Business Strategy for Under Armour

Under Armour: Working to Stay on Top of Its Game

1. Create a SWOT analysis to understand Under Armour’s strengths and weaknesses. Does Under Armour have a sustainable competitive advantage? If so, what is the source? What about Under Armour’s evolution and current business strategy may pose problems going forward?

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2. Conduct a Value Chain analysis to identify value-creating activities.

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SWOT ANALYSIS FOR UNDER ARMOUR
Under Armour: Working to Stay on Top of Its Game
Background
Under Armour is a sports clothing and accessories company. The company is a supplier of a wide range of sportswear and casual apparel; mainly focusing on hi-tech sportswear for professional athletes. It has now broadened its horizons and Under Armour began offering footwear in 2006, it continues to expand its offerings. In fall of 2010, Under Armour began offering its first line-up of basketball shoes.

SWOT Analysis
Strengths
These are the strengths of Under Armour: .
? The company’s presence is felt on the Internet. Its website is www.underarmour.com.
? The company is financially strong. Its third-quarter earnings rose 25 percent on strength in the apparel business.
? It has gigantic distribution chain. Under Armour’s global headquarters is located in Baltimore, Maryland. Its European headquarters is located in Amsterdam’s Olympic Stadium; additional offices are located in Denver, Hong Kong, Toronto, and Guangzhou.
? Net Revenues Increased 22% to $328.6 Million in 2010.
? It has a physically powerful brand
? Offering wide range of casual apparel and sports wear
? High profit to earnings ratio. Under Armour said its revenue rose to $186.9 million from $127.7 million.
? Positive response from customers. Moreover, Under Armour said inventory more than doubled from the same quarter last year, attributing the build up to “planned investment in core inventory to position itself for anticipated consumer demand.”

Weaknesses
These are the weaknesses of Under Armour:
? It is considered as male targeted brand
? Not reducing costs in the same way as their competitors’ means Under Armour is outlaying more of their profits. Having higher costs than competitors is a major weakness.
? Not having an effective marketing strategy seriously hampers the success of Under Armour.
? Under Armour’s limited product line is a major weakness. Its focus is only on casual apparel and sports wear
? Narrow focus

Opportunities
These are the weaknesses of Under Armour:
? Looking at export opportunities is a way for under Armour to raise profits.
? The changes in the way consumers spend and what they buy provides a big opportunity for under Armour to explore.
? New market opportunities could be a way to push under Armour forward.
? Expanding the product/service lines by …

Solution Summary
This solution presents a SWOT analysis to understand Under Armour’s strengths and weaknesses. A Value Chain analysis using Porter’s model was used to identify value-creating activities.

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