...Academia logo redesign 2015 LOG IN SIGN UP Case Study 2, Under Armour's Strategy Nicola Hudson UPLOADED BY Nicola Hudson TRENDING top 1% VIEWS 1,786 DOWNLOAD Case Study 2, Under Armour’s Strategy Under Armour is an emerging company in the sports apparel industry whose mission is to “Make all athletes better through passion, science and the rel entless pursuit of innovation” . Under Armour was a disruptive innovator in the sports apparel industry by creating sports apparel using synthetic materials as an alternative to natural fibers, such as cotton. This important change in material resulted in a “shirt that provided compress ion and wicked perspiration off your skin rather than absorb it…that worked with your body to regulate temperature and enhance performance” . This promise to increase athletic performance differentiated it from competing sports apparel companies, but rivals have since implemented synthetic materials into their product lines. This case study seeks to analyze Under Armour ’s history, resources, capabilities, and core competencies, business and corporate-level strategies, as well as the general environment and competitive landscape. After careful inspection of these varying areas, the factors contributing to Under Armour’s current success and future challenges will become clearer. The conception for Under Armour began over a year ago when CEO Kevin Plank played on the University of Maryland football team. Frustrated with...
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...Under Armour Andrea George Alvernia University Abstract Under Armour is a North American sports apparel company started in 1995. Started by Kevin Plank, his business has become one of the leading companies in the sports apparel industry. Under Armour is best known for its moisture wicking t-shirts. Under Armour is popular among middle and upper class athletic and health conscience consumers. It competes with other popular sports footwear and apparel companies. Nike and Adidas are Under Armour largest competitors. Under Armour offers a variety of clothing, sports equipment and footwear. They will continue to be a very competitive company in the sportswear market. History of the company Under Armour was started by Kevin Plank in 1995. He was a special teams captain on the University of Maryland football team. During games his teammates’ cotton shirts would be soaked with sweat and heavy to wear. Realizing there could be a better option, Kevin began looking and researching ways to produce a better type of t-shirt. After Kevin graduated from college he began working on a superior t-shirt. He used fabric samples to build his first prototype. He gave this prototype to his Maryland teammates to get feedback on how the shirts performed. From their feedback he found that using microfibers in the t-shirts wicked away moisture that helped keep athletes dry and cool while participating in sports. Kevin ran his business out of his grandmother’s basement working...
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...Management 31 October 2013 Under Armour Some of the main reason for Under Armour’s success has to do with the decision making, creativity, and great entrepreneurship from their founder and CEO, Kevin Plank. Plank was very business savvy from day one, while juggling school and football in college he also had his own business, selling flowers which allowed him to save nearly $20,000 to start Under Armour. Plank’s creativity with Under Armour is stemmed from the fact that he was a college athlete so he understands exactly what athletes want from his products. Plank still uses his athletic instincts in the workplace during meeting, rather than just sitting around a table he calls a huddle which allows for a more fun and relaxed environment in the workplace. When plank was a football player at The University of Maryland he was proclaimed as the sweatiest man on the field and his cotton shirts held too much water which made him very uncomfortable during practice and games, thus Plank decided to try and create a shirt that would not hold water which would make him faster and lighter on the field. Plank had an edge that most sports apparel CEO’s did not have and that was that he was a college athlete, which meant that many of teammates and close friends went on to play in the NFL, allowing Plank to send his teammates his product and share them with their new teammates in the NFL. Many college and professional equipment managers, got word of Under Armour, asking Plank for products and...
