Introduction
Under Armour is a multibillion-dollar apparel corporation. While Kevin Plank was playing fullback for his college, he observed how the compression shorts remained dry while the t-shirts remained damp and heavy (Lussier & Kimball, 2019). He began by selling the concept to NFL players and collegiate teams he knew. Consequently, they developed heat gear, the first moisture-wicking, and lightweight t-shirts. Under Armour’s most significant proportion of sales come from moisture-wicking and light t-shirts (Under Armour, 2022). Under Armour has elevated its company to the next level through strategic planning and policy research. This paper will discuss Under Armour’s strategic strategy and policy analysis.
Vision and Mission Statement of Under Armour
Like most fashion brands, Under Armour is guided by a vision and mission statement. The company’s vision statement is “Under Armour’s vision is to inspire you with performance solutions you never knew you needed and can’t imagine living without” (Under Armour, 2021). The vision statement demonstrates how significant a firm can be to an athlete’s overall performance. It relates specifically to the company’s power to effect change wherever and whenever its goods are involved. Under Armour’s mission statement is “to improve the performance of all athletes through passion, design, and an unwavering pursuit of innovation” (Under Armour, 2021). The statement focuses on the different ways in which the firm contributes to the sports industry. It emphasizes the importance of concentrating its impacts on the immediate beneficiaries of its goods.
Balance Score Card
A balanced scorecard is a widely used strategic planning and management tool in business and industry. Under Armour’s scorecard lets them verify that their business actions align with their vision and goals. Additionally, the scorecard provides managers with a balanced assessment of the organization’s performance via the lens of four distinct views. The four perspectives are financial, customer value, internal operations, and innovation and learning.
Financial Perspective
From a financial perspective, their main objectives are to increase their profits, add new customers to their product line, and maintain steady growth in sales. Under Armour has enjoyed consecutive growths of more than a 20% increase in terms of sales (Sternthal & Malaviya, 2018). It has taken measures to release new swimwear into the market by targeting more sports companies such as basketball teams to continue this growth. As a result, the organization expects a drastic increase in sales over the next five years through this initiative.
Customer Value
Under Armour’s main objective is to pursue new clients with distinctive marketing strategies continuously. The primary goals are to grow their customers’ businesses, maximize profitability and lifetime value, and produce high-quality standard goods on time. Athletes and active persons are the company’s main target markets. The company will distribute this new line to their customers by maintaining their relationship with all sporting authorities and ensuring that the consumer understands that the new swim line will provide them with the same level of comfort and durability as previous lines, as well as excellent mobility and a stylish look appropriate for modern swimwear.
Internal Operations
The effectiveness of the company’s marketing strategy is critical to the company’s future prosperity. Under Armour’s primary internal objectives are to guarantee that their products complete a development cycle, ensure percentage sales rise, and satisfy all product introduction goals. To meet the aim of keeping marketing costs low, Under Armour has implemented procedures to prevent them from overspending on product promotion and advertising, resulting in revenue loss (Sternthal & Malaviya, 2018). Similarly, there is an endeavor to monitor the most popular and least popular items to break even over time.
Innovation and Learning
Under Armour ensures employee happiness by providing various benefits that help keep morale strong. Employee happiness, retention, and retraining cycle time are the goals. According to James and Whitney (2018), to accomplish these goals, the firm used the following measures: subsidized memberships to its state-of-the-art combined training facility, discounted lunches at their Humble and Hungry Café, and providing all staff with a ticket to a Baltimore Orioles game. Additionally, the corporation offers an in-house concierge service that may provide inexpensive tickets to concerts and athletic events for workers (James & Whitney, 2018). All these programs intend to stimulate and enhance staff morale.
Strategically Relevant Features
Market Size and Growth Rate
The worldwide market for sports footwear is valued and expected to grow over the next few years. The rise is due to the high level of footwear design and technology innovation. Additionally, the increase in public knowledge of health problems and incentives has resulted in a growth in the number of customers in the sports industry (James & Whitney, 2018). Under Armour’s firm market size and growth indicate nothing but change and will continue to do so due to technological advancements and increased public awareness about health and fitness.
Scope of Market Rivalry
Competitive rivalry is prevalent in the sporting sector. Today, the sports industry has a range of new entrants, although when things first began, it seemed to be dominated by Nike and Adidas (James & Whitney, 2018). Customers may be situated anywhere in the world and have the slightest interest in sports clothes and footwear, whether it is their daily walking tennis shoes, comfortable attire for living a healthy lifestyle, working out, or competing as a high-performance athlete. Nike and Adidas, for example, exert pressure on other sports businesses with their footwear assortment and high-tech footwear. Other brands, like Under Armour, compel other manufacturers to create high-performance clothes using proprietary fabrics and technologies (James & Whitney, 2018). Consequently, sports apparel and footwear are getting more tailored, making them more desirable for each brand.
