Under Armour Is Gaining Market Share And Challenging Nike

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Abstract

Under Armour is gaining market share and challenging Nike in the sports apparel industry.

However, Under Armour is having major issues with inventory management and managing cost.

Inventory cost has increased steadily over the past three years and is now at the point where it is

out weighing revenue.

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CASE DESCRIPTION

Under Armour, Inc., was founded in1996, by Kevin Plank, by a former University of

Maryland football player. The company was born out of an idea to make a T-shirt that provided

compression and “wicked” or unbelievable perspiration from the individual’s skin and thereby

regulating body temperature and eliminating the discomfort of
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The company has built an incredible authentic brand in relatively a short period. The

company has been in existence for a little over 15 years and has made huge strides in the textile,

apparel, and luxury goods industry. With success come challenges, and therefore a need for

strategic adjustments. The company’s strategy lines up well with the sports apparel industry key

success factors. However, the company has a few weaknesses and threats they need to address in

order for the company to continue on the path of steady growth and stability.

The case study revealed there is a huge issue with inventory management. Under

Armour, inventory strategy is to have enough inventories to fill orders quickly. The company’s

year-end 2011 financial statement revealed inventory cost had exceeded revenue gained

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

2009 to 155.8 in 2011 (Thompson et al., 2014, p. c-52). Under Amour’s product days of

inventory is much higher than the sports apparel industry and that of its competitors. This

revelation has caused management to consider reducing the products offered by 20 percent.

The other issue revealed is that Under Armour does not own any patents for its products.

This issue poses a huge threat to the company. Under Armour has a group
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