Question

Under Armour, a multinational sports apparel company plans entry into a new geographical location, Vietnam, considered an emerging market, with its established and best-selling product line: women's running shorts. How should Under Armour not craft a strategy to enhance future profits in Vietnam?

• implement a diversification plan that aims at adding health and fitness centers to its existing line of products

• chart an acquisition plan that aims at acquiring local smaller-scale sports apparel manufacturers that seek funding and offer a complementary product lineup

• devise a marketing plan that aims at mass customer segments with attractive advertisements and offers on products

• establish a distribution plan to set up more supply outlets than any other rivals in the location

• create a sales plan that aims to enhance initial sales and market penetration with low prices based on high operational costs

Answer 1

Diversification plan

Here, the diversification is with respect to the production of health and fitness centers into the existing product line. For diversification, there are 4 major prerequisites for the company to follow.

1. The in-depth study on the acceptability of the new wing, i.e., health and fitness centers into the market.

2. Research on the potential benefits obtained from it. If the benefits are more than the cost, the plan is acceptable.

3. Consider other miscellaneous factors such as spending capacity of the company, government policy, etc.

4. Analyze the long term viability of the expansion model.

Acquisition plan

The company intends to acquire local companies that need funding through a two-step method.

1. Initially, they will provide financial assistance and support to the local companies with a contractual condition to have control in the management.

2. Within 6 months, Acquire at least 60% control or stake in the company through a gradual method.

Marketing plan

The marketing plan intends to cover the entire market in a cost-effective method. For that, the combination to be used is:

Digital marketing+paid advertising+ Word of mouth marketing+publicity

This is the best combination available since the advantages of each of the given methods neutralize the disadvantages of the other one.

Distribution plan

The distribution will be done in a smart and labor-saving manner. Various minor retail outlets will be set up throughout the country will major stores in the national hotspots. Hotspots refer to city areas and the most potential market areas. Stores will be set up near the shops to ensure the incessant supply of materials.

Sales plan

In order to boost sales, penetration pricing will be used in which a low price will be charged initially by gradually increasing the price to attract more and more customers. It is a process of using price as a tool to increase sales. Accompanied by a thorough advertisement, it will bear results.

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