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Under Armour: Challenging Nike in Sports Apparel
Transcript of Under Armour: Challenging Nike in Sports Apparel
KP Sports - The Beginnings of Under Armour
Five Forces Analysis
Core Competence - an activity that a company performs proficiently that is also central to its strategy and competitive success
Innovation & R&D
“to make all athletes better through passion, design, and the relentless pursuit of innovation”
Distinctive Competence - a competitively important activity that a company performs better than its rivals
High quality, long-lasting products
Trey Lavespere & Wells Audrey Russell
Rivalry Among Competing Sellers: HIGH
Competitive Pressures from Suppliers: MEDIUM
Firms in other Industries Offering Substitute Products: LOW
Competitive Pressures from Buyers: MEDIUM
Potential New Entrants: MEDIUM
Innovation & technology
Simple, straightforward, & memorable message
CEO an athlete
High quality & high performing product
Athletic endorsements & sports sponsorships
Marketed & produced mainly for males in the beginning
Very limited product line in the beginning
Limited online presence
Small international presence
Expand the product line
Patent the technology/process used to make their apparel
Lack of patents
Competition from larger companies
Key Elements of the Strategy
1.) to win buyers over with a superior product depsite the higher price
2.) to gain buyer loyalty to the Under Armour brand
3.) to increase sales due to high brand loyalty and the attractiveness of the product/brand to additional buyers
To achieve these goals, Under Armour focuses on several uniqueness drivers.
Under Armour's Competitive Strategy
Beginning = Focused Differentiation Strategy
Current = Broad Differentiation Strategy
Broad Differentiation Strategy
Focused Differentiation Strategy
Weighted Competitive Strength Assessment
Priority Issues & Recommendations
1.) Lack of patents - Under Armour needs to think about patenting its intellectual property in order to safeguard their product and prohibit competition from stealing their property
2.) Product Line - Under Armour needs to continue the expansion of their product line to market to more women, children, outdoors (hunting & fishing), etc.
3.) International Presence - In order to stay competitive with companies like Nike and Adidas, Under Armour needs to continue their foray into the global market.
Gross Profit Margin
Operating Profit Margin
Net Profit Margin
Net Return on Total Assets
Total Debt to Assets Ratio
Debt to Equity Ratio
Under Armour is doing great!
Founded in 1996
Former Maryland football player
15 years - sales of $15 billion
Key Success Factor Weight Under Armour Nike Adidas
Raw material access
New product innovation
Relative cost position
Overall weighted competitive strength rating