Analysisof Under Armour
BackgroundInformation of the Company
UnderArmour is a company that has been in the timeline since 1996. KevinPlank, a former football player, was the founder of this firm. Thecompany deals in synthetic textile design that is responsible forabsorbing sweat when a person is performing activities that requiremuch energy. The initial name of this company was KP Sports until2005 when management changed its name to Under Armour (Davidoff, andClaire 67). The unique branding and ability the company to expand aresome of the strategic features that lead to its efficient performancein the global market. Managers direct all the activities of thiscompany concerning the mission statement of the company, which statesthat “making all the players better especially athletes throughpassion, adorable designs as well as the relentless quest forinnovation.” Some of their core values include keeping peoplecomfortable, use complex technology that improves the quality of theproducts and meet the demands of customers at all time.
OrganizationalEnvironment and Culture
UnderArmour company experiences healthy competition from other producers.It employs techniques that improve the quality of the sports apparelin the global market. The number of competitors keeps on increasingwhich is a threat to the performance of this company. Despite all thestrategies to maintain or increase the profit margin, othercompetitors have added advantage like a large amount of capital,which makes them enjoy economies of scale. Besides, emerging trendsin global sports and fitness clothing is posing a challenge to themanagement of the company. For instance, customer appeal towardscurrent lifestyles, new sports as well as an increased rate of sportsparticipation are some of the issues that make the company experiencehigh levels of rivalry. As such, there is a compellation of othercompetitors to enter the market. Some of the key competitors in theindustry are Reebok, Nike, Adidas and Puma (Wu, Hirshfield, and Sui101). For this reason, new companies will have to incur expenses likeadvertising, marketing, and technological requirement. Finally, newproducers will use a lot of money for creating productdifferentiation.
Managementof Under Armour Company operates under a threat of substitutes. Inthis case, the company has to lower the prices to make considerableprofits. Due to the growing global market for sports, apparel,related products and footwear attracted more than 25 producers.Similarly, athletes also like changing designs and products todetermine which of them fits them during sporting activities.Moreover, the level of technology is also another threat that affectsthe performance of Under Armour. For example, various customers areusing the internet to search for the products with favorable prices.Other competitors also have websites that advertise and providedetails for all the substitutes to the sports apparel. As a result,it gives the company the pressure to produce products that surpassthat of other competitors.
Availabilityof customers is another factor that affects the performance of thecompany. Clients have high bargaining power, which forces themanagers to sell the products at the lower process. It is difficultto change costs because customers have high bargaining power and havethe opportunity to choose options from the available product. Assuch, buyers can reduce the prices of the products, which maydiscourage the performance of the company. Customers do not considerthe operating costs that the company incurs while forcing for thereduction of the prices. It is not that the company is not able tocontrol the customers regarding the change in prices, but theirdiminishing brand loyalty gives them the ultimate power to influencethe pricing of the products (Regan 98). However, the managers havebeen able to deal with this challenge by availing various ranges ofproducts depending on their prices. People willing to buy expensiveproducts have their category as well as those who want to purchaseproducts of low cost.
Suppliersalso regulate the operations of this company in various ways.Usually, managers depend on the availability of the products to setprices and predict the performance of the company within a specificperiod. Sometimes, supplies impose high prices on goods depending onthe quality and quantity of raw materials. High costs of rawmaterials reduce the profit margin of the company because it will bedifficult to sell the items to customers at high prices. However,Under Armour Company has been able to enjoy in the industry becauseof the large number of supplies, which provide the raw materials atlow prices. Key players like Reebok and Adidas have the power toregulate the costs of the raw materials for the benefit of allcompanies.
Organizationalculture determines the performance of Under Armour Company. Usually,team spirit helps the managers to achieve the prospects of theorganization. All employees are aware of their tasks in the company.Departments operate to achieve the ultimate goal of thisorganization. They play specific roles which regarding their areas ofoperations to provide quality goods. Besides, the aim of the companyis to provide goods that fit the demands of customers (Pride 78). Forthis reason, managers employ the use of advanced technology to at alllevels of production to ensure that this dream comes true. Whateverthere is a problem in the production, the mangers rectify at earlystages to prevent the dangers that might arise from such hitches.
ManagingInnovation and Change within the Company
Changesin the technological environment determine the performance of UnderArmour Company. It is the type of technology that designs the densityand nature of shoes. For example, changes in technology have led tothe production of different products over a specific period. Thecompany improves in the way of churning new shoes, coming up withdifferent and unique products and production of grip-enhancinggloves. Apparently, it is difficult for the companies that cannotkeep pace with the improving technology (Catlin-Legutko, and Klingler112). As a result, Under Armour Company use this norm as a drivingforce to enhance change in the production.
Evolutionof production innovation has led to the existence of marketcompetition. Usually, the quality of the products determines thesales of the products. Management prefers using teams as the way ofexpanding sales. For the company to maintain one team all time, thequality of the products should match the demand of players. Manycompetitors use different ways of winning the interests of thecustomers. Others aim to impact sports in the society to increase thenumber of clients. For example, this company prefers sponsoringpeople from around to engage in sporting activities as a way ofadvertising the products (Hill 59). They give gifts to the society tocreate more awareness. As such, management also aims at providingsports apparel to the teams that participate at international levelslike Olympics and World Sports Organizations.
OrganizationalStructure and Leadership
Themanagement structure of this company is a main key success factor. Ithas various departments that take control of various activities. Highlevels of the competition in the market have led to the creation ofan organizational structure that enhances the performance of theorganization. The tope mismanagement is responsible for evaluatingall the activities of various departments. Managers ensure that theemployees have the relevant qualifications regarding the productionspecific goods. Other departments found in this company includefinance, marketing, distribution, production, human resourcesmanagement and the public relation department. All these sectionsinteract to achieve the goals of the company. For instance, thefinance department is responsible for outsourcing funds and recordboth losses and profits made by the company. Futureperformance of Under Armour Company
UnderArmour Company is currently doing well regarding methods ofproduction and high demand of its sports apparels. Some of thefutures that make it enjoy the economies of scale include the levelof technology, production of quality sports apparels and an expandedmarket for these products. Managers also play a vital role employingqualified workers and providing strict supervision of employees. Assuch, all the problems related to production are gotten rid off atearly stages (Crombie 45). However, the future performance of thiscompany may not be efficient due various reasons. For instance, theincreased level of competition is likely to reduce sales volume anddominance in the market. New competitors are also likely to interferewith the prices of the products in the market because they aim atattracting customers.
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