Under Armour Case

Under Armour (Case 1)

The following is an environment analysis of the 'clothing' business sector of the Performance Apparel Industry, with an analysis on Under Armour, a growing company headquartered in Baltimore, Maryland. The Future of Under Armour is unforeseen but we know that Under Armour wants to be number one in the industry above all competitors. Nike and Adidas will always strive to be the leaders but is our products truly better than theirs? The first section of this report will consist of an overview of the trends in technology, demographics, economics, political/legal and finally social/cultural.

Political/Legal

There is not too much content that Under Armour must worry about in this section. They just need to stay in the realms of regular business and legally obtain the correct patients so that no other competitors steal valued material. This actually makes their products perform better than other competitors. Politically Under Armour needs to promote good and safe work habits. They do not want a negative view like Nike obtained after they were seen utilizing sweatshops to make a deeper profit in the Industry. Even if a few customers find out they are using bad practices, then it shatters the whole reputation and brand image.

Socio-cultural and Global

Under Armour and other competitors can and have been using a global image to win the customers over. It is very important that Under Armour utilizes the global image of their quality product, for instance, showing their products on a global scale such as providing gear to the NFL and MLB. People are likely to wear what the professionals wear because they want to be like them. It also utilizes product placement in movies, TV shows, and video games that places their product on a global scale. It can also reach a global scale by endorsements made with worldwide know people, such as people participating in the Olympics.

Technology

Under Armour may successfully take over the market thanks to technology. There are new trends in this industry such as the Under Armour shirt. It actually performs better than the other competitors. For instance, when you wear an Under Armour shirt vs. Nike one, Under Armour's actually performs better. It regulates your body temperate therefor making it possible for a consumer to perform better. Nike's is just made from cotton so it just soaks up all the persons sweat, making the shirt heavy and uncomfortable. Under Armour must stay on the current trends of technology in order to achieve a better market share in its current industry. This technology gives a company a bigger and better competitive advantage over the other companies.

Demographics

The demographics in the industry are usually males wanting to be healthy and active. They want to sport their favorite brand to show the world that they are working out to be healthy and active. Also on the rise are females are starting to want to wear performance apparel to show they are fit also. People wear what they want to be viewed as so other people can see who they really are. There is also a market share in child sport appeal that can very much benefit a company. Selling to all three of these categories can make a huge market share because this is practically everyone in the world.

Porters five forces

Supplier/Power (high)

Supplier power is high. Under Amour is absolutely dependent on its suppliers. It obtains 25 to 30 percent of its material needed for manufacturing purposes. That itself leaves 75% to import from other countries in which it only has 8 suppliers. This means that one of their very valued supplies can increase the cost of the material. They can do this to Under Armour is forced to buy from them because they have the special raw material needed for their products.

Barriers to Entry (high)

When analyzing the barriers to entry for Under Armor I found it was very hard for a new company to enter into the Performance Apparel Industry. If an entrant tries to enter this market they must put a lot of capital down