Under Armour Essay

4. Further Research—Gather information on Nike’s recent moves and accomplishments, and those of its rival Adidas. Are both firms following the same strategies and using the same structures to support them? Or, is one doing something quite different from the other? Based on what you learn, what do you predict for the future? Will Nike stay on top, or is Adidas the next industry leader?

How strong are the competitive forces confronting Under Armour, Nike, and The Adidas Group? Do a five-forces analysis to support your answer.

1.What is your assessment of the strength of competitive pressures stemming from rivalry among Under Armour, Nike and Adidas-Reebok?

1. How strong are the competitive forces confronting lululemon in the market for performance-based yoga and fitness apparel? Do a five-forces analysis to support your answer.

Under Armour adopt a differentiate product strategy through striving to offer superior products in its lineup of offerings to foster an innovation culture for the company. Moreover, it also worked with high-tech companies to produce innovative products such as Connected Fitness to step into a newer market segment.

Other competitors include Reebok, Asics, Puma, Adidas, and FILA. Under Armour’s biggest competitor, Nike, whose gross revenues of $25.3 billion vastly overshadow Under Armour’s $1.8 billion. One positive trend for Under Armour from a competitive standpoint is the fact that their competitors may have reached their maximum potential. Nike’s 12-Month Revenue Growth was 4.9% , while Under Armour had a rate of 24.6% (Colbert, 2013). Nike is booming in production but Under Armour is on the rise and will eventually take over the athletic

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

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

UA has fostered a culture of innovation, beginning with its 1996 introduction of one of the first athletic compression T-shirts that wicked moisture, replacing cotton. Since then, Under Armour has made innovation a priority, with product technology at the forefront of its offerings, which helps maintain its competitive advantage. The technological aspect of its activewear products provides Under Armour with a barrier to entry, as few can afford to innovate at the pace or scale of UA. The key to its innovation is a multiyear process that starts on a small scale to prove demand and popularity, eventually expanding to platform innovation, where multiple categories and products can use the innovation to drive revenue. One example of an increase in pricing power via innovation is the Clutchfit platform, a technology that helps lock the foot into the shoe for better performance and more comfort. With this innovation, the company was able to increase prices on cleats to $130 from $110 and to grow sales by 35%. As is typical for its platform innovation, UA has extended the Clutchfit to football cleats, soccer cleats, basketball shoes, and training shoes. In order to execute platform innovations and current product demands successful, UA has to rely on outsourcing the material and manufacturing from third parties. Given the technically advanced and specialty fabrics used in production, many of the raw materials and fabrics are from a limited number of sources. “In 2015, approximately 54% of the fabric used in our products came from five suppliers. These fabric suppliers have primary locations in Taiwan, Malaysia and Mexico” (5). Additionally, more than half of UA’s products are manufactured through unaffiliated manufacturers. “our products were manufactured by 44 primary manufacturers,

Apparently, customer have the right to decide whether to buy the product or not, and this right should affect a firm¡¦s destiny. When Nike angers their customer, the customer can choose to boycott Nike and go to other brand instead of Nike for substitution. However, the unfair bargaining power between Nike and customer base upon this substitution. If we merely talk about the shoes¡¦ function, substitution sure does exist. Nike sport shoes¡¦ function can surely be replaced by similar brand like Reebok or Adidas, or

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

We found that there are several available substitutes creating a middle-tired buying power. Although the industry has several players, Under Armour’s ability to supply premium differentiating products helps maintain its competitiveness against lower-tier brands. Studies have shown that many customers purchase brands due to brand recognition and association (Strider); this in turn has lead companies such as Nike, Adidas and Under Armour to invest heavily in athletic sponsorships and endorsements. Stephen Curry and Tom Brady are among the athletes whom Under Armour has signed to a multi-million dollar endorsements (Under Armour Roster).

There is a high threat of substitute products. Over the past years, the demand for athletic apparel has significantly risen (Strider). Under Armour has positioned themselves in an

However, Adidas used the five forces model: The reason for this model is directing an outer examination by measuring the: level of competition, the energy of providers, and energy of purchasers, the risk of substitutes, and danger of new entrants, in Dr. Syed Awais Ahmad Tipu Adidas Group Strategy Analysis.

In the performance apparel market the top three competitors consist of Nike, Adidas, and Under Armour, with Nike leading the industry and Under Armour coming in last. The Challenge for Under Armor will be can they stand the pressure from their competitors as they expand into a bigger market. They must be able to provide their customers with either cheaper or better products, the companies marginal cost should be better than that of their competitors, and Under Armour must prove to their customers that their products are different and overall better than their competitors (Terfis Team, 2014). If they’re able to succeed through these risk, then Under Armour will have a fighting chance of competing with those larger companies.