Under Armour Micro Factors

  

 

Under Armour

 

Under Armour (UA) is a company that manufactures and sells sports clothing, equipment, and accessories. The company operates in the sportswear sector, which is a highly competitive industry with high customer demand and limited expansion. According to Linchpinseo, the worldwide sportswear market is expected to reach $580 billion by 2025.

 

The Marketing Environment

 

The advertising surroundings encompasses all internal and external components that have an impact on the organization's advertising decisions, both without delay or indirectly.

 

-“…the actors and forces that affect a company’s capability to operate effectively in providing products and services to its customers” (p.73)

Jobber (2010)

 

-“…the actors and forces that affect marketing management’s ability to build and maintain successful relationships with target customers” (p.76)

Armstrong et al (2012)

 

Micro Factors

Suppliers, competitors, marketing intermediates, consumers, and the public are examples of aspects or elements in a firm's immediate surroundings that affect its performance and decision-making. 

 

Suppliers

Suppliers are an important part of a business's total client shipping network. They are the people who deliver raw materials, parts, machining equipment, and other devices to businesses. Vendor satisfaction and dependability are critical for a company's operations to run smoothly.

 

Providers of athletic apparel frequently promote materials to competitors. Large buyers receive lower rates from carriers for obtaining large volumes than smaller firms. For example, Nike and Addidas are both bigger organisations than Under Armour they would get their materials cheaper than Under Armour for example cotton for their fabrics that's why Under Armour products tend to be more expensive.

 

 

 

 

Market intermediaries

 

Within a company's general cost shipping community, marketing intermediates play a critical role. They are individuals or organisations who assist a company in marketing, selling and dispensing its products to end-users. For example, CEVA Logistics has taken over full contract logistics for Under Armour in the United Kingdom. CEVA Logistics has announced the successful completion of a Zero Defects Start-up for the full Omni-channel distribution of Under Armour's sports clothing items in the United Kingdom.

 

But recently Under Armour continues to pursue its goals of promoting products directly to customers and reducing its reliance on middlemen. Starting in the second half of 2021, the company plans to go out and find wholesalers across North America.

 

Competitors

 

Nike and Adidas are Under Armour's predominant competitors, and each has a much large sales record than UA. Despite the giant boundaries to access withinside the sports activities clothing sector, UA became capable of carving out a spot for itself via way of means that specialize in American football.

What Makes UA different from its competitors?

The difference is how innovative they are towards their products which has changed the sports apparel industry. They focus on developing their brand and products they are not just improving current sports gear, but also designing entirely new products that surpass present technologies.

 

 

 

Customers

 

Within the company's microenvironment, customers are the most powerful players. The total cost shipping community attempts to interact and build strong relationships with its target customers. Their target market is men and women with more money who want to improve in the game they play. Under Armour's product is pretty cool, flashy, and inventive because their target demographic is interested in cool, flashy, and new products. With this, you could say that it mostly attracts Generation Z inspired market.

 

-The improvement of Under Armour Inc.'s virtual health packages and technology-related apparel has been a vivid factor for the sports clothing maker amid the chaos brought by Covid 19. For example, Through their innovative ways Under Armour has introduced new apps for digital fitness and technology-enabled footwear.

 

-Since Under Armour has realised how much their customers mean to them they have introduced ‘focused performers’’ these are customers who want to focus more on their fitness goals so Under Armour provides them with products and apps they can use to achieve their fitness goals. This is a way Under Armour gives to its loyal customers and it shows how much weight the customers have on the company.

 

 

References

Baines, P., Fill, C. and Page, K. (2012) Essentials of Marketing OUP

Armstrong, G., Kotler. P., Harker, M. and Brennan, R. (2012) Marketing An Introduction, Pearson, 2nd Edition

Dibb, S., Simkin, L., Pride, W.M. and Ferrel, O.C. (2012) Marketing Concepts and Strategies, Cengage Learning EMEA, 6th Edition

Fahy, J. and Jobber, D. (2012) Foundations of Marketing,  McGraw-Hill Higher Education, 4th Edition

Blythe, J.  (2012) Essentials of Marketing  Pearson , 5th Ed.

Shah, D., Rust, R.T., Parasuraman, A., Stalelin, R. and Day, G.S. (2006) The Path to Customer Centricity. Journal of Service Research, Vol. 9, Issue 2, p.p. 113-124.

 

 

 

 

 

 

 

 

 

 

 

 

Macro Analysis Under Armour/PESTEL

 

 

 

 

 

Hello Welcome to our Under Armour Blog, In this blog, we will be looking at The marketing Environment of Under Armour and how it affects the company.

