Under Armour faces low barriers to entry into the sports apparel industry due to high capital requirements, product differentiation by major competitors like Nike and Adidas, and difficulty obtaining effective distribution channels. The bargaining power of Under Armour's suppliers is high because they rely heavily on a small number of suppliers and many intellectual property rights are owned by suppliers. The bargaining power of buyers is also high since customers purchase a large portion of industry output and can easily switch between brands. Rivalry among competitors in the industry is intense due to equally balanced major competitors and high fixed costs. Under Armour differentiates itself through a focus on performance and authenticity.
Basically its a group project done by Shayla Khan Shimu,Badhon Mahadi Islam , Shahanur Alam , Shamrat Banik from American International-University Bangladesh
Comprehensive Analysis on roadmap of strategic management
1) WHERE ARE WE NOW?
2) WHERE DO WE WANT TO GO?
3) HOW DO WE GET THERE?
4) HOW DO WE ENSURE OUR ARRIVAL?
Basically its a group project done by Shayla Khan Shimu,Badhon Mahadi Islam , Shahanur Alam , Shamrat Banik from American International-University Bangladesh
Comprehensive Analysis on roadmap of strategic management
1) WHERE ARE WE NOW?
2) WHERE DO WE WANT TO GO?
3) HOW DO WE GET THERE?
4) HOW DO WE ENSURE OUR ARRIVAL?
I made this PowerPoint presentation for my Consumer Behavior class in 2006. It was the for a project in which we examined Under Armour's integrated marketing communications, and made recommendations at the end.
Who is top dog in the athletic apparel arena? On the surface, the way that consumers view athletic apparel brands Nike and Under Armour is very similar. However, we were able to dig below the surface to unearth what makes the two brands radically different in consumers’ eyes, and what that ultimately means for each brand’s market share. Check out the report to see how consumers describe each brand, who they view as the loyalists for each, and what drives them to purchase one over the other.
How to do Under Armour's SWOT Analysis? Strengths, Weaknesses, Opportunities ...SWOT & PESTLE.com
Check out our latest publication on Under Armour, Inc. which is an American sports equipment company that manufactures and produces footwear, sports and casual apparel.
Check out the SWOT and PESTLE analysis on Under Armour- https://www.swotandpestle.com/under-armour/
The analysis covers the business strategy of Under Armour.
We appreciate Siddhesh Suhas Salkar 's contribution towards this research report.
Follow us @swotandpestle to know more and visit our website - https://www.swotandpestle.com/
NEED HELP WITH YOUR RESEARCH?
Apart from SWOT and PESTLE analysis we also do Value chain analysis, Porter's five forces, BCG Analysis, Segment-Target and Positioning Analysis and other models and analyses to suit customised needs. Place your inquiry here
https://www.swotandpestle.com/solutions/
#UnderArmour #SWOTAnalysisUnderArmour #PESTLEAnalysisUnderArmour #MarketResearchUnderArmour #CustomisedResearchUnderArmour #StrategyUnderArmour #BusinessCasestudyUnderArmour #BusinessStrategyUnderArmour
#SWOTandPESTLEUnderArmour #SWOT #PESTLE #ConsultingUnderArmour
I made this PowerPoint presentation for my Consumer Behavior class in 2006. It was the for a project in which we examined Under Armour's integrated marketing communications, and made recommendations at the end.
Who is top dog in the athletic apparel arena? On the surface, the way that consumers view athletic apparel brands Nike and Under Armour is very similar. However, we were able to dig below the surface to unearth what makes the two brands radically different in consumers’ eyes, and what that ultimately means for each brand’s market share. Check out the report to see how consumers describe each brand, who they view as the loyalists for each, and what drives them to purchase one over the other.
How to do Under Armour's SWOT Analysis? Strengths, Weaknesses, Opportunities ...SWOT & PESTLE.com
Check out our latest publication on Under Armour, Inc. which is an American sports equipment company that manufactures and produces footwear, sports and casual apparel.
Check out the SWOT and PESTLE analysis on Under Armour- https://www.swotandpestle.com/under-armour/
The analysis covers the business strategy of Under Armour.
We appreciate Siddhesh Suhas Salkar 's contribution towards this research report.
Follow us @swotandpestle to know more and visit our website - https://www.swotandpestle.com/
NEED HELP WITH YOUR RESEARCH?
