Under Armour industry analysis

Acknowledgement
We would like to express our special thanks of gratitude to Musrat Mou madam, who gave us the
opportunity to do this wonderful project on Under Amour Company. This also helped us in doing
a lot of research. Through this we came to know about so many new things. We are really
thankful to them .We would like to thank to this company and the founder of this company
named Kevin plank and those who are related to this company. Social network gave us the
energetic information. We also give credit to various websites like YouTube, Amazon,
Business.com, Realist.com etc. We really honor Charles Handy, Gray Hemel, Michel E. porter,
Peter ducker and also give thanks some journalist named Mitchell Stephens , David broed, news
reporter and some analogist are the really wonderful. Some of the customer of Under-Armour
gave their review. So we also remember them. Lastly thanks going to God to make us capable
enough to complete our task.

Table of Content
Topic Page No
1. Summary……………………...………………………………………………. 1
2. Introduction of UA………..………………………………………………. 2-6
I. The History of UA……………………………….………………….. 2
II. Type of Business of UA………………………………..…….…….. 2
III. The Products ofUA……………………………………..………….. 2-3
IV. Services of UA………………………………………………………. 3-4
V. Organo-gram ………………………………………………………... 5-6
3. Literature Review…………………………………….…...……………… 7-16
I. SWOT……………………………………………….………………... 7-8
II. BCG Matrix……………………………………...………………….. 8-9
III. Porter’s Five Forces Model………………....…………………….. 10-11
IV. Competitive Strategies………………..……….…………………… 12
V. Organizational Structure…………..……………..………………… 13-16
4. Analysis of UA…………………….………………...……………………. 17-31
I. SWOT of UA…………………………………..……………………. 17-19
a. Strengths…………...…………………...……………………… 17
b. Weaknesses……………………………….……………………. 18
c. Opportunities...………………………………………………… 18
d. Threats…...………………………………..…………………… 19
II. BCG Matrix of UA…………..…………………………………….. 20-23
a. Star…………………....…………………...…………………… 20-21
b. Cash Cow………………………………………………………. 21
c. Question Mark…………………………….……………………. 22
d. Dog………………………………………..……………………. 22-23

III. Five Forces Model of UA….………………….…………………… 24-27
a. Five Forces Analysis of UA………………….………………… 24-26
b. Five Forces Comparison with Competitive Environment….…… 26-27
IV. Strategies for Marketing of UA………………………..………….. 28-32
a. Business level strategies……………………………..………….. 28
b. Corporate Level Strategies…………………………..……..…… 28-29
c. Innovative Strategies………………………………..………….. 29
d. Other Strategies……………………………………..………….. 29
e. UA Organization Structure…………… ….….…………… 30-32
5. Recommendation…………………………………………….....…..…….. 33-35
I. Matching Strength with opportunities………...………………… 33
II. Correcting Weakness……………………………………………….. 34
III. Guard against Threats………………………………………………. 34
IV. Recommended strategies…………………………………………… 35
V. Organization Design…………..…………………………………….. 35
6. Bibliography/Reference ……...………………………………………… 36-37
I. Additional Websites…..…………………………………………….. 37-37
II. Additional Books…………………………………………………….. 37
7. Appendix…………………………………………………………………….. 38-40

Summary
Under-Armour Founded in 1996 by former football player Kevin Plank University of Maryland.
After graduation, he set out to make a superior T–shirt that stayed light in even the nastiest heat.
After driving through the night to New York’s famous garment district for fabric samples, Plank
built his first prototype, which he then gave to his Maryland teammates and friends who’d gone
on to play in the NFL. With their feedback, he went back to work, quickly emerging with a
revolutionary new T-shirt built from microfibers that wicked moisture and kept athletes cool,
dry, and light. Under-Armour is a sports clothing company. It provides unique sports product. It
has also opened several specialty stores and factory outlet locations in many countries. It started
with a simple plan to make a superior T-shirt. A shirt that provided compression and wicked
perspiration off your skin rather than absorb it. A shirt that worked with your body to regulate
temperature and enhance performance. When Kevin plank launch his product it become more
popular day by day. At this time Plank needed funds to launch his apparel line, so he maxed out
his credit cards to the tune of $40,000 and set up a company in his grandmother’s basement in
Washington, DC. Twelve months later, he made his first team sale to Georgia Tech.
Under-Armour is the originator of performance apparel - gear engineered to keep athletes cool,
dry and light throughout the course of a game, practice or workout. The technology behind
Under Amours’ diverse product assortment for men, women and youth is complex, but the
program for reaping the benefits is simple: wear Heat-Gear when it's hot, Cold-Gear when it's
cold, and All-Season-Gear between the extremes. Under-Armour promotes its products by
sponsorship agreements with the some celebrity athletes, professional teams and college athletic
teams.
Under-Armour’s mission is to make all athletes better through passion, design and the relentless
pursuit of innovation.
Page 1

