Under Armour: Case Study Case Study Samples
External Assessment Part A
Under Armour is an American company formed in year 1996 by Kevin Plank. The company mainly involve in designing, production, marketing & distribution of sports clothing, footwear and other related accessories. Under Armour provides hi-tech gears to its consumers that are designed to control temperature and enhance the performance of the players. The company is one of top key brands in performance wear, however the company is facing tough competition from Nike and Adidas. Other competitors of Under Armour are Puma, New Balance, Columbia, Champion, Sugoi, North Face and Quick Silver. Under Armour is largely depends upon United States for its sales and market share. Around 80 percent of the sales of Under Armour comes from USA, and around ten percent sales from international markets (Under Armour, Inc., 2014).
Nike and Adidas the major competitor of Under Armour has wide presence in international market and well recognized brand name along with loyal customer base. Therefore market share of Under Armour in international market is negligible. In United States Market Under Armour holds 14 percent market share of athlete apparel market, whereas Adidas holds 6 percent and Nike holds third position. In Footwear segment Nike holds 46 percent market share in USA market Followed by Jorgan (Mirabella, 2014). Adidas holds third position. Overall Nike holds largest market share of 36 percent, and Under Armour 33 percent, surpassing Adidas. Under Armour is continuously gaining sales growth and becoming a major threat for the Nike in US market (Backs, 2006).
Competitive Profit Matrix:
* Rating is provided on the scale of 1 to 4, where 4 refers to highest and 1 to lowest.
The competitive profile matrix shows that Nike holds highest position in terms of competitiveness whereas Under Armour holds second position. The company has wide opportunity in global expansion. Presently Under Armour depends on very few number of distributors which negatively impacts the distribution network of the company (Under Armour, 2015).
External Assessment Part B
Performance apparel industry is gaining popularity across the globe. The overall market size of the industry is around 6.40 billion USD. Over past five years the industry is growing at average 20 percent growth rate. The same growth is expected in coming one and two years’ time period. Currently Performance apparel holds around 11 percent share in overall sportswear; this share is expected to grow to 12 percent in current year. The industry performing well irrespective of the adverse economic conditions and single digit growth in overall apparel market (Textile Exchange, 2014).
According to a Standard and Poor’s report the apparel industry has not seen a good time in year 2014. There are various factors impacting performance of apparel industry such as changing lifestyle of people, economic conditions, and harsh weather. According to the report various major brands registered a decline in their sales in year 2014. However, sportswear industry is registering continuous growth for last one decade. Various socio-demographic and economic factors are supporting the growth of sport apparel industry (Standard & Poor's, 2014).
External factors that are fueling growth of sports apparel industry and performance apparel industry are: higher participation in sport activities, inclination towards healthy lifestyle, innovative and technically advance products, and improving economic conditions. Awareness about benefits of sport activities and exercise is increasing not only in America but across the world. Young population is very conscious about their health which driving growth of sports apparel industry.
In developing countries government encourage foreign companies to invest by forming friendly policies. Technology also made possible for the companies to increase their reach and accessing customers located in remote areas. Companies are utilizing technologies in developing innovative products that improve the performance of the products and encourage customers to make the purchase. Under Armour is well known for its innovative products that improve the performance of the athlete by maintaining the temperature of the body according to the external environment. Economic growth in developing nations also positively impacting the purchasing power of the consumers which further impacting the growth of apparel industry. All these factors positively or negatively impacts the performance of the industry.
Backs, C. (2006, November 17, 2006 17). Nike and Under Armour. Retrieved from 247wallst: http://247wallst.blogspot.in/2006/11/cramer-backs-nike-and-under-armour_17.html
(November, 2014). Company Profile: Under Armour, Inc. USA: MarketLine.
Mirabella, L. (2014, September 8). Under Armour surpasses Adidas to become No. 2 sports brand. Retrieved from Baltimore Sun: http://articles.baltimoresun.com/2014-09-08/business/bs-bz-under-armour-beats-adidas-20140908_1_armour-ceo-kevin-plank-market-leader-nike
Performance Apparel and its Global Market Trends. (2014). Retrieved from Textile Exchange Online: http://www.teonline.com/knowledge-centre/performance-apparel-global-market.html
Standard & Poor's: Apparel & Footwear: Retailers & Brands. (2014, September 18). Retrieved from alacrastore: http://www.alacrastore.com/storecontent/S-P-Industry-Surveys/Apparel-Footwear-Retailers-Brands-2149-33
Under Armour. (2015). Retrieved from investor.underarmour: http://investor.underarmour.com/annuals.cfm
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