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...Under Armour Case Study Source: Hogan, 2013 Table of contents Detailed Timeline 3 Business and Corporate Level Planning 4 Brief Summary of the Company Situation in their Competitive Environment, Issues they Face and Clear Problem Statement to Analyze 6 Key Leadership 8 Types of innovation and Evidence of Entrepreneurship 10 Global Presence and Effects 11 Ethics - Examples of Social Consciousness/Corporate Social Responsibility 12 Responsible Wealth Creation 14 Engagement and Plan Alignment & Corporate Culture 15 Wild Card 16 Internal Analysis 17 External Analysis 20 SWOT Analysis 24 Recommendation 27 Bibliography 33 Appendix 37 Team Member Roles 46 Detailed Timeline It all started in 1995 when Kevin Plank, the special teams captain on the University of Maryland football team, noticed that the cotton T-shirts he and his teammates wore underneath their pads were always soaked and filled with sweat (Under Armour, 2012). “There has to be something better,” he believed (Under Armour, 2012). That statement soon launched the performance apparel industry (Under Armour, 2012). That statement also became Under Armour’s generic strategy, which was to develop a better product than there was in the market. While Plank was perfecting his t-shirt after he graduated, he needed funds to launch his apparel line, so he maxed out his credit cards to the tune of $40,000 and set up a company in his grandmother’s basement in Washington, DC (Under Armour, 2012). In...
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...Under Armour has exponentially grown within the last 10 years even though they have been under the shadow of the most lucrative company of the 21st century Nike. Even though Under Armour has been working under Nike’s shadow they can't be considered to far back. Under Armour has worked itself up into becoming the second most popular athletic apparel in America, surprisingly beating Adidas in the market. Many would think that Adidas would be Nike’s only competitor but speaking statically Under Armour is right behind Nike eating into Nike’s market share. Under Armour was founded in 1996 by Kevin Plank the CEO and chairman of Under Armour and it all started from his grandmother's basement in Washington, D.C. The company is now based in Baltimore,...
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...Under Armour’s Strategy Case Analysis 1. How strong are the competitive forces confronting Under Armour, Nike, and The Adidas Group? Provide a five-forces analysis to support your answer. The competitive forces confronting Under Armour, Nike, and the Adidas Group are very strong. There are many other companies who offer similar sportswear and gear lie these three groups. A consumer has a wide variety of merchandise available to choose from, and the price to pick one brand over another costs the customer very little. All the competitors have allowed the market to be saturated with similar merchandise without much differentiation in products. The companies have an equal economic capability and economy of scale as Under Armour, Nike, and Adidas Group which allows them to remain equally competitive. The competitive pressure coming from new entrants into the sportswear apparel industry is relatively high. Active lifestyles are promoted heavily and customer demand for athletic products are high which means newcomers can expect to earn exponential profits. If a company has the resources to enter the market, then they could become a formidable competitor. The competitive pressure coming from firms offering substitute products is very high. Substitutes are often attractive to consumers because they are readily available for a nice price. Consumers often become used to buying substitutes because they suffer very low cost when switching products. Competitive pressure...
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...Every since the creation of the well known body wear Under Armour in 1996, Kevin Plank's formal University of Maryland football player. The band has under gone rapid expansion and popularity throughout the world today being that it all started in a basement. It has taken over the performance workout apparel market in the United States and worldwide, over the years it has began to outsell another well known sporting apparel such as Nike and Addidas. Under Armour Inc. has even expanded its market way beyond performance apparel line and brings products such as footwear and casual wear also workout wear. The company has prided itself on maintaining a competitive advantage by always having top-notch products and adopting new ideas to outcompete...
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...Case Study Analysis of Under Armour Module: Lecturer: Submission Date: Word Count: Matriculation number: Contemporary Issues in Strategic Management Maurice Brunet 15th November 2013 2990 (max. 3.000) 40131612 1 Introduction Under Armour, founded in 1996 by former University of Maryland football player Kevin Plank, is an American sports apparel company with headquarter in Maryland, US. Kevin Plank had the idea of making a t-shirt that is able to enhance athletes’ performance by controlling the body’s temperature and acting like a second skin. In only 14 years, Plank has succeeded in building Under Armour into a worldwide operating company that offers a wide range of premium priced sport articles including performance apparel, footwear and accessories. As of 2010, Under Armour was able to generate sales revenue of $1.06 billion of which the majority comes from Canada and the United States. Under Armour’s vision is to become the world’s leading performance athletic apparel by pursuing the mission of making “… athletes better through passion, science, and the relentless pursuit of innovation” (Ireland et al., 2013, p.378). The following report provides an analysis of the company Under Armour based on information from Ireland et al. (2013) in Management of Strategy. The paper is divided in the following three parts: 1. Five Forces analysis of the sportswear industry 2. Value chain analysis of Under Armour 3. Under Armour’s generic strategy. 1 2 Five Forces Analysis...
