Previously we did the exclusive SWOT analysis of an American-inspired global brand that is all about fashionable fitness, Reebok, this time we will look at the SWOT analysis of Under Armour.
Under Armour is the inventor of performance costume – sportswear engineered to keep athletes & players cool, dry and light throughout a game, practice or workout. Starting from producing a moisture-wicking t-shirt company to becoming a global brand, Under Armour has its sports product line which extensively includes hats, pants, shoes, gloves, bags, facemasks and the like.
Under Armour is a very big company because of its marketing tips and tricks and as the world is shifting online the marketing techniques are changing which is digital marketing. As the world goes online, marketing is changing and if you are interested in learning about the latest – check out our Free MasterClass on Digital Marketing 101 by the CEO and Founder of IIDE, Karan Shah.
Before we begin with the SWOT analysis of Under Armour, here’s a deep dive into the company’s history, founding, products, financial status, competitors.
About Under Armour
(Kevin Plank – The Founder of Under Armour, Source: nytimes)
Under Armour, Inc. is a USA-based sports equipment company that manufactures sports and casual apparel and has a wide base of the product range. The company was incorporated on September 25, 1996, by Kevin Plank. When Kevin Plank was a 24 year old he used to captain the former special football teams of the University of Maryland.
The products are designed to adapt to weather conditions. It has reached all across the globe and the transformation in Under Armor has made it the largest digital fitness and Health Company worldwide. The brand has survived a lot of competition because of its wide product range and having premium quality clothes.
With the launch of Under Armour fitness apps, the company has become one of the world’s largest fitness companies and has become a leader in the sports gear business.
|No. of Employees||16,400+|
|Market Cap||$ 9.794 Billion (2021)|
|Annual Revenue||$ 5.3 Billion (2021)|
|Net Income/ Profit||$ 92.14 Million (2021)|
(An Under Armour Retail Store, Source: Footwearnews)
Products of Under Armour
Competitors of Under Armour
- New Balance
After understanding the core of the company, let us now proceed to the SWOT analysis of Under Armour.
SWOT Analysis of Under Armour
SWOT (Strengths, Weaknesses, Opportunities, and Threats) Analysis is a famous method that is used to evaluate a company’s position and helps them in developing strategic planning. SWOT Analysis helps the companies in finding out internal and external factors, and also helps them in looking for the prospects for the company.
To better understand the SWOT analysis of Under Armour, refer to the infographic below:
So let us first start by looking at the strengths of Under Armour from the SWOT analysis of Under Armour.
Strengths of Under Armour
An organization’s capabilities that give it an advantage in increasing and capturing its market share, attracting more customers, and maximizing profits are referred to as its strengths. Following are Under Armour’s strengths:
- Presence in the Market: Under Armour is a leading sports apparel company and expanding to various sports, it has increased its business manifold. This gives Under Armour the advantage of brand awareness, brand reputation and therefore enhances customer relations and develops strong relations with them.
- Recognition from Sportcelebs: Under Armour is famous in the NBA community. Most of the basketball players such as Steph Curry recently promoted the Under armour commercial after setting the NBA 3-point record.
- Best Quality: Under Armour believes in providing the best it can offer and hence never compromises on the quality of its products which adds to another strength of the company.
(Under Armour 3 Applications, Source: GeekWire)
- App-Store Management: Under Armour have 3 applications for the fitness lover. MapMyFitness & MyFitnessPal work as a calorie and nutrition app and Endomondo for fitness & body makers. These applications are helping Under Armour to enhance its revenue potential and this is only possible by optimizing the apps on the play store & iOS based on app icons, titles, descriptions, screenshots, preview videos and much more.
- Good Suppliers Relations: Under Armour has good relations with their suppliers and hence they have the best source of raw material to manufacture the best quality of products. Good Suppliers also help the organization to get raw materials at a lower cost and so the company can increase its margins and profits.
- Well-managed System: Under Armour has a well-established and well-managed system that ensures efficiency in their internal as well as external working.
- Good Product Portfolio: Under Armour has a large product portfolio where it provides products in a large range of categories. It also has a good number of products that other competitors lack in providing them.