Introduction of Under-Armour (UA)
The History of UA
In 1996 Kevin Plank founded Under-Armour. There was a history behind the Kevin
Plank’s Great intention to established this company.
When Kevin plank was a captain on the university of Maryland football team, he grew
frustrated with cotton T-Shirts that bunched up under his gear. So he sought to find a
fabric that won’t get gross and to build a company around it.
The 1st product of the company was synthetic base layer made to wick away sweet.
When he founded the company it made $17000 in annual revenue. Founder and CEO
Kevin Plank has used breakthrough technology, celebrity endorsements and clever product
placement to make UA a force in the athletic apparel industry.
Now this company only cannot focus the cotton shirts they are made various type
product like Apparel, Footwear, Device, Tracks etc and they are successfully catch up the
market because of their innovative thought. Now this company made over $3 billion
with a market cap that’s swelled to $15 billion.
Type of business of UA
Basically UA is a manufacturer retailer sport’s wear company. They produce many types of
apparel products, foot-war products, devices, tracks and so many things along with these to
satisfy their athletes & customers. They produce their products both for male and female.
The Products of UA
Under-Armour company produce many types of product like Apparel, Footwear, device,
Tracks and many more.
Apparel: The company not only focus on men’s athletes apparel but also focus on women’s,
school going boys and girls also. In this company they produce many types t-shirts, shirts, shorts,
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sports bra, jackets, printed Capri, girls Luna tank pant, printed lagging, long sleeve etc. They
mainly produce this product for athletes and some of produce for the general people. Now they
are adding verity innovative thought to produce their product and that’s why the customer are
attracted to their product and they easily catch up the market.
Footwear: In the product of footwear they produce many types of shoes like Gemini Running
Shoes, twist Running Shoes, Fortis Running Shoes, Twist Running Shoes, Zip Boots etc. They
mainly produce products mainly for basketball players, football players, boxers etc but they are
now also made their product in general people. They produce their product in different types of
colors, designs. They are now also made in slippers, kids shoes etc.
Device: UA at first produce the sports athletes’ apparel but now they are also produce many type
of device to expand their market. They mainly focus the fitness accessories like UA I-phone 6
armband and case, Map My Run Universal sport Armband, Belkin Grip at Handbag for I-phone
5, Speed Run Belt for women etc.
Tracks: UA produce many types of activity trackers for sportsman like jawbone, mistfit shine
activity tracker, pulse activity tracker, smart body analyzer, basketball short tracker, youth
basketball shot tracker, balance Bluetooth smart. They mainly focus the basketball player for
their device product
They also produce many activity watches like Garmin Forerunner, Magellan Echo smart sports
watch, Pebble smart watch etc.
Others: They are not only produce footwear, devices, apparel but also produce many types of
different products like backpack, handbag, sack pack etc. The name of the product is UA storm
Camden backpack, storm hustle muffle, and extra sack pack. They are producing this product not
only for sports athletes but also for school going students, kids, and general people. They make
these products very stylish and fashionable.
Services of UA
UA produce many types of athletics products and also general people related products and they
merge their business briefly to give strong services and commitment to their customer they focus
all types of customer to give their services.
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VIP Service: They give their services to the VIP customer. The customer orders the products
and then the company produces the products and gives the services in time to their customer.
Athletes Service: UA Company is mainly athletes Apparel Company. They made many types of
men’s and women’s athlete’s apparel, footwear and accessories. But their main customer of their
product is basketball players and they also give their service to local, club’s athletes very
successfully.
Normal Users: They produce mainly athlete’s related product but they give their innovative idea
to merge their business. They are also focusing on the normal users. They made their product and
sale it cheap price to the general people and the general people are satisfy buy their product and
the company will catch up the market.
Customer satisfaction: Under-Armour produces the product to focus strongly customer
satisfaction. They mainly analyze what type of product should accept the customer with their
satisfaction. They are focus all type of their customer satisfaction like VIP customer, normal
users, athlete’s satisfaction and that’s why they are successfully expanding their business
internationally.
Online facilities: Everyone knows the quality of the UA product so they want to buy their
product but sometimes they have no ability to buy their product for their short time. So they buy
their product with online facilities and also they want some internal facilities to the company so
the company strongly focuses to give their service by online.
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Literature Review
SWOT
 What is SWOT?
 Conducting an external and internal analysis combined is called SWOT analysis. SWOT
refers to strength, weakness, opportunities and threats. SWOT analysis is a process where
the management team identifies the internal and external factors that will affect the
company’s future performance. SWOT analysis also helps management to identify
company’s internal strengths and weakness.
Strengths
Of the company
Opportunities
Of the company
Weaknesses
Of the company
Threats
Of the company
(Graph: SWOT analysis)
 Why SWOT analysis is important?
 SWOT Analysis is a very useful method for understanding and evaluating business strengths
and weaknesses while identifying the opportunities and threats that you have. This analysis
is very useful for businesses which can help to understand its strengths and weaknesses and
also help in locating opportunities and eradicating threats. It helps in the formation of a
strategy so as to make preparations for the possible threats from the competitors. SWOT
analysis evaluates the business environment in a detailed manner so as to take strategic
decisions for the future course of action. Every company has some weakness and threats. If
company become field to identify this weakness and threats company will be in trouble.
SWOT analysis helps company to identify company weakness and threats and company
become more aware for their weakness and can overcome threats. It serves as a source of
information for planning.
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 How it affects decision making process?
 SWOT analysis helps manager to cope up with uncertainty about future while conducting
situational analyses. It helps to find out organization weakness .so manager can identify the
problem. When manager formulate strength and opportunity, correct & overcome their
weakness, guard for threats, manager can identify Decision Criteria. By allocating Weights
to the Criteria and analyzing SWOT manager can implement decision and evaluate decision.
It also effect strategies planers, weather top manager, key operating manager or staff
planning, specialists have many ways to scan the environment for opportunities. Through
this a SWOT analysis affects in strategic decision making.
BCG Matrix
 What is BCG matrix?
 BCG matrix was developed by Boston consulting group. It is a type of diagram or portfolio
which enables its users to identify high-growth prospects by categorizing the company’s
products according to growth rate and market share. By optimizing positive cash flows in
high-potential products, a company can capitalize on market-share growth opportunities.
BCG matrix consists of 4 major factors or terms and they are Star, Question mark, Cash cow
and dogs/problem child.
Star: Stars represent business units having large market share in a fast growing industry.
They may generate cash but because of fast growing market, stars require huge investments
to maintain their lead. The portfolio of a diversified company always should have stars that
will become the next cash cows and ensure future cash generation.
Question Mark: Question marks are growing rapidly and thus consume large amounts of
cash, but because they have low market shares they do not generate much cash. The result is
large net cash consumption. A question mark has the potential to gain market share thus
becoming a star and gradually a cash cow when the market growth gets stable. It will
degenerate into a dog when the market growth declines. Question marks must be analyzed
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carefully in order to determine whether they are worth the investment required to grow
market share.
Cash cow: Cash Cows represent business units having a large market share and a high
growth rate in a mature, slow growing industry. Cash cows require little investment and
generate cash that can be utilized for investment in other business units. Because the cash
cow generates a relatively stable cash flow, its value can be determined with reasonable
accuracy by calculating the present value of its cash stream using a discounted cash flow
analysis.
Dogs: Dogs represent businesses having weak market shares in low-growth markets. Dogs
have low market share and a low growth rate and thus neither generate nor consume a large
amount of cash. These business firms have weak market share because of high costs, poor
quality, ineffective marketing, etc. Unless a dog has some other strategic aim, it should be
liquidated if there are fewer prospects for it to gain market share. Number of dogs should be
avoided and minimized in an organization.
Star Question Mark
Cash Cow Dogs
(Graph: BCG matrix)
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Porter’s model of 5 forces
Porter five forces analysis is a framework to analyze the level of competition within an industry
and business strategy development. It draws upon industry organization economic to derive five
forces that determine the competitive intensity and therefore attractiveness of an Industry.
Threat of New Entrants: Profitable markets attract new firms. This results in many new
entrants, which eventually will decrease profitability for all firms in the industry. New entrants
bring new capacity and a desire to gain market share. This puts pressure on prices, costs, and the
rate of investment necessary to compete in the industry. When the threat of new entrants is high,
existing companies must hold down their prices or boost investment to strengthen their position.
It is to be noted that it is not the physical entry of a new competitor decreases profit down, it is
the threat of new entrants.
Threat of substitute products or services: The existence of substitute products outside of the
existing is a threat that increases customers to switch to alternatives. Sometimes the threat of a
substitute is indirect. For example the substitute of a traditional phone is a smart phone. The
threat of a substitute is high if it offers an attractive showcase than that of industry’s product.
Bargaining power of suppliers: The bargaining power of suppliers is also described as the
market of inputs. Powerful suppliers can capture more value by themselves by charging higher
prices, limiting the quality of services, or shifting costs if the supplier list is low. For example if
you are making biscuits and there is only one person who sells flour, you have no alternative but
to buy it from him. It could be big threat to the industry or company.
