Under Armour Case Study Solution

Under Armour1. How strong are the competitive forces confronting Under Armour, Nike, and Theadidas Group? Do a five-forces analysis to support your answer.The competitive pressures within the industry is strong. There are numerous competitors offeringa broad range of similar products. The lack of differentiation weakens Under Armour’s position and makes competition stronger. The cost to switch brands is low for the buyers.The competitive pressures from the threat of new entrants to the industry is moderate. Demand isgrowing due to the increase of people exercising out in order to live healthier lives. The limits to new entrants would include large capital costs required for branding, advertising and creating product demand. But with the capital and proper vision, a new entrant has the potential to compete within the industry due to the low switching cost to buyers. The competitive pressures of firms of other industries offering substitute products is strong. Nikeand adidas offer good substitutes for sports apparel and accessories. Most items are readily available, comparable, and have better features than some of Under Armour’s products. And the strength of the completion will be strong due to the low switching cost.The competitive pressures from supplier bargaining power are moderate. Under Armour's products were produced by 27 manufacturers located across 14 countries. The top 10 manufacturers accounted for 49 percent of the products manufactured. A diverse supplier base limits bargaining power.The competitive pressures from customer bargaining power are moderate. Under Armour clients include both wholesale and end consumers. Wholesale customers such as Dick's Sporting Goods

Running 2 internationally. UA has recently surpassed Adidas and is now, currently the number 2 sportswear company in the U.S. based on sales (Germano, 2014). The primary revenue sources include apparel and footwear. Apparel and footwear, has presented astounding growth in sales year after year. CEO and founder has ambition is to turn UA into a global brand. One primary goal of UA is to surge their presence in the footwear world. They have made leaps and bounds, and in the third quarter of 2014, the footwear sales have increased to about a 50% (Meehan, 2015).While, UA, is rather new to the footwear market, they hired Nike executive, Peter Ruppe, to serve under UA’s senior vice president. Although, UA has shown they are serious about their footwear division, they are still relatively new to the footwear market and because of this they recently hired Peter Ruppe, a former Nike executive that focused mainly on footwear, to be UA's senior vice president of footwear and was brought in to help create UA's future footwear strategy to grow their shoe brand. While UA international sales are still minor, they are increasing sales at a steady rate. UA endorses professional athletes and sports teams all over the world, in effort to expand their brand into international markets. They also understand the significance targeting younger customers, and in 2013, UA spent $150 million in acquiring fitness app maker, MapMyFitness (Symington, 2015). This has been a very successful investment. They have recently launched the UA Record app, reinforcing an online community of over 30 million users (Symington, 2015). UA has introduced innovative and exciting products to the markets and the current sales are

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