Under Armour: We must Protect this House
The original creator of performance apparel in the athletic world, Under Armour was founded in 1996 by Kevin Plank, a former University of Maryland football player whose goal was to provide athletes with a breakthrough in the technology of athletic gear (UAbiz.com). Under Armour’s apparel was engineered to relieve the effects of temperature an athlete has to endure during any workout, practice or game, and wick away perspiration rather than absorb it. At first, just creating T-shirts, Under Armour has expanded its production line in the sporting goods and apparel market each and every year from shorts and shoes, to equipment in almost each and every sport (Underarmour.com). The sporting goods and apparel
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market is an unattractive industry that has many players, along with intense competition within it. The threat of entry into the sporting goods and apparel industry is low because the barriers to entry are high, as large capital requirements are needed for production, marketing and branding.
In addition, supply-side economies of scale in the industry are crucial as new entrants would have to enter with large investments in scale in order to compete on a cost basis with companies within the industry. Last, an incumbency advantage independent of size is established brand value by big players in the industry making it extremely tough for new entrants to compete against. High rivalry exists in the sporting goods and apparel from brands such as Under Armour, Nike and Adidas potentially limiting the profitability in the industry. This can lead to price competition as these companies offer some similar products, and buyer switching costs are relatively low. Also, with larger amounts of resources available, the big players in the industry have the flexibility of their strong brand value to gain market share in international markets. The bargaining power of wholesale buyers in the sporting goods and apparel industry is high, as they can negotiate for lower prices amongst brands and drive down profitability within the
industry. Under Armour has performed well in the sporting goods and apparel industry through product differentiation, specifically in the performance apparel segment. With strong and upcoming brand recognition, Under Armour is known to deliver innovative products that are of superior quality to consumers. From professional athletes such as Carolina Panthers quarterback Cam Newton to customers with dynamic lifestyles, allseason, hot, and cold gear has established Under Armour as the market leader in the performance apparel segment with over 70% market share (Trefis.com). When looking at Under Armour’s fourth quarter earnings statement, total net revenue in 2014 for apparel was up 30% compared to 2013. This implies that Under Armour’s customer base and brand is growing and gaining popularity within the market place. Recommendations to top management would include continued focus on increasing international markets, as in 2013 international sales accounted for only 6% of total sales, and Under Armour forecast that number to be around 12% in 2016 (Forbes.com). In addition, Under Armour should maintain their push in footwear, even though strong competition by Adidas and Nike is present. This could be done by adding more professional athletes to wear Under Armour shoes in order to promote the brand, along with R&D for advanced technology for the company’s footwear. Furthermore, Under Armour should increase their brick and mortar as gross margin is roughly 30% higher in the direct-to-consumer channel compared to wholesale (Trefis.com). In order for continued growth, Under Armour should strive in sponsoring more collegiate athletic programs. The company is currently under contract with eight of the sixty-five power conference schools including Maryland, Notre Dame and Boston College which accounts for only 12% (Lousivillesportslive.net). Last, Under Armour has been relatively known as a brand for men. It is important that the company progresses its penetration in the women’s market and create products better suited and tailored towards the female segment.
Overall, Under Armor did an outstanding job targeting young, aspiring athletes to do what they want to do with their life. They used logic to show how hard the athletes work along with emotion to show how serious they take their training. Finally, Under Armor used the credibility of the athletes to sell their new training shoe. This commercial will make anyone want to purchase a pair of shoes and workout themselves. Since the commercial is on such a serious level, viewers emotionally connect with it which makes Under Armor seem like the best brand
Under Armour’s product is swim gear. They sell their product by doing what Adidas did, used motivation, emotion, and a message to connect with the audience. But, Under Armour used a famous celebrity named Michael Phelps. The audience starts to pay attention to the ad and either feels connected or wants to be a better athlete like Phelps. Under Armour finally manipulated their audience into buying their
Under Armour provides innovatively designed performance products that incorporated a variety of technologically advanced fabrics and specialized manufacturing techniques, all in attempt to make the wearer feel “drier, lighter, and more comfortable.” This is Under Armour’s core competitive strength.
