How Under Armour Became a Household Name

INTRODUCTION 

With its interlocking U and A logo, Under Armour has become one of the most known brands in the world of sports and extensively, the military. Established in 1996 by Kevin Plank, Under Armour (UA) can be considered the pioneer of performance sports apparel, with the purpose of keeping athletes dry, light and fresh throughout their workouts, games or practice. The underlying mission of UA was simple; to manufacture fabric, hence sports clothing that would rid the problem of sweat-absorbed apparel, through a T-shirt that facilitated a high level of perspiration of the wearer’s skin and compression. This caught on almost instantly in the sports market. Nearly two decades later, the brand has grown and currently boasts revenue of $2.3 Billion (in the year 2013). The significant areas it sells being in the markets of sports apparel, athletic footwear, and activewear, specifically in the United States (Wilkinson, 2015). The only sports apparel company that it seems to be in tight contention with is Nike, which currently holds the highest market share with regards to sports apparel and related goods. 

ORGANIZATIONAL BACKGROUND 

The beginning of Under Armour can be traced back to its founder Kevin Plank and his love for football. Plank is known to have played football all through high school and even when he finally graduated, he was part of a walk-on special team’s football player, for the Maryland University, as the team’s captain. 

The critical mission of Under Armour was a essential discomfort that Plank faced in his college years as a footballer. The trouble of peeling of sweat-soaked jerseys and shorts, this repeatedly caused him uneasiness. However, the ‘formative’ years of Under Armour began when Plank set upon the idea of using a polyester blend, moisture-wicking fabrics, to create new and improved tighter-fitting undergarments and shirts. These would keep athletes comfortable by keeping them fresh while they engage in whichever activity their sport entails. 

SITUATION 

Formerly KP Sports, the company came to be known as Under Armour in late 2005, when it became a public traded company. Ryan Wood was vice president of sales; Kip Fulks was vice president of sourcing and quality assurance and Plank functioned as president and CEO. During that year, its IPO generated approximately $114.9 million, and the company changed its name to Under Armour. 

Under Armour, their mission was “to make all athletes better through passion, design, and the relentless pursuit of innovation.” In 2014, the company underwent radical development and growth; this is considered to be a factor of its management focusing on the manufacture, marketing, and circulation of their branded footwear, performance apparel and accessories for women, men, and youth. Their aim did not stop at that; their performance apparel was geared towards functioning in varying climatic conditions and offer a robust variant and competitive brand to traditional sportswear. Additionally, its growth rate is factored into its apparel being worn by athletes at all levels, from professional to youth. Alternatively, those who did not engage in sports considered it a lifestyle brand. This exponential growth is indicated by the fact that approximately 75.5 percent of Under Armour’s sales. This was in the years between 2012 and 2013. The remainder of its sales block was composed of accessories and footwear products. 

While it was considered an organization with extensive reach, most of its sales were from North America, which formed almost 94% of its sales. This was irrespective of the fact that its distribution network in the south of America was expanding steadily. Under Armour’s international presence was still mostly unfelt. Forming its most significant challenge yet. The organization needed to develop both in the United States and beyond, further, it needed to topple the traditional sports brands that were Nike, Adidas, Puma, and Reebok. 

PROBLEM 

Under Armour’s fundamental challenge was expansion. It needed to grow and expand beyond the traditional sports brands in the US and the world. Hence, Plank and other management heads decided the follow a strategic plan that would remedy this issue and possibly see them at the tip of the berg with regards to performance sports apparel. The first strategy to achieve their goal was a product line strategy, initially, Under Armour had employed a multiple price points element as its chief strategy, this needed to evolve. Thus its management decided to increase and improve its product line, hence by so doing, Under Armour would have a broader catalog that all the other traditional brands. This, combined with the research and development done on their products, would give them the edge of having a superior product line that rivaled all other competitors by far. The underlying and unseen way it would achieve this was by fostering and nourishing a culture of innovation among all company personnel. Using this approach, the organization divided its array of products into three categories, depending on the weather conditions. First was Heat Gear for hot weather conditions; followed by ColdGear for cold weather conditions, and lastly AllSeasonGear for temperature conditions between the extremes. Respectively, HeatGear was intended to be worn in warm to hot temperatures under equipment or as a single layer. This had the company’s first compression wear, which is still one of its signature apparel today. Made using micro-fiber technology, the company boasted technological advances beyond all others, in the ability to keep athletes cool, light and dry. ColdGear was designed for low-temperature activities such as skiing, where athletes needed to retain body temperature and sometimes lose it. All Season Gear was designed to perform in intermediate temperatures. Each of the three apparel lines contained three fit types: compression (tight fit), fitted (athletic fit), and loose (relaxed). 

