Under Armour has to be extra innovative in order to stay strong in the competition Besides the big problems the company is dealing with, there are good opportunities where the company can grow to another level. Leadership and technology are hard to imitate hence they give Under Armour a competitive advantage compared to the other competitors. Do a five- forces analysis to support your answer. One such business that presents a low risk, yet high reward potential, is Under Armour. The first time he started this business, he uses the connections that he had through playing sports. Class A Comm Stock — Yahoo! How strong are the competitive forces confronting Under Armour, Nike, and The adidas Group? Thus diminishing 2379 Words 10 Pages Case Study 1 Under Armour — Challenging Nike in Sports Apparel Problem Statement Under Armour is a sport performance apparel brand that is looking to move ahead of its competition and branch out into different sectors of the sporting goods industry.
Due to the degree of competition in the industry, a substitute product could drastically hurt their company and its market share. The decrease in gross margin percentage was as a result of the following: About 110 basis point decrease that was driven primarily by higher apparel production input costs, this include cotton, in the current financial year. Under Armour's HealthBox Connected Fitness app. Weaknesses Heavy Investment Spending: One has to look closely to find weaknesses here there certainly has been nothing weak about the stock price , but the high level of investment spending is at least a modest cause for concern. By then, the currency situation should be a bit better, and margins ought to widen as Under Armour leverages its infrastructure investments. Even though it might not be sustainable through the end of the industry life, now is the time that Under Armour should accommodate the growth with appropriate innovation and expansion.
After he graduated, Plank went to many different universities trying to find a buyer for his product. The 3D printing that are getting popular lately revolutionize many industries in the term of designs. Many of the countries picked by the companies have different standard of living than the U. While playing football, he disliked wearing the cotton t-shirts that the players wore under their jerseys. A solid research and development team has allowed for the innovation of new products to gain an advantage over their top competitors.
Since Under Armour possesses a special technology that are not available in some other brand the threat of substitute products can be managed. Under Armour needs to take the difference in the cultures seriously in order to excel in other countries globally. Subramanian Balachander and Axel Stock. Brand House stores carry the best items available with a full price tag and on the other hand, the retail stores feature more items with more affordable price to customers. Thus far, most of the footwear gains have been in the running space. As for companies that are already present in the apparel market, it is easy for them to move into the performance apparel market.
Brand House stores has a purpose which is to show the customers the power of the brand itself with having a full control of displaying what the company wants. By not having its own factory, the overhead cost can be reduced but the risk of not producing enough merchandise is higher and Under Armour has low control in those manufacturers. So that brings us back to the valuation question: is the stock too expensive to recommend at this juncture? Seeing that many Under Armour clothing is made to fit and tight fitting, people who are out of shape are less likely to wear it since it does not look that good on them. The company has grown from the east coast to nationwide, as well as some international markets. Accessed April 1, 2016 Marder, Andrew. This is the reason Under Armour has been innovating non-stop.
Plank has always strived to be the best so he has only hired the most competent workers for his company. A second factor that could affect the sports clothing company is the growing population of staying in shape. This may call for a rise in the number of people Under Armour chooses to employ. Current Financial Performance Under Armour has proven itself as one of the powerhouse in the sport apparel industry in North America. Under Armour cannot set its price freely considering that Under Armour has many competitions from companies such as Adidas, Nike and Luluemon. Accessed March 18, 2016 Chew, Jonathan.
Although the company is several years behind Nike and Adidas, Under Armour has been growing steadily since its inception. Doing so would play to the advantage of their specialty performance wear for hot and cold weather. These have made the company to experience a significant growth in the sports apparels industry. The women line has so much potential to be the source of revenue of the company. Today, the story at Under Armour is revenue growth. Consumers do not need to be informed with every decision that the company takes.
Accessed March 20, 2016 15. What is the task or problem facing the company? How strong are the competitive forces confronting Under Armour, Nike, and The adidas Group? Strategy Recommendations, Alternative Analysis and Arguments These next few pages will discuss some recommendations that will help Under Armour to strengthen its current weakness with its narrow product offering and provides ways to better adapt them for the future. Competitive Rivalry: There are many companies in the sports apparel, footwear and accessories industry, such as Nike, Adidas, Puma, Therefore it makes it hard for companies like Nike, Adidas and Under Amour etc. Accessed April 14, 2016 Singh, Pankaj Kumar and J. To accurately assess the risks involved… 863 Words 4 Pages Case Analysis Model Begin with a brief introduction which names the company and the industry in which it operates. Economic Many economic factors can affect customers whether they want to spend money to luxury items such as sporting goods and hobby items.
Key Success Factors This part of my analysis of the industry examines the key success factors in achieving success in the Sport Apparel and Active wear industry key factor plays are the main completive factors that enable company to prosper and out compete their rivals. The data shows it that Under Armour only generates about 12% of its total revenue from outside the U. The analysis of the Porters five forces are very important to business entities. We can see a heavy dose of advertisements are done by the companies that are participating in this monopolistic competitions in order to show customers the advantage of the goods sold by the companies. And we expect big strides to be made in the years ahead sales growth of 30% a year seems reasonable , which should help Under Armour gain ground in key international geographies and underpenetrated sports realms, such as golf, tennis, basketball, and soccer. We can see that Under Armour main competitors are Nike, Adidas, Luluemon, Columbia, and Adidas. On a financial level, Under Armour needs to keep funding a strong research and development team to continue to develop breakthrough products.