Apart from SWOT and PESTLE analysis we also do Value chain analysis, Porter's five forces, BCG Analysis, Segment-Target and Positioning Analysis and other models and analyses to suit customised needs. Place your inquiry here
https://www.swotandpestle.com/solutions/
#UnderArmour #SWOTAnalysisUnderArmour #PESTLEAnalysisUnderArmour #MarketResearchUnderArmour #CustomisedResearchUnderArmour #StrategyUnderArmour #BusinessCasestudyUnderArmour #BusinessStrategyUnderArmour
#SWOTandPESTLEUnderArmour #SWOT #PESTLE #ConsultingUnderArmour
Running Head MARKETING ANALYSIS OF UNDER ARMOUR (UA)1MARKET.docxjeanettehully
Running Head: MARKETING ANALYSIS OF UNDER ARMOUR (UA) 1
MARKETING ANALYSIS OF UNDER ARMOUR (UA) 9
Draft Topic Paper Three Marketing of Under Armour
Principles Of Marketing BUSB 340
James Greene
January 28, 2020
University Of Redlands
BUSB 485 SD12
Undergraduate Capstone Paper
Instructor Richard Doyle
Plank established Under Armour in 1995 upon noticing that the cotton shirts of his football team at the University of Maryland were always soaked in sweat and noted that there had to be something better for his team (Kraft& Lee, 2009). He thus wanted to create shirts that were always cool even in the hottest of weather conditions. Plank went ahead and designed his prototype for his team, which attracted a lot of attention from other collegiate teams. Which prompted the expansion and growth of Under Amour products hence resulted in the opening up of its headquarters at Maryland-Baltimore (Kraft& Lee, 2009). Nonetheless, despite its success, Under Amour continues facing stiff competition from similar sports retail brands. As a relatively new organization, Under Amour faces a high threat, yet it still has the opportunity to incorporate creative and innovative ideas (Kraft& Lee, 2009). The SWOT analysis below thus chronicles the elements that make Under Armour to stand out and strategies that it could incorporate to reinvent its brand a take an even more significant share of the existing market.
STRENGTHS
WEAKNESSES
· Innovative technology
· Diversity of its Product
· Strong Brand recognition
· Athlete Endorsements
· Eco-friendly/ Green products
· Limited Material/Technology
· Stiff Competition
· Lacks a Top Seller
· Limited Footwear Line
OPPORTUNITIES
THREATS
· International Expansion
· Expansion of athletic footwear
· Development of markets to incorporate women campaigns
· E-commerce
· High competition (Adidas, Nike, Reebok)
· Product Replacement
Strengths
One of Under Armour’s greatest strength is the unique and innovative technology behind its products. Under Armour was established on the premise that its t-shirts wick off sweat as opposed to absorbing it hence keeping the athletes cool even in hot temperatures. In 2013, the company went on and released shirts that tracked an athlete’s heart by installing sensors in the shirts that could register electrical signals from the center (Boone& Kurtz, 2013). Moreover, the company also developed tape-replacing cleat that offered ultimate support to the athletes. Such outstanding inventions offer Under Armour a better competitive position against other retail brands. Competitive position “Is the position that a firm has already acquired or is trying to acquire, relative to its competitors” (Boone& Kurtz, 2013). Even better as the company strives to keep with emerging technological advancements in society, it could easily resonate with many consumers.
Under Armour’s brand, recognition in the sporting arena is another of its significant strengths. Brand recognition “Is the ability of a con ...
Strategic Analysis of Nike, Under Armour & IMGTiantong Liu
Strategic Analysis of Nike, Under Armour & IMG
Content include:
Mission & Vision of each organization
PESTEL Analysis
Five Forces Model Analysis
Suggestions
Strength & Weakness
Strategic Implementation
Running Head: MARKETING 1
MARKETING 14
Principles of Marketing
Institutional Affiliation
Student Name
Introduction
Kevin Plank, a former Fork Union Military Academy football player, established Under Armour in 1995 upon noticing that the cotton shirts of his football team at the University of Maryland were always soaked in sweat and noted better items for his team (Kraft, P., & Lee, J. W. 2009). He wanted to create shirts that were always cool even in the hottest of weather conditions. Plank went ahead and designed his prototype for his team, which attracted much attention from other collegiate teams. This prompted the expansion and growth of Under Amour products hence resulted in the opening up of its headquarters at Maryland-Baltimore. Nonetheless, despite its success, Under Amour continues facing stiff competition from similar sports retail brands. As a relatively new organization, Under Amour faces a high threat from competitors, yet it still has the opportunity to incorporate creative and innovative ideas (Kraft & Lee, 2009).
