Under Armour Case Analysis Essay
Under Armour Case Analysis
INTRODUCTION TO THE COMPANY
Under Armour is a company that started IN WHAT YEAR in the basement of former University of Maryland football player Kevin Plank, but is a now large and very well known company. Under Armour has grown to be one of the top selling brands of athletic wear and is rapidly growing.
CENTRAL STRATEGIC ISSUES
Even though it is one of the most competitive athletic wear brands in the Unites States, there are a few issues that prevent Under Armour from surpassing its competitors. Under Armour is not as geographically diverse as Adidas and Nike, which inhibits the company from a great amount of potential profit. Although competitors are currently more widespread than Under Armour is, Under Armour …show more content…
has been expanding internationally during the past few years and is continuing to do so. Many brands and stores use websites to advertise and sell their products online. Although Under Armour has an online website, is extremely weak and could definitely use improvements. Another strategic issue that Under Armour has is that it is not strong in the footwear department. As Nike and Adidas emphasize the quality and variety in their footwear, Under Armour loyal brand buyers may now be purchasing shoes from these competitors, which sets Under Armour back even more. INDUSTRY DRIVING FORCES
Under Armour is a rapidly growing industry. The high tech material of their products is a differentiating factor because they are unique and are not easily replicated. This gives Under Armour a competitive advantage because the high tech weather specific fabrics are currently exclusive to the company and are of high quality. NATURE OF COMPETITION
Under Armours biggest competitors are Nike and Adidas. The competitive rivalry within the industry is extremely strong because the competitors have more resources available to them because they are larger and more widespread. As Under Armour does not have a patent on the fabrics of their products, it is possible that Under Armour’s differentiating feature will be copied in the future.
Suppliers have relatively weak bargaining power because of the amount of manufacturers Under Armour has. As Under Armour is rapidly growing, it is possible that the number of manufacturers will increase, which will cause suppliers to have even less bargaining power. That will benefit Under Armour because they wont be forced to pay more for the product, which allows them to make more profit.
A customer’s bargaining power is low with Under Armour because it is such a strong brand. But when Under Armour is selling to a wholesale customer, the customer has greater bargaining power. This is because wholesale customers could potentially replace Under Armour products with other brand products if it is a better deal. There is more competition to consider with wholesale buyers, so wholesale customers have somewhat strong bargaining power.
The threat of new entrants is low. Many buyers are loyal to the brands that they buy, so it is difficult to enter this market. The threat of substitute products is also low because athletic apparel is necessary for many people and will continuously be in demand.
Under Armour isolates themselves from other forces and competition with the continuation of their authentic product materials. Their weather tech fabrics are what isolate the competition from them. Under Armour is at risk of their unique products being replicated because of the lack of fabric patents. They can eliminate this risk by patenting all of the fabrics used to make these unique products. (you’ve already said this)
COMPETENCIES
Kevin Plank is extremely intelligent and has a great ability to revolutionize authentic athletic wear products.
He also excelled in market development of the company. His competencies assisted greatly in the rise of the Under Armour brand. Under Armour’s competencies are their ability to produce unique fabrics and product design. Under Armour also has an extremely recognizable logo, the linked “U” and “A.” These are factors that may draw consumers to Under Armour products.
BASIC STRATEGIES
Some of the current strategies of this company are the expansion of product lines, increasing marketing for footwear and to distribute to more locations, especially internationally. These basic strategies are very important for the growth of the company. With these improvements, Under Armour has the potential to become an even stronger competitor in the athletic wear industry.
RECOMMENDATIONS/ CONCLUSION
Growth of the footwear department, expansion of international markets, and improvements to the online website could all benefit the company greatly. Under Armour could become an even stronger competitor in the sporting and athletic wear industry. With Under Armour’s plans to work on these weaknesses, the company will become even more successful than it has ever
been.
References
Peteraf, Margaret A. Essentials of Strategic Management: The Quest for
Competitive Advantage. By John E. Gamble and Arthur A. Thompson. 4th ed. New York: McGraw-Hill, 2015. 248-70. Print.
