Under Armor Case

 Competitive forces in Under Armor Inc have provided the ability to compete in the market.  Even though rivals such as Nike and Adidas are presents in the competitive market with a strong power, Under Armor competitive forces have increased growth.  In 2015, Nike and Adidas had $30.6 and $18.8 sales respectively while Under Armor had $3.9 (McFatter, 2017). This show that rival sellers in sports apparel and footwear industry have a strong power  which allows them to sustain their competitive edge in the market or in other words, Under Armor  success is hindered by the  rival of sellers. However, Under Ramous is doing well in the competitive market and this is a result of implementing the strategy of brand image and developing external market (McFatter, 2017).  Even though Nike and Adidas have the economies of scale, Ander Armors is in a good position since it has growth opportunities in future. The porter’s five forces are shaping the Ander Amours competitive position in these ways;

Threat of new entry

  New entrants have brought a big challenge to the market since technology has given giving them an opportunity to participate. New entrants have also created a strong loyalty though they need long-term strategy to be able to compete with big companies (McFatter, 2017). However, Under Armors is able to put barrier to new entrants through product differentiation and unique innovative performance. The company also minimizes switching cost in product differentiation.

 

 Threats of substitutes

 There is a high growth of threat of substitute and the root cause of this is   the technology and segmentation of market in globe.  Foot ware, sports and athletic apparel are segmented all over the world where they are using technology to recreate products. However, these companies do not produce quality products as they fails to conduct research and development (McFatter, 2017). Thus, Under Armor is able to compete with other big companies by conducting research and producing high tech products demanded in the market. Under Armors sell quality products to the right customers while   informing the customers the technology the use (McFatter, 2017).

 Supplier power

 There is a low bargaining power of suppliers in the Ander Armor since it has limited suppliers who work with a common goal in using the advanced technology and multi-level manufacturing. The suppliers and company work together with a high standard of conduct while using low costs (McFatter, 2017).

 Buyer power

  Buyers in Ander Armor have a moderate bargaining power. The company maintains its customer through implementing marketing effort, brand loyalty, unique brand image, product differentiation and technology. The company is able to increase the operating costs in meeting the customers’ demand.

 

  Under Armor   have core competencies which provide power and strength of achieving a competitive advantage and maintaining the competitive edge (McFatter, 2017). The company has created a global presence through selling high quality products which align with the advanced technology. The companies sell unique products that other big companies are unable to manufacture. For example, athletes access quality, lighter, comfortable and favorable footwear (McFatter, 2017). Athletes can wear the footwear during all seasons such during hotter temperature, colder environment and normal condition.  Under Armor also value ethics and this allows the business be committed and to produce high quality products. The company also show core competency on marketing strategies, its quality products are highly demanded globally due to the company’s logo. The company uses innovative synthetic, marketing; research and development to ensure those customers’ needs are met with high quality products (McFatter, 2017).

 

     Even though big companies in modern markets have core competence, Ander Armor’s core competency looks distinctive. This is because; the company is able to use the advanced technology to increase growth. In addition, it uses new technology to improve the product line, market visibility on research and development and brand exposure in the competitive market.  Technology provides the strength to offer quality products, maintaining competitive price despite the higher demand. The core competencies and strength which make the company achieve a competitive advantage and provide high quality unique products are unique brand image, high standards and commitment, multiple product line- designed to meet needs of customer globally, financial stability-growth development and a stable competitive position (McFatter, 2017). However, the company has some weaknesses that will hinder success. For example, there are limited production facilities and man power where it has outsources business and this is hindered its ability to meet the high demand.  

 

 In financial performance, Under Armor has increased its net revenue by 170% in from 2011-2015, and net income which have been brought by high production and high cost (McFatter, 2017). The substantial investment has increased the total return on assets and more important, the company does not need to borrow to sustain growth money given that it has a low debt to assets ratio. Financial performance is promoted by celebrity endorsement where individuals advertise brand to athletes. Cash and company values are high due to the rise in stockholder’s equity and assets (McFatter, 2017).

 

 

 

 

Recommendations

 Kelvin Plank, the CEO in Under Armor should try and achieve the possibilities of business growth in the globe. In other words, he should take a step outside the normal limit and think of expanding the business with specialty items with the help of advanced technology, research and development (McFatter, 2017). While expanding globally, Kelvin Plank should value women or family in general. Give women an opportunity to purchase quality products   for their family.

           

In strategic plan, Ander Armor should focus on growth strategy through product and market development. Second, the promoting strategies such as product presentation will give customers the opportunity to value and purchase products.  Given that the company has 17,000 retail facilities, it should look for distribution strategy such as wholesale, product licensing and more (McFatter, 2017). To main the competitive edge, the company should implement product design strategy. In addition, it should maintain a quality assurance by looking for additional sources and inventory management.

 

 

 

 

 

 

 

 

 

 

 

 

 

Reference

McFatter Constance. (2017). Case 8 Under Armour’s Strategy in 2016 – How Big a Factor Can the

Company Become in the $250 Billion Global Market for Sports Apparel and Footwear?