Bargaining Power of Buyers: Powerful customers can take more value by forcing down prices,
demanding better quality or more service. The buyer power is high if the buyer has many
alternatives. The buyer power is low if they act independently. For example if a large number of
customers act with each other and ask to make prices low, the company will have no other choice
because of customer demand. These kinds of actions will reduce company profitability. Buyers
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are especially powerful if they have negotiating power with the company. Buyers have
negotiating power if they are few in number. It is also a strong threat to the company.
Intensity of competitive rivalry: Rivalry is most destructive to profit. Price competition
transfers directly from the industry to its customers and gives them the most benefit. When
competitors aim to meet the same customer needs or to compete on the same attributes, this
causes zero-sum competition. The opposite of this is positive-sum competition which happens
when companies compete on different attributes, service, customer support, etc.
(Graph: Porter’s 5 force model)
Intensity of
Rivalry
among
Current
competitors
Threats os
new
Entrants
Bergaining
power of
Buyers
Threat of
Substitutes
Bergaining
power of
Suppliers
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Competitive Strategies
Competitive strategies are the method by which you achieve a competitive advantage in the
market. There are typically three types of competitive strategies that can be implemented. They
are cost leadership, differentiation and a focus strategy.
Cost leadership strategy: Cost leadership strategy is used by businesses to create a low cost of
operation within their niche. The use of this strategy is primarily to take an advantage over
competitors by reducing operation costs below so that of others. Cost leadership is a concept
developed by Michael Porter used in business strategy. It describes a way to establish the
competitive advantage. Cost leadership in basic words means the lowest cost of operation in the
industry.
Differentiation: A differentiation strategy is a way to develop a competitive advantage by
supplying and marketing a product that is in some way different to what the competition is
doing. If developed successfully this strategy can provably decrease the price and improve the
brand loyalty towards customers.
Focus strategy: It is a kind of marketing strategy in which a company concentrates its resources
on entering or expanding in a narrow market or industry segment. It is a focus strategy that
usually knows its segment and has products to competitively satisfy its needs. Focus strategy is
one of three generic marketing strategies. It identifies the needs, wants and interests of the
particular market segments and customizes marketing techniques to reflect those characteristics.
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Organizational Structure
Organizational structure is the framework around which the organization is organized, the
underpinnings which keep the coalition functioning. It's the operating manual that tells members
how the organization is put together and how it works. More specifically, structure describes
how members are accepted, how leadership is chosen, and how decisions are made.
A process involving decisions about six key elements:
 Work specialization
 Departmentalization
 Chain of command
 Span of control
 Centralization and decentralization
 Formalization
Work specialization: Work specialization is the process of focusing one’s
occupational concentration on a specific area of expertise. It creates efficiency and productivity,
but can also result in boredom, fatigue, stress, low productivity, poor quality, increased
absenteeism, and high turnover.
Departmentalization: It is one kind of Manner or practice in which related individual task and
their allocation to group work is combined, to from a specialized functional area that is distinct
from other functional area in an organization. When the firm develops independent lines of
business that operate as separate companies, all contributing to the corporation profitability, the
design is call divisional departmentalization or (M-FORM). For example, the Limited. Inc. has
this division Limited, Express, Lerner New York, Lane Bryant and Mast Industries.
Chain of command: A chain of command is an official hierarchy of authority that dictates who
is in charge of whom and of whom permission must be asked.
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Span of control: Span of control is the area of activity or number of functions, people, or things
for which an individual or organization is responsible.
Centralization and decentralization:
Centralization is a process where the concentration of decision making is in a few hands. All the
important decision and actions at the lower level, all subjects and actions at the lower level are
subject to the approval of top management. According to Allen, “Centralization” is the
systematic and consistent reservation of authority at central points in the organization.
Centralized organizational structures rely on one individual to make decisions and provide
direction for the company. Small businesses often use this structure since the owner is
responsible for the company’s business operations.
Decentralization is a regular allocation of authority at all level of management and in all of the
organization. In a decentralization concern, authority in retain by the top management for taking
major decisions and framing policies concerning the whole concern. Rest of the authority may be
delegated to the middle level and lower level of management.
Decentralized organizational structures often have several individuals responsible for making
business decisions and running the business. Decentralized organizations rely on a team
environment at different levels in the business. Individuals at each level in the business may have
some autonomy to make business decisions.
Formalization: Formalization is process in which manager specifies, in writing, responsibilities
of the individual and the organization as a whole, which leads to the expansion of processes,
relationships, and operating trial.
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Organizational design decision: There are two types of Organizational design decision.
1) Mechanistic organization structure.
2) Organic organization structure.
Mechanistic organization structure:
Mechanistic an organizational structure is based on a formal, centralized network. The
mechanistic structure is best suitable for companies that operate in a stable and certain
environment. In general, a mechanistic structure is easy to maintain and rarely needs to be
changed when an organization operates in a stable environment.
A mechanistic organization is a concept developed by British theorists Tom Burns and G.M.
Stalker in their work titled The Management of Innovation (1961). According to them,
characteristics of a mechanistic organization include a high degree of organizational complexity,
formalization and centralization.
Characteristics of mechanistic organization structure:
 High specialization
 Rigid departmentalization
 Narrow spans of control
 High formalization
 Limited information network (downward)
 Low decision participation
 Strict company policies & work separately.
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Organic organizational structure:
The organic organizational structure one kind of framework of a company. It is useful to
distinguish power and authority, roles and responsibilities, and the manner in which information
flows through the organization.
Characteristics of organic organizational structure:
 Non-standardized jobs
 Fluid team-based structure
 Little direct supervision
 Minimal formal rules
 Open communication network
 Empowered employees
 Working of verbal communication in groups
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Analysis of UA
SWOT of UA
Strengths Opportunities
 High quality assurance
 Marketing strategy
 Commitment to service
 Brand value
 Business communication
 Positive response from customers
 Unique technology
 Good strategy
 Business expansion
 Global expansion
 Increase number of retail
 Emphasize variety of sports
 Include designs in the fabric to attract
new customers
 New innovative technology
 Moving to other business
Weaknesses Threats
 High price
 Manufacturing
 Low service of web site popularity
 Not competing in international market
 Internal politics
 Competitors
 Low price importance
 Environmental issue
 Natural disasters
 Government issue & policy
1. Strengths:
 Quality assurance of products, devices and sport tracks is very high.
 In marketing strategy their products promotion, publicity, brand ambassador etc
through sponsoring clubs, events, teams and athletes is remarkable.
 Their commitment of giving best service to their consumer is like a pillar of their
strength.
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 Through very good quality of their products they maintaining their high brand
value in the market. They have good liaison and connection with other sports
companies, associations, teams, institutions, clubs, retailers, agents, athletes etc.
 By getting good service the customers are very promising and positive for them.
 They are launching new trends of products which are unique and desirable to all
class of people especially to athletes.
 They set up a very good strategy to fulfill their goal.
2. Weaknesses:
 Selling products on high price which is a notable weakness for them.
 Website based customer service is not up to mark to make it more popular than
competitors like Adidas and Nike.
 They are focusing on national and local level markets and teams.
 Having wide manufacturing in Europe, Asia, Africa and North America which is
very costly for maintaining their products quality.
 Internal politics among the top management.
3. Opportunities:
 They can expand their business by more promotion, publicity, joint venture with
other companies, launching new outlets in different countries.
 Focusing on international markets, clubs and more variety of sports can give them
more business profit.
 Can increase number of retailers through many offers and privileges.
 Focusing on other athletes and sports games like cricket, football, Olympic etc.
 Make more attractive their sportswear through more creative designs to compete
with Adidas.
 Come up with more high technology device and tracks for athletes, sprinters,
sportsman even for mass people.
 Can move to other business like launching cell phones, electronics products etc.
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4. Threats:
 Having very strong competitors like Nike, Adidas & Canadian sports company
can be a big threat for operating business.
 Because of high price of their products, other companies pricing their products on
a low price which can be a big threat.
 Because of environmental issues price of their products raw materials can go up
which can effect on their business.
 Natural disaster like cyclone, heavy rain, earthquakes can damage their business.
 Governmental issues and policies are very sensitive like high tax, inflation etc. for
operating business.
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BCG of UA
Under-Armour is a sportswear company. They sold different kinds of products. For BCG matrix,
firstly we have to consider its market share and growth. For analyze the market share and growth
of Under-Armour we need to make a (2x2) matrix.
Star
MS (%) MG (%)
Apparel Products 18 % 17.4 %
 Hot-Gear
 Cold-Gear
 All Season Gear
Question Mark
MS (%) MG (%)
Footwear Products 2 % 10 %
 Running Shoe
 Basketball Shoe
 Hike Boots
Cash Cow
MS (%) MG (%)
Device & Track 15.46 % 11,82 %
 Misfit Shine Activity Tracker
 Up move BY Jawbone
Dogs
MS (%) MG (%)
Sports Apparel 0.0001 % 0 %
 Brand of Balls T-Shirt
{ Graph: BCG Matrix of Under-Armour }
 Star Product: The first part of BCG Matrix is the star product. The star product consists of
