Under Armour Case Analysis Essay
Under Armour Case Analysis
Abstract
Under Armour is a sports apparel, footwear, and accessories company that is quickly becoming a global force to be reckoned with. The company is competing in a saturated market and has maintained the ability to grow. Analysis of the company shows that it should: look for alternative sources of materials and suppliers; continue a marketing campaign using athlete endorsements; and, model expansion into new foreign countries after the successful entrances into areas such as Europe. Reasoning behind these recommendations is shown in the analysis below.
Background
Under Armour was established in 1996 by Kevin Plank, a former football player with the University of Maryland. Plank saw the potential for the …show more content…
The rivalry among established companies is high. The sports apparel industry is very competitive for multiple reasons. There are a large number of companies and a high volume of demand, both factors increases rivalry. Low switching costs for customers also increases the competition. Under Armour’s main competitors have large levels of capital at their disposal. Key players in the industry include Nike, Adidas and Reebok. Generally lower levels of product differentiation also increase the rivalry between these companies. The threat of new potential entrants is moderately high. The sports apparel market has been subject to continuous changes of trends that have increased its popularity. These trends include: a rise in concern for healthier living, and higher participation in sports.. Any attempt at a new entrant would have to put out a lot of capital on marketing and advertising to prove as competition for these companies. The threat of substitute products is high. The market for sports apparel, athletic footwear, and sports accessories is large and fragmented with more than 25 companies. Nike, who is an industry leader, only has about 4% of the market share of sports apparel and 17% of the footwear market. These numbers support the evidence that gaining market share is extremely difficult. The bargaining power of buyers is high. Price sensitive customers have a lot of power as the costs to switch between brands are extremely low or nonexistent and customers have multiple product options when purchasing. In this market, buyers are divided and no individual buyer has the ability to influence a product or price, however overall disloyalty to a brand can give segments of consumers levels of power. The bargaining power of suppliers is moderate. In the sports apparel industry there is a large amount of suppliers that companies can choose between to manufacture their products. However, for Under
Abstract
Under Armour is a sports apparel, footwear, and accessories company that is quickly becoming a global force to be reckoned with. The company is competing in a saturated market and has maintained the ability to grow. Analysis of the company shows that it should: look for alternative sources of materials and suppliers; continue a marketing campaign using athlete endorsements; and, model expansion into new foreign countries after the successful entrances into areas such as Europe. Reasoning behind these recommendations is shown in the analysis below.
Background
Under Armour was established in 1996 by Kevin Plank, a former football player with the University of Maryland. Plank saw the potential for the …show more content…
The rivalry among established companies is high. The sports apparel industry is very competitive for multiple reasons. There are a large number of companies and a high volume of demand, both factors increases rivalry. Low switching costs for customers also increases the competition. Under Armour’s main competitors have large levels of capital at their disposal. Key players in the industry include Nike, Adidas and Reebok. Generally lower levels of product differentiation also increase the rivalry between these companies. The threat of new potential entrants is moderately high. The sports apparel market has been subject to continuous changes of trends that have increased its popularity. These trends include: a rise in concern for healthier living, and higher participation in sports.. Any attempt at a new entrant would have to put out a lot of capital on marketing and advertising to prove as competition for these companies. The threat of substitute products is high. The market for sports apparel, athletic footwear, and sports accessories is large and fragmented with more than 25 companies. Nike, who is an industry leader, only has about 4% of the market share of sports apparel and 17% of the footwear market. These numbers support the evidence that gaining market share is extremely difficult. The bargaining power of buyers is high. Price sensitive customers have a lot of power as the costs to switch between brands are extremely low or nonexistent and customers have multiple product options when purchasing. In this market, buyers are divided and no individual buyer has the ability to influence a product or price, however overall disloyalty to a brand can give segments of consumers levels of power. The bargaining power of suppliers is moderate. In the sports apparel industry there is a large amount of suppliers that companies can choose between to manufacture their products. However, for Under