Five Environmental Forces
Environmental factors form part of a component of the PESTLE analysis tool, which gathers information regarding the firm’s circumstances. The environmental factors constitute usually impact various essential aspects of the business (Lam et al., 2019). A detailed description of how environmental factors affect Under Amour is outlined below.
Social factors
Under Amour is influenced by any alternations, whether positive or negative, in social factors in various circumstances. The management should examine the people's lifestyle in a given locality to determine whether they exercise regularly or not. This would determine if the company is viable to widen or restrict market share in the region.
Economic Factors
A business organization such as Under Amour is affected when significant trends in the economy might alleviate or hinder the organization attaining the set goals and objectives. The management must examine consumer behavior, interest rate adjustments, banking behavior, inflation, as well as overall economic indicators. When the economic factors are positive, the business growth would be significant as well.
Technological
Under Amour’s management should consider the changes brought about by the technology. It is because technology is changing the way of doing things in any organizational setting. Organizations that fail to embrace technology offer services and goods that are less competitive in the market hence low market share.
Competitive
Business growth and success are dependent on how organizations are capable of competing in the market. Under Amour’s management must ensure substantial financial resources are budgeted to ensure that the organization conducts aggressive marketing campaigns for brand awareness and recognition to the potential market.
Regulatory
The laws and regulations are enacted by the federal and state government to regulate the way bu.
Running Head MARKETING1MARKETING14P.docxjeanettehully
Running Head: MARKETING 1
MARKETING 14
Principles of Marketing
Institutional Affiliation
Student Name
Introduction
Kevin Plank, a former Fork Union Military Academy football player, established Under Armour in 1995 upon noticing that the cotton shirts of his football team at the University of Maryland were always soaked in sweat and noted better items for his team (Kraft, P., & Lee, J. W. 2009). He wanted to create shirts that were always cool even in the hottest of weather conditions. Plank went ahead and designed his prototype for his team, which attracted much attention from other collegiate teams. This prompted the expansion and growth of Under Amour products hence resulted in the opening up of its headquarters at Maryland-Baltimore. Nonetheless, despite its success, Under Amour continues facing stiff competition from similar sports retail brands. As a relatively new organization, Under Amour faces a high threat from competitors, yet it still has the opportunity to incorporate creative and innovative ideas (Kraft & Lee, 2009).
Five Environmental Forces
Environmental factors form part of a component of the PESTLE analysis tool, which gathers information regarding the firm’s circumstances. The environmental factors constitute usually impact various essential aspects of the business (Lam et al., 2019). A detailed description of how environmental factors affect Under Amour is outlined below.
Social factors
Under Amour is influenced by any alternations, whether positive or negative, in social factors in various circumstances. The management should examine the people's lifestyle in a given locality to determine whether they exercise regularly or not. This would determine if the company is viable to widen or restrict market share in the region.
Economic Factors
A business organization such as Under Amour is affected when significant trends in the economy might alleviate or hinder the organization attaining the set goals and objectives. The management must examine consumer behavior, interest rate adjustments, banking behavior, inflation, as well as overall economic indicators. When the economic factors are positive, the business growth would be significant as well.
Technological
Under Amour’s management should consider the changes brought about by the technology. It is because technology is changing the way of doing things in any organizational setting. Organizations that fail to embrace technology offer services and goods that are less competitive in the market hence low market share.
Competitive
Business growth and success are dependent on how organizations are capable of competing in the market. Under Amour’s management must ensure substantial financial resources are budgeted to ensure that the organization conducts aggressive marketing campaigns for brand awareness and recognition to the potential market.
Regulatory
The laws and regulations are enacted by the federal and state government to regulate the way bu ...
