Introduction
The recent COVID-19 pandemic continues to impact businesses in all industries, including garment manufacturing and retail. One of the companies that suffered financially was Under Armour (UA). This American organization produces sports equipment, including clothes, shoes, and accessories. According to recent reports, UA could not meet its financial goals in the fiscal years 2022 and 2023, reporting losses due to logistic disruptions and lockdowns in China (Thomas, 2022). The following paper presents a SWOT (strengths, weaknesses, opportunities, threats) analysis of the company to determine the potential factors related to this issue.
SWOT Analysis
Strengths
Although UA experiences financial difficulties, it still maintains a strong presence on the market. The company is one of the most valued businesses in the athletic apparel market and has high brand recognition (Under Armour, 2021). It also has a cohesive product portfolio, which allows it to interest a wide range of consumers interested in sportswear. UA is a strong competitor in the e-commerce market, selling its products through the brand website and other major retailers, including Amazon, Dick’s Sporting Goods, and more.
Weaknesses
Nevertheless, UA is not a market leader due to its limited international presence. In 2021, about 67% of the revenues came from the North American Segment, while the rest of the world contributed the remaining 33% (Under Armour, 2021). In contrast to its competitors, UA’s reliance on the US and Canada increases its vulnerability in the market. Another weakness is the slow expansion into the e-commerce world—UA focuses on its brand stores rather than investing in projects that could boost online sales.
Opportunities
UA can improve its position by expanding into international markets. Suppose the company continues to grow in countries outside of North America. In that case, it can increase its sales and attract new customers. Second, UA may also work on expanding its product line, targeting such segments as athleisure and home-based exercising, which are the two directions that have gained popularity due to COVID-19 (Thomas, 2022). Finally, the business may collaborate with other companies that offer products related to the athletic lifestyle to increase brand recognition.
Threats
One of the main threats to UA is continued issues with its logistics. The brand is at risk of further financial loss if it does not find a solution to disruptions in its supply chain. Other problems may arise due to the market uncertainties brought on by the pandemic and similar events. Third, increased market competition from brands such as Nike and Adidas continues to limit UA’s outreach to the global customer base.
Discussion
The SWOT analysis presents a view of UA as a company with a solid foundation that expands slowly and does not take risks in marketing or e-commerce. The brand’s position makes it inflexible, disrupting the company’s supply chain. UA’s slow responsiveness to innovation may be a core issue that results in financial losses and limits its chances of gaining more presence in the athleticwear segment. To overcome this problem. UA must devote more resources to research and development and create an adaptive, resilient supply chain in times of crisis.
Conclusion
The pandemic has affected all companies, but some were able to adapt to the new circumstances and lower their losses. Under Armour, however, experienced financial losses, and its prospects for future growth are at risk. The SWOT analysis identifies issues such as slow innovation and the lack of expansion. UA should focus on these areas to improve its position and remain competitive.
References
Thomas, L. (2022). Under Armour stock falls as company offers weak guidance, posts unexpected loss. CNBC. Web.
Under Armour. (2021). Annual report [PDF Document]. Web.