Under Armour Analysis

Part1  Five force--competitive rivalry

Analysis--Under Armour faces the intense competition not only from two large rivals, Nike and Adidas, who take the market share 7% and 5.4% respectively, but also new players. These tycoons could improve their strong brand recognition and marketing efforts to enhance their presence in international markets from which UA generates only 6% of its revenues. In addition, private label offerings of retailers and non-ownership of any fabric or process patents pose threats. Moreover, the operational process of this industry is focused on delivering the innovative products, so they tend to rely on suppliers but the buyers seem to have moderate power over the company and the substitute products are widely available. Given the global nature of sports and their popularity, this industry should remain very competitive for the forseeable future.

Part2  Value Chain--Marketing and sales

Analysis-- The company’s also been launching highly visible marketing campaigns, top-profile endorsements, and publicity blitzes, all of which keeps the brand in the limelight.

UA spent approximately $57.8 million in 2013 for athlete endorsement and league sponsorship, which is a basically good marketing strategy because celebrity endorsement will not only induce consumers to switch brands but also incur market demand, and thus increase profit.

UA is very aggressive in its promotion strategy to the point that it provides new up-and –coming athletes with clothing and accessories to bring the official footwear suppler of the MLB. This has helped the company to be visible among the consumer as the leading performance apparels. As a result of its aggressive promotion, the company in 2011 was able to spend $168 million in marketing expenses.

UA also worked with retailers to devise space in the store dedicated solely to UA. In stores where such space where not allowed, the company worked to show off their merchandise in each individual department. As a result they were able to open their own company-owned retail stores. The constant changes in athletic needs made the company to develop and implement new designs, products, and technology to fit the changing needs of the athletes.

Part3  Management measures that will build on a company strength to improve UA’s competitive position

Analysis—

UA has a couple of strengths, such as strong product positioning, quality products, dynamic advertising, etc., among which innovation is the key strength that UA should still continue to maintain in order for consumers to relate and for the company to continue to be an effective brand. Since UA is the current market leader in the performance apparel market with over 70% market share, it should expand globally with performance apparel first and then consider expanding overseas in the footwear market based on the sales performance locally. UA should continue to concentrate on high-quality performance apparel while still being innovative and developing research in the footwear and accessories segment. If the company boosts marketing efforts internally and domestically, while ensuring that the international expansion is targeted where population has large purchasing power the company will strengthen. UA needs to continue to provide value to consumers through innovation and research and development. UA should still continue to have more product endorsers in order to continue to build clientele globally and locally.