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
Under Armour has several large competitors; the largest being Nike, Adidas and Columbia Sportswear. These companies are similar in that they all stress product innovation, advertising and sponsorships. Adidas is broadly focused in all sporting categories but fails to stand out. Columbia is known almost solely by its winter gear, limiting its growth potential and creating strong seasonality trends. Nike strives to be the best in every segment while Under Armour’s goal is to be a leader in each process of its product development, concentrating on quality over quantity. An advantage for Under Armour is that it is focused more on improving its brand and unique products, licensing other items and accessories through independent manufacturers.
Under Armour is a well-known brand for all ages known for its quality products. UA has high brand recognition and offers a variety of products, with a variety of styles and product purposes. UA continues to grow and is already the third largest athletic brand in the world (Chapman, 2017). They have sponsorships with big name athletes including championship athletes. They have a strong marketing message that encourages consumers to work hard at their goals like the underdog athletes they sponsor that end up on top. Another strength is their retail stores; they offer hands-on stores that allow consumers to see their innovative technologies.
Though in competition. Under Armour and Nike have a lot in common. Not only do they both offer premium sports and athletic apparel, but they also utilize professional athlete sponsorships to aid in driving sales. With so much in common there are different marketing approaches between the two. Under Armour acts like the underdog in a sales world which is dominated by Nike. While proving others wrong is Under Armour’s forte. Nike is about proving yourself right. Both of these tactics have worked to their advantage as it appeals to the different senses we as Americans have. Even though Under Armour is growing they do not have the tradition or brand awareness that Nike has. With that being said: They are heading in the right direction by toppling Adidas and taking the second spot behind Nike in the sports apparel business. The things that Under Armour is doing to differentiate themselves from their competition is being clear and concise about their brand mission. Targeting the right audience by appealing to humanistic experiences to expand brand audience. Finally, giving the consumer an experience that goes well beyond just purchasing their products. (Chen, 2015)
There were some significant differences in the two company’s statements. For example, Nike incurred a net loss of $60.6 million from their operating activities where as Under Armour experienced a $69.52 million gain. Another significant figure is the difference in the total cash dividends paid. Over the course of the year, Nike paid $412.9 million in cash dividends where as Under Armour paid no cash dividends during the year. However, when it came to the cash balance differences between 2008 and 2007, Nike increased its cash by $277.2 million where as Under Armour only increased its cash by $61.45 million.
Competitors in the industry can wreak havoc on the bottom line for a company. With rivals, a price competition usually ensues, which benefits the customers but hurts the competing businesses that share a common strategy. In reviewing rival sellers, many competitors exist within the sports apparel and footwear industry, but most of them are unable to compete with the industry giants, Nike and Adidas. They are well seated in the industry and their sales reveal this ultimate strength, however, Under Armour is putting pressure on these mammoths. In 2015, global sales of sports clothing and footwear equated to $250 billion, of which Nike grabbed $30.6 billion, Adidas held in its grasp $18.8 billion and Under Armour had a much smaller piece of the pie, at $3.9 billion globally. In reviewing these numbers, it looks like Under Armour is really subpar to the industry giants, but this is not exactly the case. Under Armour in the past couple of
Nike is one of the biggest regular apparel brands in the world.Nike is ranked number one in apparel brand, as of 2015. Nike beat Jordan at number three, and Adidas at number four. Plus beating other big apparel companies such as: Converse, Ralph Lauren, Under Armour and
In 1962, Blue Ribbons Sports was established by Bill Bowerman & Philip Knight, became Nike, Inc. on May 30,1972. Nike, Inc. established the Nike swoosh logo and the “Just Do It” trademark. Nike. Inc., is one of the largest publicly traded sportswear, athletic shoes & apparel company with revenues of $19 billion in 2010 (3). NIKE, Inc. headquartered is located in Beaverton, Oregon. NIKE, Inc. sells merchandises through distributors, licensees, and subsidiaries in 120 countries globally. NIKE, Inc. has experienced generous amount of financial and marketing success since the 1960s (Wokutch, 2008). This why I chose Nike Inc., (NYSE: NKE) because of the substantial growth throughout the years.
Under Armour has proven year over year that they are indeed a growth company. As their brand recognition and product availability increases so do their revenues. Under Armour achieved a growth in net revenue by over 18 percent, increased net income by 22 percent (suggesting financial discipline) all leading to their ability to sustain growth year over year (Under Armour 10K, 2009). This considerable increase in net revenue is attributed to an increase in apparel and the introduction of footwear in the first quarter of 2009 (2009). Although Under Armour has only been around 14 years they have only been traded publicly since 2005 (2009).
Nike was formed in 1962 as Blue Ribbon Sports by Phil Knight and Bill Bowerman where the goal was to manufacture high quality running shoes. By 1979, the company had garnered approximately 50% of the United States running shoe market. By 1987, the company had moved into other athletic segments such as Basketball and general purpose exercise. Nike operates globally and claims a great deal of media attention as they sponsor big league sports celebrities and other media stars (Kell, 2016). Recently, you can see the majority of athletes at the 2016 Olympics in Rio de Janeiro wearing Nike shoes. This demonstrates the power of their brand.
Nike became very successful and became the #1 Sports brand in the world. However, Nike could not slack off as their competitors might surpass them. For years, Adidas was Nike’s biggest competitor. However, recent studies show as of 2015, Under Armour has become the second biggest Sports brand in the world. Under Armour revenue was reported to be about $17,000 in 1996 (year the company was founded). Now, Under Armour has reported to be making a little over $2 billion a year while their biggest competitor, Adidas, has dropped quite a bit and making a little under $2 billion a year. Though, both companies seem to be doing well, neither is close to Nike’s revenue a year. Nike is making over $11 million a year; Nike’s Jordan brand has reported to be making a little over $2 billion a year alone. Nike will always be the #1 Sports brand in the U.S. and in the world. The company will continue to grow with not only their Jordan brand, but with more and more star athletes the company
sponsors. Nike's market cap is $98 billion and Under Armours market cap is $22 billion. Nike
When deciding between us and our competitors, when choosing which performance apparel producer you want to invest into, we know the marketplace for performance apparel, footwear and accessories is highly competitive and includes many new competitors as well as increased completion from established companies expanding their production and marketing of performance products (pg. 6, 10k). We believe we have been successful in competing with others for limited retailer floor space because of the relationships we have developed as a direct result of the strong sales of our products. Under Armour is the official sponsor of the National Football League Combine. They are also the official footwear supplier of Major League Baseball (5 Things You Didn’t
Nike has been around since 1968 so they are a much more established company than Under Armour. They are a bigger brand than Under Armour and they have been able to sustain and grow that brand over time. The Nike swoosh logo is one of the most popular and easily recognizable logos currently out there. The Under Armour interlocking U and A is a very successful logo too, but it is not quite on the same level as the Nike swoosh yet. According to the case in the textbook, in 2011-2012, Nike had over 1,000 professional athletes with endorsement contracts. It’s going to be tough for anybody to knock off Nike as the market leader in the near future with numbers like that. Adidas is another strong competitor as well. They have several strong components of their business such as Reebok and Rockport. Perhaps their biggest strength is how wide spread their business is across the world. Puma is a big competitor for Under Armour in the athletic footwear business. Polo Ralph Lauren is also a major competitor in the performance activewear business. According to Exhibit 1, the level of rivalry among existing competitors is
Under Armour is in the Textile- Apparel Clothing industry, in the consumer goods sector. The market has been driven by economic recovery, new product offerings and a