Running Head: MARKETING 1
MARKETING 14
Principles of Marketing
Institutional Affiliation
Student Name
Introduction
Kevin Plank, a former Fork Union Military Academy football player, established Under Armour in 1995 upon noticing that the cotton shirts of his football team at the University of Maryland were always soaked in sweat and noted better items for his team (Kraft, P., & Lee, J. W. 2009). He wanted to create shirts that were always cool even in the hottest of weather conditions. Plank went ahead and designed his prototype for his team, which attracted much attention from other collegiate teams. This prompted the expansion and growth of Under Amour products hence resulted in the opening up of its headquarters at Maryland-Baltimore. Nonetheless, despite its success, Under Amour continues facing stiff competition from similar sports retail brands. As a relatively new organization, Under Amour faces a high threat from competitors, yet it still has the opportunity to incorporate creative and innovative ideas (Kraft & Lee, 2009).
Five Environmental Forces
Environmental factors form part of a component of the PESTLE analysis tool, which gathers information regarding the firm’s circumstances. The environmental factors constitute usually impact various essential aspects of the business (Lam et al., 2019). A detailed description of how environmental factors affect Under Amour is outlined below.
Social factors
Under Amour is influenced by any alternations, whether positive or negative, in social factors in various circumstances. The management should examine the people's lifestyle in a given locality to determine whether they exercise regularly or not. This would determine if the company is viable to widen or restrict market share in the region.
Economic Factors
A business organization such as Under Amour is affected when significant trends in the economy might alleviate or hinder the organization attaining the set goals and objectives. The management must examine consumer behavior, interest rate adjustments, banking behavior, inflation, as well as overall economic indicators. When the economic factors are positive, the business growth would be significant as well.
Technological
Under Amour’s management should consider the changes brought about by the technology. It is because technology is changing the way of doing things in any organizational setting. Organizations that fail to embrace technology offer services and goods that are less competitive in the market hence low market share.
Competitive
Business growth and success are dependent on how organizations are capable of competing in the market. Under Amour’s management must ensure substantial financial resources are budgeted to ensure that the organization conducts aggressive marketing campaigns for brand awareness and recognition to the potential market.
Regulatory
The laws and regulations are enacted by the federal and state government to regulate the way bu.
COMM 200 Gaming Experiential Learning (10 pts.)Throughout thi.docxclarebernice
COMM 200: Gaming Experiential Learning (10 pts.)
Throughout this quarter we have discussed topics relating to culture and communication such as selection, perception, and interpretation. Write a two-page paper on your experiences, decisions, and the conflicts that arise when you engage in the game, Inside Disaster: http://www.insidedisaster.com/experience/Main.html. This interactive experience takes you into the Haiti earthquake that happened in 2010. You will be describe your experiences as a gamer and turn in your paper discussing your gaming experience on Moodle by Saturday, February 18, 11 pm.
Creating your gaming experiential learning paper:
1. Play Inside Disaster as all three of the different characters.
2. What challenges did each character face? How did you feel while playing the game as each character?
3. Take notes on the communication, goals, and interactions you see while playing Inside Disaster.
4. What did you learn about Haiti and the 2010 earthquake?
5. Discuss the story and perspectives of this game.
6. What were your thoughts and experiences of gaming before this assignment? How is this game different or similar to games you have previously played? Your papers should be two pages., double-spaced, 12 pt. font. Citations are encouraged.
Page 1
Group 4: Mark Keck Contribution
Instructor Merriman
MGMT479
February 9, 2017
Under Armour Strategic Audit (Team Suggestions)
Under Armour Current Situation
Current Financial Performance
18.1% increase net revenue over 2008, US$856,411,000
.71% decrease in gross margin in 2009 (attributed to liquidation of shoe inventory)
78% market share in the performance apparel clothing segment (UA created the segment)
94% of revenue generated from Canadian and domestic markets
Sports apparel industry down 4.3% as a whole due to recession
Strategic Position
Brand Mission:
“To make all athletes better through passion, science and the relentless pursuit of innovation.”
