General Environment Facing Under Armour Marketing Essay

General Environment Facing nether armour trade EssayTarget in men, women and youth. ( below armors diverse product line for men, women, and youth is complex, but the message is simple wear HeatGear when its hot, ColdGear when its cold, and AllSeasonGear between the extremes.)Cultural differences. (Product transcends cultural differences and it is appealing to many athletes, regardless of nationality nether armour is puisuing a worldwide scope via regionalization.)EconomicIncrease economic condition by improving the gross sales equipoise and reducing the seasonal vari qualification in sales, inventory efforts and distribution.Economic risk. (The degree of economic risk associated with the aid pricing and chthonic equip is feeling the cause of the current declining retail consumer commercialize that is affecting the broader economy.)Current economic downturn challenges on a lower floor Armour to compete against major rivals.Political/ LegalThe political party whole kit wi th multiple licensees directly throughout the product development process to ensure that the products are aligned with its brand and quality expectations. infra Armour does not put up a patent on any of the materials use in its products. Therefore, it needs to be cautious in its licensing agreements so companies do not steal its know-how and enwrap their own versions.Under Armour signed a five- year partnership agreement in April 2009 with Cal Ripken, Jr.The intellectual shoes rights laws and regulations of countries in the global market vary dramatically.SocioculturalUnder Armour missions is to enhance the experience for all athletes by applying passion, science, and the relentless pursuit of innovation to create clothing with temperature control, blow, and flexibility. Under Armour has reached regular athletes, active outdoor enthusiasts, elite tactical professionals, and active lifestyle consumers.Planks shirt truly did regulate athletes body temperatures, lending to improve d performance.Under Armour had five lines of clothing made for every climate.Footwear product line designed for high performance through a highly breathable and lightweight design. planetaryUnder Armour is able to successfully penetrate the sports apparel market by using the image and influence of domestic and international professional teams, collegiate teams, Olympians, and individuals.Under Armours products are sold worldwide, with the smart sets headquarters located in the United States and support offices in Hong Kong and Guangzhou, China.Under Armour sells products in 13 countries, including in-house distribution in the United Kingdom, Germany, and France. Sales in other Western European and Asian countries are dvirtuoso through partnerships and third-party distributors.Under Armour do not nominate to contend with the challenges associated with establishing manufacturing plants in foreign countries.TechnologyPlank created a synthetic shirt made of high-tech material that ha d a snug fit designed to feel like a second skin.Products are offered through the company website.For the stolon off ten years of its existence, the company was able to fix operations by using off the shelf software programs.Under Armour invested in a new SAP system. This system is a key to the companys ability to tot up products to disceptation of offerings, as it allows Under Armour to falsify a more diverse inventory and to ship directly to distributors.Physical EnvironmentWhen Plank was a football player he grew tired of having to change his damp, heavy t-shirt under his jersey, so he set out to create a alone(p) product that would meet the needs of all athletes.Though the materials and technology used to create its products are not exclusive, by implementing an effective corporate system Under Armour has been able to fashion itself as a profitable business and re principal(prenominal) a key player among competitors.Use Porters Five Forces Model to disassemble the appar el, footwear, and equipment industry in the US. Given this analysis, is the industry attractive or unattractive?Porters Five Forces ModelMedium threat to new entryUnder Armour operates in a highly competitive industry where the dominant competitors induce significant breadth of market coverage that is difficult to find an entry point. The main competitors have been advertising and establishing distribution channels, marketing agreements, and recognition for many years.High threats of substitute productsUnder Armours major competitors are Nike and Adidas with similar or competing product offerings.Under Armour does not have a patent on any of the materials used in its products.High intensity of rivalry among competitorsThere is stiff contender in the athletic apparel industry with companies of various sizes employing different strategies in order to attract consumers to their product and brand. The larger companies continuously increase arguing by spending large amounts of money o n product innovations, advertising, and sponsorship.High bargaining power of suppliersUnder Armours customers is resulting to pay the price for its products because their products have value in it.Some of it suppliers are commodities and thus are subject to price fluctuations for example, petroleum-based materials are used in Under Armous products and the petroleum industry has experienced significant swings in price and relative availability in recent months and years.Under Armour relies heavily on suppliers and manufacturers outside of the United States. Seventy to 75 percent of the theoretical account used in its products comes from only six suppliers, lending to Under