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...Under Armour – Challenging Nike in Sports Apparel Zenith Shrestha 000722986 Section 1 Under Armour has dominated the performance apparel market in recent years. They have used innovative technology and created a product that is high in quality and has gained a lot of customer support from its target industry. Their strategy of producing climate favorable, Athlete friendly, fitting sizes apparel made of moisture-wicking polyester-blend fabric ensuring high quality has been working to good effect as it has been dominating a performance apparel industry overcoming its rivals Nike and Addidas. So, their innovation and technology is their major strength. Similarly, products they introduced to the market are unique so they are going to enjoy the first mover advantage for quite a good time. This allows them to stay competitive in the industry. They have also been able to establish a very good brand image among customers. Their strategy of targeting athletes and active lifestyle has helped them to gain a lot of popularity among targeted customers. Apart from that its strength also lies on the athletic endorsements and players sponsorship. There are few weaknesses that Under Armour needs to consider. Most of the raw materials used by Under Armour are developed and manufactured by third parties. However, the company’s popularity is based on the innovation and uniqueness. So development of those materials through third party could be risky for Under Armour as they can be imitated...
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...UNDER ARMOUR: CASE ANALYSIS Under Armour is a company based in the United States, best known for its introduction of form-fitting, moisture-wicking clothing designed to be worn under sportswear. Founder Kevin Plank was a football player with the University of Maryland who got tired of having to change out of the sweat-soaked T-shirts he wore under his jersey. This was the inspiration to make a T-shirt using moisture-wicking fabric for athletic performance. The company is a supplier of a much wider range of sportswear and casual apparel. After creating and improving his first product he sold it to his first football team, Georgia Tech. After this the company expanded to include many NCAA football teams, several NFL teams and is starting to leak into other sports and other markets around the world. In 2008 it expanded with the footwear and accessory product lines. Under Armour’s current mission, vision and values provide direction both operationally and strategically for the company. Under Armour’s strategy is to outperforming its competitors and achieving superior profitability through actions to gain sales and market share via more performance features, more appealing design, better quality or wider product selection. The goal is to achieve the competitive on the basis of differentiation features, such as higher quality, wider product selection, and added performance, value added services, more attractive styling, and technological superiority. The Under Armour brand is positioned...
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...Under Armour (Case 1) The following is an environment analysis of the ‘clothing’ business sector of the Performance Apparel Industry, with an analysis on Under Armour, a growing company headquartered in Baltimore, Maryland. The Future of Under Armour is unforeseen but we know that Under Armour wants to be number one in the industry above all competitors. Nike and Adidas will always strive to be the leaders but is our products truly better than theirs? The first section of this report will consist of an overview of the trends in technology, demographics, economics, political/legal and finally social/cultural. Political/Legal There is not too much content that Under Armour must worry about in this section. They just need to stay in the realms of regular business and legally obtain the correct patients so that no other competitors steal valued material. This actually makes their products perform better than other competitors. Politically Under Armour needs to promote good and safe work habits. They do not want a negative view like Nike obtained after they were seen utilizing sweatshops to make a deeper profit in the Industry. Even if a few customers find out they are using bad practices, then it shatters the whole reputation and brand image. Socio-cultural and Global Under Armour and other competitors can and have been using a global image to win the customers over. It is very important that Under Armour utilizes the global image of their quality product, for instance, showing...
