Analysis on Strategies and Competitive Environment
Under Armour is one of the leading organizations in the United States of America carrying expertise in the manufacturing of sports items, casual apparel, and footwear. The company is currently distributing its products all over the world, including the United Kingdom, India, South Africa, China, Germany, etc. The evaluation of the company as per the annual report shared by the company in 2018 is about $5.2 billion. Currently, there are more than 15,800 employees that are serving the company for supporting it in achieving the business goals and objectives (‘UnderArmour’ 2019). In the previous studies, the author carried out an analysis of globalization and technological changes about the company, along with their influences on the mission, vision, and stakeholders of the company. The author also carried out a SWOT analysis of the company to provide reliable recommendations that can help the company to gain success in the future. This study will be focusing on the business and corporate-level strategies of the Under Armour to evaluate and select the most effective strategy that can contribute positively to long-term success. The study will also be comparing Under Armour with one of its competitors in terms of business strategy for identifying the chances of success of Under Armour or its competitor.Business-Level Strategies
The main focus of any organization operating in the market is to provide quality products or services to its customers for making sure that they are capable enough to meet the needs and preferences of its customers positively. It is the only opportunity available to the company for achieving success and maintaining a solid branding in the market (Moretz & Giapponi, 2019). The business-level strategies are an effective solution available to the company for supporting it in the achievement of its mission. The business-level strategies not only support the company in offering value to the customer but also benefit them positively enabling to gain competitive advantage (Weiss, 2019). With the same reason, there are three types of business strategies available for Under Armour Company, including cost leadership, differentiation strategy, and focus strategy. There are certain drawbacks and benefits of each of the business-level strategy; the company needs to select the most optimum one as per the nature and requirements of the business (Hayduk & Walker, 2017).
Customers are an essential asset of an organization which ensures the whole revenue and profit of the company. The nature of the customers varies from company to company, and as far as the customers of the Under Armour Company are concerned, they are most interested in different products (Jae-Won & Park, 2008). The products being offered by the company are mostly related to casual and sportswear; the customers are always looking for the products that can provide the differences as compared to the other brands. The Under Armour Company is also competing with various renowned companies operating worldwide such as Adidas, Nike, etc. The competitors of Under Armour are quite advanced in terms of technology and offering differentiated products (Hayduk & Walker, 2017). The Under Armour Company has captured a considerable amount of market shares with the renowned brand name; therefore, in the light of all this statistics, it is much clear that the most suitable business-level strategy available for the Under Armour Company currently is differentiation strategy (Jae-Won & Park, 2008).
The main aim of the company as per this strategy would be the addition of value benefits in their products and services for attracting the customers as compared to their competitors. When the company attracts the customers effectively, the customers will be certainly willing to pay premium pricing for purchasing its products and services (Weiss, 2019). The Under Armour Company can implement differentiation strategy in their business by adding more functionality, durability, features, value-added services, and services to its products. The company also needs to ensure the provision of effective after-sales services in addition to suitable sales and marketing strategy. This will not only attract the customer for the first time but also help in retaining them as a loyal customer of the organization (Moretz & Giapponi, 2019). The customers will sooner start to realize the differentiation availed by them through the products of Under Armour Company as compared to the products of other brands. This differentiation will help the Under Armour Company in improving its sales for the long-term.Corporate Level Strategies
The corporate-level strategies are beneficial for the companies in positioning them suitably in the market for achieving targeted success. They add value to the plan of the company for achieving its strategic objectives. The corporate-level strategy is long-term in nature; it can be implemented for short-term; however, its benefits will be realized in the long-term only (Braun, 2015). There are various elements of uncertainty involved in this strategy due to its dynamic and complex nature; the strategy also influences the overall organization (Galpin, 2019). There are several options available for Under Armour Company under this strategy, including business growth strategy, business diversification strategy, and business stability strategy. The company has to select the most appropriate option as per the nature of business and expectation of their customers (Spiegel, Linke, Stauder & Buchholz, 2015).
