Under Armour Strategic Audit Executive Summary

Under Armour Strategic Audit Executive Summary

Team 2: Amy Lopez, Matthew Jones,

Lauretta Maldonado and Rosa Lugo

Strategic Management

Columbia College of Missouri

October 3, 2015

Summary

        Under Armour has experienced great success since their launch of their flagship product, the moisture wicking t-shirt.  They are number two, just behind Nike.  Although this is commendable, there is room for continued expansion into different markets, both from a demographic perspective and globally.  The company will require changes in personnel to be capable of handling the growth potential, while continuing to offer quality service to customers.  And finally, Under Armour must evaluate not only the competitive environment, but it’s online efforts.  Consumer purchases through the convenience of shopping online continue to increase and Under Armour must embrace this shift.  

Strategic Alternatives

        Even though Under Armour is still a young brand compared to Nike and Adidas they have been on a tear.  After Kevin Platt was able to convince his first team Georgia Tech to purchase his moisture wicking t-shirt he has never looked back.  Right now Under Armour is second among sports apparel companies.  

        Under Armour started off with just selling moisture wicking shirts to selling pretty much anything you need from head to toe.  But, they have much more room for improvement.  

Most of their sales come from males in the United States.  Under Armour announced their collection for females in 2003, but they have not made marketing to females a main priority.  

In 2011, Under Armour finally made a presence in the International Market; they were able to sign Tottenham Hotspurs (Premier Futbol Team), this was Under Armour's largest team deal to date.  Under Armour also opened its first ever brand store in China.  This was a huge success; before this Under Armour was pretty much unheard of internationally.  

Recommended Strategy

        Under Armour is dong a fantastic job for such a new company compared to its competitors.  But if Under Armour wants to continue to increase their footprint in the market they will need to increase the target audience.  

        One of the first things Under Armour should do is have a bigger market towards women.  Not only do women make the majority of the purchasing decisions (especially with clothing) their sports are becoming more popular across the world.  Under Armour uses the same moisture wicking shirt design and created a sports bra for women.  They have also designed many items for the women who run, do yoga, to the new fad of cross fit for women.

        Next Under Armour must continue to reach out to new international markets.  With opening the “Experience Store” in China last year it has become a huge hit and they need to expand with more of these stores worldwide.  Not only was Under Armour able to sign a deal with Tottenham (a premier soccer team in Europe) last year they signed Chilean giant soccer team Colo Colo.  This is huge for Under Armour as “soccer” is the biggest market for sports worldwide.  

          Under Armour was able to sign deals to outfit the US Gymnastics team for the 2016 and 2020 Olympics, US speed skating team through 2022, and has begun to target Mexico, the host country for the 2016 Olympics.

Under Armour’s research and development team needs to continue to reach out to as much different sponsorship they can.  The more people can see the product the better off they will be.  Under Armour makes a great product and the best way for people to know that is word of mouth.  In this day in age it is easy to spread the word for something good or bad.  It is called social media; you can have your opinion heard by millions in just one click of the button.  

        Under Armour has plenty room to advance as a company, with being second to Nike in the market without having a big international market says a lot about the company.  Nike generates sixty percent of its revenue internationally; Under Armour is just now getting into the international market. So if they continue to make a good product, open more stores internationally, buys into the market towards females, and have good customer service they will have nothing that will be able to stop them from going to the top.  

Implementation

Under Armour’s implementation plan will be carried out in four parts: prepare a sustainable differentiation strategy, reorganize and reorient Human Resource Management, hire qualified employees, and enhance marketing strategy.  Under Armour has a competitive advantage over Nike, Adidas, and Champion in the performance apparel segment; however changes will need to be made in order to maintain.  To accomplish this, the company must focus on the following key sporting groups: “Men’s Training, Women’s Training and Studio, Basketball, Team Sports, Running, Global Football, Golf, and Outdoor” (Soni, 2015).  This will be accomplished in the introduction of new and improved performance enhancing apparel.  In preparation to implement their differentiation policy, Under Armour plans to evaluate “potential contract manufacturers on “quality, social compliance, and financial strength prior to certifying them” (Wheelan, 2015).