Under Armour’s Strategy Case Analysis 1. How strong are the competitive forces confronting Under Armour, Nike, and The Adidas Group? Provide a five-forces analysis to support your answer.
The competitive forces confronting Under Armour, Nike, and the Adidas Group are very strong. There are many other companies who offer similar sportswear and gear lie these three groups. A consumer has a wide variety of merchandise available to choose from, and the price to pick one brand over another costs the customer very little. All the competitors have allowed the market to be saturated with similar merchandise without much differentiation in products. The companies have an equal economic capability and economy of scale as Under Armour, Nike, and Adidas Group which allows them to remain equally competitive.
The competitive pressure coming from new entrants into the sportswear apparel industry is relatively high. Active lifestyles are promoted heavily and customer demand for athletic products are high which means newcomers can expect to earn exponential profits. If a company has the resources to enter the market, then they could become a formidable competitor.
The competitive pressure coming from firms offering substitute products is very high. Substitutes are often attractive to consumers because they are readily available for a nice price. Consumers often become used to buying substitutes because they suffer very low cost when switching products.
Competitive pressure stemming from supplier-seller collaboration and bargaining is also high. When a company tries to switch a supplier they often incur high cost which negatively affects their profit margin. Switching suppliers could also cause a company to raise price on merchandise to combat the increase in price of supplies.
The competitive pressure stemming from seller-buyer collaboration and