Weaknesses of Under Armour
Whenever a company is recognized with its strengths, there are always going to be some weaknesses as well. Let’s check them out.
- High Investment Expenditure: A lot of risks have been taken by the company by doing huge and risky investment expenditures in the past three years. These investments can be beneficial from a long-term perspective but in the short run, these investments will affect the revenues of the company. It has also greatly impacted its ability for some new acquisitions.
- Expansion Strategies: Under Armour focused on direct-to-consumer sales as its long-term growth opportunity instead of online sales and hence it was not able to capture the larger online market. If they work on this online segment then it can greatly boost the company’s growth and revenues.
- Low Market Penetration: Under Armour has very low market penetration and it has affected its market share as well. It is very low as compared to other competitors in the industry and this is the main reason why the company is lagging.
- Financial Planning and Growth: Currently financial planning of Under Armour is not done efficiently which is hindering the growth of the company. The asset ratio and liquid asset ratios of the company suggest that the company can use its cash more efficiently than what it is doing now.
Opportunities for Under Armour
- Enter Growing Market: They have the perfect opportunity of entering a growing market to expand their penetration and increase their market share. With the upcoming new generation, the company is gaining some popularity and with correct methods, they can drastically grow their market.
- Better Designs: Under Armour should boost its R&D to enhance its product design and quality. With better designs and good quality, they can gain a lot of attention as high product quality increases brand loyalty and will improve Under Armour’s performance in this competitive market.
- New Market: Several new niche markets have opened up in the past three years and are growing at a very fast pace. Under Armour can enter these markets to sell its products and can gain first movers advantage.
- The Popularity of E-commerce: With the boom of the internet, the e-commerce market has emerged quite well and it has been increasing greatly. Under Armour needs to tap into e-commerce just like Under Armour’s competitors are using this 8-step e-commerce guide and it has come out as a great opportunity for them. By launching e-commerce, Under Armour can hold a good market share if implemented properly.
Threats to Under Armour
When there are opportunities, there are also threats to the company. Let’s learn more about them and see some upcoming threats to the company from various other industries.
- Competitor’s Performance: New technologies developed and undertaken by the competitors can become a threat to the company. This could affect the market of Under Armour for a short period and even for the long-term future.
- Rise in Fuel Prices: The rise in prices of fuel has increased the input costs for Under Armour. This has increased the costs for the company like the companies that are providing them with the raw material have increased transportation costs and thus the prices have increased.
- Marketing Campaigns by Competitors: Increased promotions by competitors have been a threat for Under Armour. Now the customers are bombarded with a lot of messages from various competitors. Hence this has reduced the effective marketing campaigns and promotions by Under Armour.
- New Entrants in the Market: Nowadays more and more companies are entering the market and have also gained a lot of market share. Thus decreasing the market share of previous companies. They are gaining the trust of consumers through innovations brought by them. If Under Armour does not make its move then it can lose its customers to these new entrants.
This ends our comprehensive SWOT analysis of Under Armour. Let us conclude our learning below.
Under Armour is still growing its market in the sports equipment sector. In the SWOT analysis of Under Armour, we have observed that the company is very reliable and trustworthy but lacks in the brand portfolio, designing, and some R&D departments. This indicates that the brand has a bright future ahead of it. The company has made good investments through their publicity and market attention and now it requires only some necessary reorganization through expenditure reductions.
Under Armour also needs to focus on expansion as they have a lower market penetration. But with better up-gradation in some key areas will improve the company’s performance and then only it can survive in this competitive market. Companies need to go for digital marketing methods to gain the attention of new people and the younger generation as they will be the prospective buyers for them.
In today’s world, every business has its presence online. With increasing competition and challenging companies that are always up to their marketing game. It is very important to make your mark and defend yourself in the market. In changing times when everything is shifting digitally it is very important to be well-versed and thorough with the new trends to be at the top. If you are interested in grasping a skill or investing in upgrading your skills in marketing, feel free to check out IIDE’s 3 Month Advanced Online Digital Marketing Course to know more.
We hope this blog on the SWOT analysis of Under Armour has given you a good insight into the company’s strengths, weaknesses, opportunities and threats.
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