Objectives: UA has continually struggled to compete with industry giants such as Nike and Adidas, with its penetration into the sports apparel/equipment industry coming primarily from its early Niche strategy focusing on American football. Revenue growth has been minimal since 2016, and profit margins have decreased substantially through the same period. A strategic acquisition, such as lululemon, would help UA grow its market share while diversifying its customer base to get them back into relevancy. Lululemon's strong growth prospects and brand awareness would couple well with potential operation synergies to reduce costs and improve operating margins for the combined firm.
Business Plan (for acquiring firm):
- Quantified strategic objectives (including completion dates): Indicate both financial (e.g., rates of return, sales, cash flow, share price, etc.) and non-financial (market share, being perceived by customers or investors as number one in the targeted market in terms of market share, product quality, price, innovation, etc.) goals.
Acquisition Plan (developed by acquiring firm):
- Timetable: Establish a timetable for completing the acquisition, including integration if the target firm is to be merged with the acquiring firm's operations. Identify key activities that need to be accomplished and indicate the estimated time required to complete these activities. Also, estimate resources (i.e., people, money, licenses, etc.) needed to complete each activity.
- Resource/capability evaluation: Evaluate the acquirer's financial and managerial capability to complete an acquisition. Identify affordability limits in terms of the maximum amount the acquirer should pay for an acquisition. Explain how this figure is determined