Objectives
Launch and establish a running shoe line to capture some of the $5 billion running shoe segment, and at least 3% of the $31 billion international branded footwear market
Strategies
Keep retail pricing aligned with competitors in apparel and foot wear
Policies
Strategic Managers
Board of Directors
8 Person Board of Directors including:
Kevin A. Plank, Chairman of the Board of Directors
Top Management
Kevin A. Plank, President & CEO
Wayne A. Marino, COO; Brad Dickerson, CFO
Henry B. Stafford, Senior VP of Apparel
Gene McCarthy, Senior VP of Footwear
Dan J. Sawall, VP of Retail
John S. Rogers, VP/General Manager of E-Commerce
J. Scott Plank, Executive VP Domestic and Global Business Development
External Environment
Natural Environment
Societal Environment
Sports apparel market is highly correlated to disposable income, recession had an industry wide negative net effect to revenues, recession ending
Primary target consumers for Under Armour are 15 to 25 year-old males. However recent trends show increases in female ...
1. Under Armour Strategic Analysis
Porters Competitive Forces
Threat of New Entrants(low)
I do not believe that Under Armour faces a high threat for new entrants although it could still happen.
The reason for this is because of the high barriers to entry such as the large capital requirements needed
for inventory, manufacturing and research and development to name a few. Along with the capital
requirements, product differentiation is a key barrier to entry. Because of the fact that the sports
industry is dominated by 3 main competitors (Nike, Under Armour, Adidas) they have been set apart as
the best in quality, innovation, and uniqueness. It would be incredibly hard for a new company to begin
operations, and make any significant dent in the perception of value and differentiation provided by
these leading firms. They would likely have to start off as low cost, and gradually increase diversity and
differentiation after they have proven themselves. This is highly unlikely however. Another main barrier
to entry would be the lack of effective distribution channels. Many retailers that carry sports related
products would be extremely picky about who they allow to sell in their stores. They know that Nike,
Under Armour and Adidas sells, and they will quickly turnover inventory. However, if a new company
were to seek out distribution from one of these retail channels, they would need to have a proven track
record of success in sales prior to being accepted. This may not be too challenging if the new company
could utilize a niche market as well as a highly-targeted marketing strategy through online channels.
Nonetheless, being accepted by a large retail channel would be extremely difficult. Lastly, the expected
retaliation would be rigorous. The few large competitors would retaliate in a manner that a smaller firm,
who is trying to make headway in the athletic market, could not shield. They own such a large stake of
the market that the smaller firm would have a hard time answering any strategic or tactical act.
Bargaining Power of Suppliers(high)
The bargaining power of suppliers would be high because Under Armour relies on its suppliers for
practically all of its product lines. Many of the Intellectual property rights are often owned and
controlled by these same suppliers. Approximately 70 – 75 percent of Under Armours fabrics come from
only 8 suppliers meaning that they are in a weak position when compared to their suppliers. Lastly,
Under Armour has many products that rely on commodities, such as petroleum-based material, that are
subject to price fluctuations. Because of these factors, the bargaining power of Under Armours suppliers
would be high.
Bargaining Power of Buyers (high)
The bargaining power of buyers is very high in this industry because of the fact that the customers
purchase a very large quantity of the industry total output. The industry has two main revenue sources
for the most part: wholesale and retail. In both channels, the customers, whether a consumer or a
business, purchase a large portion of their products. This make the buyer very powerful. The athletic
industry also makes revenue through licensing deals, however the largest portion of their revenues
come from their sales. This is another reason why the bargaining power of buyers is powerful. Lastly,
because of the many offerings by other companies in the industry, a customer could easily switch to
purchasing product from one of the other firms. If Under Armour were to quit offering innovative
2. products, or it increased its prices disproportionately, then their customers could begin to give business
to other firms that are more competitive.
Threat of Substitute Products (medium)
Firms in this industry do face a threat of substitute products, although it is not as high as it would be in
other industries. What substitutes have against their favor is the fact that top companies have great
brand perception. The substitutes are mainly being purchased by people who could not afford to
purchase brand name products in the first place. For this reason, the threat of substitute products is a
medium threat. There will be some customers that settle for substitute products simply on the basis of
price.
Intensity of Rivalry Among Competitors (high)
Intense rivalry is very high in this industry because it is dominated by many equally balanced
competitors, there are high fixed and storage costs, the switching costs are relatively low, strategic
stakes are high, and exit barriers are also high. The main competing firms, such as Nike, Under Armour
and Adidas/Reebok, hold large portions of the athletic market. These companies engage a daily war to
increase their share of the market. Also, the fixed costs and storage costs are high because the firms try
to maximize their cost of manufacturing by producing excess capacity and then selling it off at a
discounted price. This is because storage costs are high. The strategic stakes are high because
consumers across the world rely on the products that these top firms offer. If any one of these
companies were to completely fail, there would be a large segment of the market that would suffer.
