Under Armour: Business Strategy, SWOT, and Value Chain Analysis Report

This report provides an in-depth analysis of Under Armour (UA), examining its business strategy, competitive advantages, and market position. The report begins with an overview of UA, highlighting its growth and evolution in the sports apparel industry, founded by Kevin Plank. A detailed SWOT (Strengths, Weaknesses, Opportunities, and Threats) analysis is presented, evaluating UA's robust governance, product recommendations by athletes, and brand recognition, while also acknowledging weaknesses such as limited international presence and dependence on fitness wear. The report assesses UA's competitive advantages, specifically its high-quality products and moisture-wicking fabric technology. A value chain analysis, based on Michael Porter's framework, examines UA's primary and secondary activities, including procurement, manufacturing, sales, and marketing. The report concludes that UA possesses a compelling story with strengths and opportunities that outweigh its weaknesses and threats, suggesting the potential for long-term investment. References from Under Armour's investor relations, Facebook, and executive officer details are included.

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OVERVIEW
Under this assignment, I am beholding UA’s trade and carrying out SWOT study of the
organization. SWOT study stands for Strengths, Weaknesses, Opportunities and Threats. From
past era, Under Armor is considered as the best stock in terms of Growth. From over last 5 years,
Fitness attire name has been on a rip with escalating approximately tenfold in worth, with
increment in yearly rate of about 25%. Further the company has bifurcated its business into shoes
/ sport foot wears and other classifications of merchandises.
Established year of Under Armor (UA) was 1996. UA was founded by Kevin Plank. UA
deals in sporty wears and in a short span of time it grows with 50% share of market with
increasing its other lines of merchandises. UA considered as the best firmness apparel trader
around the globe due to the stuffs dampness wicking and heat dissolving machinery. NFL and
MLB was sponsored by Under Armor and it is used by academic level sport players. The Foot
wears launched by UA was in year 2006.
SWOT ANALYSIS
1. STRENGTHS
Kevin Plank was the hard worker and because of this UA has robust governance in sports. The
products of UA were highly recommended by the sports persons/ athletes and this really increases
UA’s marketing control. The products of UA were also seen in movies, daily soaps, online games etc.
The company has also a very cherished brand plus authorizing contracts.
2. WEAKNESSES
Approximately 7% of its total sales were made out of US in year 2007. This deficient in universal
presence. Due to little modifications, UA’s business is quite good in seasonal sales during the seasons

UNDER ARMOUR: WORKING TO STAY ON TOP OF ITS GAME
of basketball and football and also during the season of vacations. Around 84% of Under Armor’s
turnover is wholly dependent on fitness wears.
3. OPPORTUNITIES
Under Armor increasing its growth in the souk of foot wears. This makes the UA to further branch
out its merchandises which helps in finding new ways of returns. UA increases its attention on other
sports such as baseball which helps in sinking in seasonal sales, distribution and also in stock. The
products of UA were already marketed in China which means global market offers huge potential to
UA thus making the positive sign towards the company.
4. THREATS
Under Armor’s third party dependence like contractors, producers can raise the prices of the product
in future because of UA’s lack of patent rights and IP rights. This is the threat to Under Armor by
which the other organizations can promoted with related products in the market. This declines the
demand for UA’s products and other brands could arise and turn out to be grander competitive fears.
Does Under Armor have a sustainable competitive advantage? If so, what is the source?
What about Under Armour's evolution and current business strategy may pose problems
going forward?
Yes, Under Armor have a justifiable competitive benefit.
Regardless of solid antagonism from Reebok, Adidas and Nike, UA's greatest competitive lead is
its sporty apparel.
There are 3 ways to enjoy a competitive advantage. These are:
1. Dealing in inexpensive product.

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2. Dealing in high value product.
3. By being the most expedient.
The success of UA is through the second way that is dealing in high excellence in product
in which many people chooses over equivalent preferences. This is why UA enjoys over and
above average profits by charging high prices. Another reason for UA to gain the market is its
creating a fabric which soaks the moisture from the sportsman which enables them to play in hot
weather.

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VALUE CHAIN ANALYSIS
Under Armour SWOT Analysis
Michael Porter’s Value chain is used for Under Armor’s Analysis.
By manipulating its essential capabilities, a competitive organization produces worth for its
consumers. Value/Worth is dignified by a presentation, individualities and its qualities for which
consumers are enthusiastic to pay. Enterprises with a competitive lead propose value to consumers i.e.
grander to the values opponents can offer. A VCA provides facts comparative to primary activities such
as inward bound/outward bound logistics, processes, promotions & sales, and service etc. and secondary
activities such as firm setup, HR management., technical developments and procurement etc.
Under
Armor’s
Secondary
Activities
Under Armor’s Primary
Activities

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1. Procurement
Under Armor buys raw resources for its products and supplies them to their business associates.
2. Product Expansion
a. Manufacturing:
UA produces every merchandises in China. Under Armour products are commonly possessed by
dealers.
b. Authorizing:
JR286 Inc. & USG are two brand associates of Under Armor. UA certifies their brand associates
for creation of diverse products such as baggage, whacks, headwear, etc.
3. Transactions
a. Under Armor vends its merchandises straightly to clients over online and also over flagship
stores which are situated in United States, Japan, Canada, New Zealand & Australia.
b. Under Armor also vends its products in thirteen nations counting domestic distribution in the
United Kingdom, Germany and France and in International distribution are done via partnerships
and third-party distributors in other Western Europe and Asian countries.
4. Prominence
a. Finances & Conglomerates:
Under Armour increases momentous prominence in the senses of the buyer through its
partnership/sponsorship of: NFL, NFL Europe, MLS, MLB, NHL, U.S. Olympics, Youth Leagues,
etc. In addition to this, Under Armor also extended projecting with innumerable expert
sportspersons that uses their products.
b. Hollywood.

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CONCLUSION
This has been concluded that story of UA is tremendously convincing outlining with Fortes and
chances which effortlessly offsetting its dimness and fears.
At this moment the stock of the Under Armor does not look like an inexpensive and it is currently trading
at approximately 75 times of the earnings. Stock of UA can be a low-priced if the returns can sustain their
existing situation. Therefore, it can be assumed that UA shares can be purchased for long term purpose.

UNDER ARMOUR: WORKING TO STAY ON TOP OF ITS GAME
REFERENCES
Under Armour. 2018. Investor relations. Viewed on 28 January 2018 from
http://investor.underarmour.com/annuals.cfm.
Facebook. 2018. Under Armour. Viewed on 28 January 2018 from
https://www.facebook.com/underarmour.
Under Armour. 2018. Executive Officers. Viewed on 28 January 2018 from
http://www.uabiz.com/company/managementTeam.cfm.