Competitive Forces Confronting Under Armour, Nike, And The Adidas Group

1726 Words Feb 26th, 2016 7 Pages
1. How strong are the competitive forces confronting Under Armour, Nike, and The Adidas Group? Do a five-forces analysis to support your answer.
Under Armour, Nike and Adidas are the top three brands known worldwide. These three companies were able to gain a strong brand to make a name for themselves in the sports apparel market today. On the other hand, Under Armour has become one of the top leading distributing companies to offer athletic apparel, footwear amongst many other things. “In 2013, Under Armour had a 14.7 percent share of the U.S market, compared quite favorably with Nike’s 27 percent market share and Adidas’s 7.4 percent market share.” (C-50) However, the company’s path of success can come crashing down as you take a look
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In addition, these companies are able to easily compete in the sports apparel market because the barriers to entry are low. On the other hand, many companies should think twice before entering the market. One reason is the large capital costs that are required to meet consumer demand in the market. In addition to large capital costs, some of the largest companies have gained customer loyalty based on their strong marketing skills. For example, Under Armour, Nike, Adidas, Reebok, ASICS, make new entrants into this industry much more difficult to compete with when these companies have a big share in the market already. According to Exhibit 4 in the textbook, it shows the major competitors and brands in 2013. Nonetheless, competition is intense in the sports industry market but, the high levels of product differentiation can also act as a barrier to entry for many companies because company’s need a high level of marketing to market their brand to consumers.
The competitive pressures from the threat of substitute products is also high. This directly links back to the competitive pressures coming from rival sellers which forces company’s to limit their prices. The global market for sports related gear has amongst many top name brand competitors in the market. However, it doesn’t just end there. The demand for sports apparel is only going to continue to grow in the near future. However, today, the use of technology has actually helped many

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