

plays
sports/
exercises at
least once a
week
151

tend
to act in the
spur of the
moment
121

it is
important to
be wellinformed
129

OLYMPIC

VIEWER

willing to
help others
event when there
is no benefit to
myself
132

willing
to volunteer
time for a
good cause
131

adventurous
110

likes
to share my
knowledge
with others
123

you
should seize
opportunity in
life when it
arises
128

AGES 45-65+ WATCHING/VERY INTERESTED IN WINTER OLYMPICS

ADVERTISING

OBJECTIVE

Maintain public perception of Under Armours brand image

of being the top performance apparel maker
Increase awareness among the public of the correct facts
surrounding the crisis situation and control the media
message being spread

CRY ME A RIVER

DENIAL
Under Armour should deny that the problem exists, and deny
that they had an role in the crisis.

There is no evidential proof that Under Armour was the direct cause for
the loses.
The breaking Wall Street Journal article has no reliable sources.
All of the quotes used in the article are hearsay or taken out of context
According to three people familiar with the U.S. team One skater
said team members felt they were fighting the suit to maintain correct
form. (WSJ)

No direct mention of any names

Bert van der Tuuk, the designer of the Dutch Olympic team's suits,
said Thursday he had tried a similar ventilation panel on the back of a
prototype three years ago, but it slowed his skaters by letting in air and
creating drag. The suit was blowing itself up, he said. (WSJ)
Speaking about his skaters and their suits, NOT the U.S. Under
Armour suits

Overhearing a conversation about them, a Dutch coach shouted, Are

you talking about the suits? They're slower! (WSJ)

Again, no direct names mentioned and only information is hearsay

EXCUSE
Under Armour should deny that they did any harm, and say that
they had no control over the events that took place.

There were many other factors that could have been the reason why the
U.S. speedskating team was performing so poorly
U.S. Olympic Committee CEO Scott Blackmun said earlier this week: We
do not believe the suits were the problem. (USA Today)
Shani Davis and Heather Richardson both failed in the 1500 even after
switching out of the new bodysuits. So maybe its not the suits, maybe its
the athletes. (WSJ)
The U.S. team trained at higher altitudes on an outdoor track in Collalbo,
Italy, with ice conditions different from the track in Sochi. (USA Today)
Mr. Davis said his start in Wednesday's losing 1,000-meter race was one
of the fastest of his career. (WSJ)
The athletes simply weren't comfortable racing in a suit without prior
experience. (USA Today)
(U.S. Speedskating Executive Director) Ted Morris said exhaustive travel
was identified as the most significant factor in the team's struggles. (USA
Today)
As the governing body focused on the project with Under Armour and
extolled its cutting edge technology, it failed to prepare the team for the
conditions in Sochi. (USA Today)

PROS

Discrediting the Wall Street Journal

will kill the original source of the
rumors surrounding the Mach 39 suit
Under Armour strongly emphasizes
that they are not at fault
Relies on actual facts and quotes that
can be attributed by name to Olympic
personnel involved in the situation

CONS

Attacking the Wall Street Journal

may seem tacky in the eyes of the
public and press and create a bad
relationship between Under Armour
and the publication
Not admitting guilt or emphasizing
with the athletes may be taken as
subtle implication that the athletes
are to blame
Relying on other sources to
substantiate Under Armours
innocence rather than their own may
imply a lack of interest in actually
addressing the crisis head-on

EXPECTED OUTCOMES
Under Armour wont be held responsible for the incidents happening in Sochi, but the
media and the public may find that they are trying to distance themselves and not take
action of the situation by denying their association with the problem and making
excuses while dragging the Wall Street Journals name through the mud.

YOUR CRYING SHOULDER

CONDOLENCE
Under Armour will give a formal vocal response that shows deep
concern for the situation at hand. They will recognize sorrow and
empathize with the athletes for the misfortune they have
experienced, but they will not admit guilt.

There is no evidential proof that the Under Armour suits are the direct
reason for the losses
Under Armour will show its unending support for the athletes during these
disappointing losses and continuously stand behind the athletes as they
move forward in the U.S. Winter Olympics.

INVESTIGATION
Under Armour will send a team to Sochi to immediately examine
the facts that led to this situation and if the suits are to blame.

