Answer: A drop in sales and earnings forecast was triggered by Armour’s 2016 recession. North America’s decreased market negatively affected sales, prompting the company to decline from 2.57% in Q1 to 21.5% in Q2 and 15.6% in Q3. Under Armour is a manufacturer of sports appeals primarily to the consumer of North America. The firm, however, has been seed reduced revenues and the overall decline in its market in recent times. Different factors can be linked to the recession. Some of them are a shift in consumer preference: at this time, sportswear brands are not usually the top fashion brands.
Although customers are still purchasing these brands, instead of sportswear, the overall market is growing for fashion products. This ensures the companies need to be outstanding in order to perform well in the sports apparel industry. Lack of diversity under Armour’s product is comparatively feminine and has failed to create a centric female identity, thereby restricting its target market. The organization makes clothing for women, but men find their image, commercials, and tweets and alienate female customers.
Weak supply chain management is when it comes to their delivery, the company has developed a weak position. They tried to sell their brand through all sorts of shops. This has led the company to collapse in terms of the overall industry situation and thus face a further challenge.
2. What is your assessment of the strength of the competitive rivalry among the leading participants in the North American market for performance sports apparel headed into 2018?
Answer: The competition between competitive retailers of sporting goods like under Armour, Nike, Addidas, and Reebok is strong and expected to escalate.
The competition between sporting good energy dealers will continue to grow and become greater in the year to come. Beneath the Armour, Nike, Addidas, and Reebok have a similar and overlapping product offering, which is why there is a strong rivalry between them. Many companies are competing for a slowly growing market. Industries were highly aggressive in vying for larger market shares in comparison. In contrast, in this region, there are only a small number of businesses that can be influenced by any external factor such as new entry. If these businesses want to remain in business, they need to come up with different tactics to differentiate them from the opposition. Competition is high and performance-related. Both pioneers in sports apparel will make the market easier for each other as customers are gradually turning for health and fitness, and these firms will do whatever they can to provide these consumers with the best products that can boost the strength of competitive friction between them.
3. As of 2018, how does Under Armour’s competitive strength in the global market for sports apparel and athletic footwear compare against that of Nike and The Adidas Group? Does Under Armour have a net competitive advantage or disadvantage in competing globally against Nike and The Adidas Group? (Suggestion: refer to Table 4.4 in Chapter 4 to support your answer)
Answer: Competitive Strength assessment table (10 = very strong and 1 = very weak
Reputation 0.10 8 0.80 9 0.90 8 0.80
Quality of Product 0.10 9 0.90 9 0.90 8 0.80
Manufacturing capabilities 0.10 7 0.70 9 0.90 8 0.80
Innovation capabilities 0.15 10 0.10 7 0.70 6 0.60
Technology adoption 0.10 10 0.10 9 0.90 8 0.80
Access to raw materials 0.05 5 0.50 10 0.10 6 0.60
Cost efficiency 0.15 6 0.60 10 0.10 7 0.70
Financial position 0.10 6 0.60 10 0.10 8 0.80
Customer satisfaction ability 0.15 8 0.80 8 0.80 8 0.80
Total Strength Rating 7.85 8.85 7.45
When we access the competitive strength table it obvious that Nike stands first in strength as its rating came up to 8.85 whereas Under Amour scored 7.85. One thing we need to look after is the factors which make UnderArmour stronger in the market like technology adoption and innovation of product which are must capture market as we as the customers as they always search for something advanced, even it has good position in case of maintaining customers satisfaction level at high with help of quality products thereby it has maintained the reputation in market. But it lacks in accessing raw materials required for the business. One thing that should be developed in the case of Nike is innovation activities, whereas Adidas should make sure that it gives more importance to innovation as well as procuring necessary raw materials. Nike, of course, leads the packs within many of the stated categories of strength. This includes quality/product performance, reputation/image, manufacturing capabilities, raw materials access, financial resources, and relative cost production. Nike has been in the industry for many years and has staked its claim. One item of caution is that they must not think that they are exclusive. Under Armour is knocking on the door and there are many consumers that letting them in.
4. Which one of the five generic competitive strategies discussed in Chapter 5 most closely approximates the competitive approach that Under Armour is employing?
Answer: Board differentiation strategies seek to differentiate the company’s product or service from its rivals to appeal to a broader market space and customer base. Under Armour’s main strategic initiatives include: broadening the company’s offerings to all genders and ages for wear in a widening variety of sports; targeting additional consumer segments; increasing its penetration of the market for athletic footwear; expansion of sale in foreign countries. Its innovation product lines help in attracting customers from different sports backgrounds. Thus, Under Armour’s competitive approach closely approximates a broad differentiation strategy with the primary goal of gaining a significant share in the market and improving its profitability rates.
5. What are your recommendations and suggestions for improvement regarding Under Armour’s turnaround strategy, particularly in relation to global expansion and international competition in the North American market?
Answer: Under Armour’s main goal was to become a “quiet company with a loud brand” for this it adopted strategies like go-to-market and franchising, I think franchising is a good idea where it will help the company to cove overcome its disability of raw materials procurement or accessibility.
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