Under Armour Case
Case Study #1
Under Armour – Challenging Nike in Sports Apparel
Problem Statement
Under Armour is a sport performance apparel brand that is looking to move ahead of its competition and branch out into different sectors of the sporting goods industry. Kevin Plank and his company’s problem is that their footwear only makes up for about 15% of the firms revenue and they only generate about 6% of their revenue in international sales. In order to compete with the top brands in the industry, Under Armour must find a way to raise the revenues on its footwear and enter into the global market.
SWOT Analysis Strengths * Brand Equity * High Profit to Earnings Ratio * Collegiate and Professional Sponsorships * Customer Loyalty – (U.S.) * Innovated | Weaknesses * Price * Limited Product Line * Product Focus is Narrowed * Not prominent internationally | Opportunities * Branch out internationally * Expand product line * More competitive pricing * Joint Ventures to maximize profits * Specialty Stores | Threats * Competition * Economic Recession * Substitute Products |
Company Overview
Under Armour is the originator of performance sports apparel. Kevin Plank and his company wanted to create a product that was able to keep athletes cool, dry, and light throughout sporting competition and workouts. Plank began marketing his products by giving them out to consumers to test out. As popularity grew, Plank created the name Under Armour and revenue began coming in. The company’s market share in the sports apparel industry is at 2.8%; about 4% lower than Nike and 2.5% lower than Adidas. There are roughly 25 brands that compete in this market that generates $60 billion in the US. Under Armour’s annual revenue growth from 2000-2005 rose at 127%, while the operating income grew at 124% during that same time.
Under Armour has three main product lines that it generates revenue from. The first is the apparel portion. This contains
Under Armour – Challenging Nike in Sports Apparel
Problem Statement
Under Armour is a sport performance apparel brand that is looking to move ahead of its competition and branch out into different sectors of the sporting goods industry. Kevin Plank and his company’s problem is that their footwear only makes up for about 15% of the firms revenue and they only generate about 6% of their revenue in international sales. In order to compete with the top brands in the industry, Under Armour must find a way to raise the revenues on its footwear and enter into the global market.
SWOT Analysis Strengths * Brand Equity * High Profit to Earnings Ratio * Collegiate and Professional Sponsorships * Customer Loyalty – (U.S.) * Innovated | Weaknesses * Price * Limited Product Line * Product Focus is Narrowed * Not prominent internationally | Opportunities * Branch out internationally * Expand product line * More competitive pricing * Joint Ventures to maximize profits * Specialty Stores | Threats * Competition * Economic Recession * Substitute Products |
Company Overview
Under Armour is the originator of performance sports apparel. Kevin Plank and his company wanted to create a product that was able to keep athletes cool, dry, and light throughout sporting competition and workouts. Plank began marketing his products by giving them out to consumers to test out. As popularity grew, Plank created the name Under Armour and revenue began coming in. The company’s market share in the sports apparel industry is at 2.8%; about 4% lower than Nike and 2.5% lower than Adidas. There are roughly 25 brands that compete in this market that generates $60 billion in the US. Under Armour’s annual revenue growth from 2000-2005 rose at 127%, while the operating income grew at 124% during that same time.
Under Armour has three main product lines that it generates revenue from. The first is the apparel portion. This contains
References: Thompson, A., Peteraf, M., Gamble, J., & Strickland III, A. J. (2014). Crafting and executing strategy: The quest for competitive advantage. (19th ed., pp. C-42-C-58). New York, NY: McGraw-Hill Irwin. http://www.trefis.com/company?hm=UA.trefis# (2013) Income Statement Period Ending | Dec 31, 2012 | Dec 31, 2011 | Dec 31, 2010 | Balance Sheet Period Ending | Dec 31, 2012 | Dec 31, 2011 | Dec 31, 2010 |