The Success of Under Armour

Categories: CompanySales

What makes a person choose one brand of clothing over another? Is it the price? Or is it the style of the clothing? There are numerous factors that will play a key role in determining who will purchase your products and why they will choose to purchase your product. Kevin Plank, the founder of Under Armour and former captain of the special teams on Maryland University’s football team, would become infuriated at the amount of times he was forced to change his undershirt during games and practices due to how heavy with sweat they would become.

He set out to create a shirt that would help keep an athlete cool and dry during intense physical activity. This simple idea would develop into a powerhouse in the sports apparel industry and has broken into the sports equipment industry as well.

The sports apparel and accessories industry has a highly competitive market. Businesses are constantly competing for elite athletes to sponsor, raw materials, and every opportunity to expand.

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Under Armour is able to not only survive but thrive in this market because of their ability to think outside of the box. They are constantly creating new and exciting products that help athletes everywhere.

Under Armour has a mission statement that clearly states what they wish to accomplish and how they will do it. “To make all athletes better through passion, design, and the relentless pursuit of innovation”, this is a powerful statement that makes consumers and the competition aware that this organization will strive to help athletes everywhere reach their potential (Mission, 08).

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Their mission statement leads directly to the philosophies that are taught within this organization. “No loser thoughts” is one that they use regularly when trying to keep their athletes and employees motivated. They do not tolerate negativity; they strive to keep pushing forward and never think of quitting. “Passion, Vision, People” (Mission, 08) is a philosophy they use that shows their customer that they really do care about them and are working hard to provide a product that will be the most beneficial to them. It is not only about the profit margin for this company. “To build the biggest baddest brand in the world” is their philosophy that lets their competition know that they will stop at nothing to monopolize and dominate the industry. The confidence that this organization shows is unwavering (Mission, 08).

Their strategy that enables them to compete with companies like Nike and Adidas is directly linked to their mission and philosophies. By staying focused, determined, positive, and imaginative they allow themselves to reach the customer in a manner that touches multiple factors that the consumer is searching for. They provide products that are both comfortable and functional.

This brand has survived on its numerous strengths that have carried it through the years. Their popularity has been steadily increasing through the years. They have also come to be known as a very reliable brand because their products always seem to perform well when put to the test. They also strive to create new and exciting products and designs. This helps to make sure that their customers do not become bored with the styles. One of the biggest factors is the commitment level that the employees have for this company. Without their brilliant minds and hard work they might not have grown like they have. One of their downfalls through the years was that they were not able to penetrate overseas markets, however they have finally begun their expansion into Europe which they hope will drastically increase their customer base (Success factors, 08).

No company is perfect; there will always be weaknesses and chances of failure. Under Armour’s specific weaknesses exist in various areas of their market. First, they do not utilize long-term contracts in their negotiations so they are always at risk of losing clients. Losing clients mean those clients will eventually sign on with the competition. Also, their designs are not patented so anyone can utilize them and create a similar product and become direct competition. They also lack in female based products. Females make up a huge market and they are losing out on substantial profits by not targeting women. Their global expansion is also moving along slowly and this allows competition to reach clients overseas before they can.

With weakness comes opportunity. Under Armour’s opportunities are very promising. A huge opportunity to expand their customer base and greatly increase their revenue lies in the female market. By incorporating designs that are for female athletes they are allowing them to enjoy the same comfort levels and performance increases that their male counterpart has long been a part of. This is a market that Nike has been utilizing for years now and has increased their revenue earnings from women’s apparel to $4 billion (Townsend, 2013). Under Armour does generate income from their line for women; it is roughly $400,000: which is not even equal to half of their income from their men’s line (Townsend, 2013). This could be due to the fact that men do not understand women’s clothing. They need to incorporate more women into their company so that they may have a woman’s perspective. Another opportunity exists in overseas markets. By increasing their use of target marketing they will be able to expand to different sports that will actually appeal to other cultures. Not very many Europeans participate in our American style football, so it would make more sense to create a soccer line, or target any other athletic event that has high participation and begin developing products for them. Numerous cultures around the world have competitive athletics that require high quality products in order to effectively participate in the event. Targeting these multiple smaller markets can lead to an increase in sales.

