MGTOP 491 Professor: Dr, Arthurs Date: Individual Case analysis: Under Armour: working to stay on top of its game Overview Under Armour, was founded by Kevin Plank, in 1996, one of the major sports clothing and accessories companies in all over the world.

They are a supplier of a wide range of sportswear and casual apparel mainly focusing on high technology sportswear for professional athletes. Depending on the high technological and differentiated product lines, Under Armour has dramatic growth rate from 2000 to 2007.In addition, it is supplying over 100 NCAA division 1A football program and 30 NFL team, and opened self-owned retail and outlet stores in 2007. As the result, they had 43 present of the total U. S. performance apparel business sold sporting goods stores, even higher than other two main competitors which Nike and Adidas.

Under Armour has 93 percent of sale in U. S. market and 84 percent of sale on apparel; plus international markets and other product lines, it totally profit 0. 61 billion in 2007. By comparing with Nike and Adidas in the same year, Nike grossed 18.

billion and Adidas 15. 6 billion. The consequence, Under Armour mostly focuses on the domestic market and apparel but neglects the international market and lack diversification on their product. Although they won the sale in domestic market and apparel in this battle, their revenue was much less than Nike’s and Adidas’s which they lose in the entire market and products in sports clothing and accessories domain.

Moreover, Under Armour does not have a patent on any of the materials used in its products; it creates the most critical issues, which lack of proprietary product rights.As the result, Under Armour is facing the problem on losing the international market, diversifying product lines and protection on their technology. If Under Armour still wants to stay on top of its game, they have better to overcome those problem. Recommendation #1: Under Armour should primarily patents their technology, fabrics, and process, which set up the proprietary product rights when they contract with supplier and oversea manufacturers. Justification:Base on the Under Armour's business strategies, they attain physical differentiation through the value chain activities of technological development and procurement.

As their faith that "key driver is to offer products that are better that what is currently in the market, best in class". They completely differentiate products apart from other. However, currently, they lack of proprietary product rights, intellectual property rights in foreign countries and their supplier. If their supplier and manufacturers steal knows- how and introduce their own versions.Under Armour will completely lose their competitive advantage because they are not unique products in this industry. Buyers are gaining bargaining power, appearing the product substitutes; their differentiation business strategy will be defeated.

The outcome can be predicted which they will out of the market. As the result, their unique technology, fabrics and production process are extreme confidential internal resources and capability, those consist in their competitive advantage.They have to protect it. Implementation: They should apply patent on their unique technology, fabrics, and all the production process to the relevant organization, negotiate with current supplier and manufactories to modify their existed contract. In addition, they need to care the foreign regulation in their international market, which make the deal with the foreign government and organization to make the protection on their patent, such as the copyright, trademark.Recommendation #2: Under Armour should develop wider product lines that diversify product categories to match more market segmentation and educate their customers on the product.

In addition, they should better to cooperate with more suppliers and manufacturers. Justification: According to the case, in 2007, Under Armour had approximately 84% of sales from apparel; other product only generated 16% of sales. They identify itself with team sports, rather than individual sports and fashion, which they are more focusing on the professional sports player; it might narrow their target market segmentation.In other word, their business strategy tends to be focused differentiation, which high differentiation on the narrow target market. They might neglect other target market segmentation.

If other competitors can produce closer products as Under Armour dose, they might face a big challenge, which competitors step into their original narrow market and create intense battle, Under Armour's market will shrinking in the future, all the eggs on one basket is not a good idea.Moreover, currently, 75% of their fabrics used in its products are from only six suppliers, which they heavily rely on the fewer suppliers. As the result, they lose the bargaining power of suppliers, and suppliers can easily drive up, or even control their cost. Implementation: As Under Armour is one of the major sports clothing and accessories companies in U.

S, they should develop wider product categories better to against other competitors, not just focus on the apparel, for example, more different jackets, and outwears.Moreover, on the promotion strategy, they should educate their customers on the product differentiation by comparing with other brand because the non-professional athletic users might not have enough knowledge to distinguish their differences among other brands. They should not just sponsor on the sport teams to increase their brand awareness For instance, they can use their athletic celebrities on the promotional event to educate customers. Finally, discover and cooperate more suppliers, even use the foreign suppliers to reduce power of existed suppliers.