Under Armour

Posted by Winnie Melda on April 2nd, 2019

1. Describe the major components of the company’s strategy in the following areas:

a. Product Line- the product line strategy entails expanding the company’s product offering as well as marketing them by use of diverse price points. The objective of each addition entails offering the consumers with superior products in reference to the traditional competition’s product. The company enters into outfit agreements with diverse collegiate as well as professional sporting teams, professional sports events and the direct sale of the company products to team managers.

b. Marketing/Promotion & Brand Management- the company possess an in- house promotion and marketing department that has the responsibility of designing as well and producing most of their advertisements. The build advertising campaigns in order to drive the consumer demand in regard to their products as well as building awareness of the company’s products being the leading brand on matters of athletic performance. They also ensure that they increase the company’s floor space dedicated to their products in various retailing stores.

c. Distribution- the company is targeting the distribution of its apparel via the use of their factory outlets as well as their stores, catalogs, and websites. The company strategy is in the increasing of the websites sales in order to create a refined connection between its website and the undertaking of the brand initiatives in their retail stores.

d. Product Design and Development- the strategy follows that the company’s management stressed on product innovation in regard to both esthetic and technical design in an effort to propel sales and stronger brand name.

e. Sourcing/Manufacturing/QA- the company’s management stressed on outsourcing the fabric in order to be able to use the latest fabric that the best supplier had in the market. The company only used the latest fabric in the market to facilitate the best performance in regard to the company’s specifications.

f. Distribution Facilities and Inventory Management- the company’s distribution facilities strategy involved leasing. The distribution to the European markets entailed contracting third parties to handle the logistics. The company’s inventory strategy entails ensuring that there are enough inventories to manage prompt handling of the incoming orders. Putting in place strong systems as well as procedures to enhance the efficiency in the management of the inventories for the individual orders ensures that the processing is timely.

2. The company’s success is as a result of their ability to develop a highly strong brand within a short duration. The significant growth opportunities that were available for the company made the development possible. The other factor for the success is the company’s ability to establish the brands as well as expanding beyond North America. The company’s continued production of technologically superior apparel products enables them to win a greater customer loyalty. Investing larger amounts in the marketing of their products also contributed to the success of the company. The company invested almost 8 million in the advertisement campaigns. The company also boasts of an efficient distribution network to enable them accomplish the distribution requirement by the various clients. The company has managed to win a greater customer base due to the reduced costs result in from the efficiency of the distribution ensuring the customers are able to receive their orders efficiently and in time.

3. The competitive advantages that the company has over the competition are in terms of the innovativeness. Under amours’ objective in ensuring that their brand delivers the authenticity to the customer has helped them gain the competitive advantage. The success resulting from the innovativeness of the company has seen them introduce the performance training. The company’s expansion into the overseas markets also gave them the competitive edge.

5. The company’s SWOT analysis

Strengths

The company’s innovativeness

The company is built on innovativeness in the athletic industry especially with the invention of the compression undershirt. Using the new technology, UA has managed to meet the demands that are coming due to the diverse industry needs through their innovativeness. The numerous product offerings, various market segments, as well as the diversified product mix, make an account for the company’s innovativeness. The broad product portfolio makes UA an intense sports industry competitor due to the diversified product segment that they offer to their customers. The initial company’s focus on football has additionally been expanded to include baseball, golf, hockey, soccer, swimming apparel.

UA’s financial stability is the other strength that they enjoy especially due to the fact that they have been experiencing positive growth for the last five consecutive years. The company’s annual rate of growth is at 19.3%. Between the years from 2006 to 2011, the revenue by the company has grown in triple rates.

The weaknesses

The outsourcing of manufacturing by the company of the various raw materials that they get from the third parties in order to use them for their products result in challenges due to the few available sources. The fact that the fabrics are manufactured by third parties brings the risks of tainting the company’s basic competencies in innovation and development.

The geographical limitation is the other factor accounting for the weakness in that the revenue from North America is almost 94% of their total revenues. Although they have ventured into other regions, it is imperative that they diversify their product offerings.

The opportunities

Technological prowess

The growth in the sales targeting the direct to consumers, UA as a company is additionally assessing new innovative means for connecting with their customers. The development of phone application by the company enables the consumers to have a greater experience in terms of using company’s sportswear. The company has further purchased MapMyFitness, which is an application for the consumers to locate their outlets.

The growing positive outlook that is in existence in America for the sporting footwear and apparel

UA is boasting of positive developments in the US, which typically accounts for their biggest market geographically. The company’s increase in revenues is as a result of the growth of the sporting industry as well as the extensive focus on the female consumers.

The threats

The high costs of labor

The labor cost in the US has grown at a constant rate between the years 2004 to 2013. On the other hand the labor costs in China which is the company’s principal supplier are increasing. The high costs in China, which supplies textile to most of the apparel companies, are deemed to have an adverse impact on the industry.

The fluctuating costs in the petroleum industry

The rising costs of petroleum are going to affect the industry since the largest portion of the athletic wear has polyester as well as other textiles related to petroleum substances. The costs will raise the costs of production and consequently the revenues made by the company.

The low barriers to entry

The suppliers in the sporting apparel normally have a significant influence in the industry and thus can integrate forward, thus limiting the existing company’s market share. The minimal capital investment required to venture into the industry makes it easy for new players to penetrate the market.

Carolyn Morgan is the author of this paper. A senior editor at MeldaResearch.Com in Write My Research Paper For Me services. If you need a similar paper you can place your order from custom nursing essay writing services.