Free enterprise is an economic state where people can start up private businesses without government control. Success or failure is decided by competition and the demand for a product. The people ultimately decide what they want to purchase or not. Kevin Plank, the founder of Under Armour, entered his business into a market towards the end of the growth period and with a lot of hard work, became a success. The free enterprise system enabled Kevin Plank to create a powerful and revolutionary company in a mature market.
A growing market has businesses that are successful by demand creating sales growth. The athletic clothing industry is still in the growth phase because of constant innovations and upgrades to products, but is close to maturity.
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There were established players like Nike, Reebok, Umbro, Fila and Adidas, to name a few. Nike was the clear leader. Michael Jordan and Nike had taken the athletic shoe market by storm with his “Air Jordan” shoe line beginning in 1991 and everyone wanted to “Be Like Mike”. There hadn’t been a clear industry fabric innovation in many years which actually gave Plank an …show more content…
Instead of marketing his merchandise to the general public, Plank marketed the clothing to professional and college sports teams. His business took losses and he gave away merchandise to get teams to try it. Once they did, he began receiving orders. The turning point was in 1999 when a $25,000 advertisement in ESPN led to $1 million in sales.
Kevin Plank used free enterprise to gain his success. He manufactured his product, put it in the market he chose, the sports industry, and let the product represent itself. The demand for his product created Under Armour’s ultimate success.
The idea behind free enterprise is the businesses will succeed or fail based on their merit and the demand for the product in the market without intervention from the government. There are many success stories that support this argument – Apple, Microsoft, Mary Kay Cosmetics, YouTube, among many others. The government did not have to help these businesses to succeed. The ideas they had were worth merit and people supported them.
Free enterprise also gives entrepreneurs a market where they can try their ideas. It may take many renditions before a product is what the public wants. Free enterprise makes people be creative, think differently than others before them and figure out what will help people in their daily