Under Armour Working to Stay on Top of Its Game Essay
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Target in men, women and youth. (Under Armour’s diverse product line for men, women, and youth is complex, but the message is simple: wear HeatGear when it’s hot, ColdGear when it’s cold, and AllSeasonGear between the extremes.)
Cultural differences. (Product transcends cultural differences and it is appealing to many athletes, regardless of nationality; Under Armour is puisuing a worldwide scope via regionalization.)
Economic Increase economic condition by improving the sales balance and reducing the seasonal variability in sales, inventory efforts and distribution.
Economic risk. (The degree of economic risk associated with the premium pricing and Under Armour is feeling the effects of the current declining retail consumer market that is affecting the broader economy.)
Current economic downturn challenges Under Armour to compete against major rivals.
Political/ Legal The company works with multiple licensees directly throughout the product development process to ensure that the products are aligned with its brand and quality expectations. Under Armour does not have a patent on any of the materials use in its products.
Therefore, it needs to be cautious in its licensing agreements so companies do not steal its know-how and introduce their own versions.
Under Armour signed a five- year partnership agreement in April 2009 with Cal Ripken, Jr. The intellectual property rights laws and regulations of countries in the global market vary dramatically.
Sociocultural Under Armour mission’s is to enhance the experience for all athletes by applying passion, science, and the relentless pursuit of innovation to create clothing with temperature control, comfort, and flexibility. Under Armour has reached regular athletes, active outdoor enthusiasts, elite tactical professionals, and active lifestyle consumers.
Plank’s shirt truly did regulate athletes’ body temperatures, lending to improved performance.
Under Armour had five lines of clothing made for every climate. Footwear product line designed for high performance through a highly breathable and lightweight design.
Global Under Armour is able to successfully penetrate the sports apparel market by using the image and influence of: domestic and international professional teams, collegiate teams, Olympians, and individuals.
Under Armour’s products are sold worldwide, with the company’s headquarters located in the United States and support offices in Hong Kong and Guangzhou, China.
Under Armour sells products in 13 countries, including in-house distribution in the United Kingdom, Germany, and France. Sales in other Western European and Asian countries are done through partnerships and third-party distributors.
Under Armour do not have to contend with the challenges associated with establishing manufacturing plants in foreign countries.
Technology Plank created a synthetic shirt made of high-tech material that had a snug fit designed to feel like a second skin. Products are offered through the company website. For the first ten years of its existence, the company was able to sustain operations by using “off the shelf” software programs.
Under Armour invested in a new SAP system. This system is a key to the company’s ability to add products to list of offerings, as it allows Under Armour to manage a more diverse inventory and to ship directly to distributors.
Physical Environment When Plank was a football player he grew tired of having to change his damp, heavy t-shirt under his jersey, so he set out to create a unique product that would meet the needs of all athletes.
Though the materials and technology used to create its products are not exclusive, by implementing an effective corporate strategy Under Armour has been able to fashion itself as a profitable business and remain a key player among competitors.
Use Porter’s Five Forces Model to analyze the apparel, footwear, and equipment industry in the US.
Porter’s Five Forces Model Medium threat to new entry Under Armour operates in a highly competitive industry where the dominant competitors have significant breadth of market coverage that is difficult to find an entry point. The main competitors have been advertising and establishing distribution channels, marketing agreements, and recognition for many years. High threats of substitute products
Under Armour’s major competitors are Nike and Adidas with similar or competing product offerings.Under Armour does not have a patent on any of the materials used in its products.
High intensity of rivalry among competitors There is stiff competition in the athletic apparel industry with companies of various sizes employing different strategies in order to attract consumers to their product and brand. The larger companies continuously increase competition by spending large amounts of money on product innovations, advertising, and sponsorship.
High bargaining power of suppliers Under Armour’s customers is willing to pay the price for its products because their products have value in it.
Some of it suppliers are commodities and thus are subject to price fluctuations; for example, petroleum-based materials are used in Under Armou’s products and the petroleum industry has experienced significant swings in price and relative availability in recent months and years.
Under Armour relies heavily on suppliers and manufacturers outside of the United States. Seventy to 75 percent of the fabric used in its products comes from only six suppliers, lending to Under Armour’s weak position relative to its suppliers.
Low bargaining power of buyers Under Armour has developed unique products that consumers value. The customer is willing to pay the price because the Under Armour product has value in it.