Research Report on Analysis of Markting Strategies adopted by Under Armour Company

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Executive Summary
The research aims at analyzing the marketing strategies adapted by the Under Armour Company to give Nike and Adidas a run for their money. It has been evaluated through obtaining the Porter’s five forces model, developing a strategic group map, identifying and analyzing the key success factors for the Under Armour sportswear and apparel. It also involves developing the company value chain analysis for the competitive strength assessment of the competitor’s strategies and evaluating the same for developing an ideal strategy for marketing the products of the Under Armour brand. The key strategic issues have been discussed and potential solutions have been obtained. Developing optimum use of the resources available and promoting the product extensively across various markets is the chosen solution for increasing the market share of the Under Armour Company across the global market.

Table of Contents
1. Executive Summary 1
2. Market Analysis (External Environment) 2
2.1. Porter’s 5-Forces Analysis. 2
2.2. Strategic Group Map. 3
2.2.1. Product category: 4
2.2.2. Geographic coverage: 4
2.3. Key Success Factors. 7
3. Firm Analysis (Internal Environment) 8
3.1. Introduction 8
3.2. Company value chain analysis 8
3.2.1. Primary activities: 9
3.2.2. Support activities: 9
3.3. Competitive strength assessment 10
3.4. Analyzing the key success factors: 11
4. Analysis Summary 12
4.1. Strategic issue 13
4.2. Potential solutions 13
4.3. Recommendation selection 14
5. References 15
6. Appendix 15

Market Analysis (External Environment)
There are many factors that influence the success of an organization in the sportswear and apparel industry. It has been obtained through the variable available in them and on the basis of that, adequate theories and strategies have been discussed in the following section.
Porter’s 5-Forces Analysis.
The three companies Nike, Under Armour and Adidas are the leading companies in the production of sportswear and related apparel. Porter’s five forces Analysis have been carried out considering various elements as shown in figure 1 in the Appendix. It has been discussed below:
Rivalry among the existing competitors
There is a huge competition that is existing among the companies Under Armour, Adidas and Nike for occupying a significant position in the market. The competition is regarding the market share that they aspire to create for themselves in the global market of sportswear and apparel. These three companies constitute a large portion of the overall sales of sportswear and apparel in the market.
Bargaining power of suppliers
Bargaining power of the suppliers is very limited as there are a large number of suppliers available to these companies and the resources that they require are developed by many suppliers across the globe. So, there is a constant competition among the suppliers too.
Bargaining power of buyers
The bargaining power of buyers is extremely high. It is due to the increasing demands of the customers and a tremendous boost in the availability of quality products across the globe at feasible prices. Buyers have to be constantly upgraded with the new innovations and designs that are developed in the sportswear industry by these companies.

Threat of new entrants
There is a constant threat of new entrants that have the potential and capabilities to occupy a large share in the market through providing interesting offers to the customers at very effective costs. However, the threat of new entrants is harmful on long term basis as it would take time for the new entrants to develop a market share that would be comparable with Nike, Under Armour and Adidas.

Threat of substitutes
There is a threat of substituting the current designs and features offered by the leading sportswear companies by a more effective and feasible design, patter nor material. It has to be kept under constant check so as to ensure that the companies are staying upgraded with the new innovations made in the industry.
Strategic Group Map.
The strategic group mapping of the three companies, namely, Nike, Under Armour and Adidas would help in projecting the sales across different parameters of strategic importance. The strategy group map of these three companies is shown in the figure 2 provided in the Appendix.
These parameters are:
Product category:
The product category is a parameter that refers to the different sections of types of products that are developed in these three companies. It would be including elements like:
• Footwear
• Apparel and
• Equipment/accessories.
The mapping of the product category parameter would be in two scales and they are:
Less:
It refers to less production of the overall varieties of different products across the globe. It considers both the availability of different product categories as well as its sales for a specific company out of the three companies that are considered.
More
It refers to the production of several categories of products and its scale of availability across the globe among these three companies.
Geographic coverage:
Geographical coverage refers to the reach of the products of these companies across the globe. It is carried on the basis of the number of stores and outlets that these companies have in different countries worldwide including the remote areas.
It is divided into two elements and they are:
Few localities:
It refers to the availability of the products across the globe in less number of localities as compared to its competitors.
Many localities:
It refers to the availability of the products across the globe to more number of localities on the basis of geographical diversity.
Hence, all these kind of groupings would help in achieving an understanding of the strategic positioning of these companies among different countries of the world.

