MD4100: Strategy and International Management - Under Armour Report

This report provides a comprehensive strategic analysis of Under Armour, examining its overall strategy, responsiveness to international differences, and market presence. It explores Under Armour's differentiation strategy, its focus on the North American market, and its challenges in expanding globally, particularly in the female market and footwear. The report highlights Under Armour's adoption of market penetration, market development, and product development strategies. It also discusses the company's limited responsiveness to local market preferences, its key challenges, and suggests an alternative strategy using Bowman's strategic clock, specifically advocating for focused differentiation to achieve premium pricing and competitive advantage. The conclusion emphasizes the importance of strategic planning for business success and provides a summary of the key findings and recommendations.

Running Head: MARKETING AND STRATEGY
Marketing and Strategy

MARKETING AND STRATEGY 1
Contents
Introduction......................................................................................................................................2
Overall Strategy of The Company...................................................................................................2
Responsiveness of the Company to Differences among Nations....................................................3
Presence of Company in Specific Markets......................................................................................3
Key Challenges Faced by The Company.........................................................................................4
Suggestions relating to Alternative Strategy...................................................................................4
Conclusion.......................................................................................................................................6
References........................................................................................................................................7

MARKETING AND STRATEGY 2
Introduction
Under Armour Inc. is a company from America which is engaged in the manufacturing of sports
and casual apparel, and footwear. The global headquarters of the company is situated in
Baltimore, Maryland while the other offices are located in New York City, Mexico City, Hong
Kong, Austin, etc. Under Armour was founded in the year 1996 by Kevin Plank. The vision of
Under Armour is to inspire others with their performance solutions. They aim at meeting the
requirements of the customers such that they cannot imagine living without it (Under Armour,
2019).
The focus of this assignment is on analyzing and evaluating the strategic situation of Under
Armour company by considering its overall strategy, responsiveness towards differences among
nations, presence only in specific markets along with the key challenges faced by it.
Overall Strategy of The Company
Under Armour is known for its innovative brand image. This is due to the fact that it keeps on
bringing innovation in its products since its inception. Differentiation is the generic level strategy
which has been adopted by Under Armour. The brand has completely differentiated its products
from the strong competitors like Adidas and Nike. This innovation also makes the products of
this company superior to that of its competitors. The main focus of the company is to produce the
products which can fulfill the needs and requirements of the athletes. One of the most important
requirements of the athletes is to remain season proof. This has been taken into consideration by
Under Armour by producing the heat gear, cold gear and all season gear such that the athletes are
not affected by the effect of season. This type of innovation has assisted in creating a unique
identity of the brand and in acquiring a greater market share (Lasserre, 2017).
Market penetration, market development, and product development have been adopted as the
part of an intensive strategy by Under Armour. As the part of market penetration, the company
added more products to its product line by way of selling more to its existing customers. Market
development has been assured by the company by expanding its market outside US. This
strategy has helped the company in entering new markets and increasing its global revenue and

MARKETING AND STRATEGY 3
sales (Zhao, Park and Zhou, 2014). Under Armour has also used the product development
strategy by continuously offering innovative products to the customers (Doz, 2017).
Responsiveness of the Company to Differences among Nations
When a company expands its business in a number of countries, it has to take into account the
differences among the nations in order to meet the requirements of the customers in the best
possible manner. For this purpose, Under Armour has entered into several strategic partnerships
and alliances with smaller corporations such as JR286 in order to gain competitive advantage in
the accessories department. Lack of differences is noticed in the products offered by Under
Armour in various nations. In other words, Under Armour has adopted a global strategy due to
which it has sacrificed the responsiveness towards the local requirements of different customers
across the globe. In this way, the company aims at attaining the economies of scale by providing
the same products to the customers in each and every market. Global strategy can be defined as
an action plan which is adopted by the companies in which they develop and sell a standardized
product in different markets or nations (Peng, 2013). The products offered by Under Armour in
United States are similar to the products offered by the company in other markets. Moreover,
importance is not given by the company to variances in the local preferences (Ghemawat, 2007).
Presence of Company in Specific Markets
The presence of the Under Armour company is only in specific countries and not in others. The
competitors Adidas and Nike have been able to maintain an effective balance between the
international and domestic business while Under Armour has set its major focus on its North
American business for the purpose of gaining a significant market share. The international sales
of the company are also strong in China and Europe. However, the data for the year 2017
highlights that the total sales of Under Armour in Northern America were 3.8 billion U.S. dollars
while the total international sales of the company were just equal to 1.08 billion U.S. dollars
(Statista, 2019). After analyzing this data, it can be predicted that the company is not able to
perform well in the international market. The international entry has been made by the company
after proper analysis of the market but still it has not been able to perform well. Since the
company was not able to achieve the desired success from its expansion in the international
market, it may be hesitating in further expanding its market in other countries. The other possible