Lastly, exit barriers are high because of factors such as specialized assets (technology based assets),
fixed costs of exit (such as licensing agreements) and strategic interrelationships (such as partnerships
with other organizations or sponsorships).
Company Analysis
Vision/Mission/Strategic Intent
Under Armours stated mission is “to make all athletes better through passion, science, and the
relentless pursuit of innovation. Every Under Armour product is doing something for you; it’s making
you better.” Under Armour desires to become the world’s leading performance athletic apparel brand.
Their key to success is to offer products that are better than what is currently in their market. They want
to be the best in class. Every single action the company makes is focused around performance.
Current Goals/Objectives
Under Armour is focusing on retaining customers by keeping its products fresh, such as taking more
fashion risks in order to modernize its vision. They are also trying to compete against Nike by attracting
customers that where the clothing for purposes other than performance. According to one of the
studies in the case, 80 percent of activewear is worn for non-sports activities. With Under Armours focus
on performance, they will need to find a way to bring the two together by marketing to peoples desire
3. to be fashionable while also providing high performance products. They also have plans to double their
growth over the next three years to more than $2 billion.
Strategies
To achieve their goals, they have offered their first cotton garment by using their Charged Cotton. Until
2011, they had never used cotton because of its lack of performance during athletic activities. However,
they were innovative in producing a cotton product that had the same moisture-wicking as their original
clothing lines. They believe that the key to their growth will be apparel sales, and direct-to-consumer
business. Because of this, they have spoken about expanding their products to include water-repellent
hoodies, sports bras and yoga pants for women, and underwear line made with their moisture wick
technology, and a line of t-shirts featuring a new coldback technology. Other strategies include
remodeling their stores and launching a new website so that they can improve their direct-to-consumer
sales. As one last major strategy, Under Armour plans to increase its share of the footwear market by
rolling out a new footwear line.
Situational (SWOT)
Strengths
Image
Impressive publicity
Efficient operations
Efficient distribution
Broad range of products
Physical differentiation
Innovative
Authenticity
Unique products
Drive for success
Experience in athletic realm
Customer loyalty
Respondent to feedback
Team-driven management style
Master of product placement
Key sponsorships
Weaknesses
Small market share in footwear
Financially small
Heavy reliance on third-party suppliers
Limited ability to obtain patent
protection
Lack of proprietary product rights
Lack of intellectual property rights in
foreign countries
Opportunities
Growth in footwear market
Increase product lines
Leverage licensed products
Increase brand image in footwear line
Extended growth in women’s, youth and
international markets
Threats
Nike has strong foothold in footwear
market
Low brand-loyalty for footwear
Shortage from Suppliers
Under-engineered running shoes
Intense competition from leaders
4. Philosophical/Value Base
The main Philosophy that Under Armour has is that they want to make sure that all of their products are
doing something for the athlete. They are not just going to make a product to bump up sales. This fact
goes back to their authenticity. They are not in the business to simply make money; they want to make
athletes better. Everything that Under Armour does is centered around the performance of the athlete.
Noreen Naroo-Pucci said, “Ultimately, we will never compromise the performance aspect of what we
offer.”
Core Competencies/Competitive Advantages
It’s clear that one of Under Armours core competencies is its ability to market its product. To have
started in 1996 and have already made a significant mark on the athletic market shows that Under
Armour has been able to market their product effectively. Along with their strengths in marketing, they
are also innovative. The company has been able to stay up to date with industry trends and customer
wants. This is seen in their move toward developing a cotton-based performance t-shirt. Under Armour
also knows how to get endorsements that increases their brand image. As far as competitive advantages
are concerned, I would say their ability to market themselves as an “authentic” brand is something that
sets them apart from other firms and is a key to their continued growth. Also, their ability to have
efficient operations and distribution networks is a great competitive advantage for the long-term.
Porter’s Value Chain
Supply Chain Management
A key issue that Under Armour faces in this area is the fact that they rely on a few suppliers. The
company needs to work on branching out to other suppliers so that they do not have to worry about
have problems with getting supplies if one supplier decides to raise its prices or stops carrying a certain
material or product.