 

So what is The Marketing Environment, Its stated that “…the actors and forces that affect a company’s capability to operate effectively in providing products and services to its customers” (p.73)

Jobber (2010)

-“…the actors and forces that affect marketing management’s ability to build and maintain successful relationships with target customers” (p.76)

Armstrong et al (2012)

 

The Macro Environment what is it, The surroundings where the corporation operates is called the micro-environment. The macro-environment refers to the general surroundings that could have an effect on the operations of all businesses.

 

When we are looking to go into the Macro environment of a business the best tool to use is PESTEL Analysis, which allows us to analyse the direct impacts it has on the industry. The programme lets the organisation adapt and mould its present plans to meet the changing times by carefully judging these elements. Political, Economical, Social, Technological, Environmental, and Legal Aspects of the PESTEL analysis methodology are included. After examining these factors, the tools analyse the company's present plans and highlight its strengths and flaws.

 

 

 

 

 

 

 

 

 

About Under Armour: Under Armour, founded in 1996 by former University of Maryland football player Kevin Plank, is the pioneer of performance wear, which is designed to keep players cool, dry, and light during a game, practise, or workout.

 

Political Factors

Political issues impose external restraints on a company and its operations that are normally beyond the company's control. Legislation and rules that either force or restrict a corporation from taking particular actions are examples of typical political factors. It assesses how local and national governments affect the economics of various businesses. As a result, it has an impact on corporate growth and expansion.

 

-Flexible government regulations appear to be an advantage for industrial enterprises like this. However, in nations like India and Bangladesh, where labour rules are severe, the political component could be an issue.

 

-Currency fluctuations, currency rates, taxes, customs fees, and other factors obstruct the company's global expansion. For example, About 60 per cent of Under Armour's output is produced in 15 countries, the majority of which are China and Vietnam. Federal subsidies, inexpensive labour, and a designated special economic zone in China assisted the company in dramatically lowering its expenses and exporting its goods to the rest of the world.

 

 

 

 

 

 

 

 

 

 

Economical Factors

Economic factors are underlying economic or market statistics that influence business performance. Economic growth, exchange rates, inflation, unemployment, consumer purchasing power, and other factors all have a direct impact on profits. All of these elements are classified as economic.

 

-During the projection period, the global apparel industry is expected to grow at a rate of 5.5% (2020-2025). It gives up a multitude of opportunities for Under Armour to expand its operations into rapidly growing Asian and Middle Eastern countries But due to the labour cost increases in China It becomes more difficult for the corporation to supply low-cost products to its clients.

 

-The brand has gone through a hard time due to the pandemic restrictions because sporting activities were cancelled and gyms were closed leading to consumers not buying their products, therefore, leading to a decrease Year over year, revenue dropped by 23%, from $1.2 billion to $930.2 million.

 

Social Factors

It refers to the social/cultural elements that shape and mould the preferences and wants of customers. In any sector, demographics, population growth, career attitudes, and social conventions all have a part in determining need and distribution channels.

 

-Due to the company being widely favoured by its consumers it shows us how the company has established itself as being a unique brand that offers high-quality goods at reasonable prices. Which works in the company's favour.

 

 

 

 

 

-Due to technology improving people want to have clothing fabric that absorbs sweat and moisture Under Armour must continually adapt to changing consumer tastes by removing sweat from the body and using antimicrobial textiles. At the same time, the apparel must be appealing and fashionable not only for sports but also for everyday use.

 

-When it comes to attracting new customers Under Armour decided to partner up with Dwayne Johnson and due to this partnership, it has brought in new customers which is appealing to the mass.

 

Technological Factors

Production techniques, information and communication resources, production, logistics, marketing, and e-commerce technology are all technological elements. These have an impact on how businesses operate, sells their products, communicates with customers, suppliers, and competitors, and gathers intelligence on them.

 

-Since the Covid pandemic hit a lot of businesses have gone online and one of them is Under Armour bringing their services online reaching a wider audience because there are people who prefer to shop physically and there people who prefer to shop online so they would need a balance.

 

-Nowadays everyone has got themselves a mobile phone that has access to the internet leading to them being active on social media and Under Armour has seen this, therefore, leading them to be more active on their social media platforms such as Facebook, Instagram and Tik Tok.

- The firm has used technology to create unique items that have met the changing preferences and want of customers.

 

 

 

 

 

Legal Factors

 

Legal factors are external elements that describe how the law influences how firms run and how customers act. Legal factors, like political factors, are made up of laws and regulations. Consumer rights, health and safety, equal opportunity, and other issues are among them. Legal considerations are critical, particularly in global trade.

 

-In 2018 one of Under Armours' customers had posted on Facebook stating that their clothes are flammable resulting in children getting burns and injuries. Once this post was seen people started to doubt the quality of the products.

