Executive summary
There are a lot of companies that make and distributes clothes that are for sports, also
casual clothes, and, sport shoes, and casual shoes. This companies have been in a
constantly competition about who sell more than the others. This research will be focus in
the marketing processes the company use to rich their goal.
Introduction
What is Under Armour? Under Armor, Inc. is an American sports apparel and accessories
company. The company sells sportswear and casual wear. Under Armor began offering
footwear in 2006. The global headquarters of Under Armor is located in Baltimore,
Maryland. Its European headquarters is in the Olympic stadium in Amsterdam; there are
additional offices in Denver, Colorado; Hong Kong and Guangzhou, Jakarta and Toronto.
Methods
For the obtaining of data, I will make use of web pages and interviews. There are going to be
compare two of the more common sport clothes companies: adidas and under armour. the
information I want to get from the research i will make is: how much value this company has,
the advantages of Under Armour, the strengths it has, the weaknesses this company have,
etc...
Findings
Under Armour has been one of the best growth stocks this decade. Indeed, the fitness-
apparel name has been on a tear over the past five years, appreciating almost tenfold in
value, as the bottom line has leaped ahead at an annual rate of about 25% and the company
has branched out into footwear and other large product categories.
The mission of Under Armuor is: “to make all athlete better through passion, design and the
relentless pursuit of innovation.”
The main objectives of the company are:
Grow international business – from 6% to 12% of business
Grow women’s categories – to US$1 billion by 2016
Expand brand – to new areas like golf and outdoor wear
The revenues and earnings of the company have been growing through the years. Even though
it doesn't develop so fast as other companies as it can be Nike and adidas, it doesn't stop
developing.
Discussion
Its strengths are:
Runaway Growth: Under Armour has established quite a track record since going public a
decade ago, when sales were less than $300 million and the company was not even on the
radar of large sector players like Adidas and Dow component NIKE. Over this span, profits
have soared in excess of 20% annually, and the top line has steadily risen to past the $3
billion mark. And Under Armour recently beat out Adidas for the No. 2 spot in terms of
domestic sportswear sales. Growth has been supported by an effective leveraging of the
core sweat-wicking apparel (that first put Under Armour on the map), much the same way
NIKE leveraged its early prowess in running shoes to expand into broader apparel and
athletic categories. Plus, the company has used a winning strategy from NIKE’s playbook:
ink long-term marketing deals with up-and-coming sports personalities.
Trendy Advertising: Two such marketing agreements that have yielded big returns lately
include one with Stephen Curry of the Golden State Warriors (who just won the NBA title)
and one with Jordan Spieth (winner of the Masters and U.S. Open golf tournaments). These
advertising partnerships, along with new social and digital campaigns and long-standing tie-
ups with the likes of football great Tom Brady and pitching ace Clayton Kershaw, are helping
Under Armour maintain its “cool” factor with influential young consumers. What’s more, they
should enable the company to further broaden its product portfolio going forward. While
Under Armour’s ten-year track record is quite impressive, it still has plenty of room to expand
around the world. (Note that market leader NIKE maintains a sales base fast approaching
$30 billion.) This is particularly true in areas such as basketball and golf gear, where the
company currently has only limited exposure.
Weaknesses
Heavy Investment Spending: One has to look closely to find weaknesses here (there
certainly has been nothing weak about the stock price), but the high level of investment
spending is at least a modest cause for concern. The expenditures are needed, to be sure,
not just for endorsement deals but also for product innovation, IT and supply chain
upgrades, and overseas expansion. The cash outlays mean that a quarterly dividend is
probably not in the cards anytime soon, however, which may be a turnoff to some income-
oriented investors. Additionally, the spending may curb Under Armour’s future actions on the
M&A front. That has not been the case historically, with the company, most notably, using
acquisitions to shore up its online presence. Within the past few years, Under Armour bought
the nutrition-tracking apps MyFitnessPal, Endomondo, and MapMyFitness (for a combined
$710 million). These transactions ought to pay off by bringing more athletic, on-the-go
consumers into the company’s fold. Indeed, by tapping into large online fitness communities,
Under Armour should be able to collect invaluable data on customers’ habits and
preferences, fine-tune its advertising message, and wrest further market share from rivals.
Opportunities
Footwear: Under Armour’s share of the footwear market is fairly small, likely still in the low
single-digits. That’s a good thing, though, since it means that the company has a huge
opportunity in this competitive sector. And we expect big strides to be made in the years
ahead (sales growth of 30% a year seems reasonable), which should help Under Armour
gain ground in key international geographies and underpenetrated sports realms, such as
golf, tennis, basketball, and soccer. (Thus far, most of the footwear gains have been in the
running space.)
Direct-to-Consumer Distribution: While the company has earned its stripes in the domestic
wholesale channel, it’s been expanding its retail presence in recent years. This has mostly
involved the opening of factory outlet shops that let the company clear its inventory position
and reach untapped rural and suburban U.S. markets.
Overseas Expansion: With Under Armour growing at such a blistering pace, it is constantly
seeking ways to enlarge its addressable market, so as to ensure continued success. A big
way to do this is by moving overseas, which is why the company is building out its network of
factory outlets. (The overseas sporting goods market is estimated at $130 billion.) UA has
also reshuffled the international leadership team, hired marketing consultants in select
regions, and taken back control of product sales and distribution in many countries.
Women/Children: With the majority of sporting goods sales to men, industry participants are
always endeavoring to widen their demographic reach to include more women and children.
Under Armour, for its part, has made a lot of headway in the women’s apparel segment,
improving the quality and styles of its collections and signing up high-profile endorsers.
Conclusion
My conclusion is that even though the company has a lot of competition because there are
many other companies that have a higher value, that they are more recognized around the
world and have more strengths and less weaknesses it still keep developing and using
different systems of marketing.
