Comprehensive SWOT Analysis of Under Armour – A USA Based Sports Equipment Company

Quick Stats on Under Armour

Founder	Kevin Plank
Year Founded	1996
Origin	Maryland, U.S.
No. of Employees	16,400+
Company Type	Public
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

• Facemasks
• Footwear
• Sportswear
• Clothing
• Toiletries

Competitors of Under Armour

• Reebok
• ASICS
• New Balance 
• PUMA 
• Adidas 
• Nike

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.
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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.