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Comparison Of Under Armour And Lululemon Athletica

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As you requested, I have researched and weighed the advantages and disadvantages of the potential merger of our company with Lululemon Athletica for the upcoming fiscal year. For the purpose of providing assurance to our Board of Directors on this business plan, intensive efforts were made to thoroughly understand the current standpoint of both companies, in regards to both financial and corporate cultural bases. If Under Armour acquires Lululemon, they will gain a larger female target audience that Under Armour was once lacking, and therefore be able to gain more market share in the athletic apparel industry as well, fending against competitors like Nike or Adidas. The collaboration between two companies will also provide for cultural synergy …show more content…

Athletic apparel is currently making up 17% of the overall apparel industry, making over 35 billion in revenues, and so the merger would gain higher market power in comparison to its competitors, like Nike and Adidas (Walsh, 2015). Lululemon currently is holding at $61.35, which is substantially lower than its results in the past few years. Under Armour on the other hand, is holding at $78.04 per share, but its overall cash value is lower than that of Lululemon Athletica, making the merger a perfect way to achieve the best of both worlds (Walsh, 2015). They will also be able to reach out to a broader target audience by joining alliances and providing services to both the male and female population. Lululemon will provide Under Armour with a 50% increase in female customers, which is exactly what Under Armour needs right now to access the female athletic wear market, since this is an area in which they have been lacking for a while (dbmaltby, 2013). The recent trend of the Under Armour ‘womanifesto” is a perfect example of the company’s efforts to gain more female approval, even targeting Lululemon’s loyal custromers. From the benefits proven above, it is only ideal at this time for the two companies to merge into one to gain access to the market and its new customer

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In essence, the competitive rivalry in the athletic apparel industry is very high because of several competitors who are capable. As reported in the case, the leading competitors always position themselves in an attempt to appeal to a greater market share. Besides, it is reported that the competitive rivalry among the rival brands is vigorous. As already mentioned, the leading competitors for Lululemon Athletic are the Adidas group, Nike, Inc., and Under Armour. The consumer’s switching costs are low, meaning that it is easier for the consumers to switch to the products offered by Lululemon Athletica’s

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Overall, I don’t know how I feel about Lululemon’s product for a high price. I know fitness gurus that praise the company’s products mentioning the high quality of their product. I also know that there are many other comparable quality products out there that is half the price or less. I’m also glad that founder, Chip Wilson, is no longer affiliated with Lululemon. He did not seem like a great CEO at that time, and I’m glad the current CEO took over.

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The NFL’s players, like in other professional sports leagues wear unique uniform and equipment. The NFL gets its uniforms from Nike (Solutions, 2018). They have been sponsoring the NFL since April 2012. The NFL does not have a specific sponsor for equipment. The NFL’s preceder to Nike as the sponsor was Reebok, which ran from 2002 to 2012 (Daughters, 2017).

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Also, they will go to the Lululemon stores to purchase the products. After the customer buys their products, customers always compare Lululemon’s clothes with other brand clothes. Then, consumers will give some feedback to the Lululemon Athletica. Moreover, Lululemon customers are young, so they will be influenced by their friends and family members. However, they are most with higher education; therefore, they will have their own ideas and attitudes to

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 Lululemon fully depended and worked on retail model, as well as management team relied on customer feedback to make changes.  Employees would also give instructions how they were supposed to rearrange the product each week. Moreover, employees were instructed to wear athletic outfits.

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Executive Summary Under Armour is an American company where sell sports equipment. This including footwear, sports, casual apparel and accessories. The company is founded in1996 by Kevin Plank. The headquarters is in Maryland, United States. Moving together with the development of technology, Under Armour introduce Under Armour Healthbox.

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Government policies supporting active and healthy lifestyle can have effect on Lululemon. With growing market, there will be opportunity to grow. Canadian government introducing Workplace Fitness Program Policy, and many other countries that Lululemon operate have also such policies. It is opportunity for Lululemon.

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Page 1 of 7 Alexis NanthanongMrs. PerezBusiness 101March 6, 2018Lululemon AthleticaLululemon Athletica is a Canadian athletic apparel retailer. Founded in 1998 in beautifulVancouver, Canada, lululemon is a technical athletic apparel company for yoga, running,training and most other sweaty pursuits. As a dynamic and growing global brand, the companyinvests in sustainable business and mindful practices to ensure highest ethical and businessstandards, and create value and positive impact for a healthy future and resilient brand. Thecompany makes a variety of types of athletic wear, including performance shirts, shorts, andpants, as well as lifestyle apparel and yoga accessories.

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Under Armour faces a twofold challenge, in the product and market area. Their heritage product category was compression Heat-Gear, and Nike the major competitor, was planning to take control of the new customers generations by creating a whole new line called Nike’s Pro Combat. Besides that, the marketing side was also having struggles. Since Nike created a strategy in which a strong emotional connection with customers was developed. This would have as repercussion the displacement of the Under Armour brand and therefore the slow decline of the company.

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2.0 Competitor Analysis The industry that Under Armour is involved with is extremely competitive, with competing against big names such as Nike or Adidas. Although it’s hard at the beginning, but customers want to have the highest quality apparel therefore they turn to Under Armour. Under Armour stays in the competition by having high quality products, and also by signing endorsements deals with major athletes (Owusu, 2017). By having major athletes represent Under Armour, means the company will be bringing in "big money" because they will bring up the brand’s popularity. The major competitors in this industry are of course inclusive of big names such as Adidas, Nike, Dick’s Sporting Goods and Puma.

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This can be easily searched via Internet *Threat of substitutes: Web internet is a threat to Lululemon as their potential customers can look up the price of other yoga clothing brand and prefer them over Lululemon. In order to combat this threat, price needs to be very competitive and high quality. *Rivalry among existing firms: As stated, Nike and Gap also have athletic clothing similar to Lululemon and these companies are multinational and known around the globe. Even if their prices are little higher compared to Lululemon, people will stay prefer buying from them due to the brand image and reputation they possess in the market.

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Consequently, Nike’s pricing is intended to be economical and competitive to the other sport gear retailers. The pricing is built upon many factors that have been taken into consideration before setting a selling price on the root of the high-class segment as target customers. Nike as a brand orders high premiums. Nike’s pricing strategy makes use of perpendicular amalgamation in pricing in which they target participants with different channel levels or take part in more than one type of channel level operations. This can govern costs and effect product

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Under Armour: Working to Stay on Top of Its Game Lulu M. Mero Webster University Abstract This paper explores the case study found in the Strategic Management: Competitiveness & Globalization (10th ed) under the authors of the book, Michael A. Hitt, R. Duane Ireland, and Robert E. Hoskisson. The title of the case is “Under Armour: Working to stay on Top of Its Game” which analyzes fully the portfolio of the company. Under Armour is an apparel firm that faces some competition and it constantly has to revise its business strategy to stay on top of the market. This case study discloses the company’s history, growth, product and sales profile, major competitors, management, marketing, business strategy, and strategic challenges.

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