Product-Marketing Analysis
Under Armour, Inc. is an American firm that manufactures footwear, sports as well as casual clothing. UA has many products manufactured under the company’s name, including athletic shoes, apparel, and accessories like bags and safety gear. The company products and services are targeted to all ages, including men, women, and kids (Bedoshvili, 2011). The corporation operations through the following sections: North America, EMEA, Asia-pacific, Latin-America, and Connected fitness. The company’s moisture-wicking technology offers a performance option to conventional products. However, UA consumers are athletes for the most section (Bedoshvili, 2011). Consequently, the corporation makes and improves non-conventional performance fabrics based on the gear lines and marketed across the sporting goods outdoors and the active lifestyle market.
The UA’s footwear products are a comparatively new group with products launched in the year 2006. The corporation’s footwear product portfolio comprises of softball as well as soccer cleats, slides, and hunting boots. The accessories portfolio comprises headwear, bags, and products produced under the HEATGEAR and COLD GEAR technologies (Miloch et al., 2012). The company sells online, by catalog as well as through retail and outlet stores globally. Although the corporation operates globally, most of its revenue is generated in the United States.
External Situation Analysis
An external analysis focus on the wider business environment that influence the business. In this case, external analysis is an objective evaluation of altering the world where the business functions to have an early cautioning system for recognizing possible risks and prospects. Every enterprise has competitors, and Under Wear Corporation is no exception. Under Armour operates in the sports sector, a highly competitive sector characterized by rapid development and strong customer demand. Based on the Statista, the world apparel market was valued an estimated 181bilion dollars in 2019 and is predicted to reach over 207billion dollars by the year 2025 (Chandra, 2017).
Although there is no shortage of athletic clothing corporations that contest with UA in certain market niches, just a few corporations have the sheer size, including recognized supply networks, to contest across all the product lines provided by UA. The biggest of these rivals include Nike and Adidas, which are older corporations with higher total annual sales than Under Armour (Farooq, 2019).
Nike is amongst the most renowned and dominating products globally. In the apparel industry, Nike has the biggest market share. Nike brand image, deep pockets including its endorsement list, for instance, Michael Jordan, Kobe Bryant, Cristiano Ronaldo, and other celebrities force UA to use their funds on market research and endorsements in increasing brand image and stay competitive (Farooq, 2019). Nike is amongst the top rivals of UA, and because of its global reach to European markets, it creates a robust competitive advantage over UA Corporation.
Adidas and UA are the giants of the athletic sector. In this case, Adidas is the second biggest athletic footwear and apparel brand globally (Farooq, 2019). Adidas dominates and has a huge market share in European nations. Reebok and TaylorMade are two popular band names owned by Adidas Group. Originally, Adidas was recognized as a soccer brand; however, both brands’ tenure expanded its market to athletic clothing. In the previous years, Nike and Adidas did very well in the North American Market, where UA was losing its market share (Farooq, 2019). However, Under Armour, global market revenue is growing.
Revenue for Nike came in at 39.1billion dollars for the 2019 financial year(Farooq, 2019).
On the other hand, Adidas recorded revenue of 23.6billion dollars for a similar period. The market caps for both Adidas and Nike as of 2020 were 135.6billion dollars and 44.5 billion dollars accordingly (Farooq, 2019). While this gap is big, Under Armour has witnessed a significant degree of development.
Although it may not be as diverse in terms of products or global market penetration, UA has been prosperous in almost every industry subsector it entered.
The risk of Substitute Products
Apparel is an indispensable product that is always in demand. As global interest in sports rises, the demand for athletic apparel and accessories is anticipated to rise. For every item, there is always the risk of a more inventive version entering as an auxiliary (Palmer, 2020). Nevertheless, in UA’s sector, it is hard for a corporation to create numerous such substitute commodities across numerous sports effectively. For instance, UA’s flagship stretchy base-layer shirt has mostly substituted the standard cotton T-shirts formerly worn by athletes (Palmer, 2020). UA could not utilize that early prosperity and brand recognition in creating other commodities, however, the company took time and investment to grow. Furthermore, style and fashion trends play a vital role in the sector. In this case, while pure function might be the only aspect a professional athlete takes into consideration, daily customers care a lot about look and styling (Palmer, 2020). This is a much more subjective field and may be more vulnerable to other brands becoming prominent.
Macro environment analysis
The macro-environment analysis recognizes potential prospects and risks outside the company’s control (Bedoshvili, 2011). Macro environment factors are analyzed under PESTEL, an abbreviation for Political, Economic, Social, Technological, Legal, and Environmental. Variations in the macro-environment aspects can directly affect Under Armour Company and other players in the textile industry. PESTEL analysis offers great information about problems UA Corporation will encounter in preventing these forces.
Political
The closer economic associations in the US, Europe, and Asia have profited the UA’s business performance for a long period. These areas enjoy political stability, which is an ideal ground for conducting business activities. This guarantee shareholder that their investment is secure (Palmer, 2020). With constant political stability, the UA Corporation is poised to develop a lot as numerous investors are guaranteed security if they decide to invest.
Investors no longer fear political wars that can influence UA’s performance in the recent target markets.