The Under Armour Company has reached to reasonable success in the business. As far as the business success of competitors (Nike and Adidas) is concerned, the Under Armour Company is not able to increase its profits further, even in a marginal manner. Therefore, the most suitable strategy available for the company at the current time is the concentration strategy (Galpin, 2019). This strategy will certainly benefit the company in improving the growth of its products and services positively. The reason behind the selection of this strategy is that there is solid growth potential in the current product line of the company (Braun, 2015). This strategy will support the company in gaining maximum control over its products and services for achieving its strategic fit and synergy.
The vertical integration as a part concentration strategy must be adopted by the Under Armour Company. The company can select either of the forward or backward integration as per their relation with the suppliers to enhance its control over the current product line; however, the company must attempt for carrying out a balanced integration for making sure that there is no adverse influence on any particular area of their business (Spiegel, Linke, Stauder & Buchholz, 2015). The company will be able to develop a direct relationship with the customers and provide them with better services for winning their loyalty. The Under Armour Company will be able to offer the products in better pricing to the customers for positively improving its sales and revenue (Galpin, 2019). The company will gain more experience in the new sector that will be highly beneficial for them in the further extension of their business. The supply chain process of the company will get smooth to comply with the legislative and customer requirements. The strategy will enable the company to fulfill its corporate strategic responsibilities for attracting the customers positively; this will enhance the barriers to the new entrants (Braun, 2015). The company will be able to absorb both upstream and downstream profits to improve its overall profits. The distribution and after-sales service of the company will become more efficient in improving their relationship with the customers to grasp more market shares.Analysis of Competitive Environment
The biggest rival of the Under Armour Company in the current market is Adidas. Both the Adidas and the Under Armour Company are focusing on sports and casual footwear. However, currently, the domination of Adidas as compared to the Under Armour Company is comparatively higher. There was an upsurge of about 217% in the stock shares of Adidas while the stock shares of Under Armour Company went down by 59% in the annual year of 2018 (Weiss, 2019). The main reason behind the lagging of the Under Armour Company from Adidas is the branding, which is certainly higher for the latter. Currently, the sporting shoes being offered by Under Armour Company are only comfortable as there is no effective technological innovation involved for improving the services and quality of the product (McDonald, Christensen, West & Palmer, 2018). On the contrary, Adidas is offering all of its new products by carrying out detailed engineering to ensure that the sportswear will be the best at the comfort level and satisfy customer’s needs.
The Under Armour Company is lagging in positively promoting its brand as compared to its rivals as the amount of profit being generated by the company is quite low that is restraining the company for investing further money in the sales and marketing (Galpin, 2019). Adidas not only focuses on the sales of its products, but it is equally concerned regarding the after-sales experience of the customers as compared to the Under Armour. Under Armour does not provide competitive services to the customers after selling its products (Weiss, 2019). Due to the same reason, Adidas has been able to improve the loyalty of its customers leading towards customer retention while Under Armour has to establish new customers that help in increasing its marketing cost as compared to the Adidas. Adidas is positively promoting its brand by associating with successful sports athletes while the Under Armour is struggling in gaining support from any renowned athlete due to the factor of less innovation in their products (McDonald, Christensen, West & Palmer, 2018). If the situation proceeds in the same direction, then it is obvious that the Adidas will leave the Under Armour Footwear Company much behind in the race of becoming the sole leader of the footwear market.
The business level and corporate level strategies are the best possible solution available for the Under Armour that will change their fortune. The business-level strategy will support the company in involving high-technology engineering to improve innovation in its products for attracting the customers. The corporate-level strategies will certainly benefit the company in improving its relationship with the customers (Jae-Won & Park, 2008). If the Under Armour succeeds to implement both business and corporate-level strategies in its business, they will be certainly in a stronger position to gain top position in the market as compared to Adidas. Conclusion
Overall, the performance of the Under Armour Footwear Company in the market is satisfactory; however, there is still a long way to go for maintaining a strong market position. It is the high time for the company to adapt diversification as its business-level strategy along with the concentration as its corporate-level strategies. The business-level strategy will benefit the company in offering innovative products to the customers while the corporate level strategy will benefit the company in improving its relationship with the customers. The current performance of Under Armour is certainly lagging from Adidas; however, if the Under Armour succeeds in implementing both business and corporate-level strategies in its business operations, then they will be able to stand ahead of Adidas.References
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