Under Armour

  • Under Armour global strategyA corporate strategy article by Thunderbird students Eric Chown, Veronica Yusz, David Prestin, Sarah Olsem and Rosemary Geelan

    The Under Armour brand evokes an image of elite athleticism, almost at odds with the company’s humble beginnings in the home basement of the founder’s grandmother. A simple idea ultimately developed into one of the most prominent names in the industry. As the company evolved, the relative importance of the strategic challenges they faced changed as well. One shift has already occurred – from word of mouth advertising to promotion by professional athletes – and this will likely be insufficient to expand their market in the direction that they are focusing on with their newest production lines. Their marketing strategies and ability to maintain the share they have established will be tested as they move away from their traditional customer base and into new niche markets. The challenge to Under Armour is whether to change their strategy as they expand, or to apply their initial model in new, innovative ways. Both have risks if not executed properly.

  • Home_brandingUnder Armour (UA) competes in an industry that faces ethical challenges in all operations.  The ethical standards of UA span to all sectors of the business to include the following: product production, manufacturing, operations, and global aspects of the corporation. Yet, UA is leading the way in concurring ethical challenges through successful tactics that make them stand out from competitors.  UA is a market leader, not only in innovation, but in ethical standards, eco-friendly operations, and business practices, throughout the active wear industry.

    Athletic Apparel: A Tainted Industry?

    True to the apparel industry, active wear has not been immune to labor issues as outsourcing to less developed countries has introduced questionable practices and possible human rights violations.  The lack of environmental and human labor regulations has given the industry a suspect reputation and often times a stigma that, “no news is good news” for the industry’s human labor practices.

  • Under Armour global strategyBy Gael Marchal, Hardy Drackett, Kali Poza, Robert Bigot, Venkat Srinivasan and Veronica Borrowdale

    “We must protect this house” is Under Armour’s rally cry; however, in broadening its brand the company has failed to protect the market it created. Under Armour recently has made several strategic missteps compromising its unique position. Its failure to make difficult trade-offs and CEO Kevin Plank’s inability to articulate a clear strategic focus will ultimately dilute the Under Armour brand and hurt the bottom line.

    Since its inception in 1996, Under Armour has been seen as an improbable success story in an extremely developed and competitive industry.  It effectively created the performance apparel market, a blue ocean within the sports apparel industry.  In this market, Under Armour’s focus was centered on compression fit and moisture wicking fabrics, a product that filled the needs of many athletes unhappy with the standard cotton t-shirt.  This blue ocean allowed for tremendous company growth, expanding from $17,000 in sales in 1996 to $856.4 million in revenues in 2009. (2009 Annual Report)  Along with this growth came a very strong and recognizable brand.  In fact, according to a survey of teenagers, Under Armour “is now the #2 brand among teens, behind Nike”.  (Lefton) Naturally, this success has bred imitation and, together with Under Armour’s failure to protect their position, the blue ocean has turned red.