Economic
The international market has a significant effect on the business function currently and in the future. The economic downturn, including any kind of inflation, causes the enterprise to take drastic actions in withstanding the problems of existence. The market changes due to competition and a real risk to the prosperity of UA Corporation because it operates in a very vibrant market directly impacted by changing consumer preferences as well as economic recession. Consequently, comparative foreign exchange impacts the UA because it carries international transactions in the foreign markets (Palmer, 2020). That is, disparities in the value of money at the points of production, including destination markets, have extremely affected the earnings from exports of the corporation. Actions need to be taken to ensure that this concern does not negatively affect the company’s operations.
Social
Numerous social aspects drive business for UA. With the variation in the lifestyle of individuals, demands for commodities change. Now individuals are more brand conscious and want quality products that give them high fulfillment at rational prices. Furthermore, individuals are becoming more conscious about their wellness, and they began inclining towards sports and outdoor tasks. Individuals are now more actively taking part in sports activities, including motivating others to participate. All these changes offer a great chance for the firm which has specialization in sports clothing. Therefore, UA needs to adapt itself to varying customer preferences frequently.
Technological
Technological aspects are made to impact business operations globally. Corporations with inventive skills in their production lines and those utilizing marketing approaches are more likely to have numerous consumers. The Service-Oriented Architecture is a technological initiative by the UA Corporation, which allows the management to supervise general performance trends, including spotting out any prevailing blockages that could be slackening the enterprise down. The quickness with which this occurs assists the management put actions to avert negative development. Consequently, technological advancements have attracted numerous consumers from different sports backgrounds because of the enhanced product orientation in the prosperity of football cleats products in the United States market.
Legal
Every corporation must obey the rules of the nation where it operates or faces lawful prosecutions. UA Corporation is based in Baltimore and functions within the boundaries of the country’s codes. The corporation operates within the structural business rules governing the business operatives in Maryland State. Consequently, UA operates in global markets like Japan and Germany; thus, it must obey the codes governing corporations that operate in those nations towards facilitating smooth operations. UA has never faced any lawful prosecutions over the years, and most of the company’s operations have been in North America. However, as the corporation plans to expand its operations in other nations, they must prepare themselves in addressing possible legal challenges.
Environmental
UA, like numerous corporations, has the responsibilities towards the environment. In the contemporary world, individuals are recognizing that climate variation is rapidly damaging the planet. If they have not done anything concerning it, soon the earth will not be the same anymore. A significant number of companies have begun promoting environment safeguarding campaigns since they have realized its significance, and they want to attract customers in the name of environment protection. UA has taken similar steps by producing merchandise made from recycled material. Consequently, the corporation supports numerous activities organized in promoting environmental protection. The UA must surge its contribution to environmental protection towards complying with government rules of the areas of the operation and attracting customers.
Marketing Mix
Place
UA has expanded internationally. Nevertheless, the company sells products both online and offline and serves distinct nations through distinct websites. Other than the company’s websites, UA sells its products through websites such as Amazon.com. UA operates 188 factory house stores, whereby 150 are in North America (Mohamad, 2019). Consequently, the company operates its 57 brand house, whereby eighteen are in North America. UA’s distribution system comprises of national and local suppliers, including independent and specialty retailers.
Price
UA utilizes a value-based pricing approach. This strategy utilizes data on the perceived consumer value of any commodity in determining the appropriate selling price of an item. Thus, instead of concentrating on increasing prices in a competitive setting, the VBPO technique centers on the creation of additional consumer value, including how consumers’ inclination to pay can surge despite the stiff competition in the market. Although UA encounters immense rivalry from other products, the customers appreciate the company’s quality products and are thus enthusiastic to pay premium prices for inventive commodities.
Promotion
Instead of depending on only a good logo or a great and elegant slogan, Under Armour has utilized invention in marketing its products, thus, increasing product awareness amongst the consumers. Every product does something special and serves some special purposes. Initially, the company did not utilize costly marketing approaches and campaigns to market its commodities. Nonetheless, currently, the company has cleverly utilized sponsorships to better market its products (Mohamad, 2019). Consequently, UA spends on advertising by using social media such as YouTube in promoting its products through innovative videos. Furthermore, the company utilizes its Facebook account to show its interest in invention and showcasing its fashionable and creative products.
Protection of environment
Under Armour work to make products that one will feel good about wearing. This implies responsibly engineering and selecting the materials, supporting neighboring factories in cleaner manufacturing as well as innovation, including striving towards reducing the environmental effect of the company’s corporate operations.UA works to give their athletes, including their communities cleaner air, water as well as preserving environmental resources for future generations. The company recognizes the values of the energy, water, and chemicals they utilize, including the waste they create, involving their teams and partners to safeguard the home field. Consequently, the packaging is designed to avoid wasted and non-recyclable materials. In this case, the company reduces plastic packaging and labeling. The cartons are made with recycled content and utilize minimal fiber. Consequently, the company has built a significant number of its stores largely following LEED-certified specifications. All the stores are connected with energy management systems allowing the corporation to utilize remote control in setting more effective schedules for lighting.