Under Armour: Performance Apparel Competitors

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

Under Armour is a very famous sportswear company in the world. It sold products in three categories: apparel, footwear, and accessories. It had a wide variety of innerwear and outerwear in the apparel segment, a broad line of footwear, and a line of accessories for both men and women. Kevin A. Plank, the founder and Chief Executive Officer of Under Armour (UA), was a walk-on special team’s player for University of Maryland football team. As an athlete, he knew what kind of sportswear material would be popular for athletes. Under Armour created a new category of sports apparel: “performance apparel” which focused on the athlete’s performance. In this segment, it had a 78% market in 2009. Because, it paid more attentions on quality, performance

There is a high threat of substitutes in the athletic gear industry especially when competing with companies such as Nike and Adidas who have been around much longer, have the funds to continuously innovate their products and already hold a large market share. Under Armour has used “authenticity” as it’s guiding principle to grow the company and advertise their products, but if they wish to be the number one brand of athletic gear they will have to appeal to people who are also concerned with the look of the product and not just performance. According to research done by NPD Group, almost 80 percent of activewear is used for non-sports activities. “Under Armour will need to find a

Under Armour’s (UA) current CEO Kevin Kant founded the company in 1996, which has witnessed the company grow in recent years to become a key player in the sporting gear and apparel industry. UA focuses its products and marketing efforts towards the youth, men, and women. The amount of resources that are allocated to each group of customers differs in that initially, UA primary source of revenue was from men even if youth and women products were also produced and sold. The specificity of UA’s products and their sporting activities selectivity can be attributed to UA’s limited global market share in the sporting gear and apparel industry. The company’s mission statement is inspiring, but in order to gain competitive advantages against larger

In today’s athletic market world, being the number one is what many athletes strive for—that is what sets the standards for many sport clothing companies, to deliver products that allow athletes increase their performance while striving to take the number “one” spot. Under Armour works to deliver products that do that and more. Under Armour is currently one of the leading companies in the sports apparel industry whose mission is to “Make all athletes better through passion, design, and the relentless pursuit of innovation” (Under Armour, Inc). Baltimore, Maryland-based Under Armour, founded in 1996 by ex-football player Kevin Plank, who transformed the sports apparel industry by creating apparel that used synthetic materials as an alternative to natural fibers, such as cotton, or other materials, such as polyester. Plank’s mission was to develop a shirt using synthetic materials that handled perspiration most efficiently than was previously expected. Under Armour’s ability to target their products to a wide range of potential clients has enhanced their ability to continue to grow within the athletic marketplace. Under Armour, it is classified as a high-end fitness clothing supplier that appeals to a diverse income audience. This audience has been reached by the outstanding advertising strategies and that include men, women and children. Under Armour currently uses a mixture of pull marketing and different campaigns for its diverse product lines. The overall goal for Under

Other clothing brands have the ability to start manufacturing athletic apparel to take away market share and diversify their portfolio. Thus, existing apparel companies could enter the performance apparel market if they decide to invest capital for advertising and building product demand. Under Armour has weak patent protection over its product; hence, there is a threat of different unexpected entrants who want to reiterate on their proven formula. Overall, the threat is less imperative to their continued success since other issues are more pertinent and likely.

Under Armour Inc. is the fourth biggest manufacturer in the consumer apparel industry. Under Armour Inc. stock price has dropped nearly 30 percent in the past year. They represent more than 4.45 percent of the total market share. Despite the decline in stock price, Under Armour Inc. continues to grow. This fluctuation in stock price has caused us to take a deeper look at their financial statements. In doing so, we decided to do a financial ratio analysis. To have a better understanding of the industry and how Under Armour Inc. compares to the rest of the industry we will compare them to Columbia Sportwear Company.

As per the instructions, I believe that while I may not have the answers to what innovations are needed, I’m confident that the employees of Under Armour do, and it’s a matter of inspiring them to propose innovative ideas. Currently, their brand statement states “To make all athletes better through passion, science and the relentless pursuit of innovation.” Under Armour has shown substantial year on year growth in revenues, exceeding the growth in the global apparel market.

The article entitled Under Armour Overtakes Adidas in U.S. Sportswear market, written by Germano, claims that Nike is number one seller of sportswear & footwear in the US market followed by Under Armor. Adidas was directly behind Nike in the US market yet it lost its No. 2 position in the acutely focused U.S. sportswear advertise a year ago to Under Armor Inc., which expanded both clothing and footwear deals at its German adversary's cost. Nike has long held the top roost in U.S. offers of sweats and tennis shoes, with its Nike and Jordan brands representing more than 90% of the American business sector for basketball shoes. Be that as it may, both the footwear and attire divisions of Nike and Under Armor expanded their piece of the overall

income they may buy more clothing, increasing sales for clothing manufacturers, wholesalers and retailers. However, recessions have the opposite effect. Sales for clothing may be significantly lower due to many clothes being luxury items. If this happen retailers are stuck with large amounts of inventory which they might have to sell at reduced prices. The demand for more clothes, changing materials and demand for price there outside factors playing a role. One consequence of the rapidly expanding worldwide system of trade flows in clothing is that individual companies are not only competing more and more intensely with one another but are also becoming more functionally integrated with one another across the globe. (Scott, 2006). The sports

Even though footwear sales have improved for Under Armour, when looking at the Composition of Revenues for Under Armour in 2012-2015 (Exhibit 3, C-79) and comparing their composition to that of Nike and the Adidas Group, it’s evident that footwear sales are

Under Armour, Inc. is the frontier for innovation of athletic performance products that enable consumers, men women and youth, to maximize their potential throughout the duration of a game, practice, or workout. The company was founded by Kevin A. Plank in 1996 and is headquartered in Baltimore, Maryland. Under Armour develops and sells products in three primary categories, “In 2015, sales of apparel, footwear and accessories represented 71%, 17% and 9% of net revenues, respectively” (Under, 1). The remaining 3% of net revenues is generated through licensing arrangements. Sales are primarily driven by wholesale channels, but Under Armour “also generate net revenue from the sale of our products through our direct to consumer sales channel…and

UnderArmour is a sports fashion line that has gained 4 billion dollars in annual sales. It also has a continuing rise in stocks since the business began operating. The company’s products consist of a large variety of active and outdoor footwear as well as clothing, accessories, undergarments, and equipment for certain sporting categories. UnderArmour’s products are made from top quality materials via advanced technology so that the footwear can sustain any environment. The company’s footwear has even won against larger companies such as Nike for their better quality in basketball shoes and sneakers. The company has achieved a large number of global endorsements via athletes, sporting events, and department stores.

In the documentary we watched in class "The Naked Brand", Under Armor was one of the company's mentioned. Under Armour came out with a new Green Line of clothes centered around helping the environment. This new line of athletic clothes is made from recycled materials such as plastic water bottles. One important part of Under Amour's company is their sustainability. According to their Mission statement, "At Under Armour, we see environmental and social sustainability as a journey". Another example of an imitative Under Armour took to help the Environment was join the Sustainable Apparel Coalition. In which helps "apparel, footwear, and textiles industry that produces no unnecessary environmental harm and has a positive impact on the people and communities associated with its activities". Companies like Under Armour produce large quantities of apparel so going green and helping the environment is a very proactive way to reach consumers, because who doesn’t want to help the environment?

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