This company’s success has been so great because of their unwillingness to become complacent. They constantly strive to create new and exciting products that constantly remind their customers why they continue to be loyal to this company. Customers become bored of products and want the newest and best thing that will give them the highest advantage and best comfort levels and that is what Under Armour strives to give them. Innovation with their products will allow them to always be able to reach the younger generations that require those new features in order to purchase.

A big key to Under Armour’s success is the detailed organization structure that they have. The company is very vertically complex. They have numerous personnel that make up their hierarchy of authority. This allows every person to be held accountable for something and will force them to work harder. They are also very spatially complex as they have numerous locations throughout the world that distributes their merchandise allowing them to reach many more market segment.

Under Armour began in 1995 as an idea from the founder Kevin A. Plank. The way this company is organized starts with an executive board. This executive board consists of a chief financial officer, chief operating officer and president of product, chief supply chain officer, president for international, executive vice president for global marketing, senior vice president of sales for North America, and a president for North America. The “chief financial officer is responsible for managing the financial risks of the corporation” (Executive Team, 08). He is also vital for financial planning and record keeping as well as financial reporting to higher management. As for the chief operating officer, this position can be one of the highest- ranking executives in an organization. The responsibility of this position consists of the “daily operation of the company and routinely reports to the highest ranking executive” (Executive Team, 08). The chief operating officer can also be known as second in command when working alongside the chairman of the company. When discussing manufacturing operations, materials management, procurement, packaging, handling, and transportation the chief supply chain officer is the person who is in charge of all this. These positions require a great background in order to do well in these positions. These positions make sure that the organization of the company is done properly.

Running an international business takes a lot of work and to further its organization it is organized by stock info, financials, events and presentations, executive team, brand news, governance, facts, and investor contact. Stocks are very important when it comes to a business because if they are managed the right way it can help give an edge over other corporations in competition. The history of the company’s stock will help determine how the company should go about doing things in the future. It will allow the company to gain more investors and stock holders if the stocks are doing well and there is consistency within the company. Along with stocks are the finances and the finances detail how well the company is doing with net revenues as well as net growth. The way they check this is by doing quarterly earnings reports which allows the company to keep track the finances.

To keep the company progressively moving forward, it is wise to have conferences and presentations discussing how the company is doing, new investors, and ways the company can be improved upon. It is a time for ideas and concerns to be brought to the company’s knowledge and will help develop a connection throughout the company’s employees. The executive board consists of Kevin Plank as chief executive officer, Brad Dickerson as chief financial officer, Kip Fulks as chief operating officer, James Hardy Jr. as chief supply chain officer, Karl-Heinz as international president, Matthew Mirchin as executive vice president, Adam Peake as senior vice president of sales, and Henry Stafford as North America president. Each of these people have a lot input towards Under Armour’s innovative products and marketing ideas; such as Kevin plank being the developer of the new and improved sports performance clothing thus starting a new era of sports apparel. Each one of these people bring an innovative mindset to the executive team which allows Under Armour to always be organized as well as continue to progress as a company.

Brand news explains the updates on whom Under Armour is getting involved with. This could be companies, schools as well as athletes who become affiliated with the brand. This is good for the brand because when universities sign on with Under Armour it helps the company with promotion. As for athletes, if they are an elite athlete that stands out from the rest sales will increase. Fans will see the athlete wearing Under Armour’s gear which will increase their desire to purchase it. This proves to be the most affective with athletic based groups that are involved with the same sport as the elite athlete. If an elite athlete is wearing the product then it must be a good product. This is the idea that companies love to put in the consumers head. A company’s ability to thrive is based on how reputable their name is. When companies, athletes, and universities use the product it demonstrates their faith in the product. When Under Armour sponsors organizations it gives the brand a higher reputation.

