Under Armour Business Analysis

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

Mellat-Parast and Spillan (2014) defines supply chain management as the method of handling material and information moves from the beginning, through the organization, and to the end-user. This is a very important factor of organizational strategy.

companywide. The increase has caused the days of inventory to increase from 121.4 days in

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).

The athletic industry is a demanding market where brands battle for consumer’s attention and try to hold on to them through brand loyalty. To compete with one another, companies have to come out with new trends regularly. Nike is a leading competitor in the market and has been for the last fifty years. However, Under Armour, an up and coming competitor is challenging Nike through new styles and lower prices. These two companies look fairly similar; however, Under Armour’s strategy is different and it should be putting Nike on edge.

Under Armour Inc. is a relatively new competitor in providing high quality and functional sporting goods. Under Armour Inc. encompasses footwear, apparel, and accessories for all types of sport enthusiasts. The company currently provides jobs to about 10,700 employees. However, they are still up and coming and are expected to create new opportunities and work for many others. Their main headquarter is located in Maryland, Baltimore. Though they operate all over North America, Asia, and certain countries of Europe. Throughout all their operations they mostly sell through retailers and whole sale. In addition, they do have factory outlets and their own “direct to consumer” channels located in North America. Under Armour has really been on the

The industry that will be analyzed in the following paper will be the athletic wear industry. The firm in particular that will be analyzed will be analyzed is Under Armour. Assessing the athletic wear industry using Porter’s 5 forces, New Entrants is the first thing analyzed. The threat of new entrants within the industry is low. It is medium because there are already many well-established brand names; including Nike, Adidas, Rebook, Puma, Champion, Patagonia, and The North Face are just a few examples of these brands. Triefs Under Armour analysis shows these companies can create competition by joining sub industries that Under Armour is involved in that they are not as competitors. Also there is often large capital cost within the industry for branding, advertising and creating demand. When analyzing the rivalry within the industry Under Armour faces , Triefs

The SWOT reveals UA as a desirable company worth investors’ time and money. The analysis also shows that, only through the continuous enhancements of its strength and the review of its weakness, opportunities and threat, will the company remain viable in the industry (“Under Armour SWOT,”2010).

Under Armour is an American athletic apparel brand that was established in 1996, and has been increasing their product offering and outreach ever since. While known as a premium brand in the US, Under Armour still has little global outreach in comparison to its competitors. However, with the slowly increasing brand awareness and their expanding product offering, Under Armour has continued to gain more and more market share. However, in comparison to their close competitors, Nike and Adidas, Under Armour is still a relatively new brand in the industry and has a long way to go before they can be competitively on the same level as their competitors in markets outside of North America.

Under Armour is one of the most established sports apparel and accessories producing companies in the world. Under Armour

UA has fostered a culture of innovation, beginning with its 1996 introduction of one of the first athletic compression T-shirts that wicked moisture, replacing cotton. Since then, Under Armour has made innovation a priority, with product technology at the forefront of its offerings, which helps maintain its competitive advantage. The technological aspect of its activewear products provides Under Armour with a barrier to entry, as few can afford to innovate at the pace or scale of UA. The key to its innovation is a multiyear process that starts on a small scale to prove demand and popularity, eventually expanding to platform innovation, where multiple categories and products can use the innovation to drive revenue. One example of an increase in pricing power via innovation is the Clutchfit platform, a technology that helps lock the foot into the shoe for better performance and more comfort. With this innovation, the company was able to increase prices on cleats to $130 from $110 and to grow sales by 35%. As is typical for its platform innovation, UA has extended the Clutchfit to football cleats, soccer cleats, basketball shoes, and training shoes. In order to execute platform innovations and current product demands successful, UA has to rely on outsourcing the material and manufacturing from third parties. Given the technically advanced and specialty fabrics used in production, many of the raw materials and fabrics are from a limited number of sources. “In 2015, approximately 54% of the fabric used in our products came from five suppliers. These fabric suppliers have primary locations in Taiwan, Malaysia and Mexico” (5). Additionally, more than half of UA’s products are manufactured through unaffiliated manufacturers. “our products were manufactured by 44 primary manufacturers,

Under Armour is a blooming athletic wear industry which is in a constant battle between Nike, Adidas, Reebok, and many other companies. The thing about Under Armour is that it has only been around for a little while unlike older companies like Nike and Adidas. Basically, I am interested in this article because I love sports. I also love to follow up and stay up to date on the top pro athletes and competitors.

Under Armour has infused their products and their brand image in various visual media forms, including over a dozen popular television shows and numerous motion pictures (Shank, 2009). The look and appeal of Under Armour was ideal as it was the combination of the intense, hard core athletic gear that could help with performance coupled with a hip, fresh look that would be able to appeal to consumers. To differentiate its product line from its competitors Under Armour leveraged its sophisticated design software, new manufacturing techniques, the latest in material engineering, and robust information technology systems to produce virtually everything it makes (Shank, 2009). The utilization of the marketing technique of product placement in television, movies, and video games has allowed Under Armour to promote the benefits of its product line to a larger audience (Shank, 2009). In 1998, Warner Brothers studio was

The following is an environmental analysis of the “performance apparel” business sector of the athletic apparel industry, with an analysis on Under Armour, the 3rd largest athletic apparel company. The company is clearly rapidly growing, touching markets that have been dominated before, but continues to pride themselves on the performance of their products. The first section of this analysis will cover the trends in technology, economics, demographics, socialites and culture, as well as politics and legalities. It also includes coverage over Porter’s 5 forces and analysis’ of the industry and competitors. It will be concluded with strategies of success of the company as well as alternative strategies.

After we thoroughly explained Under Armour’s issues, like endorsements, prices, expansion, etc. we came up with a bunch of formulated options that can be useful to the company. Now, not all of these options are truly realistic or may come true, but they are all brainstormed ideas that should be taken into consideration. Some of these should help some of the issues going forward, and all of them should at least get some attention.