Executive Summary: Under Armour is a company which was launched by former University of Maryland football player Kevin Plank. When he first started his business, it was named KP Sports, it is now known as Under Armour. The company started very small and operations were held from the basement of the founder's grandmother's house. However, the company soon expanded to have a remarkable market share in the sports apparel industry. Under Armour offers durable, functional, and high-quality products for athletes. The strategic methods implemented by the company have only got it so far. It is now in competition with big brands like Nike and Adidas. However, it will have to go the extra mile to be able to be on the same level as those rivals. Under Armour focuses more on athletic wear rather than lifestyle wear. It has strong brand recognition among athletes. That being said, Under Armour has to seriously consider expanding internationally to cover more markets. It should also work on products diversification and innovative designs. The following sections of this report will support the recommendations presented because they were based on the results of implementing external and internal …show more content…
To begin with, it is crucial to identify the industry. The athletic footwear and fitness apparel industry constitutes of somewhat 25 companies which offer sportswear, sports accessories, sports footwear, and sports equipment. Some brands even offer casual wear. Competitors in the industry have relatively high prices due to their products' durability and innovated materials used in manufacturing them. Porter's five forces which will be used in the analysis below are: competitive rivalry, bargaining power of suppliers, bargaining power of customers, threat of news entrants, and threat of substitute products. A detailed analysis will be attached in the appendix (Appendix
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Footlocker competes with others who sell similar athletic footwear and apparel. Mass merchandisers, department stores, specialty stores, and traditional shoe stores are just a few of those in which Footlocker must compete with. Mass merchandisers may have advantageous marketing resources. Not only does Footlocker have to compete with its competitors, but Footlocker also must compete against its own suppliers. Not only does Footlocker carry merchandise of different athletic brands such as Nike, Adidas, Reebok, and Under Armour, but these same companies that supply Footlocker also sell their own merchandise through store chains of their own.
In addition, well-established brand names can be continue to contribute investment and time in upholding brand identity, preserving brand loyalty and developing new sports product lines so as to occupy more market share (Mei-mei, et al. 2006). These big scale companies are well-known in the sportswear market, their marketing sales were significantly higher than others sport brands a lot. To cite an example with referencing MBASkool (2001-2014), the total amount of sales in Nike has $27.04 Billion and $19.24 Billion in Adidas but only $3.1 Billion in Asics in 2014. In concluded of all manufacturers of sport, Nike has an industry leading 38% market share of the branded sportswear market which ranked the first one in 2012. In view of this, these brands are highly competitive and easy to earn the customer loyalty to the
Each of the forces is determined how competitive in that industry as well as the structure of the industry. Porter’s five forces factors are consists of competitive rivalry, the threat of new entrants, the threat of substitutes, bargaining power from
Benchmark While Nike, the leader in the sporting industry, had a revenue of $24 billion in 2012, Under Armour achieved revenues of $1.8 billion in 2012. 58% of Nike sales come from out of the US, compared to only 5.9% of UA sales. Nike has around 20,000 retail accounts in the US, and more than 20,000 retail accounts in foreign countries. UA owns about 25.000 retail stores around the world, mostly in North America. They have the opportunity to earn higher sales by expanding their business more in foreign countries.
• Consistence of player success: Sales volume of Under Armour’s basketball shoe is highly consistent with Stephen Curry’s success. Therefore, if he couldn’t keep that rating, the revenue of UA Curry 2 is probably going to decrease, even though he is young rising player. In fact, whole sale of the product is extremely relevant to only one player’s performance.
Quickly after noticing my addiction and dedication to your sportswear, over 3/4ths of the team owns UA products (Great Expansion in Europe by the way). My son plays soccer and ofcourse I ensure that he has the best with 2 UA ColdGear® Armour Compression Mock. Now,
Threat of Substitutes 4. Bargaining Power of Buyers 5. Power vested by Suppliers 1. Competitive Rivalry: According to Porter the competitiveness in any sector is significantly increased by the number of players operating in the field and their major competencies.
Five Forces Analysis Threats of New Entrants - High The threat of new entrants for the bag industry is high since putting up a bag business is easy. There are a lot of different companies that are already in this kind of industry. There are international and local businesses that have successfully established their brands here in the Philippines. There is an increasing percentage of local brands here in the Philippines which indicates that the barriers to entry are low in the bag industry.
In the assignment, it will discuss the sports brand Nike which specifically focuses in Chinese market. There are three main content areas in this assignment. The first part is a macro environmental analysis; the next part is the target customer profile; the last part is the analysis of marketing strategies. Macro Environmental Analysis: Nike is a very well-known market leader. It is an international brand, their products are selling in the worldwide including China.
Nike is the leading and renowned world supplier of athletic apparel and shoes. The brand is in control of over 47% of the market for athletic shoes. The company begun way back in 1962 and it was founded by Phil Knight and Bill Bower. It was originally known as Blue Ribbon Support and only in 1978 did it change its name to the worldwide recognized brand, Nike. Nike provides its products to more than 100 countries throughout the world.
Competitors: PUMA, K-Swiss Inc., LaCrosse Footwear, Inc., Dick 's Sporting Goods, Inc., New Balance Athletic Shoe and Adidas – (Adidas have currently branched out into customization of footwear products. To sustain its competitive advantage over competitors, Nike has to take this to consideration). However, a large number of competitors in an industry usually indicates lots of demand for the products or services provided and this will help Nike to succeed in the long run. Suppliers: Nike outsources almost all of its footwear production to independent third party suppliers. As Nike has a minor control over quality of the products.
Consequently, Nike’s pricing is intended to be economical and competitive to the other sport gear retailers. The pricing is built upon many factors that have been taken into consideration before setting a selling price on the root of the high-class segment as target customers. Nike as a brand orders high premiums. Nike’s pricing strategy makes use of perpendicular amalgamation in pricing in which they target participants with different channel levels or take part in more than one type of channel level operations. This can govern costs and effect product
They process products through third-party distributors located in Canada, New Jersey, Florida, and leases distribution facilities in California and Maryland to channel products through its wholesale and retail networks in North America. Wholesale sales generated through national and regional sporting goods chains, department store chains, institutional athletic departments, and teams and leagues accounted for 68% of revenues in 2013. Under Armour saw a need for diversification of revenue streams and embarked on a mission to change their model. They saw by building a strong retail network to sell directly to its consumers they could do just that. One way they did that was to have factory-house stores in North America, China, Japan, Mexico, Brazil, and other countries where they attach a retail store to their factories.