Under Armour Case Analysis
1. Five forces analysis for the performance apparel industry Buyer Bargaining Power: High
There are a lot of performance apparel companies out on the market, which has created a wide variety of product options for customers. With different brands out on the market, each one has its own specific style and designs, which allows the customers to choose who has the best quality and price. Substitute Products: Low
Having a lot of performance apparel companies out on the market causes competition and this will provide similar products at a lower price. Although, since the majority of Under Armour’s customers are athletes they must create high quality products. Under Armour must set their prices high because the product provides the best comfort and use for athletes. Supplier Bargaining Power: High
Having a lot of raw material readily available gives suppliers a big advantage. Many companies in the performance apparel industry have several suppliers to choose from so they can make sure that what they are getting is the best quality and quantity of the material for a reasonable price.
Potential New Entrants: Moderate
The potential of new entrants entering into the performance apparel industry is moderately low because of the big companies that already exist in the market. It is very unlikely for loyal customers of the big companies to switch to the new entrants. For the new entrants to steal these loyal customers away they need to create a product that has a better design, better quality and a more competitive price. Rivalry: Very High
Rivalry in the performance apparel industry is very high because each company is creating similar products for performance apparel and shoe apparel. Not only is the product very similar but the prices are very similar and this will create heavy rivalry in the marketplace. 2. SWOT Analysis
Strengths: UA has a wide variety of performance apparel products with high quality material and their main focus is how their apparel performs for the user. With Under Armour being sponsors for high school, college and professional level athletes, they have created their image as a strong brand with a high quality product. Weakness: With their product being high quality, it unfortunately comes with a high price. The high prices of UA’s products can cause a decrease in their sales and lose customers to other brands that offer lower prices. Opportunity: UA could apply some strategies to lower prices on their products, which would allow more customers to buy their products. Also, with sports becoming more popular in Europe and Asia, UA could expand their products to those countries. Threats: Being in competition with Nike and Adidas will cause major threats in the performance apparel industry. With the advancement in technology, companies can create new designs or improve their workforce by getting their products out faster than UA. Also, substitute products are easily available on the market, which will also cause major threats to UA. 3. Seven key elements of UA’s strategy:
UA hopes to achieve $4 billion dollars in sales revenue by 2016, which is two times as much as what was estimated in 2013. UA wants to continue to broaden their product line up to men, woman and even children in a variety of sports. Targeting more consumer segments by widening their distribution channels, more advertising, creating more retail stores and expanding their marketing program. UA wants to be able to penetrate the athletic footwear where Nike has been the leader in the global market. Widening their product sales in foreign countries and becoming a global competitor in the performance apparel industry.
Product Line Strategy:
UA performance apparel products are designed for hot weather, cold weather and all seasons gear. UA has accomplished this by applying up to date technology and innovation to create their performance apparel products. UA hopes to continue to gain...
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