Armours weak position relative to its suppliers.Low bargaining power of buyersUnder Armour has develop unique products that consumers value.The customer is willing to pay the price because the Under Armour product has value in it.Who are Under Armours main competitors? How do they whole step up against these co mpetitors? Classify the competition under the 3 Is framework speedy competition, impending competition, invisible competition.Competitor analysisCompetitorsNike.Adidas combined with Reebok.Columbia Sportwear.SportHill.Immediate competitionThe immediate competitor is Nike. Nike is the leader in athletic shoes and captured half of the athletic shoe market. Footwear is new product line that was launched by Under Armour in fourth quarter of 2006. Under Armour is likely to introduce other athletic shoe like basketball shoe in future. It is a challenge of Under Armour to drive into athletic shoe market because Nike has already captured most of the market share in footwear.Another immediate competitor is Adidas. Adidas, who is the second largest athletic apparel manufacturer in the world after merging with Reebok. The apparel is major revenue of Under Armour. In year 2007, the apparel dominated 84% total sales of Under Armour. Reebok second largest manufactured in athletic apparel manuf actured, so the merger between Adidas and Reebok perform the immediate competitors for Under Armour.Impending competitionThe impending competitor of Under Armour is SportHill. SportHill utilizes the expertise of elite athletes to perfect its design and innovative new products. It is sound known for quality, comfort and reliability. Their clothing can be found globally in most major retailer stores and can be purchased online. Therefore SportHill poses a threat to Under Armour.Invisible competitionThe invisible competitor of Under Armour is its suppliers. The intellectual property rights in technology, fabrics and processes used to manufacturer Under Armour products are generally owned by their suppliers and not unique to Under Armour.The lack of proprietary product rights, intellectual property rights in foreign countries, and a heavy reliance on relatively few third-party suppliers and manufacturers could adversely affect the long-term sustainability of the firm.Conduct a SWOT an alysis to understand Under Armours strengths and weaknesses. employ the table below, conduct a SWOT analysis identifying the firms strengths, weaknesses, opportunities and threats in the table below.SWOT AnalysisStrengthsEmployees work as one team. Plank manages his company with a unique team-driven style. Under Armour is one team and my job is to help ensure we operate and execute as one team.Strong leadership. Planks drive to nutriment trying even during difficult clippings when it seemed the company might never flourish is what made it possible. He knows every aspect of it because at one time he actually did the work himself.Under Armour sells products in 13 countries, including in-house distribution in the United Kingdom, Germany, and France.Under Armours accessories category is developed and managed directly by Under Armour.Under Armour possesses an efficient operations and distribution network. SAP system has the ability to add products to its list of offerings, as it allow s Under Armour to manage a more diverse inventory and to ship directly to distributors.WeaknessesLow level diversification. 84% of its revenue comes from athletic apparel and gear.Highly dependent upon premium priced products that are closely related.OpportunitiesUtilizing broad-based, frequently free endorsements and well-received publicity, Under Armour has also reached regular athletes, active outdoor enthusiasts, elite tactical professionals, and active lifestyle consumers. achievement was initially slow in coming, but once Plank made his first big sale to Georgia Tech University, Under Armour grew rapidly.During 2007, Under Armour increased its marketing initiatives by opening self-owned retail and outlet stores.By leveraging its licensing partners (JR286, Inc. and USG), Under Armour can provide a wider orbit of branded products to its customers.Under Armour signed a five-year partnership agreement in April 2009 with Cal Ripken, Jr., a retired professional baseball player, to be their official uniform representative. Under Armour feels this is a great opportunity because Ripken previously was partnered with Nike.ThreatsThe main competitors have been advertising and establishing distribution channels, marketing agreements, and recognition for many years.There is stiff competition in the athletic apparel industry with companies of various sizes employing different strategies in order to attract consumers to their product and brand. The larger companies continuously increase competition by spending large amounts of money on product innovations, advertising, and sponsorship.Under Armour faces several issues and challenges. These challenges include the current economic downturn, competing against major rivals much(prenominal) as Nike and Adidas/Reebok, and maintaining a positive brand image despite setbacks, such as the recent recall of its mens protective athletic gear.The lack of proprietary product rights, intellectual property rights in foreign countries .A heavy reliance on relatively few third-party suppliers and manufacturers. Under Armour relies heavily on suppliers and manufacturers outside of the United States. 