Key Success Factors.
The key success factor for the companies tend to be the strategies, elements, variables and assets that are very much intangible and have a significant contribution on the success and growth of the company in the global market.
The key success factors that have been considered by us include the following elements:
Advanced technology and expertise in it:

• Efficient manufacturing through high capacity utilization:

• Appropriate distribution with extensive network of distributors:

• Adequate and active marketing to reach maximum mass worldwide.

• Strong brand building:

• High experience curve benefits:

• High level of innovation:

Firm Analysis (Internal Environment)
Introduction
In the cutthroat competition among the companies across the world, Companies have to consider various internal variables in order to develop a niche for themselves. It includes the strategies that are formulated within the Under Armour Company to overcome the challenges and competition that it faces from strong rivalries like Nike and Adidas. The company has few specific issues which they are dealing through innovative design that develops new trends in the market. It has to constantly face this issue across its developing stage of getting a global presence for its products and create a brand name that would surpass all of its competitors in terms of sales, quality and product service as well as customer’s needs and demands across the globe.

Company value chain analysis
Value chain can be termed as a phenomena where a company or an organization performs various set of activities for developing a product or a service with very high quality and value. Providing a valuable product to the people is a responsibility if the organization and ensuring that it gets done through innovation in the sportswear industry is the major concern of Under Armour Company. For developing a value chain analysis, there are many factors that are identified for improving the performance of the organization. There are two kinds of activities associated with the development of value chain analysis in the manufacturing of a product or a service in a company. They are:
Primary activities:
The primary activities are directly connected to the core requirements and functioning of the company. It is the main component of the value chain analysis. It consists of the following sub activities in it:
• Inbound Logistics
• Operations
• Outbound logistics
• Marketing and Sales
• Service
Support activities:
These are the activities that complement the flow of the activities and ensure its smooth functioning of the tasks that are shown in the above section of primary activities. It consists of the following sub activities:
• Infrastructure of the firm
• Human Resource management
• Procurement
• Technology (Noke & Hughes, 2010)
There are two types of value chains that can be taken into consideration and they are:
Company’s Value chain in the manufacturing
It involves the various processes that are carried within a company where obtaining a proper management process within the organization is very important. It would help in ensuring that a number of activities are carried out efficiently and productivity is not kept at stake while completing these activities. At the same time, there is a crucial element that states the importance of the above mentioned primary as well as support activities across the organizations.
Industry’s value chain.
Industry’s value chain refers to the method of adding different activities and processes across the industrial market prevailing across the globe. It also involves the different stages that are concerned with the development of the product from its initial raw materials and developing them in such a way that the industrial value chain is maintained and it serves to be one of the most important element of this industry. It involves processes like the raw materials, intermediate goods, it’s manufacturing, marketing and sales and the after sales service that is provided by the companies regarding their products or services reflects their importance and establishes a clientele across the globe. It has been shown in figure 5 in the Appendix.
Competitive strength assessment
Competitive strength assessment refers to the process that is carried out to determine the core strategies and policies that have been developed by the company to overcome the strategies used by their competitors in the global market. It helps in deriving decisions that are related to the development and expansion of a business across the global market. Competitive strength assessment help the companies to identify the strengths of their competitors and act accordingly. On the basis of it, there are special technological innovations, strategies and maintenance functions carried out for counter attacking the strength of the competitors and measure their success (INSTITUTE OF MANAGEMENT ACCOUNTANTS, 1996).

