Introduction
Under Armour is currently one of the leading companies in the sports apparel industry whose mission is to “Make all athletes better through passion, science, and the relentless pursuit of innovation”.1 When Under Armour first broke into the sports apparel industry it was a disruptive pioneer that initially made the two giants, Nike and Adidas, a little weary. Under Armour revolutionized 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. This all-important switch to these materials resulted in a 2“shirt that provided compression and wicked perspiration off your skin rather than absorb it. A
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Other than Under Armour, the industry’s most prominent competitors are Nike and Adidas. In Figure 1 of the Appendix, a strategic group model illustrates Under Armour’s performance in comparison to the other leading competitors in the same industry. 7The size of each bubble is the amount of market share that that company holds. According to the map, Under Armour comes in at third place; it is apparent that the firm needs to make some changes if they desire to remain a legitimate player in the long run.
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
It should be noted that Under Armour and its competitors form a segment of the Apparel Clothing market geared toward recreational and formal athletics. Under Armour, and its main competitors of Columbia Sportswear and Nike, are recognizible and prestigious brand names in the United States and in many other countries, yet affordable, to an extent, to most middle class Americans. They are popular among teenagers and young adults, and also worn by practical middle aged people and senior citizens. The desirability, versatility, and practicality of these items are intrinsic to the companies and help lead to their success. Specific practical yet luxurious products are offered, such as shirts and pants for running, that help the runner in either too hot or too cold climates. With more and more people trying to exercise for health, beauty, athletic, and other reasons, these types of products are in demand. It seems that there are some Niche markets, and unique products, among each of Under Amour and its competitors, so there is not much threat between the different brands. Also, some recreational and formal athletes would purchase all three brands of items. The industry is considered to be a growth industry, but also somewhat mature as all the brand names are recognized. The following article explains how the author, at the end of 2014, considered Under Armour to be “a great growth stock” http://investorplace.com/2014/12/under-armour-inc-ua-stock-growth/ (Navellier
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
The also place a big emphasizes on the Under Armour logo and pushed for brand recognition. Under Armour became the official uniform sponsor for many colleges and sport teams. Under Armour’s strategy was to design and make varies styles of sports apparel with their moisture-wicking fabrics to satisfy the needs of athletes of all levels and all sports. Their growth strategy was to continue to expand on the products they offered their consumers. They wanted to create more products that encompassed several sports and activities. By doing this they would be targeting additional consumers with their new performance products. Part of the growth strategy was to expand sales in foreign countries, become a global competitor in sports apparel and strengthening the appeal of their products and brand
In the fourth quarter of 2013, Under Armour reports that 35% of net revenue growth to 683 million dollars compared with net revenue of 506 million dollars in 2012, driven by expanded fleece offerings and new ColdGear Infrared products (Under Armour, “2013 Under Armour Annual Report” 2014). The company kept its growth, as indicated in the fifteenth consecutive quarter that increased over-20% (Under Armour, “2013 Under Armour Annual Report” 2014). In the fourth quarter, Under Armour gained a great response from its customer over this quarter, which was presented the strength of Under Armour’s brand name with new products. In the future, the company plan to expand its markets in Asia, Europe, Australia, and Latin America, also expect to increase overall sale in global market from 6% in 2013 to 12% in 2016 (Under Armour, “2013 Under Armour Annual Report” 2014).
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
Under Armour has several large competitors; the largest being Nike, Adidas and Columbia Sportswear. These companies are similar in that they all stress product innovation, advertising and sponsorships. Adidas is broadly focused in all sporting categories but fails to stand out. Columbia is known almost solely by its winter gear, limiting its growth potential and creating strong seasonality trends. Nike strives to be the best in every segment while Under Armour’s goal is to be a leader in each process of its product development, concentrating on quality over quantity. An advantage for Under Armour is that it is focused more on improving its brand and unique products, licensing other items and accessories through independent manufacturers.
Under Armour was founded in 1996 by a former collegiate football player named Kevin Plank. Plank first developed the idea for this brand through his own personal need and desire, as a collegiate athlete at the University of Maryland, for a product that didn’t exist in the market at the time. Since its inception, Under Armour has continued to grow immensely and expand upon its continued success. However, Under Armour still has a lot more room to grow and a lot of potential within their industry. Perhaps their biggest strategic issue right now is that they rely too heavily on North America for their business. They have done very well from themselves in North America so far. Now is the time for them to leave their comfort zone within North America
Under Armour is in the Textile- Apparel Clothing industry, in the consumer goods sector. The market has been driven by economic recovery, new product offerings and a
The industry that will be analyzed in the following paper will be the athletic wear industry. The firm in particular that will be analyzed will be analyzed is Under Armour. Assessing the athletic wear industry using Porter’s 5 forces, New Entrants is the first thing analyzed. The threat of new entrants within the industry is low. It is medium because there are already many well-established brand names; including Nike, Adidas, Rebook, Puma, Champion, Patagonia, and The North Face are just a few examples of these brands. Triefs Under Armour analysis shows these companies can create competition by joining sub industries that Under Armour is involved in that they are not as competitors. Also there is often large capital cost within the industry for branding, advertising and creating demand. When analyzing the rivalry within the industry Under Armour faces , Triefs
Under Armour is an American athletic apparel brand that was established in 1996, and has been increasing their product offering and outreach ever since. While known as a premium brand in the US, Under Armour still has little global outreach in comparison to its competitors. However, with the slowly increasing brand awareness and their expanding product offering, Under Armour has continued to gain more and more market share. However, in comparison to their close competitors, Nike and Adidas, Under Armour is still a relatively new brand in the industry and has a long way to go before they can be competitively on the same level as their competitors in markets outside of North America.
Nike and Adidas both have seniority over the new UnderArmour and have distributed their businesses in more countries. Nike and Adidas also have a more marketing advantage in advertising their products in mainstream movies, television, and even video games. The companies have more endorsements with athletes and famous non athletes. Nike and Adidas share a main goal of marketing to all types of consumers while introducing products for their side projects. People will always prefer name brand over lower prices and better quality. UnderArmour has a long way to go to keep up with these two companies. UnderArmour even has to face the threat of more small businesses trying to reach their levels of operating with lower
After completing our research on Under Armour, we found many ways in which they could work to increase their market share. Under Armour first, needs to work on supplying a wider variety of shoes, such as casual wear, to keep up with their current competitors such as Nike. They also must focus more of their attention on the female market and allowing customers to more easily access the brand, increasing distribution through new store locations. Their use of endorsements has been beneficial in targeted areas for Under Armour so far, so an increase in endorsement efforts in other sports will help to not only spread brand awareness but also increase brand equity.
Under Armour is a blooming athletic wear industry which is in a constant battle between Nike, Adidas, Reebok, and many other companies. The thing about Under Armour is that it has only been around for a little while unlike older companies like Nike and Adidas. Basically, I am interested in this article because I love sports. I also love to follow up and stay up to date on the top pro athletes and competitors.
Under Armour faces many competitors besides Nike, like Adidas, Reebok, and Puma. While Under Armour makes exceptional products that are of similar quality, what makes Nike so much stronger of a company? A main problem identified was that Under Armour does not have much international revenue compared to its counterpart Nike, and Under Armour does not try to send a message with their clothes. They just want to sell them. In fact, according to 247wallst.com, Nike had an international revenue quarter of about $7 billion while Under Armour saw a quarterly revenue of $610 million.
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