INTRODUCTION TO THE COMPANY
Under Armour is a company that started IN WHAT YEAR in the basement of former University of Maryland football player Kevin Plank, but is a now large and very well known company. Under Armour has grown to be one of the top selling brands of athletic wear and is rapidly growing.
CENTRAL STRATEGIC ISSUES
Even though it is one of the most competitive athletic wear brands in the Unites States, there are a few issues that prevent Under Armour from surpassing its competitors. Under Armour is not as geographically diverse as Adidas and Nike, which inhibits the company from a great amount of potential profit. Although competitors are currently more widespread than Under Armour is, Under Armour …show more content…
has been expanding internationally during the past few years and is continuing to do so. Many brands and stores use websites to advertise and sell their products online. Although Under Armour has an online website, is extremely weak and could definitely use improvements. Another strategic issue that Under Armour has is that it is not strong in the footwear department. As Nike and Adidas emphasize the quality and variety in their footwear, Under Armour loyal brand buyers may now be purchasing shoes from these competitors, which sets Under Armour back even more. INDUSTRY DRIVING FORCES
Under Armour is a rapidly growing industry. The high tech material of their products is a differentiating factor because they are unique and are not easily replicated. This gives Under Armour a competitive advantage because the high tech weather specific fabrics are currently exclusive to the company and are of high quality. NATURE OF COMPETITION
Under Armours biggest competitors are Nike and Adidas. The competitive rivalry within the industry is extremely strong because the competitors have more resources available to them because they are larger and more widespread. As Under Armour does not have a patent on the fabrics of their products, it is possible that Under Armour’s differentiating feature will be copied in the future.
Suppliers have relatively weak bargaining power because of the amount of manufacturers Under Armour has. As Under Armour is rapidly growing, it is possible that the number of manufacturers will increase, which will cause suppliers to have even less bargaining power. That will benefit Under Armour because they wont be forced to pay more for the product, which allows them to make more profit.
A customer’s bargaining power is low with Under Armour because it is such a strong brand. But when Under Armour is selling to a wholesale customer, the customer has greater bargaining power. This is because wholesale customers could potentially replace Under Armour products with other brand products if it is a better deal. There is more competition to consider with wholesale buyers, so wholesale customers have somewhat strong bargaining power.
The threat of new entrants is low. Many buyers are loyal to the brands that they buy, so it is difficult to enter this market. The threat of substitute products is also low because athletic apparel is necessary for many people and will continuously be in demand.
Under Armour isolates themselves from other forces and competition with the continuation of their authentic product materials. Their weather tech fabrics are what isolate the competition from them. Under Armour is at risk of their unique products being replicated because of the lack of fabric patents. They can eliminate this risk by patenting all of the fabrics used to make these unique products. (you’ve already said this)
COMPETENCIES
Kevin Plank is extremely intelligent and has a great ability to revolutionize authentic athletic wear products.
He also excelled in market development of the company. His competencies assisted greatly in the rise of the Under Armour brand. Under Armour’s competencies are their ability to produce unique fabrics and product design. Under Armour also has an extremely recognizable logo, the linked “U” and “A.” These are factors that may draw consumers to Under Armour products.
BASIC STRATEGIES
Some of the current strategies of this company are the expansion of product lines, increasing marketing for footwear and to distribute to more locations, especially internationally. These basic strategies are very important for the growth of the company. With these improvements, Under Armour has the potential to become an even stronger competitor in the athletic wear industry.
RECOMMENDATIONS/ CONCLUSION
Growth of the footwear department, expansion of international markets, and improvements to the online website could all benefit the company greatly. Under Armour could become an even stronger competitor in the sporting and athletic wear industry. With Under Armour’s plans to work on these weaknesses, the company will become even more successful than it has ever
been.
References
Peteraf, Margaret A. Essentials of Strategic Management: The Quest for
Competitive Advantage. By John E. Gamble and Arthur A. Thompson. 4th ed. New York: McGraw-Hill, 2015. 248-70. Print.