Analyzing the key success factors:
It involves identifying the key success factors for the establishing a niche for the Under Armour company in an industry that is ruled by Nike and Adidas. These key success factors help to provide an overview of the variables that are to be considered while developing strategies related to different products and services that are available in the organization. These key success factor are discussed in the section below:
• Efficient manufacturing through high capacity utilization:
Developing innovative and creative means of production to observe high productivity across the organization serves to be the major role of providing optimum utilization of the capacity that is available.
• Appropriate distribution with extensive network of distributors:
In the processes that are related to the marketing of a new product, the distribution of the product or services play a very important role in pioneering the base for the growth and success of an organization. It involves developing an extensive network of distributors above the general level where the main task refers to establishing an adequate share in the market across the globe and replacing the products of its competitors like Nike and Adidas.
• Adequate and active marketing to reach maximum mass worldwide.
The success of any new product belonging to an organization depends on the level of marketing and awareness that it generates among the people from different countries.
• Strong brand building:
Brand building refers to the spreading and trending of the brand among the people belonging to different countries across the globe. It also involves demonstrating the brand over a range of potential customers through extensive promotion and brand recognition. The brand image that the product carried along with the company it belongs to is very important for the Under Armour Company to develop a niche for its brand in the market.
• High experience curve benefits:
There are many benefits that are achieved through developing the experience curve that consists of the cost of the product to its volume of production. It has been shown in figure 5. It is expressed for the units of cost vs cumulative volume where the main purpose of the process is to obtain a balance between the costs of the product and achieve high volumes of production

• High level of innovation:
With the advancement in technology and a tremendous increase in the demands of the customers across the globe, the companies have to be extremely innovative at regular intervals of time so as to ensure sustenance in the global market. Innovation brought about by Under Armour brand involves sweat absorption technology that would help the athletes and sportsperson to improve their performance through getting less exhausted due to the above technology that has been incorporated by the company in the sportswear and apparel industry.
Analysis Summary
There are several potential areas of strategic fit that can be determined through the above mentioned external and internal analysis of the market as well as the factors that were available. It involves
Strategic issue
The strategic issue that is witnessed by the Under Armour Company is the lack of awareness among the people of several countries regarding its products and services. It has very limited reach inspite of the good quality and comparative prices they offer. This is a matter of great concern as it limits the reach of the company and it reduces the global market share of the company.
The problem that is faced in the form of a strategic issue requires developing solutions through innovative and quick analysis of the conditions prevailing in the market and developing an innovative strategy for it’s the sustainability of the company in the market across the globe.

Potential solutions
The major issue in the marketing analysis of Under Armour serves to be lack of awareness among the people and hence, it has to be tackled appropriately to increase the data base of the potential customers who would be attracted to the digital or simple advertisements. Another major issue that is faced by the company tends to be the low amount of market share and there most important solutions from among them and they are:
• Imbibing sufficient promotional strategies and implementing for reaching the mass across the globe.
• Using public transport to connect to a large number of people travelling in them.
• Innovative advertisements is one of the best solution for the problem persisting in the company.

Thus, potential solutions refers to the marketing strategies that are adopted to increase the awareness among the people and draw people to the Under Armour brand developed for their benefits and a better life.

Recommendation selection
There are many alternatives available to the Under Armour Company regarding the development of marketing strategies and its implementation to obtain results on a global level. It would be very convenient to multiply the number of promotions regarding the new strategies and offers developed by the company for its customers. The flow of the products from one end of the manufacturing chain to the customers involves a large chain of middle level players. However, by gaining popularity in the market through attractive promotions and connecting to the daily lives of the people would help in overall increase in the performance of the Under Armour Company. There are

References
INSTITUTE OF MANAGEMENT ACCOUNTANTS. (1996). Value Chain Analysis for assessing competitive advantage. New Jersey: Institute of Management Accountants.
Noke, H., & Hughes, M. (2010). Climbing the value chain: Strategies to create a new product development capability in mature SMEs. 132-154.

Appendix

Figure 1: Porter’s five forces model

Figure 2: Strategic Group Map

Figure 3: Key Success Factors

Figure 4: Company Value Chain Analysis

Figure 5: Experience curve

Skills

Posted on

March 10, 2018

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