Under Armour, Nike, and the Adidas Group

free essay

  1. The competitive forces facing Under Armour, Nike, and the Adidas Group are fierce. There is an intense rivalry between the three companies as they compete to grow their sales and increase their market shares.
    Several factors increase the threat of new entry into the performance athletic wear market. The dangers include the high growth rate in buyers’ demand for the athletic wear. Thus, the present industry players are determined to increase their market size by entering product areas or geographical regions that they lack presence. The threat of new entry increases as Under Armour, Nike, and the Adidas Group strive to attract customers in wider geographic areas.
    However, there are barriers to new entrants, which include challenges in the market penetration. For example, huge obstacles arise in building retail distribution networks and getting attractive retail display spaces on the logistics part. Also, the level of product differentiation and brand name recognition enjoyed by the three companies presents a challenge for new entrants. It is costly to compete with the leading players to build the same brand image and brand recognition.
    The threat of substitutes bases on a few factors. They increase competition from substitutes in the market because of the availability of other athletic wears and cheap substitute clothing. However, the substitutes are of less comfort, and many people view them as having inferior quality. The competitive forces from substitutes are moderate because customers perceive the three leaders as quality manufacturers.
    The bargaining power of suppliers is not significant. The competitive forces are low, and the influence of suppliers is low in the case of contract manufacturers. The power is modest when particular fabric suppliers have established performance fabrics of superior quality than currently available.
    The bargaining power of buyers does play a role. The competitive forces of buyers consists of retailers that purchase their stock directly from the three companies, sports teams that buy products directly from the manufacturer, and individuals that acquire clothing from retail stores. The competitive force of large chain retailers is intense, sports teams competitive force is modest, while individual power is low.
  2. Get a price quote

  1. Under Armour has core competencies. It creates high-quality and high-performance products that can be used for practicing sports in all types of climatic environments. The sportswear is designed to preserve steady body temperature and dryness in all types of sports. The company also makes sportswear for different target markets, including individual shoppers and professionals. Their product range includes apparel, accessories, footwear, and digital fitness platforms for the youth, men, and women. The main product is apparel that is divided into three product lines that include HeatGear for hot environments, ColdGear for cold climate, and AllSeasonGear for moderate temperatures.
  2. Under Armour has research strengths and competitive capabilities that qualify as distinctive competencies. The competitive capabilities include multi-purpose product that is adaptable to different climates, comfort of the goods, and a wide range of sports gear. Its wide range of products includes fitness and athletic items, such as socks and shoes. The company also delivers its products online and enjoys a reputable brand image, which contributes to gaining a competitive advantage. Its resource strength includes having 90% of its manufacturing in the United States and cooperating with suppliers in different parts of the world.
  3. Our Benefits

    • English-Speaking Writers
    • Plagiarism-Free Papers
    • Confidentiality Guaranteed
    • VIP Services
    • 300 Words/Page
    • Affordable Prices
  4. The strengths of Under Armour include leadership in innovation. The compaby provides high-tech undergarments for athletes in different climatic regions using modern technology, and high-quality components; it is famous for creating a moisture-wicking fabric customized for the use of a niche market. Moreover, the organization enjoys brand loyalty. The management is able to respond to the demands of the changing environment through the use of technology in product differentiation to maintain its customer base. The products are also easily identified and have a good reputation that consumers easily recognize.
    The weakness are that the company has not captured the international market and has fewer products than its competitors. It also lacks patents for its goods, which poses a threat to substitution and lower market share.
    The opportunity is to grow its market share and increase the customer base. The growing population in the international market provides a huge opportunity for Under Armour to exploit. It can also adopt modern technology to outcompete its rivals.
    The mahjor threat the compny faces is a threat from its rivals and high competition in the sale of sportswear.
Save 25% on your ORDER Save 25% on your ORDER

Exclusive savings! Save 25% on your ORDER

Get 15% OFF your FIRST ORDER (code: leader15) + 10% OFF every order by receiving 300 words/page instead of 275 words/page

  1. The generic competitive strategy that Under Armour employs is the broad differentiation strategy. The approach offers a strongly differentiated product to compete against rivals. Under Amour has branded its products that include moisture-wicking-performance apparel, footwear, and accessories. The goods are customized for the use of professionals, teams, athletes, and men, women, and youth with active lifestyles. The products attain a premium price because they enjoy brand loyalty among the customers.
  2. There has been an impressive financial performance during the 2008-2013 period. Sales revenue grew by 221.7% from $725 million to $2,332 million. The net profit margin also increased by 326.3% from $38 million to $162 million. There have also been tremendous increases in the cash and cash equivalent, working capital, and return on shareholder equity.
  3. How It Works

  4. The three companies have the capability to manufacture their products globally. However, none of them owns their facilities. The three businesses make performance sportswear. Under Armour has a competitive advantage for making top-performance wear, and has the first mover benefits with its products. It also provides a broad range of products that covers all types of sports. On the other hand, Nike and Adidas Group have the advantage of access to a wider geographical reach. They joined the footwear market before Under Armour and have established greater brand recognition.