Customers
To maintain a competitive edge in the sports business, brands must learn to keep top of current fashion and technological trends. This current trend helps increase brand-customer attraction and competition. Similarly, it is beneficial to work with ambassadors or partner with events and other businesses to advance its growth and recognition. Highly competitive brands provide a diverse range of garments, footwear, and accessories for all ages and genders to broaden their consumer base, maintaining inventory on hand and in suitable sizes, encouraging customers to buy the styles presented and enjoy their experience.
Five Forces Model
Threats of New entrants
To acquire market share, all new entrants in the sports clothing sector will provide new technologies and innovative goods at a lower price point. Under Armour must be prepared for these potential issues and devise novel strategies to address them. Under Armour may upgrade their goods and services and reduce the price of their items. These techniques will bring in new clients and convince current ones to stick with Under Armour.
Bargaining power of Supplier
Providers in the sector sell their wares to a variety of other suppliers. By bargaining more aggressively, powerful suppliers can reduce the company’s revenue. To address this issue, Under Armour can try diverse raw materials to get superior raw materials and obtain substitutes that will assist them if the price of a specific raw material increases. These objectives will assist Under Armour in reducing the supplier’s negotiating strength.
Bargaining power of the buyer
Customers constantly want more advantages for a lower price; in other words, they always want to get the best product on the market for the lowest price feasible. To lessen the buyer’s bargaining power, Under Armour can produce new items that reduce current customers’ desertions to rivals, create a promotional plan, such as special deals and discounts, and publicize it to attract consumers’ attention to their business.
Threats of Substitute
It is very high in the case of Under Armour due to the market’s strong rivals. Everyone in the market is developing novel items to obtain market share. Under Armour may mitigate the threat of substitution by analyzing the market to ascertain the customer’s needs and desires and then meeting those needs and desires by lowering the price of items and delivering superior service.
Rivalry among existing Competitors
The business in which Under Armour operates is very competitive, owing to prominent rivals such as Nike and Adidas. Under Armour may thrive by producing distinct goods and lowering prices or collaborating with rivals to expand the market rather than fighting for a limited market. This collaboration might reduce competition among current market rivals.
Competitive Strength Assessment
Under Armour faces stiff competition from Nike and Adidas. Nike leads the pack, followed by Adidas and Under Armour. Nike has a long history as an athletic brand. Adidas and now Under Armour have followed suit. It is acceptable that Under Armour falls short in several areas due to the brand’s youth and infancy. The best way to evaluate each organization’s strengths is by weighing their qualities into seven categories. These include quality/product performance, reputation/image, marketing, locations, customer service, and product variety. Rating the companies’ stakes in terms of the company’s overall weighted competitive strength, Nike ranks best, followed by Adidas and Under Armour. Under Armour’s poorer areas contributed to its lower overall weighted strength, including financial resources and its locations’ financial analysis. Under Armour is falling short in worldwide expansion and distributing its items via department shops.
Present Generic Strategy
Out of the five generic competitive strategies, Under Armour’s approach to the sports clothing and footwear sector is most aligned with broad differentiation. This brand’s goods appeal to many purchasers while also distinguishing themselves from competitors. To begin, Under Armour sells athletic accessories, clothes, and footwear to both men and women and teams of all ages and abilities. Under Armour promotes its new approach by establishing a reputation for offering an athletic brand for all ages and genders. I agree with this strategy because a sizable audience lives an active lifestyle and might benefit from Under Armour’s clothing or purchases tennis shoes as a convenient go-to shoe.
Conclusion
Under Armour positions itself as a corporation committed to quality and client happiness. Dedication to sport and disseminating its spirit across the organization should motivate workers to compete and achieve the most significant outcomes possible in their chosen activities. Under Armour has significant obstacles because of current competitors. The plan seems timely since the corporation must re-evaluate its options and provide something fresh and appealing to the public. Under Armour places a premium on quality and enthusiasm for its products. Sport is also about safety, and Under Armour can provide this requirement more than anybody else. Under Armour’s apparel, footwear, and accessories are a viable alternative that can significantly enhance the company’s existing standing.
References
James, C.R., & Whitney, K.A. (2018). Under Armour: Repositioning for the global stage. The Case Journal, 14, 164-193. Web.
Lussier, R. N., & Kimball, D. C. (2019). Applied sport management skills. Human Kinetics.
Sternthal, B. and Malaviya, P. (2018), “Under Armour: Creating and growing a new consumer brand”, Kellogg School of Management Cases. Web.
Under Armour (2021). Under armour makes you better. Under Armour. Web.
Under Armour. (2022). Men’s graphic t-shirts. Under Armour. Web.