Under Armour

Matthew Stickley

23 May 2012

Under Armour

Kevin Plank, the CEO of Under Armour, took on a difficult proposition when he decided to create his own sports apparel company. The sports apparel industry is a highly competitive, fragmented industry with a small margin of error for new entrants. The market consists of roughly 250 businesses that create broad industry boundaries. Under Armour entered the market with a splash by creating compressed sports shirts. The product allowed them to create a significant impact in the market by creating separation from the established companies due to innovation and product differentiation. Inevitably the competition quickly imitated the product, but it delivered enough impact for them to successfully enter that market. Under Armour now currently holds a little less than 3% of the market share, half of industry leading Nike.

One of the factors that aided Under Armour’s growth was brand visibility. They became the outfitters of several high profile division 1 universities (Auburn, South Carolina, Maryland), which quickly made their brand easily recognizable. They also created value by designing unique, trendy uniforms that today’s athletes favor. Once again the product was imitable, and Nike quickly responded with their own designs. It is difficult for any sports apparel company to create a product that the competition will not be able to imitate, so it is important that Under Armour continues to be an innovative trend-setter within the industry. This strategy, or in this case a focus strategy, creates a positive perception in the consumers mind when they see the interlocking U and A.

The area that Under Armour has significant room to expand is in the international market. Under Armour is primarily a domestic brand with only 6% of its revenue coming from international sales. Nike, and other competitors (Adidas), have an established global brand that will make Under Armour’s expansion into new markets more difficult....