Under Armour Market Power - Essay Example

Under Armour has only two distribution facilities in North America, two third-party locations in California and Florida, 80 factory outlet locations in 34 states, and 2,500 retail stores in the world (Thomson, 2012).

The fact that Under Armour has fewer retail stores means that it has fewer powerful buyers who can often dictate terms. In terms of competitive rivalry, the two companies do not pose a serious threat since Under Armour itself offers unique products. However, all the competitors have allocated a sizeable budget to research, meaning that they are likely to offer undifferentiated products and services that may reduce the attractiveness of Under Armour. Under Armour doesn’t pose the threat of new entry since the other two corporations have the advantage of economies of scale, and considering their budgetary allocations on marketing, Under Armour is less likely to capitalize on the threat of substitution.

Yes, it has the core competency of designing and merchandising three lines of apparel gear: HeatGear, ColdGear, and AllSeasonGear, which are very unique in the market.

Yes, it has a significantly growing fan base on social media and a unique advertising strategy of ‘Protect this House’ and ‘Click-Clack’.

Under Armour has a major strength in manufacturing the most unique brand in the market. However, the weakness of fewer retail stores and the threat posed by other corporations like Nike and Adidas Group gives it a lesser advantage in the market.

Broadening the company’s product offering to all athletes and increasing its sale, designing kits that can be worn under different weather conditions, marketing, and product promotion (Thomson, 2012).

All three companies are engaged in sponsorships and endorsements for product promotion and marketing. They have also allocated sizeable amounts of resources to the research and development of new products. On one hand, Under Armour has the advantage of its unique products in the market, and on the other hand, it has the disadvantage of unfavorable competition in terms of capital against the other two.

He needs to address the issue of the growing number of individual items produced, uncertainties surrounding consumer demand that affects accurate projections of items to order (Thomson, 2012), and how to acquire the lion’s share of the market.

Carrying out a proper survey in the markets to find out what customers want and producing items according to consumer needs. Lastly, he should engage in more sponsorship activities of tournaments like the Olympics, World Cup, top European leagues, and most domestic leagues abroad to attract more customers and, or increase customer loyalty.