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International Expansion Under Armour

Autor:   •  May 11, 2012  •  Research Paper  •  2,693 Words (11 Pages)  •  1,825 Views

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Executive Summary

Under Armour, a premier athletic apparel and equipment company, is looking to further expand into the global marketplace. With operations in North America, Asia, and Europe, UA finds the next place for expansion is the Middle East, specifically, Dubai. The city of Dubai carries little political risk and is considered to be the consumer hub of the region. The nation is home to UA competition such as Nike, Reebok, and Puma and will allow UA to potentially take some of the market share away from these competitors. UA plans to expand via a fully owned subsidiary. Potential risks involved in this type of strategy have been minimized. Managers in this new subsidiary will report to Under Armour's Vice President of Global Operations. The company believes a structure in which each foreign subsidiary reports to the VP of GO will ensure autonomy and allow for changes in strategy to be made without consent from the highest ranks. A manager from the US will be chosen to set up the new subsidiary and run it on a temporary basis, until employees are comfortable with product lines, procedures, and corporate culture. From there, a local hire will be chosen to run the store and the expatriate manager will return to his or her previous position in the US.

Under Armour: International Expansion

Under Armour (UA) is a premier athletic apparel and equipment company based out of the United States. It was founded in 1995 by current CEO, Kevin Plank, who sought to create a better tee shirt for football players that would wick away moisture and keep players dry. Today UA creates, markets, and distributes athletic apparel, footwear, and accessories to many nations worldwide. The head office of UA is located in Baltimore, Maryland, and also has operations in Europe, Japan, and Hong Kong. Under Armour employs approximately 3,900 people across the globe (Datamonitor, p.6).

Going International

Under Armour is a sizeable company and continues to enjoy steady growth and reported revenues of $1.39 billion in 2011, compared to revenues of $1.06 billion in the previous year (http://investor.underarmour.com). Given the unexpected growth in the previous year, Under Armour has decided to expand upon global operations. The company is looking to expand upon its customer base and one emerging market it sees potential in is Dubai, one of the seven Arab emirates.

The Dubai Mall, located in Downtown Dubai, was the world's most-visited shopping and leisure destination in 2011, welcoming more than 54 million visitors (Arabia, 2012). Locating an Under Armour retailer in this location would help to expand the brand by making it available to this large number of shoppers each year.

According to Dr. Mohamed Khalfan bin Khirbash, leaders in the United

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