Under Armour Essay

Competitive analysis is an essential part of strategic marketing where companies continuously monitor the business activities of its competitors gathering and analyzing industry information keeping up with the current trends and developments providing a perspective on the probabilities and possibilities of the future (Brannon and Divita, 2015). Athletics Supreme faces competition from its top three competitors. Dick’s Sporting Goods has made adjustments and shifted sales to meet changing trends in the area of sports now catering to serious athletes and children, and young adults at all levels of play. Foot Locker, Inc. is a leading retailer in athletic shoes and apparel mostly operating specialty stores malls across the United States. Walmart

Customers make purchasing decisions based on the information they have among products and the values of goods a company offers. For that reason, companies have to promote their products to increase products awareness. In order to achieve organizational goals, companies must understand the market’s needs to ensure the success of their businesses. Such information can be gained through research. The industry that will form the basis of this paper is Western Canadian Shoe Association. The three brands under study are Reebok, Adidas, and Nike.

How strong are the competitive forces confronting Under Armour, Nike, and The Adidas Group? Do a five-forces analysis to support your answer.

Past Corporate Performance Indexes (2009-2010)    Strategic Posture    Mission – “To make all athletes better through passion, science, and the relentless pursuit of innovation” Objectives – Become “The athletic brand of this generation. And Next.” Current Strategies     Decline in footwear sales by 4.5% Increase in apparel sales by 32.3% & Accessories by 28% Offensive tactics Outsourcing to lower manufacturing costs Competitive pricing. Current Polices   Never too small to take on industry leaders Full retail pricing,

1. Considering the five forces of competition and how they direct the profit potential for a given industry, discuss how the forces help explain Lululemon’s performance.

3. What do you see as the key success factors in the market for performance-based yoga and fitness apparel?

4. Further Research—Gather information on Nike’s recent moves and accomplishments, and those of its rival Adidas. Are both firms following the same strategies and using the same structures to support them? Or, is one doing something quite different from the other? Based on what you learn, what do you predict for the future? Will Nike stay on top, or is Adidas the next industry leader?

How strong are the competitive forces confronting Under Armour, Nike, and The adidas Group? Do a five- forces analysis to support your answer.

After 2006, Nike caught up with the Adidas in global market share. It’s all thanks to Nike’s ability to find new alternative ways of brand management such as digital distribution with YouTube or individual partnerships with players that lead to Nike catching up when it did not have the rights to market extensively on the worlds biggest stage.

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

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 sportswear industry is growing and becoming more competitive so the will be new producers and entries in the market with new ‘’aces up their sleeves’’. More competition in the market

Competition is very fierce due to the number of companies competing for sales. Lots of money goes to marketing and promotions using various channels to reach the young demographic group of consumers who spend the most money on Nike’s products. Growth is slowing down in the athletic footwear industry. But new markets are emerging with high growth rates. These markets include extreme sports market and the corporate merchandise market.

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

The sportswear industry is very price sensitive and most competitors prices are about the same. Nike sells its products in Nike shops and the selling of its products direct to the consumers conflicts with other resellers of the brand. Most of Nike’s earnings are derived from selling into retailers.