Under Armour is the international sportswear company that originates from the United States. The company manufactures a range of sports apparel with footwear as its primary product focus. Despite the relatively late market entry and initially modest financial performance, the company is currently in the top tier of the market segment, with its Adidas and Nike being among its closest competitors.
The company’s mission is to “make all athletes better through passion, design, and the relentless pursuit of innovation” (Under Armour, n.d., para. 1). The mission is achieved through a range of strategies and maintained with the help of respective values.
The values include acting like a global citizen (the encouragement to make decisions and act with an international mindset and spread the idea among its customers), thinking like an entrepreneur (focus on performance and end result in order to maintain the competitive advantage associated with the company’s status of the underdog), innovating (take risks and adjust actions based on the failures as a part of the pursuit of excellence), and performing as a part of the team (aligning the actions with the brand’s ambitious goals and participate in a collaborative effort of inspiration and support) (Under Armour, n.d.).
Despite the availability of products for wide demographics, the company’s operations are organized in accordance with a highly specific strategy that emphasizes the uniqueness of products rather than a wide appeal. The focus on specific areas of sports offers Under Armour a significant advantage over its competitors who try to cover all major segments of the sports domain (Rothaermel, 2015). The focused strategic approach allows the company to create a clearer marketing message, maintain the viability of operational and delivery techniques, timely react to setbacks in performance, and create a more loyal customer base.
Under Armour is a publicly-traded company and discloses its financial performance in annual reports. According to the latest report, the company’s revenues are increasing steadily for the last five years, with a reported gross profit of $ 2,240 million in 2016, a more than $ 200 million increase over the previous year (Under Armour, 2017). A large portion of revenue is attributed to the emphasis on innovation that is especially prominent in the footwear product line, where the company needs to constantly upgrade the characteristics of its products in order not to fall back behind the giants such as Nike and Adidas. At the same time, the report points to the reduction of net income by $1.7 million in 2016 (Under Armour, 2017). Therefore, it would be reasonable to suggest several objectives to improve the company’s financial position.
Table 1. Financial perspectives.
The combination of the described initiatives is expected to have a positive impact on the financial performance of the company, both directly (e.g. by appealing to a greater number of customers as a result of greater coverage) and indirectly (e.g. garnering the recognition among the female athletes and, by extension, improving the image of the brand) (MacInnis, Park, & Priester, 2015). Importantly, all three objectives and respective initiatives are consistent with at least one component of the company’s mission.
Namely, the outreach to the global market can increase the multicultural aspect of the brand’s approach and promote the international mindset. The introduction of the products designed to respond to women’s needs both relies on and promotes the innovation of development and, to some extent, delivery and manufacturing, of the goods and provide the adjustments necessary to stay ahead of the competition in at least one area (Mata & Woerter, 2013).
At the same time, the appeal to the female audience is consistent with the current global values and the company’s approach to diversification in the workplace (Fink, Kane, & LaVoi, 2014). In the long run, it may empower not only the customers but also the employees, thus serving as an inspiration for the team. Finally, the simultaneous enhancement in both offline and online distribution channels is expected to promote entrepreneurial values and ensure consistent performance and optimization of the existing mechanisms and tactical solutions.
References
Fink, J. S., Kane, M. J., & LaVoi, N. M. (2014). The freedom to choose: Elite female athletes’ preferred representations within endorsement opportunities. Journal of Sport Management, 28(2), 207-219.
MacInnis, D. J., Park, C. W., & Priester, J. W. (Eds.) (2015). Handbook of brand relationships. New York, NY: Routledge.
Mata, J., & Woerter, M. (2013). Risky innovation: The impact of internal and external R&D strategies upon the distribution of returns. Research Policy, 42(2), 495-501.
Rothaermel, F. T. (2015). Strategic management (2nd ed.). New York, NY: McGraw-Hill Education.
Under Armour. (2017). 2016 annual report. Web.
Under Armour. (n.d.). Mission and values. Web.