Under Armour: Internal Assessment Case Study Sample

Internal Assessment Part C

Under Armour is facing tough competition from domestic as well as from international competitors. Perceptual mapping or positioning map will help in understanding positioning strategy of the UA. Perceptual map can be developed using different criteria such as products price, features, reliability, status and quality. However, in case of UA the most suitable criteria that facilitate positioning of the company are price and quality. UA provides high quality products at high cost.
Market positioning map clearly shows that the marketing strategy adopted by the Under Armour is product differentiation. The company believes in providing products that are superior in quality and capable to deliver the desired performance. Under Armour targets customers who want quality products and willing to pay extra amount for those products. The image reflected by the brand is ‘elite athleticism’ (Chown et al., 2014). The company does not target mass market like its competitors such as Adidas, New Balance, and Columbia by providing average quality products at competitive prices. Marketing strategy of Under Armour emphasized on delivering innovative and technically advance products to the customers at high prices. Nike, very close competitor of Under Armour and market leader is also provide high quality products at good price, but Under Armour’s went ahead of Nike in terms delivering high quality performance apparel. The target market of Under Armour is concentrated on specific group of customers i.e. young, performance driven athletes whereas its competitors are targeting mass market.
Under Armour emphasized on providing innovative, technically advance and performance products. In competitive market sportswear are no longer used only for sports. Sportswear also used as fashion products. For example Nike is designing its women sport apparels and shoes according to the latest fashion. Other companies such as Adidas and SPORTHILL are focusing on fulfilling sport fashion related needs of customers. Under Armour, on the other hand, is focusing on providing apparels that can enhance performance of athletes (Aaker, 2014). Under Armour do not focused on fashion segment and kept itself away from fashion oriented customer segment. The company successfully targeted niche market of young athletes.
Competitive advantages of Under Armour are its innovative products that can enhance the performance of athletes and excellent product design. Performance apparel manufactured by the company help athletes in dealing with adverse weather conditions such as extreme cold or hot weather (Aaker, 2014). The advantage of Under Armour lies in effective brand image and in maintaining long term relationship with customers. Nike and Adidas, on other hand, focuses on maintaining expertise in all levels of supply chain such as operation, production, distribution, retailing and marketing. Nike emphasizes on cross functional developments and innovation at every stage of value chain that make Nike a world leader. Poor distribution and dependency on few distributors, and almost negligible international presence are major disadvantages of Under Armour (Under Armour, 2015).

Internal Assessment Part D

Value of the Firm
Value of the Under Armour lies in integrity, innovation, reliability and inspiration. The company maintains these values at all level of value chain, and ensures that its suppliers and distributors also follow the same. Value chain analysis shows core areas of strengths of organization and also areas where company is weak.
The value chain analysis shows that company outsourced its in-bound logistic, manufacturing and outbound logistic processes to third parties. However, company kept design, marketing, and customer service processes in-house, which are core competitive advantages of the company.

SWOT Analysis

Strengths:
Under Armour is functioning under the efficient guidance and leadership.
The company has strong technical infrastructure such as SAP system.
Under Armour has strong research and development team that ensures development of innovative products.
High quality products differentiate Under Armour from its competitors.
Under Armour is continuously achieving good sales performance year on year (Ashworth, 2012).
Under Armour has loyal customer base.
Effective marketing strategy and good number of endorsements & sponsorships.
Brand Equity
Weaknesses:
Under Armour is mainly dependent on U.S. market for its sales.

The company has small percentage of sales as compare to its competitors that serve in international market.

High prices
The company is heavily dependent on one category i.e. performance apparel for its sales (Trefis, 2014).

Dependency on few number of distributors.

Opportunities
Untapped basketball shoes market could be huge opportunity for the company.
Increasing popularity and demand of performance apparels also shows huge potential market for UA.
UA can expand its female product line (Trefis, 2014).
Target market of UA is not price sensitive, hence, company can experiment with new designs and technology in order to deliver quality products.
CSR (corporate social responsibility) is yet not much explored area by UA. The company can use CSR to build brand image in emerging markets.

Business expansion in international market.

Changing life style and increasing awareness about sports activities in developing countries can be huge opportunity for UA.
Threats
Company manufactures large percentage of products in Asian countries, hence, any increase in labor cost could be major threat for the company.

Economic slowdown

UA does not have much proprietary product rights as compare to its competitors.
New entrants
Increase in raw material cost.
IFE Matrix
IFE matrix is an evaluation of internal strengths and weaknesses of the organization. The IFE matrix of Under Armour is provided in below table:
*Rating 4 is provided for major strengths, 3 for minor strengths, 2 for minor weakness and 1 for major strength.

References

Aaker, D. (2014, August 19). “I Will” vs. “Just Do It”: The Under Armour Success Story. Retrieved from prophet: https://www.prophet.com/theinspiratory/2014/08/19/i-will-vs-just-do-it-the-under-armour-success-story/
Ashworth, W. (2012, January 23). Battle of the Athletic Gear Makers: Nike vs. Under Armour vs. Lululemon. Retrieved from dailyfinance: http://www.dailyfinance.com/2012/01/23/battle-of-the-athletic-gear-makers-nike-vs-under-armour-vs-lu/
Chown, E., Yusz, V., Prestin, D., Olsem, S., and Geelan, R. (2014). Under Armour – Positioning Themselves For The Next Win. Retrieved from thunderbird: http://www.thunderbird.edu/blog/faculty/washburn/2011/12/18/under-armour-%25e2%2580%2593-positioning-themselves-for-the-next-win
Trefis. (2014, March 3). Factors Underlying Our $74 Valuation Of Under Armour (Part 1). Retrieved from forbes: http://www.forbes.com/sites/greatspeculations/2014/03/03/factors-underlying-our-74-valuation-of-under-armour-part-1/
Under Armour. (2015). Retrieved from investor.underarmour: http://investor.underarmour.com/annuals.cfm