The Impact Of Marketing On The Athletic Apparel Market

Threats-Tax increases placing additional financial burdens on under armour could be a threat. The financial burden of increasing interest rates could be a threat to under armour. Changes in the way consumers shop and spend and other changing consumer patterns could be a threat to under armour’s performance. The actions of a competitor could be a major threat against under armour for instance it they bring in new technology or increase their workforce to meet demand. Substitute products available on the market present a major threat to under armour. Hard competition from companies such as nike and adidas. Recession may impact the sale of company. Low price importers can fetch market share. Male dominated focus.

A newcomer is going to have to build its way up the same way all the famous sporting goods brands have done it. Under Armour, Nike and Adidas/Reebok are aware of the possibility of new entrants in the market and that is why they keep advertising, establishing distribution channels, making marketing agreements, and keeping up brand loyalty in their customers.

a. Under Armour’s approach towards innovation is very unique, they think and plan out their projects thoroughly in order to create a one of a kind product that could be appealing to their consumers. The company has been extremely progressive throughout the years in order to stay ahead of the other competitive companies in their targeted industry. By constantly updating and coming up with different product lines, such as compression shirts and cleats, Under Armour is able to compete with other top athletic wear company’s in their market. If

Under Armour’s strategy is to offer superior alternatives to competitor products. They strive to dominate by offering the best products on the market. Under Armour has expanded its business by acquiring MapMyFitness and partnering in joint ventures with DC Comics and Marvel Entertainment. Analysis and

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

This would certainly be a deterrent for new companies wanting to get into this industry. Under Armor is not really threatened by new players. This would be true for Nike and the Adidas Group as well. Threat of substitutes • Under Armour, Nike, and the Adidas Group all face threats of substitutes. Substitutes can have some allure for customer/buyer.

Since the evolution of the company, Under Armour rapidly expands their business while some internal problems still exist. For example, unprotected intellectual property right issue and supplier relationship management. Also, the current business strategy was focusing on marketing, international expansion, product differentiation, and other expenses while they have weak financial management. These will certainly pose future problems to the company.

The strength of the competitive forces vary among the Under Armour, Nike, and The Adidas Group. The buyer bargaining power of Under Armour, is somewhat weak. Under Armour’s growth strategy entails, “Securing

The threat of new entrants in the athletic shoe industry is very weak. Currently the market is dominated by three major competitors, and

The corporate tax rate has just decreased from 35% to 21% which is good news for UA but not as much as companies that do more business in the US and also for a company that has significantly less debt than the highly leveraged Under Armour has (The Economist, 2018). Social factors are quite important for the retail industry and in 2017 a large demographic for clothing sales, teens, spent less overall and claimed Under Armour a brand they did not wear and athleisure in general to not be preferred attire anymore (Reagan, 2017). Thus, Under Armour’s demographics changed just in the last year with teenagers claiming to not be wearers of the brand, and also the trend of athleisure coming to an end. Technology is an external environmental factor that affects Under Armour, but not as much its competitors in the industry. When fitness bands were introduced the company also came out with their own line of bands that proved unsuccessful and were discontinued (Booton, 2017). Under Armour maintained their fitness apps however and they are able to have an edge over their competitors by having all of this information

As shown in Figure 2 of the Appendix, a Porter Five Force Analysis makes it clear that the overall rivalry within the athletic apparel industry is medium to high. Because Nike and Adidas already have a substantial amount of capital resources and other assets, Under Armour struggles against them to gain market share. 8Also, private labels of retailers and newer sports apparel companies could potentially pose a threat to Under Armour, but mostly due to the fact that Under Armour does not hold any fabric or process patents. This makes it extremely easy for any competitor to duplicate a product or process with no consequence. However, the threat of new entrants is not too troublesome within the industry because of the great capital cost required for branding, advertising, and meeting product demand. Furthermore, the sports apparel industry is in the maturity phase of the industry life cycle. This means that each company included in the oligopoly must

THREAT - LOW to MEDIUM: Interesting because Under Armour was a new organization not long ago entrants must differentiate somehow, powerful companies not willing to surrender market share and increasing apparel technology raises start-up costs.

In this industry, the Power of Buyers is low to moderate. It is considered low because athletic shoe producers have two sets of customers, direct consumers and intermediate consumers creating very low buyer concentration. Their intermediate consumers include a variety of stores from discounts stores, sporting goods stores and department stores. Due to the large size of the athletic shoe producers, the majority of intermediate consumers have very little negotiating ability and thus low power, allowing the athletic footwear firms the ability to earn an increase in profits by selling to intermediate consumers at full price. Some intermediate consumers such as large department stores and large sporting goods stores would have the size to be able to leverage some power over the athletic shoe producers giving them moderate power. The industry’s members reach direct consumers through vertically integrated self-operated brick and mortar retail stores as well as through online firms. Direct buyers have moderate power over the athletic shoe producers since there are no switching costs to go between brands. However, athletic footwear is strategically important to people if they are either athletes or people wanting to participate in high performance fitness activities, therefore giving them low power since they depend on the product to fill a

The athletic apparel industry is also defined by a moderate threat of new entrants. As mentioned earlier, the industry is extremely concentrated, with large companies (Nike, Adidas, Under Armour) at the top and several smaller companies following. While the costs for starting a local company is low, as the company grows, it will become harder to compete and be profitable in this industry. The incumbent firms in this industry have the advantage of existing production, distribution, and supply chain processes. New companies would consider the large upfront costs of these processes while incumbent firms take advantage of economies of scale due to having the benefit of already securing a large market share. These large costs in turn cause the company to have low profits, which discourages new entrants. Additionally, the threat of new entrants is low because of the brand preferences of consumers in the economy. This industry

Under Armour is a very popular and well-known brand throughout the world, there are many reasons why this is the case and why they are very successful as a company. Under Armour creates value for their customers in many ways, one of these ways is with their basketball shoes. Customers wouldn't want to buy shoes if they didn't think it would be durable and a good shoe. Customers can trust Under Armour’s basketball shoe because it is a shoe that somebody in the NBA wears. This shows that someone is willing to trust their million-dollar contract with their shoes to help them get their well-earned money, and that shows to confidence in Under Armour. Under Armour also gives many different options that the customer can choose from. They offer different technologies, materials, and articles of clothing. There are many different technologies they have, but I will only list a few. One of these technologies is cool switch, this helps athletes perform longer because the clothing will keep them cool and save them from sweating as much which helps save energy. Also, they offer many different materials in case a customer is allergic to a certain type of material there is always another so that they don't lose a customer. They also offer all different types of clothing so that whatever you need they'll have. Based on this research it proves that Under Armour has done so much to get where they are and be as successful as they are.