case 2
STRAMAN K32
Calvin & Friends
Adorable, Maria Celine
Del Rosario, Calvin
Gallego, Ralph Vince
CASE 2
1. How strong are the competitive forces confronting Under Armour, Nike, and The Adidas Group? Provide a five-forces analysis to support your answer.
3 out of the 5 are weak
2 out of the 5 are strong
= overall weak
Under Armour, Nike, Adidas Porter’s 5 Forces
1. Threat of New Entrants low threat high entry barriers large scale production high cost on extensive research and development high capital investment on innovation, factories, and stores economic recession high brand value suppliers vs. low cost manufacturers
2. Threat of Substitutes
low threat no real substitutes for sportswear items that can offer the same benefits or fulfill the same purpose function more than aesthetics specific specialization offer specific benefits to a specific target market
3. Bargaining Power of Buyers
High
buyers are more logical know where to get great deals specific want and need that has to be satisfied looking for specific benefit many retailers offer promos and discounts brand loyalty and preferences
4. Bargaining Power of Suppliers
low manufactured and supplied by factories in countries where the goods are made cheaply. labor is cheap major multinational brands such as Nike, Adidas, Reebok, and Puma control the suppliers because they can easily find other factories dictate price. buy very cheaply, sell very expensively numerous suppliers of input materials, little differentiation 5. Rivalry Intensity of Existing Competitors
High
numerous competitors several other popular and reputable multinational brands high brand preference and loyalty thus, retailers have to compete more with prices, quality, and aesthetics
2. Does Under Armour have any core competencies and, if so, what are they?
Yes
UA’s core competencies are its form-fitting, moisture wicking performance apparel designed to be worn under
Calvin & Friends
Adorable, Maria Celine
Del Rosario, Calvin
Gallego, Ralph Vince
CASE 2
1. How strong are the competitive forces confronting Under Armour, Nike, and The Adidas Group? Provide a five-forces analysis to support your answer.
3 out of the 5 are weak
2 out of the 5 are strong
= overall weak
Under Armour, Nike, Adidas Porter’s 5 Forces
1. Threat of New Entrants low threat high entry barriers large scale production high cost on extensive research and development high capital investment on innovation, factories, and stores economic recession high brand value suppliers vs. low cost manufacturers
2. Threat of Substitutes
low threat no real substitutes for sportswear items that can offer the same benefits or fulfill the same purpose function more than aesthetics specific specialization offer specific benefits to a specific target market
3. Bargaining Power of Buyers
High
buyers are more logical know where to get great deals specific want and need that has to be satisfied looking for specific benefit many retailers offer promos and discounts brand loyalty and preferences
4. Bargaining Power of Suppliers
low manufactured and supplied by factories in countries where the goods are made cheaply. labor is cheap major multinational brands such as Nike, Adidas, Reebok, and Puma control the suppliers because they can easily find other factories dictate price. buy very cheaply, sell very expensively numerous suppliers of input materials, little differentiation 5. Rivalry Intensity of Existing Competitors
High
numerous competitors several other popular and reputable multinational brands high brand preference and loyalty thus, retailers have to compete more with prices, quality, and aesthetics
2. Does Under Armour have any core competencies and, if so, what are they?
Yes
UA’s core competencies are its form-fitting, moisture wicking performance apparel designed to be worn under