75% of the fabric used in its products comes from only six suppliers.Conduct a Value Chain analysis to identify value-creating activities.Value Chain Analysis flying infrastructureThe companys operations from Planks grandmothers basement moved out into a manufacturing warehouse in Maryland.Human resource managementHaving been part of a sports team, Plank manages his company with a unique team-driven style. Under Armour is one team and my job is to help ensure we operate and execute as one team.Many of his first employees were his college classmates and teammates. Most of them are still with Under Armour and play important roles in management.In order to facilitate its international expansion, Under Armour chartered several new executives with experience in international business, most notably Peter Mahrer.Technology dev elopmentAt the end of Under Armour first year of operations, Under Armour had five lines of clothing made for every climate, and the companys operations were moved out of Planks grandmothers basement into a manufacturing warehouse in Maryland. aft(prenominal) Under Armour went public in 2006, Under Armour invested in a new SAP system. This system is the key to the companys ability to add products to its list of offerings, as it allows Under Armour to manage a more diverse inventory and to ship directly to distributors.ProcurementUnder Armour relies heavily on suppliers and manufacturers outside of the United States. 75% of the fabric used in its products comes from only six suppliers.Inbound logisticsFor the first ten years of its existence, the company was able to sustain operations by using off the shelf software programs.OperationsUnder Armour licenses its brand name to independent manufacturers for other miscellaneous products such as bags, socks, headwear, eyewear and watches. The company works with multiple licenses directly throughout the product development process to ensure that the products are aligned with its brand and quality expectations. outward logisticsAfter Under Armour went public in 2006, Under Armour invested in a new SAP system. This system is a key to the companys ability to add products to its list of offerings, as it allows Under Armour to manage a more diverse inventory and to ship directly to distributors.Products are offered through the company website and retailers, and the company stores in the United States, Europe, Japan, Canada, South Africa, Australia and new-made Zealand.Marketing and salesProducts are offered through the company website and retailers, and company stores in the United States, Europe, Japan, Canada, South Africa, Australia and New Zealand.ServiceWhen customers would request products that Plank had not created, he would respond, Of course we make that and then immediately go to work with suppliers and contract ors to deliver on his promise.What is Under Armours business-level strategy? Is the strategy appropriate to offset the forces in the industry? Conduct an analysis of Under Armours business strategy by using the 4 Ps Framework. The 4 Ps Framework is used to understand a companys strategy based on itsPosition (Mission, Values, and Vision)Priorities (what is important to the firm in the short and long terms)Payments (what it will spend its money on to reach those priorities)Performance (how it will measure success)PositionThe task at hand was to simply make a brag T-shirt and nothing more.Under Armours mission is to enhance the experience for all athletes by applying passion, science and the relentless pursuit of innovation to create clothing with temperature control, comfort and flexibility.Under Armours stated goal is to be a leading developer, marketer, and distributor of branded performance products.Ever since its inception in 1996, Under Armours leaders have strived to achieve th e companys vision of becoming the worlds leading performance athletic apparel brand by employing a differentiation strategy through innovation.PrioritiesFor short term, on that point appears to be a trend that sales are higher in the third and fourth quarters of each year, aligning with the football and basketball seasons and the traditional holiday gift-giving season in the United States.For long term, Under Armour has been able to quickly earn loyalty after a customer has had one or two good experiences with their purchase.PaymentsFor short term, Under Armour has contemplated putting more emphasis on its baseball product line to improve the sales balance and reduce the seasonal variability in sales, inventory efforts and distribution.For long term, they have the technology in the fabric and the design and the features satisfy what the athlete needs. Their baffle is getting to the athletes-supplying them with great product that helps them perform better.PerformanceThis is further evidenced by a 133 percent compound annual growth rate and an as enormous increase in operating income from $5.7 million to $52.5 million between the years 2003 and 2007. As of 2007, Under Armour had $606 million in sales revenue, outlying(prenominal) surpassing its first years revenue in 1996 of $17 thousand.Do you recommend any changes to its strategy and/or foresee any challenges?Dependability on suppliers. Under Armour relies heavily on few third-party suppliers and manufacturers. Under Armour should try to find more suppliers for their fabric. Even if the price of fabric rises or suppliers can supplying the company, Under Armour still has other suppliers to carry on its business.Strategies for competition. There is a stiff competition in the athletic apparel industry. Under Armour should do more advertising to bring awareness to people about the companys brand. This way, Under Armour could have more competitive advantages in the market. privation of patents. Under Armour sh ould apply for patents for its products innovations to prevent other competitors from duplicating its products.