high market share and high market growth. The business units or products that have the best
market share and generate the most cash are considered stars. Stars can eventually become
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cash cows if they sustain their success until a time when the market growth rate
declines. Companies are advised to invest in stars. In Under-Armour hot gear, Cold gear and
all season gear are the star product. Its market share of this product 18% and its market
growth is 17.4%.
Cold-Gear Hot-Gear
 Cash Cows: Cash cows are the leaders in the marketplace and generate more cash than they
consume. These are business units or products that have a high market share, but low growth
prospects. It can be a dog or again it can be a question mark & star. The cash cow products of
Under-Armour are misfit shine activity tracker, up move by jawbone. The market share of
this product 15.46 % and market growth is 11.82 %.
Misfit Shine Tracker Up Move By Jawbone
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 Question mark: A question mark product has high growth prospects but low market share.
They is consuming a lot of cash but is bringing little in return. In the end, question marks,
also known as problem children, lose money. A question mark can be a star and can follow
the cycle of BCG. In the Under-Armour Company Running shoes, Basketball shoes, Hike
boots are question mark products. The market share of this product 2% and market growth is
10%.
Bass-Ball Clip-Clap Running Shoe
 Dogs: Dogs are units or products that have both a low market share and a low growth
rate. It is also called problem child. They frequently break even, neither earning nor consuming a
great deal of cash. This kind of businesses has money tied up in them, even though they are
bringing back basically nothing in return. It can again be a question mark, star & cash cow. The
Brand of ball t-shirt is the dog or problem child of Under-Armour. Cause that product was for
basketball athlete and it was compared with World War 2. The market share of this product is
0.0001% and market growth is 0%.
Brand of Balls T-Shirt
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1. Competitive Rivalry: Intensity of rivals among the current competitors like Nike. INC,
Adidas AG & Columbia Sports-wear Corporation is medium to high. Wholesale
customers like Dicks sporting goods and sports authority hold a certain degree of
bargaining level as they could substitute Under-Armours products with other competitors
to gain higher margins. Bargaining power of end customers are lower than Under-
Armour. Large companies in the industry set price points for their products. Few retailers
control large market shares makes it difficult for small vendors to enter the market.
2. Threat of new entrants: Possibility of coming new entrants in the sports-Wear industry
is medium. Cause there is already much big industry in this field still there is place for
new comers to come and run business. Large capital costs are required for branding
advertising creating product demand and hence this limits the entry of newer players in
the sports apparel market. However existing companies in the sports apparel industry
could enter the performance apparel market in the future.
3. Bargaining power of buyers: Bargaining power of buyers is medium to high. Under-
Armour deals with many buyers like wholesale consumer, retail consumer, VIP athletes,
mass people and many more. Even they have many competitors in the market like NIKE.
INC, Addidas, Columbia Corporation etc. so, they have to face their buyers authority and
power which is medium.
4. Bargaining power of suppliers: Bargaining power of the suppliers is low to medium. A
diverse supplier base limits bargaining power. In 2013 the products of the Under-Armour
has been manufactured in more than 27 location of across in 14 countries. Of these the
top 10 location has manufactured 49% of the products of Under-Armour.
5. Threats of substitutes: Substitution is fulfilling the demand of a desire product by a
ordinary or such a product which can do the same work. In this case products type is not
same. It is caused for unavailability & high price of the product. It is a threat because for
it company can lose its new customers & also brand value. Threats of substitutes of
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Under-Armour are very low even we can say that there is no threat of substitute of UA.
Because it produces such unique products according to the demand of athletes & normal
people that could not be fulfilled by other products of other company.
Now we can contrast these porter’s five forces of UA with UA competitive Strategies like this:
Competitive environment is the dynamic external system in which a business competes and
functions. The more sellers of a similar product or service the more competitive the
environment. Under armour has a good competitive environment. Competitive advantage
should be based on an understanding of industry structures and the way they change. Porter has
identified five forces that shape every organization, industry and market.
Substitute: Under-armour have many direct competitors which are producing similar products
that offer same service as under-Armours. Exp: Nike, Adidas etc. for this the competition gets a
little tighter. Besides this wholesale customers like Dicks sporting goods and sports authority
hold a certain degree of bargaining leverage as they could substitute under-Armours products
with other products to gain higher margins. But actually substitute of Under-Armour products is
very difficult. Because, May there are many same type of products in the markets but UA’s
product is so unique that theirs products demand cannot be fulfilled by any other product of the
market. Substitution of products downsizes any branded company’s products value by some
value.
Competitive rivalry: Rapid growth in the performance based apparels and gears are increasing
globally due to increased demand in footwear. As a result it is becoming tough to centralize all
the focus on Brands like Nike and Adidas as they are the most competitive players over their
rivals as past records suggest. The increase of youth population in the world led to a significant
increase in the number of sporting activities and also the number of people participating in
sports. Adidas and Nike have to compete with under-Armour and many other players in the
industry and they are significantly well and not falling aside. A second factor that could affect
the sports clothing and apparels is people’s tendency to stay in shape. This has turned customer’s
motives. As a result it is becoming a threat to under-Armour because they are only focusing
products that benefit sport players.
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Bargaining Power of consumers: The significant presence of under-Armour product in various
retail stores in North America has made the bargaining power of consumers to the medium. The
innovative technology is fairly new and is in high demand by athletes. But the buyer power is
relatively low. Few retailers control large portion of the market shares, making it difficult for
small vendors to enter the market.
Bargaining power of suppliers: Under-Armour has products produced by 27 manufacturers
located across 14 countries. Asia encountered majority of the rate of products manufactured. Any
supplier that meets the quality standards for the company will be able to supply these commodity
goods. They can switch or switching suppliers quickly without a worry of a significant decrease
in quality.
Threat of new entrants: High barriers cover up the market as new entrants try to make a way.
For the brand value of under-Armour and similar company’s it is difficult for other new comers
to gain popularity in the market. New entrants like every second counts, Lulu lemon etc are
finding it tough to compete in the big market. So it is relatively low threat that new entrants
could affect under-Armours reputation.
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Strategies for Marketing UA Products
UA are now following different kind of strategy.
Business level strategy:
The brand portfolio provides clarity, energy, differentiation and protection from imitators in a
complex, competitive arena. Under Amour has branded their innovations such as Infrared,
Coldback and Mag Zip and has actively managed each of those brands. They have also provided
coherence with umbrella brands such as UA Heat Gear, UA Cold gear and UA Glow Collection.
This is differentiation strategy which the branch of business level strategy.
They are recently focusing on VIPs athletes. So they buy land for making product . this their
focus strategy .
Under Armor has successfully expanded their business .recently they focus on women apparel.
Under-Armour is also trying to expand by offering more products to women. There have been
multiple new commercials featuring women with the slogan, "No matter what, sweat every day."
The campaign has been very well received and the women's sneaker division is taking off. A big
aspect of Under-Armour’s growth strategy is expanding abroad, which also ties into how they
plan to manage competition.
Corporate strategy:
Corporate strategy is concerned with what businesses, if any, a company should enter into.
Under Armor is diversifying by selling new products to existing customers. It just recently
started selling football cleats. It is concentration corporate strategy.
Online sales and outlet and specialty stores, which are expected to represent nearly a third of
Under Amour’s distribution channels by 2013, and in international markets, with new store
openings planned this year in China. Under Armor will also cooperate with some partner
companies. For example, in order to expand EMEA’s market Under Armor sells their products to
the local distributors and cooperates with the third party logistics providers as well. This is
Forward vertical integration strategy.
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Under-Armor has successfully expanded their business .recently they focus on women apparel.
Under-Armour is also trying to expand by offering more products to women. There have been
multiple new commercials featuring women with the slogan, "No matter what, sweat every day."
The campaign has been very well received and the women's sneaker division is taking off. A big
aspect of Under-Armour’s growth strategy is expanding abroad, which also ties into how they
plan to manage competition.
Their cash cow product was vanished from the market. So it is the stability strategy which is
under corporate strategy.
Innovative strategy:
innovative products are Infrared technology that recalculates heat around the wearer’s body,
Cold back technology designed to reflect heat and keep athletics cool in the sun, and MagZip
technology which allows a zipper to be pulled with one hand.
Other strategy:
For the international market plan to continue they plan introduce their product globally by using
the brand-building strategy which already successful in North America. The company will sell
their products directly to the teams and individual athletes. These activities will help Under-
Armour promote their brand and attract an audience as well as a short term strategy , Under-
Armour will continue utilize their unique technical product “moisture-wicking fabrications”
which will help them take up a part of domestic market share. Also, they plan to focus more gear
to female buyers. Under-Armour may have a great entry point to success in the women’s market
through quality yoga wear and offering-Armour Bra style.
In the long term, Under-Armour announced that “we plan to continue to grow our business over
the long term through increased sales of our apparel, footwear and accessories, expansion of our
wholesale distribution, growth in our direct to consumer sales channel and expansion in
international markets”
The company also is focusing on direct-to-consumer categories
Page 29

