Under Armour is a leading developer, marketer, and distributor of branded performance apparel, footwear, and accessories. Former University of Maryland football player Kevin Plank founded the company in 1996. The company sells the product worldwide. Athletes at all levels, from youth to professional, from playing fields around the world wear this product. The Under Armour global headquarters is in Baltimore, Massachusetts. There are also European headquarters in Amsterdam’s Olympic Stadium, and additional offices in Denver, Hong Kong, Toronto, and Guangzhou, China. Kevin Plank began the business with savings and credit cards in the basement of his grandmother’s apartment. Now, the Under Armour is a business that has their products flying off the display racks. The defining moment for the novice company came in December 1999, with the release of Oliver Stone’s film Any Given Sunday. The film featured Under Armour throughout its duration, but the pivotal exposure scene was the locker-room scene with Jamie Foxx and Cameron Diaz. Oliver Stone wanted Jamie Foxx to wear a futuristic-looking jockstrap. Kevin made sure that the logo “UA” was front and center. The company only had 19 employees at the time. Now the employee number has reached 2,200 and the sales now exceed $700 million. As the performance apparel market grew, Under Armour diversified their product offerings, developed different types of performance gear, and ventured into women’s apparel, footwear, and other merchandise. While Under Armour managed to generate an innovative and marketable product, their scarcity of resources is somewhat concerning. In terms of physical resources, their suppliers are limited thereby abating their bargaining power. This results in lack of control in pricing, which often translates to lower profit margins. Furthermore, even though the technology behind Under Armour’s products was new, they failed to protect their intellectual property through patents and trademarks. This opened up the marketplace to large competitors such as Nike and Adidas. However, one argument against filing patents for their products was that despite their claim of authenticity, it would be easy for counterfeits replicators to elude the patent and produce a similar looking product. When it comes to Under Armour’s financial resources, despite tremendous growth, their increasing variable costs inflate their operating expenses. This threatens their future sustainability and is unnerving to investors. Notwithstanding, one great resource that has had a prodigious effect on their operations was their investment in SAP software that greatly defined logistics and distribution. When considering the individual processes and behaviors that permit the company to achieve its level of success, it becomes apparent that leadership is an important factor. Kevin Plank’s vision, high-risk predilection, ambitious poise, and team-driven significance all contributed to an unequivocal management style and human resources system. This combination style meticulously demonstrates the highly valued theories of transformational, level five, and entrepreneurial leadership. Perhaps more dominant in Under Armour’s success after all, may be its elusive resources. For example, its reputation and popularity especially in the U.S. antecedes itself. This is mostly due to its authenticity claim; “most budding stars or wannabe weekend recreational athletes want to wear the gear the pros wear.” Additionally, Kevin Plank’s competency to produce great ideas and motivate his employees is not only a resource, but explicates into an abundant and core capability. In addition to providing the crucial vision for a venture with his glorified influence, Kevin Plank inspires motivation through committing high expectations. This in turn acts as a self-fulfilling prophecy. Plank’s own high expectations serve as a model for his employees. He also gives personal attention to his employees and treats them individually. Even as CEO Plank still has a personal relationship with retailers. A level-five leader is someone who is fiercely ambitious and driven, but their real ambition is towards their company rather than themselves. Kevin Plank is ambitious for having started Under Armour and enabling the company to grow to what it is today. He has also volunteered to drop his salary from $500,000 to $26,000 and despite his success as an entrepreneur, still seeks advice from his two mentors – the founder of Gap and CEO of EBay. Kevin Plank also practices an entrepreneurial leadership strategy that consists of creating a new market with the intention of always remaining the leader of it. He created a market by coming up with the idea of a more efficient and better-performing material. His leadership and committed direction permitted Under Armour not only to manufacture new products, but also to overshadow the competition. This leadership method is rare and costly to imitate. Under Armour’s resources, capabilities, and core competencies such as their leadership, reputation, SAP software, and distribution work as strengths, while their debt and lack of intellectual property are weaknesses. Still, there are additional external factors that influence Under Armour’s strategy and life. One concern is the seasonality of their sales. Their sales area is weak during the beginning of the year since their performance appeal is more applicable to sports played towards the end of the calendar, such as football and basketball. Under Armour has attempted to approach this by broadening their product offerings and increase marketing towards baseball and other sports. In regards to demographics and sociocultural factors, Under Armour has utilized a growing opportunity in sports apparel for women as the participation rates, popularity, and intensity of female sports continues to increase. Just like other companies though, Under Armour is vulnerable to economic fluctuations render the unnecessary, yielding demand for sports apparel. With an economic decline in which disposable income decreases, one of the first categories consumers will being cutting down in is sports apparel. A large, yet ambiguous opportunity exists in international expansion for Under Armour. Under Armour built a core competency and understanding of this market based on its design for American sports. Sports such as American football and basketball