Is it the vents?
Is there another problem with the suits causing them to slow down?
How and why did the suits not live up to their promise?
Are the athletes distressed in any way?
Are there distractions in the competition?
By gathering the correct facts directly in Sochi, Under Armour can
properly examine the problem to find the best solution.

CORRECTIVE ACTION
Using what they learned from the Investigation, Under Armour
will take steps to repair the damage from the crisis and prevent
it from happening again.

Under Armour will work with the coaches and athletes to make
adjustments to the suits so the athletes can feel more comfortable and
perform better.
Under Armour will use the facts they found during the investigation to go
straight to the frontline of the media and control the message that is being
spread.
Top Under Armour executives will be the ones to face the media and put
the rumours to a halt.
Under Armour will take responsibility for the fact that the suits did not
give the athletes the competitive edge they were hoping for, but they will
work tirelessly and do what they can to enable the athletes to perform
their absolute best.

PROS

Under Armours relying on

empathizing with those involved in
the situation gives the brand a sense
of humanity, while not admitting guilt
The proceeding investigation and
corrective action will show the public
how invested Under Armour is willing
to be in order to solve the crisis
Not placing blame on anyone in
particular will

CONS

Public may not believe that the

investigation is providing authentic
results due to Under Armour
controlling it themselves
The lack of addressal toward the
Wall Street Journal report may be
seen as a silent admittance of the
suits technologically failing
Running our own investigation may
be time lengthy and stretch the
budget

EXPECTED OUTCOMES
Although Under Armour is not accepting blame or full responsibility for the events
happening in Sochi, they are still making positive strides to rectify the situation. The
media and public will see this as them taking action and not trying to place the blame on
someone else. By being on the frontline and controlling the message of the media with
the correct facts, the public will stay informed with a positive outlook on the situation
and continue to stand with Under Armour is supporting the U.S. Speedskating team.

REGIONALITY

TIMELINE

MEDIA MIX

SOCIAL MEDIA ATHLETE

INTERNET AT HOME/WORK
ATHLETE

TV EARLY/LATE FRINGE
OLYMPIC VIEWER

214

208

128

172

127

120

139

98

100

95

87

83

65

QUINTILES

LATE EVENING NEWS

1-2 TIMES
A DAY

3 OR MORE
TIMES

SOCIAL
MEDIA USER

QUINTILES

MAGAZINE QUINTILES

NATIONAL NEWSPAPER QUINTILES

326

198

175
149

131

133

248

158 156

152

221

134

130

195
183
ATHLETE
TARGET

ATHLETE
TARGET

ATHLETE
TARGET

OLYMPICS
VIEWER T
ARGET

OLYMPICS
VIEWER T
ARGET

OLYMPICS
VIEWER T
ARGET

NEWSWEEK

THE NEW
YORKER

AARP

RUNNERS
WORLD

ESPN

WSJ

USA TODAY

NY TIMES

NBC

FOX

ABC

MEDIA MIX
20%
$3M

SPOT TV
40%
$6M

20%
$3M

MAGAZINE
NATIONAL NEWSPAPER
PROMOTION
DIGITAL

13.3%
$2M

6.7%
$1M

PRINT & SOCIAL MEDIA ADS

FALL DOWN SEVEN TIMES

STAND UP EIGHT
UNDER ARMOUR is a proud partner of the U.S. Speedskating Team in 2018.

SPONSORSHIPS
& PROMOTIONS

Partner with SOS Outreach, youth development non-profit

organization serving 5,000 at-risk youth aged 8-18 annually

Use outdoor sports to engage underserved students

in long-term mentor based relationshipsTop Under
Armour executives will be the ones to face the media
and put the rumors to a halt.

Core value curriculum integrates outdoor experiential

learning, character development, community service,
values-based leadership development, social justice
advocacy, and peer mentoring

Runs various programs for youth to encourage

participants to transform themselves and others for
the better
Under Armour sponsors a two-day SOS Outreach
Adventure program for the month of May

Different city each weekend (NYC, Detroit, CA,

Chicago) with an emphasis on cities with impoverished
youth

Ice rink with EZ Glide 350 synthetic ice and ski slope
and bunny slope made with Snowflex technology

Free admission for kids

Under Armour sponsored Olympic teams (U.S.

