Environment Under Armour Is a Worldwide Company

Environment

Under Armour is a worldwide company that produces performance sports apparel. In an environment where people are always looking for the "latest and greatest," a company with a high-tech and unique product can certainly flourish. In the world of athletics there is a desire for quality products that improve performance. Additionally, local and younger athletes look towards professional athletes to set the trend as far sports apparel, equipment and accessories are concerned. The technology used in the Under Armour products is new, and has potential to change for the better as technology changes. A wide range of athletes are looking for this type of performance gear, so products need be either very specialized or appeal to multiple demographics. There is a huge market not only in the United States, but in all parts of the world where an emphasis on athletics is prevalent. While these products are not traditionally considered luxury good, they are also not considered a necessity in an economy experiencing a dip in consumer spending. Another important aspect of the environment to consider it that the sales of sports apparel are dependent on seasonal demand.

Industry Analysis

COMPETITORS: The major competitors for Under Armour are the other leading sports apparel producers such as Nike, Adidas/Reebok, and Columbia.

NEW ENTRANTS: Since the technology for Under Armour is not patented there are several possible new entrants into the market that could duplicate the technology and provide it at a lower price. Additionally, it is possible that a company could come up with a superior technology that would replace Under Armour.

CUSTOMERS: Under Armour customers include athletes of all abilities. They have a specific focus on licensing for many high school, college, and professional sports teams. The two sports that account for the largest portion of Under Armour sales are football and basketball. In addition to athletes, Under Armour clients also include outdoor adventurers of every kind.

SUPPLIERS: The vast majority of the fabric used in Under Armour comes from a handful of suppliers outside of the United States. In addition, certain components are subject to price fluctuation.

SUBSTITUTES: There are few actual substitutes for Under Armour because it is such a unique product. However, traditional cotton apparel may be less appealing to many athletes, but it is the most common substitute and certainly still used more widely than Under Armour.

Competitor Analysis

Of the three main competitors above, Nike is the market leader in every aspect of sports apparel sales. Their breadth of products is seemingly endless and they are able to charge high prices due to their reputation. Additionally, Nike is able to capture a large portion of the international market. Adidas/Reebok is second in the market overall, and its main claim over Under Armour is its dominance in footwear sales. Columbia Sportswear had similar beginnings to Under Armour. It grew from a small privately-owned firmed with an emphasis on high quality and new technology.

Internal Analysis

Under Armour's obvious main strength is that it is a value added product. It goes beyond what the traditional products have to offer and can actual enhance performance. This makes the product both very unique and desirable. Additionally, they have an incredibly successful marketing media advantage. Rather than having to pay for large endorsements, sports teams, league, and media channels want to use Under Armour. This type of grass roots exposure gives Under Armour a huge advantage over competitors.

RECCOMMENDATION

SWOT Analysis

Strengths:

Unique product

Value added

Licensing and grass roots marketing

Weaknesses:

Low international market share

Lack of patented technology

Dependency on foreign suppliers and commodities

Opportunities:

Focus more sports

Non-apparel items

International licensing and sales

Threats:

New technologies

New entrants with lower prices

Increase in price of commodities

Based on the SWOT analysis, it is important that Under Armour focuses its energy on two key areas. The first is its international market share. They can do this by using similar marketing strategies such as licensing and media exposure to make a dent in the international market. The second area that they should focus on is non-apparel items and additional sports products. As long a Under Armour stays true to its commitment to value added products, this sort of diversification can only serve to improve market share.