Business Environment Analysis - Under Armour

Assignment front sheet
Learner name Learner Student I.D. Assessor Name
Navroop Sandhu 1017470 Ms. Sabrina Tsang
Date issued Submission Deadline Submission Date
18thOctober 2021
13thDecember 2021 12th December 2021
Resubmission Deadline (If appropriate) Resubmission Date (If appropriate)
Internal Verifier Name Internal Verification Deadline
Qualification Unit number and title
Level 5 Higher National Diploma in Business Unit 1:Business and the Business Environment
Assignment
title
Assignment 2: Business Environment Analysis
Criteria
reference
To achieve the criteria the evidence must show that the student is able to: Evidence
LO3 Use contemporary examples to demonstrate both the positive and negative influence/impact the macro
environment has on business operations
P4 Identify the positive and negative impacts the macro environment has upon business
operations, supported by specific examples. 13-21
M3 Apply appropriately the PESTLE model to support a detailed analysis of the macro
environment within an organisation. 13-21
LO4 Determine the internal strengths and weaknesses of specific businesses and explaintheir
interrelationship with external macro factors
P5 Conduct internal and external analysis of specific organisations in order to identify
strengths and weaknesses. 81-89
P6 Explain how strengths and weaknesses interrelate with external macro factors. 90-94
M4 Apply appropriately SWOT/TOWS analysis and justify how they influence decision-
making. 89-90
D2 Critically evaluate the impacts that both macro and micro factors have upon business
objectives and decision-making.
22-24 and 95-
97
**Any resubmission evidence must be submitted within 15 working days of learners receiving
assessment feedback

Contents Tabl
e
Exclusive summary.........................................................................................................................12
1) The positive and negative impact the macro environment has upon business operations.........13
2) The impact that macro factors (PESTEL) have upon business objective......................................22
3) The impact that macro factors (PESTEL) have upon Decision-making.........................................23
4) How Under Armour need to monitor external influences...........................................................24
5) how Under Armour need to forecast external influence.............................................................27
6) How the macro environment influences/impacts upon business activities.................................30
7) How organizations go through the transformation process and overcome resistance to change in
response to the changing market environment..............................................................................70
8) VIRO analysis..............................................................................................................................81
9) PESTEL ANALYSIS........................................................................................................................87
10) SWOT analysis..........................................................................................................................89
11) how strength and weakness interrelate with external macro factors (the competitive
environment).................................................................................................................................90
12) how strength and weakness interrelate with external macro factors (government intervention)
.......................................................................................................................................................92
13) Evaluate the impacts that VRIO analysis have upon decision-making.......................................94
14) evaluate the impact that VRIO analysis have upon business objective.....................................95
Conclusion......................................................................................................................................97
References page.............................................................................................................................98
Exclusive summary
In this task, perception of Under Armor organization will be made. PESTLE, SWOT and
VRIO examination will be utilized to notice it full scale climate, the strength and
shortcoming of the organization. these data assist with advancing specialist on how Under
Armor organization respond to adjust with the quick evolving climate. Moreover, various
variables that effect Under Armor business movement will likewise be incorporated,

additionally, how the full-scale climate will influence Under Armor organization's
independent direction and business objective will be talked about.
1) The positive and negative impact the macro environment has upon
business operations
Political factor of Under Armour
Under Armour one of the roles is to analyse the macro environment, PESTEL can affect their
macro environment and not only that it can have impact on textile-apparel clothing.
● Political strength plays a big role in business which has a growth in it. Under Armour
political factor helps them to track the potential market.
● For manufacturing companies like Under Armour. For some countries the labour law
is highly authoritarian which can affect their business and pose a problem of political
factor
The political Factor positive and negative impact on Under Armour
Political variables remember change for the public authority exercises and changes in the
lawful arrangements and guidelines. Political elements influence promoting choices of the
organization. For instance, government give appropriation or low pace of tax assessment
from retailer business then it sways emphatically on the advertising choices of the
association. Political powers incorporate chance of political race and the potential results
whether climate will serene or there will be chances of political change.
The major political variable that is influencing the development of the games great
organizations is changing exchange approaches and political turmoil. The heightening
exchange battle among China and the United State additionally have contrarily affected the
development of the Sporting merchandise industry as increasing in the levy rates for
example 15% obligation on the billions of dollars of Sports Equipment like baseballs,
football, lacrosse sticks, and so on have contrarily affected the exchange of different
sporting gear and clothing from US(Bray, 2019). Alongside this, prohibitive exchange
strategies during the COVID-19 likewise adversely affected the general exchange of different