 

-Another scandal that Under Armour was involved with was suing a company due to trademark infringement but were later criticised due to the word Armour being a common name.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Environmental Factors

Environmental factors are significant because they can have direct and indirect influences on business operations, people, and income. The external environment of a business changes on a regular basis in ways that are beyond the company's control, but executives and managers can keep track of these changes and mitigate their effects.

 

-Under Armour promises to be investing in environmentally friendly and long-lasting techniques. It will assist them in reducing their environmental impact. Under Armour has also teamed up with a number of non-profit organisations to promote environmental awareness.

 

-Under Armour Stretch needs to know how concerned consumers are about environmental issues. It will aid Armour Extend in designing environmentally friendly products as well as avoiding public relations setbacks.

 

-Under Armour's social responsibility strategy focuses on long-term sustainability. Their goal is to stretch a dollar as far as possible by being more resource-efficient, reducing waste and lowering their carbon footprint.

References

Momin, A., 2021. 'Under Armour PESTLE Analysis 2021: Succumbing to the Competition', PESTLE Analysis, [online]. Available at: https://pestleanalysis.com/under-armour-pestle-analysis/ (Accessed 19 June 2021).

 

Team, M., 2021. 'PESTLE Analysis | PESTEL Analysis of Under Armour | MBA Skool-Study. Learn—share', MBA Skool-Study.Learn.Share, [online]. Available at: https://www.mbaskool.com/pestle-analysis/companies/18060-under-armour.html (Accessed 19 June 2021).

 

Baines, P., Fill, C. and Page, K. (2012) Essentials of Marketing OUP

 

Dibb, S., Simkin, L., Pride, W.M. and Ferrel, O.C. (2012) Marketing Concepts and Strategies, Cengage Learning EMEA, 6th Edition

 

Fahy, J. and Jobber, D. (2012) Foundations of Marketing,  McGraw-Hill Higher Education, 4th Edition

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Under Armour SWOT/TOWS

 Under Armour SWOT/TOWS  

 

 

SWOT:  

  

“The intention of SWOT, or strength, weaknesses, opportunity, and threat, analysis, is to identify those internal strengths and external opportunities that an organization can leverage to accomplish its objectives, while also seeking to mitigate internal weaknesses and external threats (Lewis and Littler, 1997).”  

  

Strengths and weaknesses are internal factors. So, they are within the company’s control. Whereas opportunities and threats are external factors, meaning the company has no control but must react to them in order to get the best outcome.  

  

  

                                      

Strengths      1.     Big brand recognition  2.     Multiple distribution networks  3.     Athlete relationships   4.     Use of digital apps	Weaknesses      1.     Dependent on US Market   2.     High investment costs   3.     Limited geographic presence   4.     High Price
Opportunities      1.     Growing markers in Africa and Asia  2.     Collaborative efforts   3.     Increase inactive people  4.     Influencer market trend	Threats      1.     Competitors   2.     Controversy and Political   3.     Fake UA clothing & footwear   4.     Rise of wages in Asia

  

 

 

Strengths  

-       Big brand recognition – UA is a well-known fitness brand that closely competes with other big brands like Nike and Adidas.  

-       Multiple distribution networks – In 2020, UA’s distribution of net sales was as follows, 53% wholesale, 41% direct to customer, 3% connected fitness, 2% Licensing and other.  

-       Athlete relationships – With the current influencer market trend, UA has been smart in sponsoring some of the world’s best athletes and movie stars in hopes of increasing sales due to an increased demand when the normal person tries to dress the same way as their role models. Some athletes and movie stars that have been sponsored by UA are Steph Curry, Tom Brady, Michael Phelps and Dwayne Johnson.  

-       Brand portfolio – The company strives on broadening its type of products. This wide selection has boosted the company’s growth.  

-       Use of digital apps - “The Under Armour app store includes MapMyFitness, MyFitnessPal (for tracking calories and nutrition), and Endomondo (a health and fitness tracking app).”  

 

 

 

 

Weaknesses  

-       Dependent on US Market – North American countries are responsible for 83% of UA’s revenue. So it is clear how dependent they are on the American Market.  

-       High Investment costs – UA’s management decided to take a big risk and increase its investment spending significantly. “The investment is beneficial if it returns in increased revenue. It does, however, limit its ability to make fresh purchases, and its ability to generate further revenue remains in doubt. “ 

-       Limited geographic presence – UA is clearly outnumbered in the number of stores in many continents compared to Nike. They are lacking presence in Africa, South America and Asia compared to Nike and Adidas.  

-       Pricing makes it unaffordable for some – The technological advancements in UA clothing makes their prices rise and makes it less accessible to low-income households.  

