Question

How attractive is Under Armour’s situation? (write by your own words)

1. Are Under Armour’s resources and capabilities (1) competitively valuable, (2) rare, (3) difficult to copy, and (4) not easily be trumped by the substitute resources of rival firms?
2. Does Under Armour have any core competencies? Distinctive competencies? If so, what are they?
3. Which of the company’s resources and capabilities have the greatest competitive power?
4. Write a SWOT analysis for Under Armour. What does your SWOT analysis reveal about the company’s situation?

Answer 1

After collecting relevant information about Under Armour, following are the answers:

Under Armour’s situation:

Under Armour’s situation is determined to be pretty attractive at present. With its brand image and recent changes that they have made, the situation of company is predicted to remain strong. Although in recent years, value of brand is observed to drop at a significant rate, but looking at their transitioning strategy to cope up with changing market trends, estimated value of brand is believed to remain high.

a. Under Armour’s resources and capabilities are believed to be competitively valuable rather than rare, or difficult to copy or not easily be trumped by the substitute resources of rival firms.

Reason: As the athletic apparel market is witnessing a shift, many young people, who are willing to spend a substantial amount in sportswear including footwear (sneakers) that is technology driven. This gives an added advantage to Under Armour, as the company’s technical innovation in its products is adding towards its capabilities. Also its resources including global suppliers add to its competitive competencies.

b. Yes, Under Armour have some core competencies that give the company an added advantage over its competitors. Some of its core competencies are as follows:

• Technical innovation in its products,
• Advanced material,
• High quality product,
• Global chain of suppliers,
• Brand image

Distinctive competencies include technical innovation in its products, as their products adapts to climatic conditions and advanced material i.e. polyester blend material that easily fit shapes and sizes of a person and is very comfortable.

c. Company’s resources and capabilities that have the greatest competitive power are as follows:

• Global chain of suppliers,
• Product performance,
• Product endorsement by celebrities,
• Technologically advanced products,

d. SWOT analysis of Under Armour:

Strengths:

• Financially stable and capable,
• High quality product,
• Brand image,
• Product performance,
• Wide range of products,

Weakness:

• High cost of products,
• Poor market segmentation strategy,

Opportunities:

• High demand in international market,
• Amount of consumers disposable income is increasing,
• New market is open for such brands,
• Product diversification.

Threats:

• Change in political environment can pose a challenge of increasing tax,
• Low price products from competitors,
• Better international presence of competitors.
• Major focus of product line is on male apparel and footwear.

The above SWOT analysis reveals that Under Armour must make maximum profit by leveraging opportunities of growth. And at the same time prone threats should be given consideration to avoid loses in future.