Under Armour Case Analysis

Topics: Brand, Under Armour, Brand management Pages: 12 (3772 words) Published: April 6, 2014


Introduction
Under Armour is currently one of the leading companies in the sports apparel industry whose mission is to “Make all athletes better through passion, science, and the relentless pursuit of innovation”.1 When Under Armour first broke into the sports apparel industry it was a disruptive pioneer that initially made the two giants, Nike and Adidas, a little weary. Under Armour revolutionized the sports apparel industry by creating apparel that used synthetic materials as an alternative to natural fibers, such as cotton, or other materials, such as polyester. This all-important switch to these materials resulted in a 2“shirt that provided compression and wicked perspiration off your skin rather than absorb it. A shirt that worked with your body to regulate temperature and enhance performance”. This promise to increase athletic performance distinguished Under Armour from the other competing sports apparel companies, however, such rival companies have since introduced synthetic materials into their product lines.

Under Armour was first conceived in 1996 by Kevin Plank, who at the time was the special teams captain for the University of Maryland football team. Plank, frustrated with having to repeatedly change his cotton shirt during practices, set out to create a shirt whose materials allowed the perspiration to dry quickly, causing the athlete to be quicker, faster, and stronger as a result of less burdensome water weight. He made it his mission to develop a shirt using synthetic materials that handled perspiration most efficiently than was previously expected. He developed a shirt that used said synthetic materials to handle perspiration and tested the prototype, aptly named 0039, with his own football team. After he graduated, Plank went to many different universities trying to find a buyer for his product. After some time, Plank found his big break when he managed to earn the football team of Georgia Technical University as a client.

As the performance apparel market has grown, Under Armour has diversified their product offerings, developed different types of performance gear, and ventured into women’s apparel, footwear, and other merchandise. 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 scrutiny of these varying areas, the factors contributing to Under Armour’s current success and future challenges will appear to be much clearer.

Current Situation
Currently, 3Under Armour employs roughly 5900 individuals and, in terms of revenue, they are the third largest provider of performance sports apparel in the world. They are currently only in direct competition with Nike and Adidas. In 2012, Under Armour had an estimated revenue of $1.8 billion dollars, with expected net revenue in the range of $2.84 billion to $2.87 billion for 2014. This represents a growth of 22 percent to 23 percent over 2013. 4Under Armour has an estimated operating income of $85.3 million. In recent years, shoes have been Under Armour's fastest growing product line, 5growing at a rate of about 31 percent from 2011 to $239 million in sales in 2012. 6Under Armour has quickly gained a reputation of providing quality equipment and sports apparel, thus leading to the company to be the official sponsor of many sports teams and individuals, such as the Tottenham Hotspurs of the Barclay’s English Premier League. Under Armour is also quickly becoming well-known for its charitable contributions to the community. They currently support the fight against breast cancer, as well as being a big supporter of the Wounded Warrior Project (which helps troops wounded in combat return to normal living) and various youth outreach programs in the community.

Industry Structure
Being an emergent competitor within the oligopoly of the athletic apparel industry,...

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