Under Armour Case Study

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Executive Summary

Under Armour has been a compelling success story. It is the brainchild of current CEO Kevin Plank who started the company, in 1996, with a meager $15,000, some locally purchased fabric and a burning desire to innovate. In 2005, the company went public and in less than a decade it ended the year with above $3 billion in revenues. Competing in the highly competitive sports apparel industry, Under Armour’s core competency is innovation. The company revolutionized the sports apparel industry with the introduction of compression gear with moisture wicking technology. With its aggressive marketing campaigns like “I Will”, the brand has been able to carve out its unique identity and has brought a determined and inspirational attitude
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With unparalleled revenue growth, high profitability, healthy liquidity and strong valuation, Under Armour has positioned itself as a very safe and lucrative bet for the investors. The company has been smart in identifying areas where it needs to focus in order to sustain this tremendous growth. Under Armour is looking to expand its product portfolio and seeks gains in the footwear department where Nike reigns supreme. Under Armour currently is highly concentrated in the United States and has identified global expansion as its key future growth driver. With the highly competitive leadership of Kevin Plank, Under Armour aims to carry this staggering momentum into the future and come forward as a global leader in sports and performance …show more content…
Though brands like Nike and Under Armour are working towards increasing their direct-to-consumer sales, the share is still heavily skewed in favor of wholesale buyers. This means that these wholesale customers can leverage their power to influence this industry and this particular force can be categorized as medium to high. However, with companies like Nike and Under Armor now focusing their attention on opening retail stores, this dynamic might see a change in the future.
4. Threat of New Entrants (Low to Medium):
For the sportswear industry, the greatest barrier to entry is the high capital costs involved in product development, branding and marketing. Due to the nature of the product, there is a high focus on quality and technology which deters new entrants despite the lucrative nature of this industry. However, there is a threat from existing apparel manufacturers which might switch to sports apparel eyeing greater profits and leveraging their existing setup and market knowledge.

5. Threat of Substitute Products

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