Lululemon Athletica Inc., also referred to as Lululemon, is an athletic apparel retailer from Canada. You can find them on Nasdaq with the ticker code LULU, as they are a publicly traded company. Lululemon was founded by Chip Wilson in Vancouver, in 1998. It didn’t take long time for Lululemon to become a wide-spread sensation throughout the United States. As of October 2015, Lululemon had over 354 stores worldwide. With growing popularity of the brand, it is not a surprise how successful the company itself has become. According to many, their products still maintain to be unique within the massive athletic-wear industry. Today, Lululemon produces outfits and gear for many different types of sports
Under Armour started in 1996 by Kevin Plank, a 23-year-old former University of Maryland football player. As a special teams captain, he turned an idea brainstormed on the football filed into a new industry changing the way athletes dress forever. Since he hated having to change his sweat-soaked cotton t-shirts over and over again during two-a-days, he figured there had to be something better, which in turn led to his solution. The basic concept ...
Under Armour’s target market is consumers that are involved in physical activities. The demographic age groups that they cater to varies from youth to adults. Their products can with stand any weather condition from cold weather to warm weather, which means their product can be used in any geographic location. These consumers can be either light user like walkers or heavy users like football players.
Nike’s goal is to remain unique and different from others in terms of the items offered on the market. Arguably, Nike belongs to a monopolistically competitive market as there only a few organizations with the ability to regulate the amount charged for their product which means they cannot make their prices high as this is likely to make customers move on to other available choices (Nike, Inc., 2012). However, Nike can find a balance between the prices to charge for their products and remaining competitive with other companies in the industry. Nike has formed a distinction between the appearance and performance of their footwear and that of their competitors. Although products are differentiated from other companies, they still influence each other because they are items of the same
Founded in 1996 by University of Maryland graduate Kevin Plank, Under Armour has become the leading supplier of the athletic performance apparel industry. Under Armour began with simple idea to create a t-shirt that would enhance athletic performance by regulating body temperature and removing perspiration without absorbing it. Under Armour was based out of Plank's grandmother's basement in D.C. until he moved the headquarters to, and built a manufacturing plant in, South Baltimore.
The second recommendation for Under Armour is that they should develop a shoe line and marketing campaign for women, based on the idea of everyday athlete. Focusing on the fact that women want to compete and have the same performance benefits that everyone wants, but also have a shoe that is stylish enough that she can wear straight
In order to beat its competitors, Under Armour Company can engage in market sensitive fresh product invention. New products are more likely to draw curiosity amongst the populations especially if they commensurate well with the prevailing trends (Hill & Jones 2009, p. 308). UA concentrated on the outside-in (market responsive) approach to carry out its strategies. It is reported that it sourced unique synthetic materials and employed on field product development. This enabled it to create the performance apparel segment in the athletic apparel market.
The sports apparel and accessories industry has a highly competitive market. Businesses are constantly competing for elite athletes to sponsor, raw materials, and every opportunity to expand. Under Armour is able to not only survive but thrive in this market because of their ability to think outside of the box. They are constantly creating new and exciting products that help athletes everywhere.
Competitors: It is always better to offer a new brand on the market instead of trying to match the prices of existing companies in that market. Nevertheless, some competitor would try to target a product and attempt to gain market share by
It is hard for new firms with a small market share to enter the oligopoly market and produce enough to make the product cheap for consumers to buy. The small amount of large firms can often produce large amounts of quantity to provide for all consumers to purchase. It is difficult for new firms to win market shares form existing producers, particularly if those firms have large advertising budgets, licenses, design patents or restrict access to raw materials on one way or another.
When comparing prices, consumers can find the exact same style Nike boot in Adidas and pay a lower price. Essentially what the consumer is paying extra for is the Nike brand. Looking back at my journal you can see I wore the Adidas boots one time, then went out and bought Nike boots. “Brand loyalty is based on an emotional connection toward the brand and a conscious commitment to find this brand each time the consumer purchases from this category.” 112 Brand Promotion I could have worn the Adidas boots for free but I spent the time and money to go purchase the Nike brand. “brand loyalty and advertising work together to create another important economic effect related to pricing flexibility and profits. When consumers are brand loyal, they are generally less sensitive to price increases for the brand.” 45 Advertising and Integrated Brand Promotion Being able to raise prices but still keep the consumer market is very valuable. This is one of the main reasons brands strive to have brand loyal
Under Armour also enforces ‘discipline’ under the Administrative Management and have formal set of rules and regulations from Bureaucratic management. For example, in Under Armour’s Code of Conduct (n.d.), the employees of Under Armour have the responsibility to comprehend and follow policies stated by the Code of Conduct together with the ethics and laws of countries their businesses are in and conditions stated in agreement of employment. One of the conditions stated by Code of Conduct is that harassment will not be taken lightly to ensure workplace safety. Disciplinary actions will be taken by the Global Ethics & Compliance team when any Under Armour employee violates the