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...Under Armour STEEP Analysis Socio Cultural: Due to, the global rising trend of quality awareness, and global health conscious of athletes and customers, they are more willing to pay for the quality product, regardless of its price with more expectation in enhancing their athletic performances and lifestyle .This is perfectly matched with the company as delivering superior unique, innovative quality products Then, company has to try to tailor the products to meet the needs. Technological: With the new technology software SAP enable the company to reach effectiveness in managing inventory and shipment to distributors. But still not enough in prospect for sufficient communication between rising number of distributors, therefore, company should introduce ICT and restructure the IT system to utilize forceful customer analysis for more operational efficiency. Economic: The growth in the sport performance apparel industry, together with rising in physical active consumers seems to be promising future for Under Armour. Nowadays, the economic recession in U.S., rising labor costs and material prices affect both local economy and international economy where the company operate in like China. Weakens of Euro and an Asian recession affect in the dropping in sales. Environmental: The innovative commodities of the company still less in environmental concern,due to raw material petroleum- based is involved in production process. Thus, company should pursue on environmental friendly materials...
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...Introduction and Background: Under Armour has emerged over the last decade as a major player in the athletic apparel industry. They have defined themselves as a “luxury” type good within that market space, demanding a slightly higher than average price point. The market for sports apparel is very fragmented, with more than 25 major competitors. Among these are giants Nike, Adidas, and Reebok. The graph below depicts the market share trend in this space since 2003. Clearly, Under Armour is on the upslope and is trending in the right direction. Under Armour has built their brand around quality and image. Their products are depicted to be rugged, durable, and to survive the wear and tear of “battle”, both on the playing field and during training. Most of the advertising and brand messaging features athletes preparing and practicing for a sport, instilling the feeling among consumers that if I wear this and prepare like that, then I can be an athlete and a “warrior” in my own way. I believe that Under Armour is emerging as an iconic brand. Interestingly enough, their largest competitor, Nike, has heralded the slogan “Just Do It” over its long history. Under Armour has since moved from its original calling “Protect This House”, to a direct answer to Nike’s dare, “I Will”. One aspect of creating a great brand is to have a great story. The Under Armour story is relatable to the public and portrays somewhat of an underdog mentality. Under Armour was founded by Kevin Plank in 1996...
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...Sheet…………………………………………………23 Free Cash Flow……………………………………………….…………...25 Free cash flow valuation summary……………………………..……...….26 WACC calculation………………………………………………………...27 Sensitivity analysis………………………………………………………...27 Graphs/ Plots Net income (loss) by year……………………………………………….…28 Free cash flow by year……………………………………………………..28 Written Report Executive Summary Executive Summary Introduction of the Firm Under Armour (UA) was incorporated on July 1, 1996; producing and distributing performance apparel and footwear for athletes of all ages. The brand engineered a fabric that enhances performance and comfort through its “moisture wicking” fabrications that helps athlete’s performance no matter the weather at hand. UA operates in North America, Europe, the Middle East, Africa, and Asia and Latin America. UA generates most of their revenues through wholesalers, planning to grow business operations by expanding their network of wholesalers and direct customers in more than 13 countries outside of the US. Stock price valuation In order to value Under Armour, our group collected financial...
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...increase market share. The Under Armour brand has been built on differentiation, authenticity, and originality. An advanced second skin microfiber under garment to control perspiration and body temperature, for athletes as well as those who lead active lifestyles, is the cornerstone of Under Armour’s business. Since founder Kevin Plank first launched the original Under Armour compression t-shirt in 1996, the company has experienced rapid growth, with distribution to over 500 retail stores, outfitting agreements with athletic teams, and international expansion. Over the past decade, Under Armour has expanded its marketing efforts and has not limited itself to only athletic wear by increasing its product offerings to include footwear, accessories, children’s wear, and women’s active wear. Problem Statement Under Armour has excelled in its product and marketing strategy to date, however the company must seek to improve the future prospects for growth, including, but not limited to, product manufacturing, operations and distribution, and market expansion. Analysis With the growing popularity of collegiate and competitive sports and physically active lifestyles Under Armour has experienced continuous growth and success, despite the many competitors saturating the sports apparel market in recent decades. Such notable success and exponential growth is due largely to Under Armour’s product innovation and differentiation. This analysis will evaluate Under Armour’s current strategy...
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