In this case, I will provide my recommendations, analyze, and share my interpretation of this case. Under Armour(UA) is a distributor of athletic apparel, accessories and shoe wear. There strategic issued is to be able to compete in the sports apparel industry against big names such as Nike and Adidas. In order for them to be successful, they have to be able to meet their market share. UA needs to open up its industry to include more women apparel and shoe wear as well as reach other people globally.
In order for them to target a large number of consumers and to compete against Nike or Adidas, they need to be able to reach the same genre of people in the United States and other countries. One strategic issue the company is facing is in the making of different types of shoe wear. According to Forbes Magazine article, the CEO for UA plans to make their brand global saying that “someday more than half of our revenues will come from outside of our home country. ” He did not put a timeline on that goal, but elsewhere the company has stated that it wants to grow the contribution of its international revenues to 12% of the top line by 2016. http:// www. forbes. com/sites/greatspeculations/2014/05/30/underarmours-bid-for-international-growth/).
The long-term issue for UA was making their product available globally. In order to do this they had to branch out to the foreign markets. They would need to be able to advertise their product and the material used to make their product in the sports apparel industry throughout the world. One of the alternatives that could probably help UA is to merge with a global shoe market so that their product will be available in all the states as well as the international markets. Some key markets to target would be UK and France.
Knowing that the Olympics try to visit a different country that would be a great thing for tourist to shop and spread the word about their products and services. The threats that they are facing is high competition from brand names like Nike and Adidas, Endorsement from celebrities are poor, and to get a celebrity whose name is golden like Kevin Durant to endorse their product instead of someone who has been seen in the public eye negatively like Ray Rice. Negative endorsers will likely make consumers not want to support your product because they may feel you value that persons way of thinking.
UA has a lot of strengths within its companies organization they have a strong customer loyalty by starting their business out just by using some close associates to pass the word out to help generate business. The products are made with the best materials instead of just cotton. This material would make it easier for athletes to deal with the wet garments that weighed their bodies from sweat. With the president, first just targeting individuals for sales he later started to use the training staff to help pushed the need for their product. Later they started to get celebrities to endorse their product.
Their products were mainly sold out of a local store called Dick’s Sporting Goods. The tight fit of the clothing made were a trendsetter. They had a high bargaining power with suppliers because no other companies were using this same material to make their product and services they were mainly using cotton as their fabric of choice. The business world has a set of tools to be used to manage and explore the internal and external analysis of a business. These models include Porter’s five forces, which describes the buyer power, supplier power, substitutes, rivalry, and threat of new entry.
Pestle Analysis, which looks at the business scope political/legal, technological, sociocultural, economical, and ecological areas. Other tools like SWOT explain the internal and external issues like strengths, weaknesses, threats, and opportunities. In the SWOT analysis, it is a good way to figure out ways to list alternatives to beat out the threats and weaknesses. VRIO which is an acronym for valuable, rare, imitability, and organization. It asks the questions for resource and capabilities to see if the company will meet its sustainable competitive advantage.
Pestle analysis measures a market potential as well as the industry’s situation. By measuring these factors, it become easier to determine market appeal as well as the prospective of the business and ability to entrance of the industry. Some of the political issues they may face is the difference in currency. Another issue they may have to deal with is some countries have policies that prohibit the ownership of retail stores. An opportunity they may face in the sociocultural is quality of the product. It also encourages people to think more health conscious.
One of the threats may be some people disregard their health and are not being healthy so therefore may not be doing exercising or walking to use the apparel or footwear. The economic opportunity is the strong brand equity and high growth of the comfortable shoe. One major threat would be outsourcing overseas instead of making the product here in the United States. The shipping costs of the material and resources increased. Technological opportunity would be the rise of social media could help with advertising the merchandise.