have limited popularity outside of this country. They will need to build research and development proficiency to develop apparel that amplifies sports in foreign countries, and improve marketing efforts in these categories. On the other hand, with the overwhelming international acquaintanceship and popularity of competitors such as Nike, such perforation will be difficult. Conclusively, Under Armour is in a problematic situation in which there are several external opportunities and threats they must respectively venture and avoid. The competitive landscape for Under Armour is appealing. In the performance apparel category, they gained first-mover advantage through obstreperous innovation and essentially creating the market. Nonetheless, their failure to guard their intellectual property opened up the marketplace to Nike and Adidas, two monsters of the sports apparel industry. This endowed the threat of substitutes. In addition, while Plank believes that an excellent athletic brand should be able “to outfit the athlete head to toe,” the market does not lend itself to the typical first-mover advantage of customer lock-in that software or technology companies apply. In lieu, Under Armour must insinuate customer loyalty through high quality materials and products that convey the performance aspect of their brand. The only form of lock-in can come in forms of endorsement contracts with athletic teams, leagues and associations, or movie studios such as Warner Bros. While Under Armour accomplished first-mover advantage in performance sports apparel, they are second movers in the general sports apparel and footwear sectors. This allows them the opportunity to set their products according to the competitive landscape. Nevertheless, in the case of international expansion, it is a disadvantage because Nike and Adidas have had generations to generalize their brands. As well as having first and second mover advantage, one competitive factor is Under Armour’s bargaining power in regards to suppliers and buyers. Under Armour’s relies heavily on a small set of suppliers. This dependence gives the suppliers advantage in negotiations, as Under Armour has no other source of gaining certain rare raw materials. Furthermore, the decrease of bargaining power, as mentioned earlier, reduces Under Armour’s limberness over their pricing in relation to their bargaining power of buyers. Yielding their attention to performance apparel, their denouement of the high-end category means larger profit margins to atone for the high prices they must charge. With their absence of patents, it becomes easier for large companies who employ revenue sharing to undermine Under Armour in order to increase multi-point competition with a threatening company that does not have the resources to compete smoothly. This ends in lower-priced benefits for competitors. This is a dominant disadvantage for Under Armour, who can now only sell products based on fabricated allegations of “authenticity,” even though competitors have free control to imitate them. More competitors creating the same product stress the few suppliers of the market, who have an inhibited amount of capacity that they can produce. In the end, Under Armour faces relentless competition from other large companies. Similar threatening rivals urge for a well-devised and completely accomplished business-level strategy. Under Armour bestows a focused variety strategy by solely creating performance products. Their non-standardized products are adept for customers who prefer performance to price. This points Under Armour’s extreme attention on research and technology development. Their focus strategy directs at specific sports, servicing the needs of each sport more accurately than general apparel companies such as Nike do and Adidas do. The influential combination of a focus separation strategy develops abundant niche settlement while meeting the specified needs of customers. When it comes to a corporate-level strategy, Under Armour is still young and small so it practices a low level of variety. Eighty-four percent of their business is from their apparel, and ninety-three percent of their sales come from the U.S. This builds a high level of expectation on their performance apparel products. Contrary to their competitor Nike, they do not have evident, separate business entities based on sport. While the company is still in its inception stage, it should ultimately seize a related inhibited heterogeneity strategy in which each sport is its own entity, but it shares the resources of the entire company. Likewise, it needs to continue its employment of experienced international managers to overlook and lead these divisions. Under Armour is an emerging company in the sports apparel industry whose mission is to “Make all athletes better through passion, science, and the relentless pursuit of innovation.” The company was an obstreperous innovator in the sports apparel industry by creating sports apparel using synthetic materials as an alternative to natural fibers, such as cotton. This important change in material accrued in a “shirt that provided compression and wicked perspiration off your skin rather than absorb it…that worked with your body to regulate temperature and enhance performance.” This promise to increase athletic performance individualized it from competing sports apparel companies. Since then however, rivals have implemented the synthetic material into their own products. Under Armour has progressed itself into a preferred brand among athletes. They have suitably taken advantage of its resources, capabilities, core competencies, while carefully taking advantage of its external environment. With its first mover advantage, it has conquered a decent segment of the performance apparel market. On the other hand, as the company grows and rivals catch up in this market, Under Armour needs to use its powerful leadership to build a more dynamic business and corporate level strategy if it wishes to face with the likes of Nike and Adidas. They also need to seek new opportunities, such as winter and extreme sports where they can increase multi-point competition and earn higher revenues. With the strong management of CEO Kevin Plank and his priority on teamwork, Under Armour should be able to remain competitive and grow even further.

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