SWOT analysis of Under Armour (2019)

Company: Under Armour
CEO: Kevin Plank
Year founded: 1996
Headquarter: Maryland, USA
Number of Employees (2018): 15,000
Public or Private: Public
Ticker Symbol: UAA
Market Cap (March 2019): $9.09 Billion
Annual Revenue (Dec 2018) : $5.19 Billion
Profit |Net income (Dec 2018): $ -46.30 M

Products & Services: Running shoes | Golf shoes | Training shoes | Hoodies | Backpacks and bags | Golf shirts Football gear | Hiking boots | Basketball shoes | Polo shirts | Gym Bags | Sports bra | Gym and training tops | Running shorts | Short sleeve shirts | Caps | Football boots | Sleepwear

Competitors: Nike | Adidas | Reebok | New Balance | Converse | Puma | Bata | Umbro | Woodland | Liberty Shoes | Fila

Fun Fact:Did you know that the CEO Kevin Plank started the business in his grandmother’s basement?

An Overview of Under Armour

Under Armour was founded in 1996 by Kevin Plank who still serves as the CEO of the company. Under Armour is an American originated company producing both casual and sports apparels along with footwear and accessories. It has outlets in Europe, the Middle East, Africa, North America, Asia Pacific, and South America.

In 2017, its revenue contributions from North America alone were estimated to be about 76.5% and 8.7% in the Asia Pacific. The company has remained unbeatable in its pursuit to provide the finest quality T-Shirts that offer athletes lighter, dryer and more comfortable clothing.

The products are designed to adapt to the weather conditions. Its international reach and evolutionary transformation have made Under Armor the largest digital fitness and Health Company worldwide.

As of 2018, the company has 15,000 employees.

SWOT Analysis of Under Armour

The following is a detailed Under Armour SWOT analysis.

Under Armour Strengths

1. Portfolio – Under Armour’s broad product portfolio has strengthened its standing. The company is not dependent on one specific product. Its establishment has not limited itself to only footwear but has also incorporated apparel, accessories, etc. The extensive product line eliminates the risk of failure. It also ensures a high sale ratio and continuous growth of the company. The revenue from 2016-2017 for apparel was 67%, while for footwear it was 21%.
2. Distribution Networks – Under Armour has amazed investors with its accelerated growth in the market. It was made possible due to its creative strategy of operating through multiple distribution networks. 65% of its revenue was accumulated through wholesale distribution, whereas 31% was gathered through direct consumer sales. The company currently sells its products in some countries through licensing. These operational modifications have continued to expand the brand globally.
3. Adoption of Digital Apps – Under Armour has adapted digital transformation with apps like MapMyFitness, MyFitnessPal (calorie and nutrition app), and Endomondo (fitness app maker). This has enhanced its revenue potential, allowing it to diversify its resources and continue its transformational industrial potential.
4. Brand Recognition – Under Armour has been voted as being the world’s 5th most valuable business brand in the year 2017. It’s brand recognition has allowed it to develop authenticity and trustworthiness much like Nike. This erases any doubts for its investors who are now investing in the company aggressively.

Under Armour Weaknesses

1. Limited Operating Presence – The company is still relatively new with a limited operating presence in the international markets. 83% of its revenue is gathered from its North American branches which makes it entirely dependent on the American markets. It has yet to expand and generate the same revenue in the International markets. This is necessary to sustain the company’s growth.
2. High Investment Expenditure – Under Armour has taken a risk with its high investment expenditure in the past three years. In the last two years, it spent about $847, 477,000 and $153, 312,000 respectively. Its restructuring plan for 2017 has added to the spending with more expenses to follow. This investment is positive if it generates more revenues. However, it does limit its ability for new acquisitions and generating more revenue is still questionable.

Under Armour Opportunities

1. Introduce New Products – Under Armour prides itself in its innovative. The products it has conceived since its inception have been technologically advanced. This gives it the leverage to continue the trend of offering better products with necessary modifications. An extension in its product line will attract more consumers and prove beneficial for the company in the long run.
2. Collaboration – Under Armour collaboration with stores such as Kohl’s began in 2017 when Kohl’s started selling its merchandise. The cooperation proved to be a success according to Kohl’s CEO, Kevin Marshall. While many well-established department stores like Dillard’s and Macy’s sell Under Armour products, there are retailers like J. C. Penneythat do not showcase the brand. Under Armour should consider more collaborations and partnerships to enter more markets in the future and grow its revenue accordingly.
3. International Markets – International markets have much scope for Under Armour to generate more sales and get new customers. The company’s sales grew by 57% in the second quarter of 2017. This figure guarantees a promising future.

Under Armour Threats

1. Political Polarization – The company was involved in a recent controversy because of the Trump administration. CEO Kevin Plank initially supported President Trump only to withdraw when his actions resulted in public This controversy has not subsided for the company and has threatened its working ability in the face of political polarization.
2. Increased Competition – Its major competitors Nike and Adidas have higher brand recognition and better operational experiences overseas. This has helped them to gain a stronger customer base that could threaten Under Armour’s working ability in the future.
3. Product Capabilities – Under Armour’s chin straps and athletic cups have been criticized by experts to cause potential athletic injuries. Any form of inflicted injury by these products could damage the brand’s reputation and drive away endorsements.

Conclusion

Under Armour SWOT analysis shows a promising future for the brand. All it requires is some necessary restructuring by cutting expenditure. The company has made enough investments thanks to media coverage and publicity.

It’s already booming revenue, and expansive growth makes it an ideal candidate for investments. Moreover, the brand is already recognized worldwide. Under Armour has a strong foothold in the American markets, all it needs to do is to capture the international markets.