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Porter's Five Forces Analysis Of Under Armour

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Executive Summary: Under Armour is a company which was launched by former University of Maryland football player Kevin Plank. When he first started his business, it was named KP Sports, it is now known as Under Armour. The company started very small and operations were held from the basement of the founder's grandmother's house. However, the company soon expanded to have a remarkable market share in the sports apparel industry. Under Armour offers durable, functional, and high-quality products for athletes. The strategic methods implemented by the company have only got it so far. It is now in competition with big brands like Nike and Adidas. However, it will have to go the extra mile to be able to be on the same level as those rivals. Under Armour focuses more on athletic wear rather than lifestyle wear. It has strong brand recognition among athletes. That being said, Under Armour has to seriously consider expanding internationally to cover more markets. It should also work on products diversification and innovative designs. The following sections of this report will support the recommendations presented because they were based on the results of implementing external and internal …show more content…

To begin with, it is crucial to identify the industry. The athletic footwear and fitness apparel industry constitutes of somewhat 25 companies which offer sportswear, sports accessories, sports footwear, and sports equipment. Some brands even offer casual wear. Competitors in the industry have relatively high prices due to their products' durability and innovated materials used in manufacturing them. Porter's five forces which will be used in the analysis below are: competitive rivalry, bargaining power of suppliers, bargaining power of customers, threat of news entrants, and threat of substitute products. A detailed analysis will be attached in the appendix (Appendix

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• Consistence of player success: Sales volume of Under Armour’s basketball shoe is highly consistent with Stephen Curry’s success. Therefore, if he couldn’t keep that rating, the revenue of UA Curry 2 is probably going to decrease, even though he is young rising player. In fact, whole sale of the product is extremely relevant to only one player’s performance.

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Quickly after noticing my addiction and dedication to your sportswear, over 3/4ths of the team owns UA products (Great Expansion in Europe by the way). My son plays soccer and ofcourse I ensure that he has the best with 2 UA ColdGear® Armour Compression Mock. Now,

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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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In addition, well-established brand names can be continue to contribute investment and time in upholding brand identity, preserving brand loyalty and developing new sports product lines so as to occupy more market share (Mei-mei, et al. 2006). These big scale companies are well-known in the sportswear market, their marketing sales were significantly higher than others sport brands a lot. To cite an example with referencing MBASkool (2001-2014), the total amount of sales in Nike has $27.04 Billion and $19.24 Billion in Adidas but only $3.1 Billion in Asics in 2014. In concluded of all manufacturers of sport, Nike has an industry leading 38% market share of the branded sportswear market which ranked the first one in 2012. In view of this, these brands are highly competitive and easy to earn the customer loyalty to the

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Their investments in research and development exceeded those of Adidas, and aided their growth in the market. However, its distribution networking is not as effective, and they have very low patent protection. Nike and Adidas manufacture a broader array of products for their customers than does UA. Furthermore, although UA has a high brand loyalty, their reputation is still not approaching those of Nike and Adidas, which are brands recognizable almost everywhere. As shown in the competitive strength analysis table in Appendix E, Nike has the highest overall strength, 8.10, Adidas in the middle with 7.70, and UA the least with a score of 7.10.

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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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Each of the forces is determined how competitive in that industry as well as the structure of the industry. Porter’s five forces factors are consists of competitive rivalry, the threat of new entrants, the threat of substitutes, bargaining power from

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