  

 
 

Opportunities 

-       Growing markets in Africa and Asia – With Asia having such a high population, it would be a no brainer to target large sales here and invest more money. Africa as a whole is developing a lot and more people are escaping poverty. This means that more and more people have more disposable income and can afford UA.  

-       Collaborative efforts – Several well-known department stores sell UA clothing and footwear so this is increasing exposure and marketing and more of this could only do good for UA.  

-       Increase active people – With the growing variety of sports in this world, more and more people are finding new hobbies and interests and many of these sports are targeted at people who wouldn’t normally participate in sports. This means that the demand for sports and fitness shoes and apparel will increase somewhat consistently for many years to come.  

-       Influencer market trend – UA must keep on track when it comes to endorsement deals with celebrities and sports stars. Currently, whatever these people wear will be what everyone else sees as “cool” and in fashion.   

-       Product Diversification – UA could grow into new production lines and sell new products like specific sports gear.  

 

 

 

 

Threats  

-       Competitors – Nike and Adidas are known as the 2 leaders in this industry and the likes of Gymshark has come up very well in the past few years.  

-       Controversy and political – With the new outbreak of body positivity, UA must be careful on how it markets itself without stepping on the toes of some people. Many people nowadays believe that it is toxic to have a societal view of “good bodies = healthy bodies” and they believe that the perfect body views are making people very insecure.  

-       Fake UA clothing and footwear – It is not a surprise that some people make their own homemade UA apparel and footwear and sell it to make an income. These products are normally of very low quality so people may be led to believe that UA sells bad quality clothing and footwear.  

-       Rise of wages in Asia – UA and many other big companies tend to open their main factories in Asia as it is cheaper and there is a higher demand for employability so getting many workers is easy and cheap. So, if there happens to be a significant increase in minimum wages, UA may be affected a lot.  

 

 

TOWS:  

“ A distillation of the findings of the internal and external audits which draws attention to the critical organisational strengths and weaknesses and the opportunities and threats facing the company” (Kotler et al 2005) 

  

TOWS Matrix is more useful than a standalone SWOT analysis because it shows the relationship between internal and external factors. Its main purpose is to:  

-       Take advantage of opportunities  

-       Reduce threats  

-       Exploit strengths  

-       Remove weaknesses 

 

	Factors creating threats     Rise of minimum wage in Asia because of labour exploitation  &  Sales of Fake UA Clothing & footwear	Factors creating Opportunities    The power of the influencer market   &  Increasing number of new sports and hobbies
Weaknesses       Dependent on US market  &  High Investment Costs	Critical Success Factor 1     UA should look into decreasing investment costs so that they are able to keep employees if minimum wages rise in Asia.	Critical Success Factor 2    UA should increase the number of influencers on endorsements deals in other countries and decrease the number of them in the US .
Strengths           Athlete Relationships   &  Multiple distribution networks	Critical Success Factor 3      UA should find smarter ways of marketing their many distribution networks and emphasize the fact that any other way may be fake,	Critical Success Factor 4    UA should identify the most influential and best players in these new sports and look into using them as marketing bait. The more people can relate to the brand within new sports, the more customers you will have.

 

 

References  

 

Pershing, J. and Leigh, D., 2006. [online] p.1089. Available at: <https://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.457.6925&rep=rep1&type=pdf#page=1135> [Accessed 18 March 2022]. 

Parker, B., 2019. Under Armour SWOT Analysis 2022 | SWOT Analysis of Under Armour. [online] Business Strategy Hub. Available at: <https://bstrategyhub.com/swot-analysis-of-under-armour-2019-under-armour-swot-analysis/> [Accessed 18 March 2022]. 

SEOAves. 2022. Under Armour SWOT Analysis 2022 | SEOAves. [online] Available at: <https://seoaves.com/under-armour-swot-analysis/> [Accessed 22 March 2022]. 

IDS Media. 2021. The Changing Demographics of Gym Members | IDS Media. [online] Available at: <https://www.idsmedia.co.uk/news/demographics-of-gym-members> [Accessed 18 March 2022]. 

BStrategy Insights. 2022. Under Armour SWOT Analysis - BStrategy Insights. [online] Available at: <https://www.bstrategyinsights.com/under-armour-swot-analysis/> [Accessed 18 March 2022]. 

Tighe,D., 2021. Under Armour: sales share by distribution channel worldwide 2020 | Statista. [online] Statista. Available at: <https://www.statista.com/statistics/259180/net-sales-share-of-under-armour-worldwide-by-channel/> [Accessed 18 March 2022]. 

Getlucidity.com. n.d. [online] Available at: <https://getlucidity.com/strategy-resources/an-introduction-to-tows-analysis/> [Accessed 18 March 2022].