labour and products. Notwithstanding, because of the adverse consequences of COVID-19,
the US government rejected different Chinese items, for example, material and clothing from
higher levy rates to work with the exchange of products. Additionally, the Chinese
government has declined levy rates on the import of some material products and cotton fiber
to guarantee decreased import cost of the merchandise(shutterstock, 2021)
There are numerous outer ecological variables that can influence Under Armor business. It is
normal for supervisors to evaluate every one of these elements intently. The point is
consistently to take better choices for the association's advancement. Some normal variables
are political, monetary, social and innovative (known as PEST investigation). Organizations
likewise study natural, legitimate, moral and demographical factors.
The political variables influencing business are regularly given a great deal of significance. A
few parts of government strategy can influence business. All organizations should keep the
law. Supervisors should observe what impending enactments can mean for their exercises.
The world of politics can affect business associations in numerous ways. It could add a
danger variable and lead to a significant misfortune. they ought to comprehend that the
political variables have the ability to change results. It can likewise influence government
approaches at nearby to administrative level. Organizations ought to be prepared to manage
the neighbourhood and worldwide results of governmental issues.
There are 3 fundamental impacts of these political elements on business associations. They
are:
Effect on economy
Changes in guideline
Political soundness
the first is sway on economy, The political circumstance of a nation influences its financial
setting. The monetary climate influences the business execution.
For instance, there are significant contrasts in Democratic and Republican arrangements in
the US. This impacts factors like duties and government spending, which at last influence the
economy. A more prominent degree of government burning through regularly animates the
economy.

the second is change in guideline, Governments could adjust their principles and guidelines.
This could thusly affect a business.
After the bookkeeping embarrassments of the mid-21st century, the US SEC turned out to be
more mindful on corporate consistence. The public authority presented the Sarbanes Oxley
consistence guidelines of 2002. This was a response to the social climate. The social climate
encouraged a change to unveil organizations more at risk. (PESTLEANALYSIS
CONTRIBUTOR, 2018)
Political analysis helps to identify the political interference in the business industry. This may
include government policy, political stability in the national and overseas market, foreign
trade policy etc.
Economic factor of Under Armour
The Macro environment factors such as inflation rate, savings rate, interest rate, foreign
exchange rate and economic cycle determine the aggregate demand and aggregate investment
in an economy. While micro environment factors such as competition norms impact the
competitive advantage of the firm. Under Armour, Inc. can use country’s economic factor
such as growth rate, inflation & industry’s economic indicators such as Textile Apparel
Clothing industry growth rate, consumer spending etc to forecast the growth trajectory of not
only sector name sector but also that of the organization
● Under Armour is motivated by strong economic policies as the better apparel industry
have hold of growth chance.
● However, the purchasing power of consumers and high labour cost in some countries may
cause a price increase in product.
The economic factor positive and negative impacts on Under Armour
As we realize that the development of the games merchandise market relies upon the
monetary conditions, GDP, work economic situations, and so forth The GDP pace of the US
is 6.6 % in the second quarter of 2021, somewhat higher than 6.5 % in the main quarter of
2021. The ascent in the GDP rate is the consequence of the recuperation from the effects of
COVID-19 which is additionally expected to impact the development of the games products
market. Further, the income from the Sports Equipment portion in the US added up to the US

