Conquer the Core: a plan for every basketball shoe under $120

What it is

The deck opens with its scope: all footwear less than $120, under the line "Premium at all levels". The consumer was the high school team player who wanted visible innovation at great value.

The numbers behind it were plain. On the deck's footwear figures, signature footwear, counting the tiered models, grew from $105M in fiscal 2012 to $321M in fiscal 2015. Non signature performance models fell from $133M to $117M over the same years. Footwear priced above $121 grew 41% a year. Every band below $100 shrank: 3% a year at $90 to $100, 1% at $76 to $89 and 7% at $55 to $75. A slide headed "UA steadily chipping away" tracked Under Armour's share month by month in early 2015.

The deck also found that the core line was not separated by channel. Sixty percent of core styles were shared between sporting goods chains and the moderate department stores and family footwear chains. The Air Visi Pro V sold for an average of $56.98 in the department and family channel against $63.95 in sporting goods, 12% cheaper for the same shoe.

What Khounlavong did

• Led the development of the strategy. His fiscal 2016 review lists it among his first quarter work as "Led the Development of the 'Conquer the Core' Strategy". Versions 3 and 4 of the deck carry his initials, and version 4 is dated July 13, 2015.
• Organized the plan by function: product, merchandising, brand and sales. Section leads from other functions were named on the working slides.
• Asked product for a $75 model sold only in sporting goods, to separate that channel from family footwear and to answer the Under Armour Jet at $70 to $75. He sized it at $17M and 424,000 pairs, $10M more than the Air Visi Pro it would sit beside.
• Asked to re-establish a $110 mid cut model, sized at $7.8M and 140,000 pairs. He cited the Hyperquickness, which had booked $5M across fall and holiday 2013 at five sporting goods accounts.
• Set a target for the core style mix. Shared styles would fall from 60% to 40%. Styles sold only in sporting goods would rise from 5% to 30%. Styles sold only in department and family stores would move from 35% to 30%.
• Proposed moving core models from a two year life to one year, and timing launches to the consumer and retail calendar.
• Laid out a three level ladder for each signature athlete, game, tiered and core, with the channel each level would lead. For LeBron James that was the $200 LeBron XII, the $130 Zoom Soldier and, by fiscal 2019, a new core model at $110.
• Wrote his own judgement on the goal slide. The choice was between $400M of revenue by 2019 and a share of the total mix. His note reads: "My gut tells me that it's the revenue."

Results

• The plan set a goal of $400M by fiscal 2019 and a market share above 70%.
• It sized three growth lines for fiscal 2019: core signature at $54.3M and 880,000 pairs, signature in the $100 to $130 band at $48.7M and 800,000 pairs, and Hyper models tied to athletes and moments at $48.0M and 720,000 pairs.
• Version 4 was still a working draft, with open fields in the brand and sales sections. Khounlavong left the category in September 2015. The documents do not record what Nike adopted or what the plan returned.
• The deck is one of ten Nike files he kept in a separate keepers folder.

At a glance