UA Organization Structure
Under-Armour company is regulating so nicely by following mechanistic organizational
structure. Although they have organic organizational structure as a alternative strategy which can
be followed. But, as their organization is a sportswear apparel focusing company they need to
follow mechanistic organizational structure. In a mechanistic organizational structure companies
have to maintain some mandatory things. These are:
 High specialization
 Rigid departmentalization
 Narrow spans of control
 High formalization
 Limited information network (downward)
 Low decision participation
 Strict company policies
 Work separately
Under-armour is following these mandatory features. Explanation is below there:
 They have limited information network. According to Under-Armour policy, employees
may become aware of important information — or what the law calls "material"
information — about Under-Armour or other companies that is not available to the
public. It is illegal and contrary to Company policy for everyone to buy or sell stock or
other securities of any company (including Under-Armour while we are in possession of
such material nonpublic information concerning the relevant company or its securities.
Whenever anyone possess such material nonpublic information, it is also illegal and
contrary to Company policy for them to disclose such information to anyone else who
Page 30

might buy or sell securities of the relevant company (including family, friends, or
business acquaintances), or to suggest to anyone else that they buy or sell securities of the
relevant company. Any of the foregoing conduct can result in severe disciplinary action
up to and including termination of your employment and subject both you and the
Company to civil liability and criminal prosecution.
 They are following rigid and tightly controlled structure . According to their policy , the
company maintain the high quality in all of these manufacturer . Their manufacturing
company are located in different territory of the world. All the manufacturing company’s
employee are following same rules .
 Low decision participation are also seen in this company. Kevin Plank at the top of the
pyramid. While Mr. Plank is the face of the company, the Board of Directors are
responsible for much of the decision-making for UA. The Board is evaluated annually by
a committee to ensure that they are doing the best job for the company. A "Lead
Director" is in charge of holding Board meetings and is elected by vote of non-
management Directors. Directors of the Board have free access to management and
information and the company tries to keep its lines of communication throughout the
entire company as open as possible.
 According to different data , the decision maker is the top management. To further
strengthen our corporate governance structure and provide independent oversight of our
company, the Board has appointed Mr. Krongard as our lead independent director. As
Lead Director, Mr. Krongard acts as a liaison between the non-management directors of
the Board and the Chairman, CEO and President, Kevin Plank and the other members of
our management team, chairs regular executive sessions of the Board without Mr. Plank
present and performs other functions as requested by the non-management directors.
 UA’s Span of control is narrow. As they have Manufacturer Company, their employees
are supervised by manager. They pride themselves on maintaining the utmost honesty
when doing business with other companies and consumers. Managers and top executives
pave the way for their employees by setting an example of ethical responsibility and
Page 31