$ 14,744 of every 2021. The income of the games merchandise market is most noteworthy
from China which is US$28,890m in 2021.(statista, 2021)The accessibility of modest work is
one of the vital elements for the quicker development of athletic gear on the lookout. Further,
the joblessness rate in China is simply 5 % when contrasted with the joblessness pace of 6.7
% in the US which prompts higher creation of athletic gear and clothing products(statista,
2021)
Alongside this, the flare-up of COVID-19 likewise adversely affected the worth of the dollar
and the worth of the dollar has fallen by 10 to 12% starting around 2018(Roach, 2021)The
fall in the worth of the Dollar is prompting the cost seriousness of the sent-out merchandise
and less expensive products help to work with an increment in the interest for different
Sporting merchandise. Be that as it may, the fall in the worth of the Dollar likewise
diminishes the buying force of different Organizations in the global market as it prompts an
expansion in the cost of the imported merchandise
Economic factors are broad in range it is the mixture of national and international
environment. Business organisations are working under complex economic environment
which affects both the decisions related with organisation’s production and consumer
decision making process.
Financing costs,
Interest rates may show up in a scope of better places, forced by a scope of various
individuals. Clearly the norm for financing costs is of extraordinary premium to banking
establishments, however it may likewise influence organizations whose systems depend on
taking out huge advances.
Trade rates,
Exchange rates are a muddled theme, yet they unmistakably need to apply to the individuals
who manage commodity or import. Changing trade rates may influence how much an
organization needs to pay to its global provider to fulfil them, which can influence net
revenues, just as take a great deal of assets to keep steady over.(bush, 2016)
Economic factors affect the profitability of the company. Economic factor includes economic
growth, interest rates, exchange rates, inflation, and disposal income of consumers and so on.

Social factor of Under Armour
It refers to the socio-cultural factors that shape and mold the customer preference and needs.
Demographics, population growth, career attitude, societal norms play a critical role in
planning the demand and distribution model in any industry.
The social factor positive and negative impacts on Under Armour
Society’s culture and way of doing things impact the culture of an organization in an
environment. Shared beliefs and attitudes of the population play a great role in how marketers
at Under Armour, Inc. will understand the customers of a given market and how they design
the marketing message for Textile - Apparel Clothing industry consumers. Social factors that
leadership of Under Armour, Inc.
We all know that individuals in the current times are becoming more health-conscious and
thus, are participating in various sports and Recreation activities to keep themselves healthy.
It is one of the good opportunities for the Sporting goods companies to expand their market
share by launching various other Sporting goods and equipment. This further opens new
opportunities for the Sporting goods companies to enter the new market by launching various
new products and services such as healthy drinks, sports technology, wearable equipment,
etc. in the market. Not just this, the desire of the customers to buy branded products also open
various opportunities for Global companies such as under Armour to expand their market
share through innovative products and services.
Social elements incorporate target clients of the Under Armor, changing in their taste and
inclinations, clients’ perspectives and qualities and so forth This element change the business
association interest and supply. Assuming that business produces merchandise according to
client taste and inclinations than it influences association decidedly. Under Armor faces these
full-scale ecological elements. Large and significant changes in the full-scale climate factors
are normally outside the control of business so it is fundamental that administration of the
organization ought to have the option to investigate the impact of these elements so they
could use sound judgment.it can impact the sales of products and revenues earned.

The cultural implications, the gender and connected demographics, the social lifestyles, the
domestic structures; all of these are studied by companies to understand the market and the
consumer better.
Several social factors drive business for Under Armour. With the change in the lifestyle of
people, demands for products changes. Now people are more brand conscious. They want
quality products that give them high satisfaction at reasonable prices.
Social and cultural factors include values, beliefs and attitudes of the customers. Thesefactors
affect company directly because changes in customers taste and preferences changes the
production policies and demand supply of the company.
Technological Factor of Under Armour
Technological advancement is the key to success for businesses nowadays. Innovation,
automation, technical awareness is some of the factors that influence the production and
distribution of goods. It also has an impact on customer communication. Technological
advancement empowers the company to improve its business strategies.
The technological factor positive and negative impacts on Under Armour
The new mechanical turns of events and forward leaps made by contenders, as referenced
previously. In the event that experiences another innovation that is acquiring ubiquity in the
business being referred to, it is critical to screen the degree of prevalence and how rapidly it
is developing and upsetting its rivals' incomes. This would mean the degree of desperation
needed to sufficiently react to the advancement, either by matching the innovation or tracking
down an imaginative other option.(Murphy, 2018)
Innovative headway has acquired significance in each circle of life and new advances are
likewise supporting up the development of the athletic gear industry. Sensor innovation is
perhaps the best technology that is utilized in outdoor supplies in the current occasions.
Likewise, wearable gear, tennis sensor devices, and so forth have acquired enormous ubiquity
on the lookout(sports, 2021)
Alongside this, Sporting products organizations are additionally putting resources into 3D
printing innovation to fabricate inventive athletic shoes. Alongside this, Under Armor is
likewise putting resources into different cutting-edge innovations, for example, 3D printing to
additional upgrade execution. Under Armor likewise has as of late concoct the 3D printing