Operations
Under Armour has extremely efficient operations. They have been able to achieve this by having a blend
of physical location metrics and strategic qualities. The provide a wide variety of branded products to
their customers by leveraging their licensing partners.
Distribution
Under Armour has been able to maintain and increase the efficiency of their distribution by investing in
a new SAP system that allows them to add products to their list of product offerings as well as manage a
very diverse inventory that can be shipped directly to distributors. This cuts the cost of logistics and
allows for a lower cost of goods sold.
5. Marketing
The marketing initiatives of Under Armour are quite extensive. They have been able to grow a
recognized brand in little to no time. By the late 90’s, hey had already become a nationally recognized
company. In 1998 they had become the official supplier of performance apparel to the NFL Europe. They
have been featured in Warner Brothers movies as well. Sports organizations love Under Armour. It could
be because Under Armours focus is all about the performance of their products rather than simply the
fashion aspect. Sports organizations want to know that their products are doing something for the team.
Sports stars want to use Under Armour. This helps the company because it provides them with an
incredible word of mouth platform; something that their CEO believes is the most effective form of
advertising. These marketing initiatives translate into sales. About 73 percent of their sales came
through wholesale business from major retailers. They plan on increasing this direct-to-consumer
approach in the future in order to satisfy demand and grow the company. Under Armour retains its
customers by never sacrificing their quality, constantly innovating, and always listening to feedback for
the purpose of improving. They are always listening to their customers needs and creating products that
serve a performance purpose. This is why athletes love Under Armour.
Follow-up Services
As previously mentioned, Under Armour is continuously seeking feedback from their customers in order
to improve their products. Especially in the early days of Under Armour, Kevin Plank often tended to his
customers personally. When a customer would request a product he would make sure they were able to
provide that product for them, even if they did not currently offer that product. Saying no to business
was never an option. That same drive is what continues to prove that Under Armour is a company that
cares about the needs of their customers.
Support Functions
In the beginning, Kevin Plank started with $60,000 in total capital. Fast-forward to 2005 when Under
Armour went public, they sought to sell $100 million in shares of common stock. Their CEO and founder,
Kevin Plank is also their largest shareholder, with 75 percent ownership of the company. From a Human
Resources standpoint, the company always seeks to work with people who have experience in the
athletic industry. Doing this helps Under Armour maintain their “Authenticity” as a brand. They also seek
to provide a work environment that is centered around being team-driven and unique. They want
everyone to have the same understanding of the goal and mission in order to operate as an efficient and
cohesive unit. The SAP system that Under Armour uses is an example of some of the MIS that they use.
This system helps Under Armour to operate at an incredibly efficient level. It also allows them to
increase what products they can offer and makes inventory management more simple.
6. Company Analysis
Corporate-level
From a corporate-level strategic view, Under Armour experiences low-levels of diversification. All of
their revenues come from directly under the Under Armour brand, with about 95 percent coming
directly from merchandise sales. While a majority of those sales come from their wholesale operations,
Under Armour has also chosen to integrate forward into opening company-owned retail stores, and
increasing their use of e-commerce in order to increase apparel sales. The only real partnership being
built is between Under Armour and a marketing firm called Optimum Sports. The reason for this
partnership is for Optimum Sports to manage Under Armours media accounts. Aside from that, Under
Armour does partner with athletes for endorsement deals, but when it comes to operations, Under
Armour relies on its own people and management to gain a competitive edge.
Business-level
Under Armour definitely operates under the differentiation/niche business-level strategy. They use this
strategy for many reasons. First, they know that their target market will pay more for high quality,
performance gear that guarantees to perform. Their main focus was to maintain differentiation from
Nike. In order to do that, they have built their brand around the idea of “Authenticity”. They want their
brand to be the one that is associated, not with just fashion, but also with functionality. It’s great if the
product look good, but if it doesn’t perform well, then Under Armour will not sell it. They use their
marketing initiatives to pull in support from major athletes. By doing this, they position themselves in a
way that makes them synonymous with authenticity and performance.
