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Swot Analysis: Under Armour

Autor:   •  September 29, 2015  •  Case Study  •  3,440 Words (14 Pages)  •  680 Views

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  1. Introduction

For my individual case analysis paper, I choose to research more about Under Armour. Throughout this paper, I will touch on the company history and how Under Armour entered the market based on its overall business strategy. My analysis starts by looking at the company’s strengths, weaknesses, threats and opportunities. Secondly my analysis will focus on Porter’s five forces model in relation to the company. I will conclude my analysis with a proposal that I believe will help Under Armour strive to become the market share leader in the athletic industry.

  1. Company History

Under Armour is one of the top athletic wear companies in the world next to Nike. The company was created by a University of Maryland football player named Kevin Plank. Plank came up with a shirt idea that was tight against the skin to help keep athletes muscles relaxed during high-intense activities. In 1996, the Under Amour brand was founded. HeatGear, was Under Armour’s first product launched. This shirt was designed to help keep athletes cool, dry and light in the hottest conditions (Under Armour, Inc. - History). Plank traveled up and down the East Coast promoting his new shirt design from the trunk of his car. His revolutionary shirt design took off, and in 1997, he introduced his next shirt design, ColdGear. This material was similar to the material used to produce HeatGear, but its sole purpose was to keep athletes warm, dry and light during intense activities (Under Armour, Inc. - History). The Under Armour brand, which originally started in Plank’s grandmother’s basement, started up a headquarters in Baltimore in 1998.  During the next several years, Under Armour accelerated its presence in the athletic wear industry when it signed contracts with Major League Baseball and National Hockey teams.   By 2003, the first Under Armour commercial aired with the slogan, “Protect This House,” which changed the face of athletic industry (Under Armour Performance Sports Company History). Today, Under Armour makes the world’s most innovative performance apparel, footwear, and accessories. Elite athletes, such as Tom Brady, Michael Phelps, and Lindsey Vonn, proudly support and wear Under Armour products.

  1. Company Strategy

As we learned in Chapter 1, a company’s strategy is the action plan for outperforming its competitors and achieving superior profitability through actions to gain sale and market share via better features, superior designs, and higher quality products (Gamble 2). There are several key factors that impact Under Armour’s business strategy. They continue to increase their distribution, use professional athletes as their spokespersons and stay relevant in the market by investing heavily in R&D to produce new products. Under Armour competes with their competitors utilizing a differentiation strategy to gain sales and market share. We learned in chapter 5 of our textbook, that a differentiation strategy is a strategy that seeks to produce a competitive edge by incorporating attributes and features that set a company’s product or service offering apart from rivals in ways that buyers consider valuable and worth paying for (Gamble 112). Under Amour gained first movers advantage when they were the first to produce a shirt material that kept athletes cool and dry while still being lightweight. When entering the market, their product differentiation proved to the market that they were a top competitor in the sports apparel industry, and not the perceived underdog that the market expected. The Under Armour brand is perceived by consumers to produce high-quality products due to their reliability and innovative designs. Consumers are willing to pay a premium for this brand based on this perception, which is a key attribute to Under Armour’s success in the athletic wear industry.

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