Governance explains how the company guidelines are set up, board of directors, board committees, committee charters, governance documents, lead director, code of ethics, stock ownership guidelines, and how to contact the board. The guidelines discuss how the “board of directors are selected which are by the shareholders of the company” (Governance Guidelines, 08). It is the job of the board of directors to “define and enforce standards of accountability that enable executive management to execute their responsibilities” (Governance Guidelines, 08) as well as keep the shareholders happy. Performance is key for a company and in order for the company to run smoothly; executive management must oversee the conduct of the company’s business to evaluate whether it is being effectively managed. When Under Armour is effectively being managed it is undergoing strategic plan review, advice and counsel, management being assisted, management being motivated by one goal, members being appointed to their appropriate positions, compensation being established, and last but not least, the evaluating of overall effectiveness of the board of directors.

Another key subject that deals with organization of the company is the code of ethics. “The code of ethics is a document that dictates what behavior is appropriate and acceptable within Under Armour” (Governance Guidelines). Some examples of what it details is the purpose, policy, laws and regulations of the company. This document is made so that they are not liable for certain incidents involving the company regarding not only a customer but the employees as well. All of this is essential to Under Armour’s success because in order to keep a good reputation there must not be any incidents that may reflect badly on the company. Under Armour understands that the company is in the hands of its employees and the code of ethics allows for the employees to have an understanding of the behavior that is expected of them and that the employees be held responsible for their actions. This will help maintain the highest ethical and professional standards. Not only does the code of ethics discuss how employees should carry themselves but it also discusses how the customer and Under Armour’s competition should be treated. It is the idea of everyone being treated fairly so that the company’s reputation can grow in a positive way. If customers and other businesses like the way Under Armour does things then that will bring more business for the company.

All of this comes to how individuals in the company are evaluated individually in order to bring more success to Under Armour. Under Armour “looks for people who are passionate, motivated, innovative, strong, and driven towards success” (Meet the team, 08). Success comes from being excited to be working for the company and to bring that energy that the company needs. Not anyone can be chosen for a job Under Armour; they are looking for the people that can best represent the company as well as its heritage. When working within an organization such as Under Armour, teamwork is a vital tool in for the company’s success and the way the brands mission and values consists are based around “innovation, customer service, and the passion that they have for helping athletes achieve their highest levels of performance” (Vision & Values, 08). This is what the company stands for and they seek out individuals with these qualities to work with them. Their website demonstrates this by having a location for submitting new and creative ideas. Though they are looking for someone who will promote these values they are also looking for talent that they need. They “evaluate based on how an individual and the team can engage easily and effectively” (Success Factors, 08) and how you can improve yourself as an employee, and how well you can get the results that company desires. All of these are factors that will help in the positive progression of the company.

As a team, Under Armour coordinates the goals of the company from the chief executive all the way down to the sales associates, they increase the availability of their systems by utilizing a main location, and continue to integrate data by utilizing the Human is providing the infrastructure to get ahead of the tremendous growth we continue to experience at Under Armour” (SuccessFactors,08). All in all, Under Armour is a company that looks to be the best producer and creator of sports apparel. They are organized and well-structured as they pick the best people to carry on their success. When all of these factors are successful goals are met and successful outcomes begin to become a regular occurrence. A source they use to better evaluate individuals and the team is through successfactors.com, as said by the director of HR Troy Barnett, SAP (Success Factors, 08).

Under Armour has made great strides in reaching the top position in their industry. By utilizing their imagination and focusing on the consumer they were able to develop products that proved to be very successful. By expanding their marketing mix they will be able to generate a higher profit and help more athletes reach their potential.

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The Success of Under Armour. (2021, Sep 13). Retrieved from https://studymoose.com/the-success-of-under-armour-essay

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