Functional Level
In the areas of superior efficiency, quality, innovation and customer responsiveness, I would give Under
Armour an A+. Through a successful corporate-level strategy, and their SAP system, they have been able
to achieve efficiency in both their operations and their distribution. Their ability to provide superior
quality and innovation rests in their desire to always provide the athlete with a product that does
something. Under Armour was started out of a mindset of innovation and performance, and that is
something that they have always kept at their core along the way. Under Armour has been able to
provide superior customer responsiveness by always accepting feedback, and watching their
competition. Simply put, they listen to their market. This fact is evident in their branching out into new
product lines and their usage of materials that they once swore they would never use. Something that
they will need to be sure to do is to never lose their focus on performance because that is what sets
them apart from all of the other top firms.
Cultural Assessment
In the case, marketing consultant was quoted as saying, “ Under Armour is identified with performance
the way that Starbucks is identified with better coffee..”. This is the basic idea behind the culture of
Under Armour. As previously stated, the company has an intense focus on performance and usability.
7. The company surrounds itself with people who are known to perform. This can be seen by looking at the
qualifications of their top executives. Everything they do is based on performing and accomplishing a
task as a team. With Kevin Plank as their dedicated leader, Under Armour has been able to maintain
their focus. This is due to Planks intense desire to always become better. Every day he asks himself if he
is making a great product, telling a great story about the product, servicing he business, and building a
great team. If he determines that he has not done those things then he knows he is off focus.
Organizational Structure
Under Armour utilizes a functional structure that they use to implement their differentiation-based
strategy. Within that structure, there is a strong focus on the research and development of new and
innovative technologies as well as marketing. Under Armour has surrounded its company with
employees who have years of expertise because companies who use this structure are often involved in
decision making that is based on incomplete information. This is because the competitive environment
of their market is always changing. They look at a combination of information from the market,
suppliers, customer and competitors in order to make effective decisions. They often have to have a
great deal of strategic flexibility in order to handle the quick changes in the environment and to move
quickly on opportunities that can help growth. There is very little centralization and decision making is
often made in an informal manner because of the fast environmental and strategic changes. This is why
Under Armour has surrounded itself with workers who have large amounts of experience in the apparel
and sports industry.
Strategy Formulation/Recommendations
1.) Under Armour continues to grow but they are lacking a a few major areas. One of which is their
footwear. Currently, Nike maintains the majority share of the athletic footwear industry and Under
Armour wants to start getting a larger cut of the market. In order to do this, they need to work on
marketing this product segment as being better performing that Nike. Currently Nike has brand image
working in its favor because of the fact that they have been in this market for so long. Customers are
loyal to the Nike name. However, Under Armour could make a significant impact in this market if they
are able to convince people that their product is superior. I would suggest pricing their shoes at a level
that is comparative to Nike. They want to create value. In order to do that, they need to offer a better
product at the same cost. Once they have loyalty in this segment, then they can think about charging a
premium price
2.) Second, Under Armour really needs to focus on increasing its research and development into
wearable and performance technology. Companies like Nike and Adidas are already making great strides
in this area and Under Armour is getting left in the dust. Under Armour should consider entering into a
horizontal complementary strategic alliance with a company like FitBit. Currently, FitBits stock prices are
on the decline. They have been over the past 3 years or so. Investors believe that FitBit may have been a
“one-hit wonder” of sorts. However, they do have valuable resources and capabilities that Under
Armour could use to get ahead in the technology market. This alliance would be mutually beneficial for
both firms in the long-run.
3.) Under Armour needs to seriously work on guarding its intellectual property and its products through
patents. This has historically been hard for Under Armour, but with technology changing so much, it is a
must for them to cover their innovations.
8. 4.) They also need to focus on finding more suppliers. Under Armour has very few suppliers which gives
those suppliers a large advantage over Under Armour. In the event of cost increases from those
suppliers, Under Armour has absolutely no bargaining power because they fully rely on those suppliers
for their materials. Therefore, Under Armour should begin research into finding more suppliers to
partner with.
5.) Lastly, Under Armour needs to branch out into more product offerings. It is understandable that they
have historically focused on more team sport products, but in order to become a major player, they
need to have a presence in more specialized sports as well. Adidas made a great move for their company
when acquired TaylorMade and Salomon group and Maxfli. Under Armour should look into doing the
same thing and getting into the golf, track and field, and fitness industries. Currently, Under Armour has
not acquired any companies. If they do not start now, I fear that they will be at a great disadvantage
when compared to their top competitors.