ALTERNATIVES 

Plank and Under Armour management sought to increase their market share through diversification of their products from their predominant upper body wear to other areas of the body, forming its chief alternatives scale. First off, the company began with Footwear. The company began to aggressively develop and market footwear apparel for women, men, and youth in the year 2006. The company has since grown its footwear line yearly. Its footwear line considered of footwear in the following sports; baseball, football, softball, lacrosse, and soccer cleats, performance training footwear, slides, running footwear, hunting boots, and basketball footwear. Under Armour’s edge in the athletic footwear market was that their products were breathable, light, and built with performance characteristics for athletes. Also, ground-breaking technologies were used to provide balance, directional dampening, and moisture management, on all models or apparel. Also, all its styling was engineered to maximize the athlete’s level of control and comfort, with the primary sports athletes shoe being the SpeedForm Apollo brand, with the catch line “This is what fast feels like.” 

The second alternative for Under Armour was delving into the market of sports accessories, which was primarily dominated by Nike and other smaller sports apparel companies. Under Armour’s catalog in 2013 included headwear, gloves, kneepads, socks, bags, custom-molded mouth guards, footballs and inflatable basketballs. A key advantage that the company had is that it had accessories to be worn before, during, and after sports activities. The final strategy was its Marketing, Promotion, and Brand Management Strategy (Mwendwa, 2014) . Using its in-house marketing and promotion department, which idealized and created the majority of its advertising campaigns, Under Armour rose to a leading Athletic brand. The company’s total marketing expenses rose steadily from $108.9 million in 2009 to $246 Million in 2013. These are inclusive of the costs of athlete endorsements, sponsorships, ads placed in a variety of television, radio, print, and social media outlets. 

RECOMMENDATION 

The sports brand Under Armour has undergone dynamic changes from its formative years in 2005 until now. In my view, the solutions to becoming the leading the leading sports apparel brand include; creating a personalized distribution technique or a direct sales approach. Factored in its plan is the said strategy which saw 30.4 % (in 2013) of the organization’s net revenue coming from direct sales (Griffin, 2008). This was a phenomenal improvement from the 23 percent in 2010 and 6 percent in 2005. Under Armour deploys this strategy through full-price arrangements to manufacture and distribute Under Armour–branded products and additionally, the sale of discounted merchandise at Under Armour’s Factory House stores. Furthermore, the organization should pre-approve all products manufactured and sold by its licensees; this is after the licensees meet stringent conditions set to ensure quality control. Pre-approving products mean that the time needed or spent shipping and approving samples is done away with, this reduces production time by almost half and gets the product to the intended buyer much faster (Wilkinson, 2015). The licensees can include manufacturers of; eyewear, team uniforms, custom-molded mouth guards, and footwear. This, in addition to golf pro shops and college bookstores, would improve its current direct sales volume and hence its revenue stream. Lastly amongst recommendations to be done by Under Armour is expanding its Distribution outside the Americas. 

Under Armour has immense capacity regarding the international market. In any company, the ability to ship to global markets usually presents such a huge advantage to its revenue stream (Wilkinson, 2015). Thus Under Armour should diversify and expand its global distribution networks, to factor in external markets, this can lead to immense growth regarding revenue. 

CONCLUSION 

From its formative years in 2005 and before that, under the management of Plank and associates, the company (Under Armour) has managed to not only diversify itself but expand its reach to a broader consumer market within and beyond as a lifestyle brand. This shows the company’s dedication to its mission statement and determination to be the best performance apparel company available. With its incremental spending in marketing and promotion, Under Armour is likely to increase its market share both in the Americas and globally. However, it is the company’s innovation and novelty that is likely to give it the best edge above its competitors. With the recent venture into military wear, with personal clothing for military personnel to use in their operations, the company may have just found its next significant niche. 

Fervently, the company’s efforts will pay off. 

References 

Amy, W. (2015). The Creator's Code: The Six Essential Skills of Extraordinary Entrepreneurs . NY, Simon and Schutzer Paper Backs. 

Mwendwa, H. (2014). Strategic Plan of an Athletic Apparel Label: Under Armour. Cambridge, GRIN Publishing. 

Griffin, R. (2008), Fundamentals of Management, Texas-USA, Cengage Learning.