trustworthiness. It is with this belief and dedication to being morally and ethically
responsible that UA has been able to give itself a positive reputation in the marketplace.
 Departmentalization is one of the characteristics of UA Company’s structure. They have
different department like HRM, marketing, it, finance, and accounting.
 High speciation is also there. According to their previous records, their transaction and
product quality is very high. Their employees are high specialization.
Page 32

Recommendation
Matching of Organizational Strength to Environmental Opportunities
 Under-Armour should exploiting high quality assurance for global expansion. Because
their product are made according to customers need and global market’s need is such
kind of product which is unique.
 They should formulate brand value to business expansion. By using their brand value,
they can gain profit in the new business.
 Under-Armour should exploited business communication for increase number of retail.
They can develop team which will be highly specialized in marketing, communication
with competitors, buyers, supplier, and good redaction with highly prepare with liaison.
So that they can make best decision for increasing the retailers. Through this they can use
marketing strategy which is UA’s very good strength.
 As we know their focus of unique technology which is very demandable in the market.
They should develop their research department. So they have a very good opportunity for
new innovation technology which can be very profitable. Example: they focus on blind
game because they have very good strength of unique strategy. They can make sound
effective tracker which is unique. Bleed runner, wheel chair are also included.
 They should formulate their good strategy, commitment to service, and positive response
from customers with moving to other business. For intense, if they move to beverage
industry and produce energy drinks for athletes which will be a good strategy cause
athletes one of the major need is energy drinks.
 If they focus on producing special sports wears, trace, device for special athletes or
special person can be very profitable. Because now we have many special events for
special athletes for example Para Olympic. Now a days many organizer arrange special
Olympic for special Olympic. As UA are not preparing apprise track so it can be
profitable. It can be a social charity.
Page 33

