Nike and Under Armour (Accounting Paper)

a. Under Armour’s approach towards innovation is very unique, they think and plan out their projects thoroughly in order to create a one of a kind product that could be appealing to their consumers. The company has been extremely progressive throughout the years in order to stay ahead of the other competitive companies in their targeted industry. By constantly updating and coming up with different product lines, such as compression shirts and cleats, Under Armour is able to compete with other top athletic wear company’s in their market. If

Kevin Plank, the founder of Under Armour sports apparel line is a brilliant businessman. This former college football player started making work-out T-shirts from his grandmother’s basement; seventeen years later, the company is generating billions of dollars in revenue. Kevin Plank has created a brand that is more than just a fancy success story. The Under Armour’s mission in the sporting goods industry is to “make all athletes better through passion, design, and the relentless pursuit of innovation (Thompson, 2014, C-53).” This company is more than just a fancy success story. VIRO Analysis reported, Under Armour has been growing its revenue at a rate of +20% for 5 consecutive years, which is extremely impressive. The company’s financial

The also place a big emphasizes on the Under Armour logo and pushed for brand recognition. Under Armour became the official uniform sponsor for many colleges and sport teams. Under Armour’s strategy was to design and make varies styles of sports apparel with their moisture-wicking fabrics to satisfy the needs of athletes of all levels and all sports. Their growth strategy was to continue to expand on the products they offered their consumers. They wanted to create more products that encompassed several sports and activities. By doing this they would be targeting additional consumers with their new performance products. Part of the growth strategy was to expand sales in foreign countries, become a global competitor in sports apparel and strengthening the appeal of their products and brand

Under Armour is in the Textile- Apparel Clothing industry, in the consumer goods sector. The market has been driven by economic recovery, new product offerings and a

Under Armour has a 4.71% market share in the global sportswear segment , and it is facing great pressure from big players such as Nike and Adidas, as well as fast growing companies like Lululemon and Fila. The intense environment makes it difficult for incumbents to offer very distinct products and thus often results in price

Even though footwear sales have improved for Under Armour, when looking at the Composition of Revenues for Under Armour in 2012-2015 (Exhibit 3, C-79) and comparing their composition to that of Nike and the Adidas Group, it’s evident that footwear sales are

Consistency tends to be the best assets that Under Armour has to their advantage. According to Plank, he states that the success of a business, "starts with a good product," and he continued to say that after you have a good product, "use front-end hustle with back-end muscle." Due to this consistent product that Under Armour produces, it has obtained a heavy customer loyalty. Sales and revenue speak for themselves. In 1996, Under Armour had revenues of fifty thousand dollars compared to 200 million in 2004.

1. We chose to study Under Armour because of their explosive growth over the last five years in a very competitive industry. From a marketing standpoint, it is quite apparent that the company is doing well and one could assume that because the firm appears to have had great success in aggressively expanding their market share, they are by extension creating value for investors. By studying the financial information, we aimed to confirm or deny whether Under Armour is indeed creating value.

I believe that bargaining power of customers and threat of new entrants are the three main key forces that have the potential to impact negatively Under Armour’s growth stability. Under Armour relies mainly on Dick’s Sporting Goods and The Sports Authority for more than 20% of its revenues and problems at these retailers could affect its growth pace. While Under Armour faces rigid competition from Adidas and Nike, they could also see the competition go up from other companies as it does not hold process or fabric patents. Furthermore, Under Armour’s hard core competitors, Nike and Adidas Group, are continuously coming up with new ideas in order to fight for that number one spot and to earn the customers’ loyalty to their brand.

What is Under Armour’s business-level strategy? Is the strategy appropriate to offset the forces in the industry? Do you recommend any changes and/or foresee any challenges?

The strength of the competitive forces vary among the Under Armour, Nike, and The Adidas Group. The buyer bargaining power of Under Armour, is somewhat weak. Under Armour’s growth strategy entails, “Securing

Under Armour, Inc. is an American sports clothing and Accessories Company. The company is a supplier of sportswear and casual apparel. Under Armour began offering footwear in 2006.

The sports apparel and accessories industry has a highly competitive market. Businesses are constantly competing for elite athletes to sponsor, raw materials, and every opportunity to expand. Under Armour is able to not only survive but thrive in this market because of their ability to think outside of the box. They are constantly creating new and exciting products that help athletes everywhere. Under Armour’s overall mission is “to make all athletes better through passion, design and the relentless pursuit of innovation” (Under Armour Mission, Vision & Values, 2013). Under Armour also has many other goals, both short term and long term. One such goal is to have total revenues reach $4 billion

Under Armour, Inc. operates in the the industry of textile-apparel clothing. According to ValueLine.com, “The apparel industry is mostly for companies that design and sell clothing, footwear and accessories.”  Under Armour works primarily with production of sportswear apparel, so their main focus in the industry is to create products that provide outmost comfort and improve overall performance of their athletic consumers. According to the 10-K, the industry is under a lot of pressure from competition and retailers to reduce the costs. As the report quotes, “These factors may cause them to reduce their prices to retailers and consumers, which could cause their profitability to decline if they are unable to offset price reductions with comparable reductions in their operating costs.” The overall economic outlook of the US Apparel industry, seems to be looking up. Due to the lower prices of cotton, the input costs have decreased, leaving more profit. However, the value of the dollar is growing stronger, as according to the 10-Q released on September, 2015, causing a negative impact on “gross margins within our international businesses.” Since operating in the industry of textile-apparel clothing Under Armour has a number of major competitors. This includes Nike Inc., Columbia Sportswear Company and Adidas just to list a few.  Under Armour has shown itself to be a tough competitor.  Its growth has been strong so far and has made significant

Nike’s management understands how important a relevant strategy is in the global environment, as Don Blair, Nike’s CFO, stated “...we are refocusing our efforts, increasing our investments in innovation, using our voice for stronger advocacy and looking at how we incubate new, scalable business models that enable us to thrive in a sustainable economy.”