MARKETING AND STRATEGY 4
reasons for the presence of the company in specific markets are struggle against FDI policies in
various countries (Hill, 2011).
Key Challenges Faced by The Company
The key challenges faced by the company include factors related to its expansion in the global
markets. Approximately 90% of the sales of the company are made from North America which
implies that it is not able to meet its objectives in other regions. This may be due to the fact that
there are limited distribution channels of the company abroad (Whittington, 2001). Moreover,
the distribution channels of Adidas and Nike are already well- established across the globe
which, in turn, makes it difficult for Under Armour to reach a wide range of customers.
Another challenge faced by the company is related to the establishment of larger market share in
the female market. However, from the beginning, Under Armour is perceived as a male- oriented
brand. The focus of the brand is also on football and its ad campaigns are also in a very
aggressive tone. This makes it difficult for the brand to achieve success in the female market.
The company is also facing challenge in keeping itself successful and organized with accelerated
growth. This is due to the fact that it needs ability for anticipating and responding towards the
changing preferences of the customers. Strategic challenges are also being faced by the company
in product line expansion of its footwear. In the basketball shoe market, the market is dominated
by Nike. On the contrary, Under Armour suffers from the lack of experience and marketing/
advertising in basketball division.
Suggestions relating to Alternative Strategy
As the alternative strategy, Under Armour should make the use of Bowman’s strategic clock
which will provide options for the strategic positioning of the brand. It will allow the brand to
position its products in a manner such that they attain the most competitive position in the
market. Bowman’s strategic clock will provide options relating to the positioning of its products
on the basis of two dimensions namely perceived value and price (BPP Learning Media, 2015).

MARKETING AND STRATEGY 5
Figure 1 Bowman's Strategic Clock
(Source: BPP Learning Media, 2015)
Currently, the company has adopted the differentiation strategy (Position 4). It is suggested that
Under Armour should adopt focused differentiation which is position 5. The reason behind
recommending focused differentiation strategy is that the company is able to offer innovative
products to the company. Therefore, the company can also charge a bit higher for their
innovation. Focused differentiation strategy will aim at the positioning of the product at higher
price levels, where the purchases will be made by the customers based on the high perceived
value (Cavusgil and Knight, 2015). The strategy will further assist the brand in achieving
premium pricing by highly targeted segmentation, distribution and promotion. If this will be
adopted in a successful manner, the company will be able to attain high profit margins and will
be able to sustain in the market for a longer period of time (Echchakoui, 2018).

MARKETING AND STRATEGY 6
Conclusion
Therefore, it can be concluded that strategy plays an important role in the success of any
business. This assignment focused on analyzing and evaluating the strategic situation of Under
Armour company by considering its overall strategy, responsiveness towards differences among
nations, presence only in specific markets along with the key challenges faced by it. The
company has adopted a differentiation strategy and is suggested to shift to focused differentiation
for attaining competitive advantage. Focused differentiation strategy will aim at the positioning
of the product at higher price levels, where the purchases will be made by the customers based
on the high perceived value The company is not responsive to the differences among nations and
has adopted a global strategy. The presence of the company is also limited to specific markets.
The company is facing challenges in expanding its business in the global markets, establishment
of larger market share in the female market and in footwear product line expansion.

MARKETING AND STRATEGY 7
References
BPP Learning Media. 2015. CIMA- E3 Strategic Management. BPP Learning Media.
Cavusgil, S.T. and Knight, G., 2015. The born global firm: An entrepreneurial and capabilities
perspective on early and rapid internationalization. Journal of International Business
Studies, 46(1), pp.3-16.
Doz, Y.L., 2017. Strategic management in multinational companies. In International
Business (pp. 229-248). Routledge.
Echchakoui, S., 2018. An analytical model that links customer-perceived value and competitive
strategies. Journal of Marketing Analytics, 6(4), pp.138-149.
Ghemawat, P., 2007. Redefining global strategy: Crossing borders in a world where differences
still matter. Harvard Business Press.
Hill, C. W. L. 2011. International Business: Competing in the Global Marketplace. McGraw-
Hill/ Irwin.
Lasserre, P., 2017. Global strategic management. Macmillan International Higher Education.
Peng, M.W., 2013. Global strategy. Cengage learning.
Statista. 2019. Net revenues of Under Armour worldwide from 2013 to 2017, by geographical
region (in million U.S. dollars), [Online]. Available at:
https://www.statista.com/statistics/518422/global-net-sales-of-under-armour-by-region/
[Accessed on: 7 January 2019].
Under Armour. 2019. About UA, [Online]. Available at: https://about.underarmour.com/about
[Accessed on: 7 January 2019].
Whittington, R., 2001. What is strategy-and does it matter?. Cengage Learning EMEA.
Zhao, M., Park, S.H. and Zhou, N., 2014. MNC strategy and social adaptation in emerging
markets. Journal of International Business Studies, 45(7), pp.842-861.