Speedskating, U.S. Snowboarding, Lindsey Vonn, and
Canadian Snowboarding) coaches and athletes will be
camp counselors along with volunteers

Parents will register their children on line during the

month of March and receive an Under Armour Skates &
Slopes Camp t-shirt, camp wristband, and a personalized
welcome video for each kid featuring an Olympic athlete

Under Armour and SOS Outreach will accept limited

amount of participants in order to keep a good
camper-counselor ratio

Throughout the program, kids will get a chance to learn the

basics of skiing, snowboarding, and ice skating through
programs coordinated by Olympic coaches, athletes, SOS
Outreach staff, and community volunteers

After the two-day program is over, kids will receive another

personalized video featuring an Olympic athlete
congratulating them on their participation
After the initial campaign, announce the partnership for the
U.S. Winter Paralympic Games in 2018 at PyeongChang.

EARNED

Press coverage of the brands reaction to the crisis, primarily our investigation as part of the
accommodative strategy
Press coverage and word-of-mouth of the Skates & Slopes Campto be in order to solve the
crisis
Publicity and PR mentions on social networks and blog
Build a claim of acceptance for the brand, make the brands claims more credible, and break
through the clutter

OWNED

YouTube web series on Under Armours own YouTube channel featuring the making and testing
of Under Armour performance apparel
Two new Under Armour official websites: one for our internal investigation into the crisis and
Sochi and another for the Skates & Slopes Camp
Under Armour Facebook, Twitter, Instagram, and Snapchat
showing exclusive and behind-the-scenes shots from Skates & Slopes, U.S. Winter
Paralympic & Olympics training and athletes, and U.S. Speedskating World Cup
Our owned media will be controlled by Under Armour themselves, allowing for complete
control in a crisis environment and build brand transparency, authenticity, and loyalty

CONCLUSION/

EVALUATION

CONCLUSION/

EVALUATION
NEAR thinks that the second option, "Your Crying Shoulder," will be the most effective and
successful crisis management plan for Under Armour to implement. By empathizing with
everyone involved, they become a more human and personal brand that consumers will
relate to and be more willing to forgive. The will be able to control what the media is
saying to disseminate the correct information and put the company's brand image on the
fast track to recovery.

!
We will evaluate the campaign by hosting a crisis management center at Under Armour's
headquarters that will monitor all social media activity. The social media team will work
around the clock to quickly respond to followers's comments that may be negative or have
questions about the situation. They will be on the very frontline of correcting this situation.
A very detailed PR action plan will be implemented to further monitor media speculation
and audit the conversation around Under Armour on social media.

THANK YOU

REFERENCES
http://mashable.com/2014/02/14/speed-skating-uniforms-usa-sochi/
http://www.bloombergview.com/articles/2014-02-14/under-armour-s-sochi-problem
http://www.cnbc.com/id/101434825#.
http://espn.go.com/olympics/winter/2014/speedskating/story/_/id/10494985/2014-sochiolympics-armour-outfit-us-speedskating-next-two-olympics
http://www.bloomberg.com/news/2014-02-17/under-armour-goes-for-damage-controlinstead-of-gold-at-olympics.html
http://www.usatoday.com/story/sports/olympics/sochi/2014/02/17/under-armour-speedsuits-usa-speedskaters/5558843/
http://www.usatoday.com/story/sports/olympics/2014/05/01/us-speedskating-underarmour-suits/8589263/

!
http://online.wsj.com/news/articles/SB10001424052702304703804579381002780722432?
utm_medium=App.net&utm_source=PourOver
http://adage.com/article/cmo-strategy/armour-s-olympic-experience-shows-handlecrisis/291990/
http://www.forbes.com/sites/greatspeculations/2013/12/17/armoured-for-growthpotential-opportunities-for-under-armour/
http://news.medill.northwestern.edu/chicago/news.aspx?id=228798
http://online.wsj.com/articles/SB10001424052702304315004579384521100344980
http://investorplace.com/2014/08/under-armour-stock-ua-nike/#.VEm9flYipuY