Correcting Weaknesses
 They should reduce their price. Basketball shot tracker of UA, track shout accuracy are
sold out now $150,$80. But they can sell it $80 and $4o instead of $150, $80 with some
condition. The validity will be 199 days and renewal price will $39 and license renewal
$39. So they can earn once higher than before. They can gain profit and also low their
price.
 UA can make a policy with their supplier. In the policy, UA should tell their supplier that
they have to buy raw materials in UA selected country but UA will pay the shipping cost.
If they make good liaso with their chosen country. They can reduce other cost. As a result
they can sell products with low price and solve the manufacture.
 They can hire it specialist is who are reading in the running time. Specially UA best
technology university is MIS. So, UA can make group project. They can give them less
salary and they can get high low service of website popularity.
 They can organize events in Europe, china. They can fashione show. They can link up
with the social site. So that their site can spread their product with video clips. They can
give retails and can be made with attractive theme. Through this they are combining their
global market with their local authorized market and can make market in department with
global thing.
Guard Against Threats
 They should continuously research about their activities. They can also make plans like
Plan b, Plan c. If any of the competitors do something dramatic, they should have plan to
control the situation. Sometime unexpected competitors can beat them. So they should
have additional plan. For this they can develop certain teams.
 Under-Armour should think about natural disasters. They should have preplanned for it.
They should have alternative plan about alternative manufacturers, suppliers for
considering environment issue, currency issue and also select several suppliers.
 Under-Armour should maintain good communication or liaison with outsiders. So, they
can guard Government Issue and policy.
Page 34

