UA and its rivals are in very intense competition to get bigger market share in the sport apparel industry which is projected about 165 billion dollar revenue in 2017. (Total Revenue of the Global Sports Apparel Market 2011-2016). Intensity of this rivalry is due to high demand and low switching costs. Since a large number of companies in the industry offer very similar products, the big brands like Under Armour, Nike and adidas need to find ways of creating differentness from others to sell more products.
The treat of new entrants seems high due to low barriers to join the sport apparel industry, but still those companies need large capital on marketing and advertising, as well as creating a new product which needs to impress the customer to compete against the big brands’ strong customer loyalty.
Even though lots of companies exist in the industry, the treat of substitute products is moderately low. Under Armour and other big brands have strong customer loyalty among the athletes and other people who expect high quality and performance.
Price sensitive buyers – customers, retailers and whole sellers- create high bargaining power to demand higher quality service and product at lower price.
With the modern technology and large number of suppliers, the bargaining power of suppliers is high.
2. Besides UA’s high quality and performance, the brand’s unique startup product base – moisture wicking fabrication (Under Armour Case Study) – creates h...
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Since the brand strengthened its position, if UA aims for longer customer relationship and loyalty, the company needs to expand beyond the high performance athletic wears into women and kids sports clothes, performance footwear, outdoors sports gears and mobile technologies to offer substitute products of Nike, adidas and others and get more market share, Additionally, the brand should take into consideration the male targeted brand image in the market if it wants to reach bigger audience.
The brand relies heavily on third-parties for the technology, fabrics and process to manufacture its unique, synthetic products. Thus, UA has no right on its manufacturing process and product pricing. The company should conduct more market research and find business partners that would understand UA’s values and provide feasible economic stability in long-term.
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