Individual Case 5 Under Armour PEAS Analysis PDF

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Individual Case: 5 Under Armour PEAS Analysis Problem identification: Under Armour was established in 1996 by former University of Maryland football player Kevin Plank to become a unique and leading competitor in the industry of sports apparel. Throughout its tenure is has made exceptional strides to become a formidable force against the industries competitors particularly the industry leaders, Nike and Adidas. Even with all of its success Under Armour faces the dilemma of garnishing a strategy that is potent enough to win market share from Nike and Adidas. Under the broad scope of that dilemma several factors have been identified. Since its inception, Under Armour has prided itself on its innovative design of products which have allowed for gains in the market share as well as overall brand recognition but in the same fashion, over time the innovation has not become a trampling factor and as the primary focus of the company it has resulted in a lack of appearance in subsections of the industry. Another problem that is present is the very limited presence in the international markets in comparison to the industry leaders Nike and Adidas. Evidence: The data used after identifying the problems and or issues in this case were diagrams found throughout the case study. Exhibit 3 “Composition of Under Armour’s Revenues, 2010-2013 (dollar amounts in thousands)” and exhibit 4 “Major Competitors and Brands in Select Segments of the Sports Apparel, Athletic Footwear, and Accessory Industry, 2013” were the diagrams used. The given are fact and based of outcomes of the various companies at the said times. The perspective can be utilized as a competitor as it shows the various positions of each of the industry competitors during the same time period. Analysis (Strategic): Within this case study there are several components that can be analyzed. Under the external or competitive environment the driving forces for change as well as Porter’s Five Forces Model can be analyzed. Globally there has been an increase in the growth as well as the desire for sports apparel. Simultaneously this has lead to development in buyer preference and innovation of products. With continual growth in the population there will always be a want for the most innovative and top of the line products this is where problems arise. Nike and Adidas are both powerhouses in the industry and throughout their tenure they have remained at the top by adapting to the wants and expanding to cover these wants. Attachment 1 “Major Competitors and Brands in Select Segments of the Sports Apparel, Athletic Footwear, and Accessory Industry, 2013” is a great indication of how the two companies have garnished a presence in multiple segments of the industry (see attachment 1). Threats of substitute products under Porter’s five forces model also displays the pressure that Under Armour faces. With all of its innovative products the company faces the pressure of twenty five different companies to have a viable and possibly better substitute product. As seen in Attachment 2 “Composition of Under Armour’s Revenues, 2010-2013 (dollar amounts in thousands)” Under Armour generates very low revenue internationally compared to its revenue in North America. This has become an internal issue within the company. Analyzing Under Armour’s value chain they subcontract internationally but have factories domestically. Their expansion to have factories internationally has been much slower than that of its competitors. This has also resulted in a problem in the companies supply chain management. The company faces a very low efficiency in their inventory holding. The last component that affects their international presence is their slower progression and access to foreign athletes and sports teams. Their largest progression was the selling of various products to England and Italy’s soccer clubs. Their competitors are much further along in the international markets as they have acquired lifetime contracts and sponsorships with some of the most influential athletes and teams in the industry.

Solutions (with alternatives): Based on the problems addressed earlier in my analysis I have two alternatives for the company. They are first for the company to begin to expand into more segments within the industry. As seen in attachment 1, Under Armour focus on innovation has caused them to not be in several segments within the market. I recommend if they ever seek to win market shares from Nike and Adidas the first way is to expand into every segment they are in. Once they acquire some type of competition in these segments they can expand to untouched segments. This is a sure fire way to then begin showing their innovative methods in an entirely more unique way. The second alternative is for the company to acquire new sponsorship of athletes and teams in the international market. I would recommend that the company pushes hard to find international athletes in the soccer field. This will lead to high brand recognition. The company has acquired huge name athletes in basketball, baseball as well as several other sports, with has done wonders for the company but expansion in to the soccer industry would be next level and a very influential component to the international market.

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