Recommended Strategies
 Under-Armour should follow corporate strategy meaning the overall planning of top
management.
1. They should follow unrelated diversification. It is one kind of business plan which
emphasize for doing unrelated industry. Under-Armour can open athletes training
center. Through this they are developing young athletes, using their products,
marketing their tracks-devices, earning money from their young trainers.
2. They can do retrenchment for their flop products which are banned like t-shirts.
Because of comparison with the World War 2 picture with basketball superstars
holding the national flag the product got negative status and got banned. They can
recycle the embroidery part of that shirt and they can put the logo with a nice
theme or picture. They could use retrenchment for resolving short-time problems.
They can buy Colombian Sports Corporation so that they can reduce competitors
and get horizontal diversification. It can be also called buying out the competition
in the competitive market.
Recommended Organization Design
They should focus on virtual organization cause they will get more benefit then before. In terms
of under-Armour the company is using or in use of network organization. Meaning under-
Armour has a main office from where they manufacture products by suppliers. For this can do
their works such as sale, market, online access from anywhere with a specialized personal. They
are only focusing on the manufacture and the products they make to market it.
If they do their works in terms of virtual organization they can cut their cost and do their
punctually in order to gain profit. As a result the company can focus in focus in a network of
talented personal and not worry about office overhead. Although it is important for them to focus
in virtual organization but in some case like research they need to focus on network organization.
Page 35

Bibliography
Additional websites:
1. https://en.wikipedia.org/wiki/Under_Armour
2. https://www.sec.gov/Archives/edgar/data/1336917/000133691714000008/ua-
20131231x10k.htm
3. http://www.baltimoresun.com/business/under-armour-blog/bs-bz-under-armour-annual-
meeting-20150429-story.html
4. http://www.uabiz.com/management.cfm
5. https://www.underarmour.com/en-bd/find-a-store
6. http://www.marketwatch.com/investing/stock/ua
7. http://www.wsj.com/articles/under-armour-overtakes-adidas-in-u-s-sportswear-market-
1420753934
8. http://www.uabiz.com/company/about.cfm
9. http://www.uabiz.com/company/history.cfm
10. http://www.footlocker.com/striperpedia/article/5002619/5%20Things%20You%20Didn
%27t%20Know%20About%20Under%20Armour
11. http://www.fool.com/investing/general/2014/09/08/5-things-under-armour-incs-
management-wants-you-to.aspx
12. http://www.underarmour.jobs/en/locations/global-locations/
Page 36

13. http://gearjunkie.com/under-armour-tour
14. https://www.linkedin.com/company/under-armour/careers
15. http://www.baltimoresun.com/business/under-armour-blog/bal-armoury-under-armour-
will-sponsor-brazilian-soccer-club-20150317-story.html
16. http://www.forbes.com/sites/greatspeculations/2014/05/30/under-armours-bid-for
international-growth/
17. https://www.youtube.com/watch?v=jqCBMVBWOjo
18. http://www.usatoday.com/story/money/business/2014/12/22/under-armour-sports-
apparel-sporting-goods-kevin-plank/20243203/
19. http://topics.nytimes.com/top/news/business/companies/under-armour-inc/index.htm
20. http://www.thunderbird.edu/blog/faculty/washburn/2010/12/14/under-armour-under-
performing
Additional books:
 Management (Eighth Edition - International) --- Stephen P.Robbins
 Management (Eighth Edition) --- Griffin
 Management (Eleventh Edition – Global) --- Stephen P. Robbins
 Product Strategy & Management (Second Edition) --- Michael Baker
 Marketing Management (Global Edition) --- Philip Kotler
 Human Resource Development (Fourth edition) --- Jon M. Werner
Page 37

Under Armour industry analysis

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