The key elements of Under Armour’s strategy:
Under Armour’s mission is “To make all athletes better through passion, design and the relentless pursuit of innovation.”
There are three main strategies that Under Armour uses:
1. Growth Strategy:
- Continuation to broaden the company’s product offering to individuals in a variety of sports and activities
- To achieve sales revenue of $4 billion by 2016, up from an estimated $2.2 billion in 2013.
- Develop the global awareness of brand name and strengthening its appeal.
2. Product Line Strategy:
- Product innovation i.e. UA designed Cold, Heat and All Season gear to meet the extreme temperature conditions that their clients were facing.
- In-house marketing and promotions department.
- Increase floor space exclusively to UA products in major accounts.
- Wide variety of products for men, women and youth. 3. Distribution Strategy: - UA products are sold within 25,000 retail stores worldwide. - 70% of UA’s net revenues are generated from sales and revenues. - 3% of their revenues also come from licensing arrangements. Competitive approach that Under Armour is employing out of the five generic strategies: Broad differentiation strategy - Initially niche - Technologically advanced apparel With the passage of time Company developed and expand, shift to broad differentiation More products Shift towards the diverse selection of products Added performance Value added services Most attractive styling Sponsorship Agreements and campaigning- - With individual athletes to secure the endorsement of newly emerging sports - Include the established stars as their brand ambassador - Partnership with the baseball factory - Campaigns like, “Protect this House”, Click-lack”, Protect this House. I Will”, - Focus on Women’s market - Initiate production for footwear company It shows rapid market growth with strong competitive position Five-Force analysis of Under Armour: Intensity of rivalry: Very high Powerful Large competing brands (like Nike, The Adidas group) Similar products Similar prices Thus a battle for market share is based on BRAND, as there are few other ways to differentiate due to similar products and prices. Threat of Entry – Low to Medium Since Under Armour is a new entrant, the entrants must differentiate. Already existed companies are not agree to leave their market share Introduction of technology raises start-up cost which creates a hurdle for the new entrant Substitute Products- Medium Low cost apparel attracts casual athletes Anything that could be worn during a workout could deliver a similar value …show more content…
So almost everyone is looking ways to save some and which even can result in switching to buy generic brand
Impressive about Under Armour’s Financial Performance during 2008-2012
Between 2006 and 2011”
Sales growth 242% from $403 million to over $1.4 billion
Net profit margin remains constant about 48-50%
COGS expense steadily accounted for 50-53% of the Revenue Earned This surprises me when I noticed that with huge sales growth and almost constant COGS Under Armour has almost constant Net Profit
After the decline for years 2006 and 2008, the following Profitability Ratios have been trending upward:
Net Profit
Total Return of Assets
Net Return of Assets
Return on Shareholders’ Equity
Earnings per Share
Leveraging Ratios over the 5-year period show that Under Armour is:
Low debt
Low risk of bankruptcy
Creditworthy
Comparison of Nike, Adidas and Under
Under Armour’s mission is “To make all athletes better through passion, design and the relentless pursuit of innovation.”
There are three main strategies that Under Armour uses:
1. Growth Strategy:
- Continuation to broaden the company’s product offering to individuals in a variety of sports and activities
- To achieve sales revenue of $4 billion by 2016, up from an estimated $2.2 billion in 2013.
- Develop the global awareness of brand name and strengthening its appeal.
2. Product Line Strategy:
- Product innovation i.e. UA designed Cold, Heat and All Season gear to meet the extreme temperature conditions that their clients were facing.
- In-house marketing and promotions department.
- Increase floor space exclusively to UA products in major accounts.
- Wide variety of products for men, women and youth. 3. Distribution Strategy: - UA products are sold within 25,000 retail stores worldwide. - 70% of UA’s net revenues are generated from sales and revenues. - 3% of their revenues also come from licensing arrangements. Competitive approach that Under Armour is employing out of the five generic strategies: Broad differentiation strategy - Initially niche - Technologically advanced apparel With the passage of time Company developed and expand, shift to broad differentiation More products Shift towards the diverse selection of products Added performance Value added services Most attractive styling Sponsorship Agreements and campaigning- - With individual athletes to secure the endorsement of newly emerging sports - Include the established stars as their brand ambassador - Partnership with the baseball factory - Campaigns like, “Protect this House”, Click-lack”, Protect this House. I Will”, - Focus on Women’s market - Initiate production for footwear company It shows rapid market growth with strong competitive position Five-Force analysis of Under Armour: Intensity of rivalry: Very high Powerful Large competing brands (like Nike, The Adidas group) Similar products Similar prices Thus a battle for market share is based on BRAND, as there are few other ways to differentiate due to similar products and prices. Threat of Entry – Low to Medium Since Under Armour is a new entrant, the entrants must differentiate. Already existed companies are not agree to leave their market share Introduction of technology raises start-up cost which creates a hurdle for the new entrant Substitute Products- Medium Low cost apparel attracts casual athletes Anything that could be worn during a workout could deliver a similar value …show more content…
So almost everyone is looking ways to save some and which even can result in switching to buy generic brand
Impressive about Under Armour’s Financial Performance during 2008-2012
Between 2006 and 2011”
Sales growth 242% from $403 million to over $1.4 billion
Net profit margin remains constant about 48-50%
COGS expense steadily accounted for 50-53% of the Revenue Earned This surprises me when I noticed that with huge sales growth and almost constant COGS Under Armour has almost constant Net Profit
After the decline for years 2006 and 2008, the following Profitability Ratios have been trending upward:
Net Profit
Total Return of Assets
Net Return of Assets
Return on Shareholders’ Equity
Earnings per Share
Leveraging Ratios over the 5-year period show that Under Armour is:
Low debt
Low risk of bankruptcy
Creditworthy
Comparison of Nike, Adidas and Under